New Orleans Private Patrol Service, Inc. v. Valiant Payroll Service, Inc.

56 So. 3d 1084, 2010 La.App. 4 Cir. 1117, 2011 La. App. LEXIS 41, 2011 WL 188841
CourtLouisiana Court of Appeal
DecidedJanuary 19, 2011
DocketNo. 2010-CA-1117
StatusPublished
Cited by1 cases

This text of 56 So. 3d 1084 (New Orleans Private Patrol Service, Inc. v. Valiant Payroll Service, 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
New Orleans Private Patrol Service, Inc. v. Valiant Payroll Service, Inc., 56 So. 3d 1084, 2010 La.App. 4 Cir. 1117, 2011 La. App. LEXIS 41, 2011 WL 188841 (La. Ct. App. 2011).

Opinions

EDWIN A. LOMBARD, Judge.

liThe plaintiff, New Orleans Private Patrol Service, Inc. (NOPPS), appeals the trial court’s judgment granting the defendants’ motion to dismiss based on declina-tory exceptions of lack of subject matter jurisdiction and improper venue, as well as a dilatory exception of prematurity or peremptory exception of no cause of action which resulted in the trial court ordering the parties to arbitration. After review of the record in light of the applicable law and arguments of the parties, we affirm the ruling of the trial court.

Relevant Facts and Procedural History

On November 14, 2007, NOPPS and the defendants, Valiant Payroll Service, Inc., and Valiant Communication, Inc., entered into a Master Software License and Services Agreement, whereby the plaintiff purchased a payroll software system from the defendants. The plaintiff gave the defendants a down payment of $9,497.00 and advanced the defendants $1,260.00 for training. After the contract was signed and the payments made, the plaintiff realized that the defendants’ systems did not have the requirements that it needed to handle its payroll. The plaintiff alleges that it demanded return of the down payment and |2advance for training from the defendants. When the defendants refused, the plaintiff filed the present action seeking return of the monies paid to the [1086]*1086defendants. The plaintiff alleges that there was no contract because there was error on the defendants’ part and no consent by the plaintiff.

The defendants responded by filing a “Motion and Order to Dismiss Based on Declinatory Exceptions of Lack of Subject Matter Jurisdiction or Improper Venue or Dilatory Exception of Prematurity or Peremptory Exception of No Cause of Action or Alternative Motion to Stay or Further Alternative Dilatory Exception of Vagueness” based upon the arbitration agreements in the Master Software License and Services agreement. The plaintiff opposed the motion, arguing that the arbitration agreements do not control because the Master Software License and Services Agreement was null and void due to error and lack of consent. After a hearing on May 11, 2010, the trial court rendered judgment on May 20, 2010, granting the motion to dismiss and ordering the matter to arbitration. This appeal follows.

Applicable Law

The determination as to whether to stay or to compel arbitration is a question of law. Billieson v. City of New Orleans, 2002-1993, p. 3 (La.App. 4 Cir. 9/17/03), 863 So.2d 557, 560. The threshold inquiry is whether the parties agreed to arbitrate their dispute, which is a twofold inquiry: (1) whether there is a valid arbitration agreement, and (2) whether the dispute in question falls within the scope of that agreement. Lakeland Anesthesia, Inc. v. United Healthcare of Louisiana, Inc., 2003-1662, p. 9 (La.App. 4 Cir. 3/17/04), 871 So.2d 380, 388. The question of whether the parties have submitted a particular dispute to ^arbitration — arbitra-bility — is generally one for the court to decide. Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83, 123 S.Ct. 588, 154 L.Ed.2d 491 (2002).

The Louisiana Arbitration Law is set forth in La.Rev.Stat. 9:4201 through 4217. Louisiana courts look to federal law in interpreting the Louisiana Arbitration Law because it is virtually identical to the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1 et seq. Lakeland Anesthesia, Inc. v. CIGNA Healthcare of LA, Inc., 2001-1059, p. 3 (La.App. 4 Cir. 2/6/02), 812 So.2d 695, 698; Firmin v. Garber, 353 So.2d 975, 977 (La.1977). The Federal Arbitration Act establishes that as a matter of preemptive federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the issue at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitra-bility. Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). The United States Supreme Court has made it clear that the substantive provisions of the FAA preempt state law and govern all written arbitration agreements in contracts connected to transactions involving interstate commerce. Id. The phrase “involving commerce” has been interpreted as the functional equivalent of “affecting commerce.” Allied-Bruce Teminix Cos., Inc. v. Dobson, 513 U.S. 265, 277, 115 S.Ct. 834, 130 L.Ed.2d 753 (1995). Furthermore, the Supreme Court has concluded that Congress intended to exercise its commerce powers to the fullest in legislating in favor of arbitration. .Id. Whether a claim is brought in state court or federal court, and whether a claim is based on state or federal law, courts must enforce arbitration agreements in contracts covered by the FAA, notwithstanding any state statutory or jurisprudential rules to the contrary. Southland Corp. v. Keating, 465 U.S. 1, 104 S.Ct. 852, 79 L.Ed.2d 1 (1984).

[/‘Louisiana courts have also recognized the heavy weight of this presumption”, noting that as to issues of arbitrability, “even if some legitimate doubt could be hypothesized the Supreme Court requires [1087]*1087resolution of the doubt in favor of arbitration.” Dufrene v. HBOS Mfg., 2003-2201, p. 4 (La.App. 4 Cir. 4/17/04), 872 So.2d 1206, 1210 (citation and internal quotation omitted).

Discussion

The plaintiff does not dispute that there are arbitration provisions in the signed agreements but, rather, contends that the agreements are null and void because there was error and lack of consent in the confection of the agreements, citing George Engine Co., Inc. v. Southern Shipbuilding, Corp., 350 So.2d 881 (La.1977) as authority for its argument that the trial court must first determine the validity of the agreement before it can order arbitration.

The defendants assert that arbitration is mandated because the license agreement and the services agreement include an arbitration provision. Notably, federal law supports this argument. The United States Supreme Court in Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967), interpreting statutory language (9 U.S.C. § 2)1 similar to the Louisiana statute, held that a trial court is confined to an analysis of whether the arbitration provision standing alone is valid and enforceable. See also Preston v. Ferrer, 552 U.S. 346, 128 S.Ct. 978, 169 L.Ed.2d 917 (2008) and Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 126 S.Ct. 1204, 163 L.Ed.2d 1038 (2006) (reaffirming holding in

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56 So. 3d 1084, 2010 La.App. 4 Cir. 1117, 2011 La. App. LEXIS 41, 2011 WL 188841, Counsel Stack Legal Research, https://law.counselstack.com/opinion/new-orleans-private-patrol-service-inc-v-valiant-payroll-service-inc-lactapp-2011.