Andrea M. Curns v. Phyllis Akins

• Court: Missouri Court of Appeals
• Decided: April 11, 2023
• Docket: WD85486
• Status: Published

Opinion

IN THE MISSOURI COURT OF APPEALS WESTERN DISTRICT ANDREA M. CURNS, ) ) Respondent, ) ) v. ) WD85486 ) PHYLLIS AKINS, ) Opinion filed: ) Appellant. ) April 11, 2023

APPEAL FROM THE CIRCUIT COURT OF JACKSON COUNTY, MISSOURI THE HONORABLE BRYAN ROUND, JUDGE

Division One: Anthony Rex Gabbert, Presiding Judge, W. Douglas Thomson, Judge and Janet Sutton, Judge

Phyllis Akins appeals from the trial court’s denial of her motion to compel

arbitration with Andrea Curns. Akins argues that Curns, who is bound by a mutual

arbitration agreement with Curns’s employer Aerotek, Inc., must arbitrate Curns’s claim

against Akins because Akins, as an employee of Aerotek’s customer, is a third-party

beneficiary to the mutual arbitration agreement. We affirm.

Factual and Procedural History

This action stems from an agreement between Andrea Curns and her employer,

Aerotek, Inc. (“Aerotek”) requiring arbitration of certain claims. In the underlying

petition for damages, Curns alleged that Aerotek, Inc. (“Aerotek”), a staffing agency, and St. Joseph Medical Center (the “Center”) discriminated against her after she was involved

in an altercation with a Center employee, Phyllis Akins.1

Before this dispute, Aerotek employed Curns to work as a billing specialist at the

Center. Curns completed Aerotek’s new employee onboarding process. As part of this

process, Curns signed a document titled “Mutual Arbitration Agreement” (the

“Agreement”) on July 24, 2019.

The Agreement states in relevant part,

Except (i) as expressly set forth in the section, “Claims Not Covered by this Agreement,” all disputes, claims, complaints, or controversies (“Claims”) that I may have against Aerotek, Inc. and/or any of its subsidiaries, affiliates, officers, directors, employees, agents, and/or any of its clients or customers (collectively and individually the “Company”), or that the Company may have against me, including contract claims; tort claims; discrimination and/or harassment claims; retaliation claims; claims for wages, compensation, penalties, or restitution; and any other claim under any federal, state, or local statute, constitution, regulation, rule, ordinance, or common law, arising out of and/or directly or indirectly related to my application for employment with the Company, and/or my employment with the Company, and/or the terms and conditions of my employment with Company, and/or termination of my employment with the Company (collectively “Covered Claims”), are subject to confidential arbitration pursuant to the terms of this Agreement and will be resolved by Arbitration and NOT by a court or jury. The parties hereby forever waive and give up the right to have a judge or a jury decide any Covered Claims.

The Agreement also states that it “is governed by the [Federal Arbitration Act (“FAA”)]

and, to the extent not inconsistent with or preempted by the FAA, by the laws of the state

of Maryland without regard to principles of conflicts of law.”

In April 2020, Curns filed a petition in circuit court against Aerotek, the Center,

and Akins. Curns, a black Aerotek employee, alleged employment discrimination against

1 Curns’s petition does not allege that Akins is an employee of the Center and

merely refers to her as a “co-worker,” however, all the parties in their briefings acknowledge that Akins was employed by the Center during the events relevant to this appeal, while Curns was employed by staffing agency Aerotek. 2 Aerotek and the Center, and assault and battery against Akins. In her petition, Curns

alleged, “On December 27, 2019, while cleaning up after a meal at the Center, an

altercation arose between [Curns] and Defendant [Akins] during which Defendant

[Akins] physically attacked [Curns].” Curns alleged that Akins, a white Center employee,

struck Curns on the hands and told Curns to not touch Akins’s belongings. Curns alleged

that she reported the incident to several Center supervisors and that “Defendant [Center]

and/or Defendant Aerotek failed to take appropriate corrective action as to Defendant

[Akins] regarding Defendant [Akins’s] physical attack on [Curns].” Curns alleged that she

was fired in early January after being falsely accused of sleeping on the job. According to

Curns’s Petition, she was fired because she was involved in an altercation with Akins

and/or reported that altercation to her superiors at the Center.

