Bodenheimer v. New Orleans Public Belt and CSX Transportation, Inc.

828 So. 2d 77, 2001 La.App. 4 Cir. 0889, 2002 La. App. LEXIS 2766, 2002 WL 31085941
CourtLouisiana Court of Appeal
DecidedSeptember 11, 2002
DocketNo. 2001-CA-0889
StatusPublished

This text of 828 So. 2d 77 (Bodenheimer v. New Orleans Public Belt and CSX Transportation, Inc.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bodenheimer v. New Orleans Public Belt and CSX Transportation, Inc., 828 So. 2d 77, 2001 La.App. 4 Cir. 0889, 2002 La. App. LEXIS 2766, 2002 WL 31085941 (La. Ct. App. 2002).

Opinion

1/TERRI F. LOVE, Judge.

New Orleans Public Belt (“NOPB”), third party defendant, appeals the district court’s denial of its Exception of Prematurity/Motion to Stay Proceedings Pending Arbitration. NOPB then filed an Emergency Interlocutory Appeal and/or Writ to this Court, which declined to exercise supervisory jurisdiction over the issue. NOPB took no further action and proceeded to trial on the merits. NOPB now comes before this Court, seeking review of the district court’s denial of its’ exception. For the reasons outlined below, we dismiss this appeal.

FACTS AND PROCEDURAL HISTORY

Robert Bodenheimer (“Bodenheimer”), an employee of NOPB, was injured in the course and scope of his employment on January 5, 1996. Bodenheimer was injured while operating a NOPB switch machine. CSX Transportation, Inc. (“CSX”) maintained the switch for NOPB under the “Tripartite Maintenance and Operation Agreement” of June 1,1993.

On December 23, 1996, Bodenheimer filed an action for damages against CSX and NOPB. On March 3, 1997, CSX filed a cross-claim seeking contractual indemnity against NOPB, and amended the cross claim on November 10, 2000. | gOn December 12, 2000, NOPB filed a “Dilatory Exception of Prematurity/Motion to Stay Proceedings Pending Arbitration.” NOPB argued that the binding arbitration agreement was contained in a separate contract between it and CSX, known as the “Track-age Rights Agreement”, of July 25, 1994 and that this contract was controlling in this action. A hearing on NOPB’s exception was conducted on March 8, 2001, at which the district court denied NOPB’s exception. On March 9, 2001, NOPB filed an Emergency Interlocutory Appeal and/or Writ to this Court seeking review of the district court’s ruling. On March 9, 2001, this Court denied NOPB’s emergency writ, declining to exercise supervisory jurisdiction. NOPB took no further action and proceeded to trial on the merits in the district court.

CSX settled with Bodenheimer prior to trial, but pursued it claim for indemnification against NOPB. NOPB now appeals the district court’s March 8, 2001 pretrial ruling.

DISCUSSION

This Court’s decision in Thomas v. Desire Community Housing Corp., 98-2097, p. 7 (La.App. 4 Cir. 7/19/00), 773 So.2d 755, is applicable to the case at bar, where we [79]*79discussed at length the procedure for preserving a claim of arbitration rights. In Thomas, the Thomas’ filed suit against Desire Community Housing Corporation and others, alleging breach of a construction contract. Defendants filed an exception of prematurity seeking arbitration pursuant to the contract. The trial court granted that exception and this Court denied plaintiffs’ writ application. Plaintiffs’ counsel then wrote defendants’ counsel concerning matters preliminary to arbitration. Defendants’ counsel responded, stating that they had a dispute over certain documents, plaintiffs’ claim had prescribed, and that if plaintiffs did not |3drop their suit, defendants would reconvene for malicious prosecution. No arbitration took place as a result of that correspondence and plaintiffs again filed suit. Thereafter defendants again filed an exception of prematurity for want of arbitration, which was overruled by the trial court. No appeal or writ application followed that ruling. Defendants filed an answer and reconventional demand. Discovery and other trial preparations occurred intermittently until trial. Defendants then requested a stay of proceedings in order to arbitrate the matter. The request was denied and judgment was rendered in favor of the plaintiffs.

