Lumm v. CC Servs., Inc.

414 P.3d 454, 290 Or. App. 39
CourtCourt of Appeals of Oregon
DecidedJanuary 31, 2018
DocketA161742
StatusPublished
Cited by5 cases

This text of 414 P.3d 454 (Lumm v. CC Servs., Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lumm v. CC Servs., Inc., 414 P.3d 454, 290 Or. App. 39 (Or. Ct. App. 2018).

Opinion

DEHOOG, P.J.

*41Defendants, a corporation and its employees, appeal from the trial court's order denying their motion to compel arbitration of plaintiff's claims and stay judicial proceedings. For the reasons that follow, we conclude that the court erred, reverse, and remand for the trial court to consider defendants' motion under the proper framework.

Plaintiff worked for defendants as an insurance sales agent. The parties dispute whether plaintiff was an employee or an independent contractor, but, as we explain below, that question is immaterial to the present appeal. After defendants terminated their relationship with plaintiff, he filed this action in the circuit court, alleging employment discrimination, retaliation, breach of contract, and other related claims.

Defendants responded by filing a motion to compel arbitration of plaintiff's claims pursuant to the Federal Arbitration Act (FAA)1 and, alternatively, under Oregon law. Defendants relied on an attached copy of defendant-corporation's standard "Agent's Agreement," which plaintiff and a representative of defendant-corporation had signed, and which included the following arbitration language:

"[A]ny claim or controversy relating to or arising out of the relationship between the Agent and the Companies, this Agreement (and/or any agreement superseded by this Agreement), or the termination of this Agreement, whether the parties' rights and remedies are governed or created by contract law, tort law, common law or otherwise, or by federal, state or local statute, legislation, rule or regulations, shall be resolved exclusively by binding arbitration in Bloomington, Illinois (unless otherwise provided by law), by one arbitrator selected by the Companies and the Agent, all in accordance with the commercial arbitration rules of the American Arbitration Association then in effect."

Defendants argued that, to the extent that plaintiff challenged the arbitration provision itself, the arbitrator, not the court, should decide that challenge, because the parties had "clearly and unmistakably agreed to allow the arbitrator to *42decide the arbitration agreement's application, validity, and scope."

Plaintiff responded by arguing that, for two reasons, the trial court could give no effect to the arbitration agreement. First, plaintiff argued that the agreement was unenforceable under ORS 36.620(5), which provides that a "written arbitration agreement entered into between an employer and employee * * * is voidable and may not be enforced by a court" unless certain notice requirements are met.2 In support of that *456argument, plaintiff contended that he had been defendants' employee rather than an independent contractor, and that the requirements of ORS 36.620(5) had not been met.3 Second, plaintiff argued that the arbitration provision was unenforceable because it was unconscionable.

Defendants replied that the FAA preempted ORS 36.620(5), and argued that, under the FAA, a state statute may not impose requirements on arbitration clauses that the statute does not make applicable to contracts in general. According to defendants, whether plaintiff had been an employee or an independent contractor was beside the point, because that federal law prohibited the trial court from applying ORS 36.620(5). In reply to plaintiff's argument *43that the arbitration provision was unconscionable, defendants reiterated that the arbitrator, not the court, should decide that question, along with any other questions about the validity or applicability of the arbitration provision.

The trial court denied defendants' motion to compel arbitration "without prejudice." The court explained that, in its view, "whether or not this is a matter for arbitration * * * is a factual determination," dependent upon whether plaintiff was an employee or an independent contractor. Defendants challenged that reasoning and argued that plaintiff's employment status was "sort of a red herring in this case * * * because the FAA preempts the Oregon law on this point." The trial court disagreed, stating, " I think this is a factual determination, and that will be determined by * * * the trial court."

Defendants took an immediate appeal under ORS 36.730(1)(a), which provides the "exclusive means for appealing from an order denying a petition to compel arbitration." Snider v. Production Chemical Manufacturing, Inc. , 348 Or. 257, 267, 230 P.3d 1 (2010). We review the denial of a motion to compel arbitration for legal error. Gozzi v. Western Culinary Institute, Ltd. , 276 Or.App. 1, 3, 366 P.3d 743, adh'd to as modified on recons. , 277 Or.App. 384, 371 P.3d 1222 (2016).

We begin by rejecting plaintiff's preliminary contention that we must affirm because defendants' opening brief fails to address unconscionability, which plaintiff understands to have been an alternate ground on which the trial court based its order. The rule that a party "cannot seek reversal on appeal by challenging only one of two independent and alternative grounds for a ruling is well-settled and familiar." Strawn v. Farmers Ins. Co. , 350 Or. 521, 527, 256 P.3d 100 (2011). But that is not the case here. The trial court's statements in the course of the hearing on defendant's motion make clear that it ruled as it did solely based on its conclusion that, under ORS 36.620

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Cite This Page — Counsel Stack

Bluebook (online)
414 P.3d 454, 290 Or. App. 39, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lumm-v-cc-servs-inc-orctapp-2018.