After Curns filed her petition, all three defendants filed motions to compel

arbitration.2 Both the Center and Akins argued that Curns entered into a valid,

enforceable arbitration agreement and that they are third-party beneficiaries of that

Agreement.

On June 15, 2022, the trial court entered an order granting the Center’s motion to

compel arbitration and denying Akins’s motion to compel arbitration.

The trial court also determined that the validity of the Agreement is determined by

applying Missouri law. Applying Missouri law, the trial court found that Akins cannot

compel arbitration as either a third-party beneficiary or under the doctrine of equitable

estoppel. The trial court concluded, “The terms of the [A]greement do not specifically bind

employees of [Aerotek’s] ‘customers and clients’ and do further not [sic] specifically

2 Curns later voluntarily dismissed Aerotek, and they are not part of this appeal.

3 extend to the alleged intentional, wrongful acts of a third-party beneficiary’s employees.”

The trial court also found that the Agreement was valid and applied to Curns’s

employment discrimination and retaliation claims against Aerotek and the Center. The

trial court found that the Center is a third-party beneficiary to the Agreement and has the

authority to compel arbitration.

This appeal follows.

Standard of Review

“The issue of whether arbitration should be compelled is a question of law subject

to de novo review.” Baker v. Bristol Care, Inc., 450 S.W.3d 770, 774 (Mo. banc 2014)

(citing State ex rel. Vincent v. Schneider, 194 S.W.3d 853, 856 (Mo. banc 2006)).

“‘Arbitration is strictly a matter of contract; if the parties have not agreed to arbitrate, the

courts have no authority to mandate that they do so.’” Central Trust Bank v. Graves, 495

S.W.3d 797, 802 (Mo. App. W.D. 2016) (quoting Thomson-CSF, S.A. v. Am. Arbitration

Ass’n, 64 F.3d 773, 779 (2d Cir. 1995)).

Analysis

Akins brings one point on appeal. She argues that the trial court erred in denying

her motion to compel arbitration because she maintains the same right to enforce the

Curns-Aerotek arbitration agreement as Akins’s employer, the Center, who, as a client of

Aerotek, is a third-party beneficiary of such agreement.

Choice of Law

Before addressing Akins’s point on appeal, we first must determine the state law

applicable to this appeal. The Agreement contains the following choice of law provision:

“This Agreement is governed by the FAA and, to the extent not inconsistent with or

preempted by the FAA, by the laws of the state of Maryland without regard to principles

4 of conflicts of law. Aerotek, Inc’s business and [Curns’] employment with Aerotek, Inc

affect interstate commerce.”

We generally enforce choice of law provisions. See Grp. Health Plan, Inc. v. BJC

Health Sys., Inc., 30 S.W.3d 198, 203 n.2 (Mo. App. E.D. 2000). However, neither the

parties nor the trial court acknowledges this choice of law provision and all use the FAA

and Missouri law in their analyses. “Parties to a contract may waive the provisions of

their contract by their conduct.” JTL Consulting, LLC v. Shanahan, 190 S.W.3d 389, 396

(Mo. App. E.D. 2006) (citing Pilla v. Estate of Pilla, 689 S.W.2d 727, 730 (Mo. App. E.D.

1985) (holding that parties to a contract waived the contract’s choice of law provision by

not citing the provision or any law from the state preferred by the contract).

Here, the parties have waived the choice of law provision in the Agreement through

their conduct. Neither party has cited to applicable Maryland law in their briefs, nor was

Maryland law addressed in their motions before the trial court. Further, neither party

has addressed the choice of law provision in their briefing. We will follow their lead and

apply the FAA and Missouri law to Akins’s argument on appeal.

