Jones v. Paradies

380 S.W.3d 13, 2012 WL 2498831, 2012 Mo. App. LEXIS 871
CourtMissouri Court of Appeals
DecidedJune 29, 2012
DocketNo. ED 97619
StatusPublished
Cited by7 cases

This text of 380 S.W.3d 13 (Jones v. Paradies) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jones v. Paradies, 380 S.W.3d 13, 2012 WL 2498831, 2012 Mo. App. LEXIS 871 (Mo. Ct. App. 2012).

Opinion

LAWRENCE E. MOONEY, Judge.

At the heart of this appeal is the question of whether the defendants, who were non-signatories, may enforce a contractual arbitration clause. We answer in the negative. Plaintiffs sued the defendants for tortiously interfering and conspiring to tortiously interfere with a contract. Defendants served as directors of a corporation that was bound by an arbitration agreement. But the plaintiffs sued the defendants in their individual capacity and not as agents of the corporation. The defendants sought to enforce the arbitration provision contained in the contract with the corporation, and thus moved to dismiss or stay the litigation pending arbitration. The trial court denied defendants’ request, reasoning that the defendants, as individuals, were not bound by or to the contract or its arbitration clause. The defendants appeal.1

Factual and Procedural Background

This dispute arises out of battle for control of the concessions business at Lambert-St. Louis International Airport.2 The entities involved are numerous, and their relationships and history complex. Those particulars are not germane to the instant appeal. Suffice it to say, a corporation commonly known by the name of PCA entered into a Management Agree[16]*16ment with three entities — The Paradies Shops, Concessions, and Arch — whereby the three entities agreed to manage and operate the airport concessions business inexchange for a percentage of annual sales.3,4

This Management Agreement contains the disputed arbitration clause. The arbitration clause provides in part that “[a]ny controversy or claim arising out of or relating to [the] agreement, or the breach thereof, shall be settled by arbitration in Atlanta, Georgia....” The Management Agreement was signed by representatives of the involved entities in their corporate capacities. The defendants here were associated with the three entities managing and operating the airport concessions.5 They were also on the board of directors for PCA. While some of the defendants signed the Management Agreement in their corporate capacity, none of the defendants signed the Management Agreement in their individual capacity.

Years later, the board of directors for PCA voted to terminate Arch as a manager under the Management Agreement, and to sell all of PCA’s assets to a newly-created limited-liability company. At the time, the corporate directors of PCA consisted of all the defendants and plaintiffs Donald Suggs and William Jones, who were also partners in Arch.6 All directors, except Mr. Suggs and Mr. Jones, voted in favor of Arch’s termination and the asset sale. As a result of this sale, all defendants are affiliated through equity ownership and/or management with the new limited-liability company. The plaintiffs and Arch are not.

The plaintiffs, all partners in Arch, sued the defendants in their individual capacities for tortious interference with contract and conspiracy to tortiously interfere with contract. Plaintiffs alleged that the defendants conspired to, and did in fact, tor-tiously interfere with the Management Agreement by authorizing and approving PCA’s termination of Arch as manager “through improper means, not for the benefit of PCA but for defendants’ own financial gain and self-interest” and in retaliation for the refusal by Mr. Suggs and Mr. Jones to consent to the restructuring of PCA into a limited-liability company.

Defendants moved to dismiss or stay the litigation pending adjudication of the matter, including any questions regarding the enforceability of the arbitration clause, by an arbitrator or a court in Georgia. Despite defendants’ request, there was no arbitration actually pending at the time the defendants filed their motion. The trial court denied defendants’ motion, reasoning that the defendants, as individuals, were not bound by or to the Management Agreement or its arbitration clause.

The defendants maintain that they may enforce the arbitration clause and thus appeal. Defendants first assert that the plaintiffs are estopped from denying the enforceability of the arbitration clause. Next, they contend that they may enforce the arbitration clause, even though they [17]*17signed the agreement only as representatives of a corporation, because they were acting for the corporation, and thus are considered as being the corporation itself for purposes of plaintiffs’ tortious-interference claims. And lastly, the defendants allege they may enforce the arbitration clause, even as non-signatories, because plaintiffs’ claims derive from a contract claim covered by the arbitration clause.

Discussion

The underlying principles of arbitration are well-established and often stated. Arbitration is fundamentally a matter of consent, and thus a party cannot be required to arbitrate a dispute that it has not agreed to arbitrate. State ex rel. Union Pacific R. Co. v. David, 331 S.W.3d 666, 667 (Mo. banc 2011). “Absent a contract to arbitrate, no party has a unilateral right to impose on another party a requirement of arbitration as the sole procedure for dispute resolution.” M & I Marshall & Ilsley Bank v. Sader & Garvin, L.L.C., 318 S.W.3d 772, 777 (Mo.App. W.D.2010)(internal quotation omitted). “It is a firmly-established principle that par ties can be compelled to arbitrate against their will only pursuant to an agreement whereby they have agreed to arbitrate claims.” Id. Correspondingly, it logically follows that one cannot enforce an arbitration agreement if he is not a party to that agreement. See Springfield Iron & Metal, LLC v. Westfall, 349 S.W.3d 487, 490 (Mo. App. S.D.2011)(holding that individuals who signed arbitration agreement only as agents in a representative capacity not bound by or to the agreement as individuals, and thus may not compel arbitration).

For defendants to enforce the arbitration agreement here, they must be a party to that agreement. But defendants signed that agreement only in their corporate capacity. They are being sued, however, and are seeking to enforce the agreement, in their individual capacity. As a matter of agency law, 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. Nitro Distributing, Inc. v. Dunn, 194 S.W.3d 339, 345 (Mo. banc 2006); Netco, Inc. v. Dunn, 194 S.W.3d 353, 358 (Mo. banc 2006). Thus, defendants’ signatures, in their corporate capacity, do not bind them to the arbitration agreement as individuals. Springfield Iron & Metal, 349 S.W.3d at 490.

Defendants contend that they may nonetheless enforce the arbitration clause, even as non-signatories, because they are being sued based on their actions as corporate directors. Thus, they contend, because they were acting for the corporation, they are treated as being the corporation itself for purposes of plaintiffs’ tortious-interference claims. Defendants cite Zipper v. Health Midwest,

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Cite This Page — Counsel Stack

Bluebook (online)
380 S.W.3d 13, 2012 WL 2498831, 2012 Mo. App. LEXIS 871, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jones-v-paradies-moctapp-2012.