In Thomas, on original hearing, this Court rejected plaintiffs’ argument that since defendants did not seek review of the order overruling the exception of prematurity, they could not now challenge the order. Thomas, 98-2097, p. 7, 773 So.2d at 759. This Court found that the trial court’s decision was not a final appealable judgment. Id. Further the Thomas Court held that while it may have been permissible for Desire to seek writs, it was referred to no legal authority and was not aware of any which required Desire to apply for writs. Id. On Rehearing, this Court found that decision to be in error. The Thomas Court stated in part:

We recognize that there is a strong public policy in Louisiana favoring the enforcement of arbitration clauses, (citing Cajun Elec. Power Co-op, Inc. v. Louisiana Power and Light, 324 So.2d 475 (La.App. 4 Cir.1975)). We also recognize that arbitration is a substitute for litigation and that its purpose is to settle disputes in a fast, inexpensive manner before a tribunal chosen by the parties. We believe that one who claims entitlement to arbitration cannot make a pro forma request for it, file a reconventional demand and then sit on his rights for six and a half years, participate in litigation and then after an adverse ruling cry “ ‘Kings X’, the judgment is invalid for want of arbitration.” That is the very antithesis of what arbitration is all about.

Thomas, 98-2097, p. 7. 773 So.2d at 759.

|4The Thomas Court stated that there was no Louisiana law directly on point but cited:

Once suit is filed, the party asserting the arbitration defense should file a motion to stay the court proceedings and to compel arbitration. This is the only way that a party may effectively stop a suit and institute arbitration proceedings. The court must stay the action once it finds that the dispute is referable to arbitration and no other impediments prevent the application of the arbitration clause. The mandatory character of the rule appears from the wording “shall be stayed” such as that in § 2(e) of the Uniform Arbitration Act. [In Louisiana, See R.S.9:4202] [A party must appeal a denial of the motion to stay or a motion to compel arbitration. If the party does not do so, and participates further in the litigation, the party will
[80]*80be deemed to have waived its right to arbitrate.] Domke, Comm. Arbitration § 19.07 (Rev. Ed.). (Emphasis added) (Internal citations omitted).

Thomas, 98-2097, p. 8, 773 So.2d at 759-760.

The Court in Thomas relied heavily on Ritzel Communications, Inc. v. Mid-American Cellular Telephone Co., 989 F.2d 966 (8th Cir.1993), for its analysis. The Court found that the facts in Ritzel were similar to those in Thomas and, accordingly, we find that they are applicable to the present case as well. In Ritzel, Mid-American had sold a wholly owned subsidiary to a group of investors known as the Goodwin group. Ritzel sued Mid-American for its fee. Subsequently the Goodwin group was added as third party defendants. The Goodwin group moved to dismiss the third party complaint or alternatively for a separate trial. Later the group filed a motion to stay litigation and to compel arbitration based on certain provisions of the stock purchase agreement. This district court denied the motion and the Goodwin group appealed. While the appeal was pending, the group continued to litigate in the district court. Specifically it answered the complaint, amended its counterclaim and participated in discovery. The trial lasted six days. All of this activity occurred before the appeal was argued.

| ¡¡The court found the Goodwin group had waived its right to seek arbitration:

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Related

CAJUN ELEC. POWER CO-OP., INC. v. Louisiana Power & Light Co.
324 So. 2d 475 (Louisiana Court of Appeal, 1975)
Thomas v. Desire Community Housing Corp.
773 So. 2d 755 (Louisiana Court of Appeal, 2000)

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828 So. 2d 77, 2001 La.App. 4 Cir. 0889, 2002 La. App. LEXIS 2766, 2002 WL 31085941, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bodenheimer-v-new-orleans-public-belt-and-csx-transportation-inc-lactapp-2002.