Point I

The Agreement and the parties stipulate that the Agreement is governed by the

FAA. “[T]he question of which parties are bound by an arbitration agreement concerning

interstate commerce ‘involves the ‘general law’ of contracts and agency.’” Tractor-Trailer

Supply Co. v. NCR Corp., 873 S.W.2d 627, 629 (Mo. App. E.D. 1994) (quoting Flink v.

Carlson, 856 F.2d 44, 46 n.2 (8th Cir. 1988)). Courts apply state contract and agency law

in determining enforceability issues, “giving due regard to the federal policy favoring

arbitration.” Id. (internal quotation and citation omitted).

5 “When faced with a motion to compel arbitration, [we] must determine whether a

valid arbitration agreement exists and, if so, whether the specific dispute falls within the

scope of the arbitration agreement.” Nitro Distributing, Inc. v. Dunn, 194 S.W.3d 339,

345 (Mo. banc 2006). Therefore, we must first determine whether the Agreement has the

elements of a valid contract under Missouri law: offer, acceptance, and consideration. See

Frye v. Speedway Chevrolet Cadillac, 321 S.W.3d 429, 436 (Mo. App. W.D. 2010).

Neither party disputes that the Agreement is a valid and enforceable contract.

During the onboarding process, Aerotek offered the Agreement, and Curns accepted it by

signing it. The Agreement was entered into “[a]s consideration for [Curns’s] application

for and/or [Curns’s] employment with Aerotek, Inc. and for the mutual promises herein.”

The Agreement requires both Curns and Aerotek to submit any claims one may have

against the other to arbitration. In other words, Curns and Aerotek mutually promise to

arbitrate any claims. Thus, the promise to arbitrate contained in the Agreement was a

mutual promise and had sufficient consideration. See, e.g., Morrow v. Hallmark Cards,

Inc., 273 S.W.3d 15, 23-24 (Mo. App. W.D. 2008) (noting that Missouri courts have

upheld arbitration agreements when both parties agree to submit claims to arbitration).

Having determined that Curns and Aerotek entered into a valid, enforceable

arbitration agreement, we must determine whether Akins, an employee of a customer of

Aerotek, can enforce the Agreement and compel Curns to arbitrate her claims against

Akins. Akins argues that she, like the Center, is a third-party beneficiary to the Agreement

even though she did not sign the Agreement.

“Only parties to a contract and any third-party beneficiaries of a contract have

standing to enforce that contract.” Verni v. Cleveland Chiropractic Coll., 212 S.W.3d 150,

153 (Mo. banc 2007). “A third party beneficiary is one who is not privy to a contract but

6 who is benefited by it and who may maintain a cause of action for its breach.” Volume

Servs., Inc. v. C.F. Murphy & Assoc., 656 S.W.2d 785, 794 (Mo. App. W.D. 1983). “To be

bound as a third-party beneficiary, the terms of the contract must clearly express intent

to benefit that party or an identifiable class of which the party is a member.” Nitro

Distributing, Inc., 194 S.W.3d at 345. Whether the parties intended to benefit any third

parties must be gleaned from the four corners of the contract. L.A.C. ex rel. D.C. v. Ward

Parkway Shopping Ctr. Co., 75 S.W.3d 247, 260 (Mo. banc 2002). When a contract lacks

an express declaration of intent to benefit a party, “there is a strong presumption that the

third party is not a beneficiary and that the parties contracted to benefit only themselves.”

Nitro Distributing, Inc., 194 S.W.3d at 345.

We turn to the Agreement to determine whether Akins is a third-party beneficiary.

The Agreement expressly covers “all disputes, claims, complaints, or controversies

(‘Claims’) that [Curns] may have against Aerotek, Inc, and/or … any of its clients or

customers… or that the Company may have against [Curns].” (emphasis added). The

Agreement’s plain language expressly benefits Curns, Aerotek, and the Center as

Aerotek’s “client or customer.”

