Bjartmarz v. Pinnacle Real Estate Tax Service

771 A.2d 124, 17 I.E.R. Cas. (BNA) 1285, 2001 R.I. LEXIS 124, 2001 WL 514462
CourtSupreme Court of Rhode Island
DecidedMay 11, 2001
DocketNo. 99-223-M.P.
StatusPublished
Cited by15 cases

This text of 771 A.2d 124 (Bjartmarz v. Pinnacle Real Estate Tax Service) is published on Counsel Stack Legal Research, covering Supreme Court of Rhode Island primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bjartmarz v. Pinnacle Real Estate Tax Service, 771 A.2d 124, 17 I.E.R. Cas. (BNA) 1285, 2001 R.I. LEXIS 124, 2001 WL 514462 (R.I. 2001).

Opinion

OPINION

PER CURIAM.

This ease concerns the arbitrability of an employment-related dispute. The petitioner, Pinnacle Real Estate Tax Service (Pinnacle), is here on certiorari seeking reversal of a Superior Court order denying its motion to stay the lawsuit pending arbitration of various claims that an employee has asserted against it.1 We ordered the parties to show cause why we should not resolve this petition summarily. Because they have not done so, we proceed to decide the petition at this time.2

Pinnacle contends that the motion justice erred in not staying the employee’s Superior Court lawsuit because the employment agreement between Pinnacle and the employee, respondent James E. Bjart-marz (Bjartmarz), specified that all employment disputes between them shall be resolved by binding arbitration. Pinnacle’s predecessor in interest, American Realty Tax Services, hired Bjartmarz in 1995. In September 1997, National Information Group purchased American Realty Tax Services and changed its name to Pinnacle Real Estate Tax Services. In that same month Pinnacle asked its employees in its Rhode Island office to sign application agreements and employment agreements. At first Bjartmarz refused to sign either agreement. Apparently, he disagreed with the arbitration clause in the application agreement because it specified that arbitration disputes would be resolved in California. He also disagreed with various other provisions contained in the agreements, such as the biweekly schedule of payments and the offering of mere “straight pay” for holiday labor.

Bjartmarz allegedly told Pinnacle that its refusal to pay “time and a half’ for work performed on Columbus Day, Veterans Day, and Victory Day was in violation of Rhode Island labor law. He asserted that Pinnacle failed to pay him time and a half for Veterans Day on November 11, 1997. Bjartmarz also allegedly informed Pinnacle on March 19, 1998, that he would notify the “labor department” about Pinnacle’s violations of Rhode Island labor law.

Nevertheless, despite his objections, on March 19, 1998, Bjartmarz signed the employment agreement with Pinnacle. According to Pinnacle, it no longer required Bjartmarz to sign the application agreement. Nevertheless, Pinnacle still required Bjartmarz to sign the employment agreement for him to receive a pay raise. Unlike the application agreement, however, the employment agreement’s arbitration clause did not specifically require arbitration in California, but simply stated that all employment disputes shall be resolved by binding arbitration. Pinnacle asserts that it would seek arbitration in Rhode Island only for the current dispute.

In the succeeding months, Bjartmarz’s ongoing dispute with Pinnacle over the biweekly pay schedule and holiday-pay issues continued. Bjartmarz alleged that Pinnacle failed to pay him time and a half [126]*126for work on Victory Day on August 10, 1998. He said that later in August 1998 Pinnacle told him that his benefits package was being reduced and that he might lose his company vehicle.

On October 21, 1998, Bjartmarz filed a pro se complaint against Pinnacle in the Superior Court. His complaint includes counts for failure to pay overtime for holiday work, failure to make weekly payments, failure to furnish an accurate statement of earnings, and violation of the Rhode Island Whistleblowers’ Protection Act, G.L.1956 § 28-50-3. Thereafter Pinnacle filed a motion to dismiss, or in the alternative, to stay proceedings pursuant to G.L.1956 § 10-3-3.

At the hearing on Pinnacle’s motion, Bjartmarz explained to the court that he was being paid $12 per hour to “do paper research” at town halls for Pinnacle. He admitted that he had signed the employment agreement and had faxed a copy of it to Pinnacle, but he also asserted that he had signed it because Pinnacle had told him that it then would fax him back his requested changes to the agreement— changes that were supposed to include the removal of the arbitration clause, the holiday-pay provision, and the biweekly pay provision. The motion justice said that she did not believe that Bjartmarz’s assertions could be considered under the parol-evidence rule, unless Bjartmarz was “saying there was some fraud that induced [him] to sign the contract.” Bjartmarz replied that he was indeed asserting fraud in the inducement. Thereafter, the motion justice denied both Pinnacle’s motion to dismiss and its motion for a stay, as well as its later-filed motion for reconsideration.

On certiorari to this Court, Pinnacle argues that the motion justice erred'in denying its motion for a stay. It contends that the Superior Court must stay proceedings, pursuant to § 10-3-3, if the matter is referable to arbitration. It notes that the employment agreement signed by Bjartmarz clearly requires this dispute to be resolved by arbitration. It further contends that the motion justice should not have relied on unsworn statements by Bjartmarz on the day of the hearing concerning what the parties allegedly discussed before Bjartmarz signed the agreement. Pinnacle additionally argues that any belated claim of fraud in the inducement can be handled at arbitration because it was asserted against the agreement as a whole and not specifically against the arbitration clause. Therefore, Pinnacle says, this claim should be decided via arbitration. Finally, Pinnacle argues, at the very least the motion justice should have conducted an evidentiary hearing on the issue of fraud in the inducement before it denied Pinnacle’s motions. Pinnacle points out that Bjartmarz’s affidavits did not substantiate any fraud allegations and that Bjartmarz’s statements to the motion justice during the hearing were unsworn. Pinnacle argues that at the very least it should have been allowed an opportunity to counter Bjartmarz’s unsubstantiated claims of fraud and that it should have been allowed to cross-examine Bjartmarz about his allegations.

Section 10-3-3 entitled “Stay of actions on issues referable to arbitration,” provides:

“[I]f any suit or proceeding be brought upon any issue referable to arbitration under an agreement in writing for arbitration, the court in which the suit is pending, upon being satisfied that the issue involved in the suit or proceeding is referable to arbitration under such an agreement, shall, on application of one of the parties, stay the trial of the action until the arbitration has been had in accordance with the terms of the agree[127]*127ment, providing the applicant for the stay is not in default in proceeding with the arbitration.”

The issue for decision, therefore, appears to hinge on whether the arbitration clause in the employment agreement is enforceable. If it is, then the proceedings in the Superior Court must be stayed. On the other hand, “[i]f the making of the arbitration agreement or the failure, neglect, or refusal to perform the arbitration agreement is in issue, the court shall proceed summarily to the trial thereof.” Section 10-3-5.

Bjartmarz orally alleged before the motion justice that fraudulent statements by Pinnacle induced him to sign the employment agreement. To be sure, if one is induced to enter into a contract based upon a fraudulent statement from the other party to the contract, then the party who has been fraudulently induced is not bound by the contract. See Continental Illustrating Co. v. Longley Motor Sales Co., 43 R.I. 552, 553, 113 A. 869, 869-70 (1921).

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Cite This Page — Counsel Stack

Bluebook (online)
771 A.2d 124, 17 I.E.R. Cas. (BNA) 1285, 2001 R.I. LEXIS 124, 2001 WL 514462, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bjartmarz-v-pinnacle-real-estate-tax-service-ri-2001.