However, although it is evident that Center is a third-party beneficiary of the

Agreement’s arbitration clause, the plain language of the Agreement does not extend to

Center’s employees like Akins. While the Agreement clearly benefits Aerotek’s

employees, there is no clear expression of intent in the Agreement to benefit employees

of Aerotek’s customers or clients, such as Center’s employees like Akins, or to name such

an identifiable class as a whole. Such a distinction is meaningful, because the Agreement

clearly intends to cover claims between Aerotek’s employees and Aerotek’s customers and

clients, but does not include the employees of Aerotek’s customers and clients. Rather,

7 the Agreement is silent as to such identifiable class. We cannot interpret such silence as

benefitting Akins. See Nitro Distributing, Inc., 194 S.W.3d at 345.

Akins attempts to overcome the plain language of the Agreement by arguing that

she “maintains the same right to enforce the Agreement as” the Center because she is an

employee of the Center. Essentially, she argues that she is a third-party beneficiary to the

Agreement because her employer is a third-party beneficiary. Akins relies principally on

several Missouri federal and state decisions. See Morgan v. Ferrellgas, Inc., 8 F.4th 795

(8th Cir. 2021); Sprague v. Household Intern., 473 F. Supp. 2d 966 (W.D. Mo. 2005);

Tractor-Trailer Supply Co. v. NCR Corp., 873 S.W.2d 627 (Mo. App. E.D. 1994); Madden

v. Ellspermann, 813 S.W.2d 51 (Mo. App. W.D. 1991). Akins argues these cases hold that

a non-signatory employee can enforce an arbitration agreement to the same extent as her

employer.

None of the cases Akins cites are instructive. The cases upon which Akins relies

address scenarios where an employee was being sued for actions they took either in the

scope of their employment with the third-party beneficiary employer or where an

employee and employer are treated as a “single unit.” See Morgan, 8 F.4th at 800

(employee could enforce an arbitration agreement because the plaintiff alleged employee

acted on behalf of employer in making tortious misrepresentations and omissions);

Sprague, 473 F.Supp.2d at 977 (arbitration agreement was enforceable as to non-

signatory individuals because the plaintiffs alleged in their complaint that “each of the

Defendants were agents or joint venturers of each of the other Defendants, and in doing

the acts alleged herein acted within the course [or] scope of such agency.”); Madden, 813

S.W.2d at 53 (collecting cases where courts have held that employees can enforce an

8 arbitration agreement for alleged actions they took in the course and scope of their

employment).

Unlike the cases Akins cites, here Akins is not being sued for actions she allegedly

took in the scope of her employment nor is she treated as a “single unit” with the Center.

Curns does not allege that Akins undertook any action in the course and scope of Akins’s

employment. In fact, Curns does not even identify Akins by who Akins is employed,

instead referring to her as a “co-worker.” Rather, Curns alleges only that Akins was angry,

struck Curns, and told Curns not to touch Akins’s things. None of these allegations stem

from Akins’s employment relationship with the Center nor does Curns allege same.

Curns’s claims against Akins and the Center are also distinct. She does not treat

Akins and the Center as a “single unit.” Notably, Curns never alleges that the Center is

vicariously liable for Akins’s actions in the alleged assault. Accordingly, Curns is not

alleging that the Center is somehow liable for Akins’s alleged assault. Nor does Curns

allege that Akins assaulted her with discriminatory intent, and she is not suing Akins for

discrimination. Conversely, all of Curns’s allegations against the Center stem from their

response to Curns reporting the alleged assault and her eventual termination. Akins

cannot benefit from the Agreement in which her employer is a third-party beneficiary for

alleged actions she took outside the scope of her relationship with her employer. See

Jones v. Paradies, 380 S.W.3d 13, 17 (Mo. App. E.D. 2012) (“[T]he plaintiffs here did not

allege that the defendants were acting for [their employer]. To the contrary, the plaintiffs

have alleged that the defendants acted through improper means, not for the benefit of

[their employer], but for defendants’ [own self-interest].”).

Finally, Akins argues that the trial court’s ruling is in error because it “results in

two parallel and overlapping proceedings,” which is more expensive and less efficient for

9 the parties. Akins argues that her claims are “inextricably intertwined” with Curns’s other

claims, which are subject to arbitration.

Even if we agreed with Akins that her claims are “inextricably intertwined” with

Curns’s claims against the Center, the Missouri Supreme Court has twice rejected this

argument in enforcing arbitration agreements. See Netco, Inc. v. Dunn, 194 S.W.3d 353,

361-62 (Mo. banc 2006); Nitro Distributing, Inc. v. Dunn, 194 S.W.3d 339, 351 (Mo. banc

2006). In these cases, plaintiffs filed lawsuits against multiple defendants alleging the

defendants were involved in conspiracies to misappropriate the plaintiffs’ businesses,

matters outside the contract that compelled arbitration. Netco, Inc., 194 S.W.3d at 357;

Nitro Distributing, Inc., 194 S.W.3d at 345. Some of the defendants in each case filed

motions to compel arbitration pursuant to several business contracts, all of which were

overruled. Netco, Inc., 194 S.W.3d at 357; Nitro Distributing, Inc., 194 S.W.3d at 345.

The defendants argued that even if they were not third-party beneficiaries to the various

contracts they should be able to compel arbitration because the doctrine of equitable

estoppel prevents the plaintiffs from refusing to arbitrate claims that are “inextricably

intertwined” with claims subject to arbitration.3 Netco, Inc., 194 S.W.3d at 361-62; Nitro

Distributing, Inc., 194 S.W.3d at 351.

3 The Court also noted, “Under hornbook rules of agency, it is the principal that

can be bound by the signature of the agent, not the agent that can be bound by the signature of the principal. This is so because the principal can control the conduct of the agent, which is the essence of the agency relationship. Netco, Inc., 194 S.W.3d at 358. While this rule is not perfectly applicable in this case, because neither the Center nor Akins as the Center’s agent are signatories to the Agreement, this rule is still instructive. Under this rule, the Center could be bound by an agreement entered into by Akins, but Akins, as the Center’s agent, cannot be bound by an agreement entered into by the Center. Therefore, the Agreement does not bind Akins simply because the Center is a third-party beneficiary to it. See also Springfield Iron & Metal, LLC v. Westfall, 349 S.W.3d 487, 490 (Mo. App. S.D. 2011) (when agents sign an arbitration agreement in a representative capacity, they are not bound by the agreement as individuals). 10 The Missouri Supreme Court disagreed, holding that the doctrine of equitable

estoppel is inapplicable because the plaintiffs were not alleging that the defendants failed

to perform under the business contracts, but were alleging other misconduct. Netco, Inc.,

194 S.W.3d at 361-62; Nitro Distributing, Inc., 194 S.W.3d at 351. In both cases, the

Missouri Supreme Court held that such an “[inextricably intertwined claims] theory is

inconsistent with the overarching rule that arbitration is ultimately a matter of agreement

between the parties.” Netco, Inc., 194 S.W.3d at 361-62; Nitro Distributing, Inc., 194

S.W.3d at 351.

Like the plaintiffs in Netco, Inc. and Nitro Distributing, Inc., Curns is not alleging

that Akins failed to perform as part of Curns’s employment contract. Curns’s claims

against Akins are outside the scope of any employment contract and the doctrine of

equitable estoppel does not apply. As such, “[w]e are not free to erode arbitration’s

voluntary nature for the sake of judicial convenience.” Springfield Iron & Metal, LLC v.

Westfall, 349 S.W.3d 487, 491 (Mo. App. S.D. 2011). We cannot compel Curns to arbitrate

her claims against Akins merely because it is more convenient to do so.

Akins is not a third-party beneficiary to the Agreement and cannot compel Curns

to arbitrate her claims against Akins. Point I is denied.

Conclusion

The trial court’s judgment is affirmed.

________________________________ W. DOUGLAS THOMSON, JUDGE

All concur.