Sullivan v. Mounger

882 So. 2d 129, 2004 WL 1470541
CourtMississippi Supreme Court
DecidedJuly 1, 2004
Docket2002-IA-01463-SCT
StatusPublished
Cited by30 cases

This text of 882 So. 2d 129 (Sullivan v. Mounger) is published on Counsel Stack Legal Research, covering Mississippi Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sullivan v. Mounger, 882 So. 2d 129, 2004 WL 1470541 (Mich. 2004).

Opinion

882 So.2d 129 (2004)

Jerry M. SULLIVAN, Jr.,
v.
William M. MOUNGER, II, E.B. Martin, Jr. and Tritel, Inc.

No. 2002-IA-01463-SCT.

Supreme Court of Mississippi.

July 1, 2004.
Rehearing Denied September 23, 2004.

*130 Dana E. Kelly, William I. Gault, Jr., C. York Craig, Jackson, and Ricky G. Luke, for appellant.

Glenn Gates Taylor, Ridgeland, Donald James Blackwood, Jr., Phillip Samuel Sykes, Jackson, and Constance Slaughter Harvey, Forest, for appellees.

Before SMITH, C.J., CARLSON and DICKINSON, JJ.

DICKINSON, Justice, for the Court.

¶ 1. This is an interlocutory appeal of a circuit court order requiring Jerry M. Sullivan, Jr. to arbitrate his claims against William M. Mounger, II, E.B. Martin, Jr., and Tritel, Inc. We affirm.

BACKGROUND FACTS

¶ 2. Mounger, Martin and Sullivan were founders of various entities that ultimately became Tritel, which built and operated a wireless telephone network. On May 20, 1998, Mounger, Martin, Sullivan, AT & T Wireless Services, Inc. and other investors executed a Securities Purchase Agreement which established the framework culminating in the transfer of Personal Communications System ("PCS") licenses into Tritel and the capitalization and funding of the company necessary to construct and operate a PCS system. Mounger, Martin and Sullivan received ownership interests in, and on January 7, 1999 entered employment agreements with, Tritel. A disagreement arose and on May 14, 1999, Sullivan was relieved of his responsibilities for the construction of Tritel's wireless network. Within a few weeks, Sullivan and Tritel each hired attorneys and agreed to mediate their disputes.

¶ 3. During late May, June and part of July, 1999, the parties and their attorneys, *131 working with the mediator, negotiated a global settlement agreement which allegedly resolved Sullivan's employment status with Tritel, his ownership of stock in the company, and various other issues.

¶ 4. On July 21, 1999, the parties entered into an agreement titled "Summary Term Sheet Jerry M. Sullivan Agreement" which contained the principal terms of their agreement, including an arbitration provision. After the execution of this document, the respective attorneys worked to prepare the "Transaction Documents" needed to fully set out the terms of their agreement. The documentation included the following:

1) Stock Purchase Agreement (Tritel);
2) Membership Purchase Agreement (Tritel Management);
3) Stock Purchase Agreement (MSM);
4) Second Amendment to Stockholders' Agreement;
5) First Amendment to Management Agreement;
6) Amended and Restated Employment Agreement; and
7) Mutual Release and Termination Agreement.

¶ 5. These documents are consistently referred to collectively, throughout the documentation, as the "Transaction Documents."

¶ 6. Under the terms of the Amended and Restated Employment Agreement, Sullivan would receive an annual salary of $225,000, and an annual bonus of $112,500.00, for three years. He would also receive an annual $100,000 business expenditure/expense budget, for two years. These amounts, which exceeded $1.2 million, were to be paid to Sullivan, whether or not he performed any work.

¶ 7. Under the terms of the Stock Purchase Agreement (Tritel), Tritel repurchased 3,186.92 of Sullivan's 7,686.92 shares of common stock for one cent ($.01) per share, $31.90, and Sullivan's three shares of voting preference stock, for the total sum of $10.00.

¶ 8. On November 4, 1999, Sullivan signed the Transaction Documents. Fifteen days later, Tritel announced that it intended an initial public offering of its stock, and on December 13, 1999, Tritel offered its stock to the public for $18.00 per share.

¶ 9. On December 3, 2001, Sullivan filed suit against Mounger, Martin and Tritel, alleging that they fraudulently induced him to enter into the Stock Purchase Agreement (Tritel), and the Mutual Release and Termination Agreement. The defendants responded by filing a Motion to Dismiss or Stay Pending Binding Arbitration and Other Relief.

¶ 10. On May 14, 2002, the trial court entered its order granting defendants' motion and ordering Sullivan to submit his claims to binding arbitration before the American Arbitration Association ("AAA"). Sullivan responded by filing a petition for interlocutory appeal. The trial court entered its order granting certification for interlocutory appeal, and the petition requesting an interlocutory appeal was then filed here.

¶ 11. While the interlocutory appeal was pending before this Court, the parties proceeded to conduct discovery for the arbitration. Sullivan did not request a stay of the arbitration proceedings, and his claims were heard before a panel of three AAA arbitrators. The arbitration concluded on January 10, 2003, and the panel of arbitrators took the matter under advisement.

¶ 12. On February 8, 2003, while the arbitration was under advisement, this Court granted Sullivan's Petition for Interlocutory Appeal. See M.R.A.P. 5. Thereafter, *132 on March 21, 2003, the panel of arbitrators rendered its decision, finding in favor of defendants, but awarding Sullivan certain expenses he incurred during the arbitration proceeding.

¶ 13. Sullivan now seeks to have us hold the arbitration void and allow him to proceed to trial in the circuit court. This we decline to do.

STANDARD OF REVIEW

¶ 14. This Court conducts de novo review on both motions to dismiss and motions to compel arbitration. East Ford, Inc. v. Taylor, 826 So.2d 709, 713 (Miss.2002). "In determining the validity of a motion to compel arbitration under the Federal Arbitration Act, courts generally conduct a two-pronged inquiry. The first prong has two considerations: (1) whether there is a valid arbitration agreement and (2) whether the parties' dispute is within the scope of the arbitration agreement." Id. The second prong considers "whether legal constraints external to the parties' agreement foreclosed arbitration of those claims." Id.

DISCUSSION

¶ 15. The issue on interlocutory appeal is whether the circuit court erred by compelling arbitration based on an arbitration provision contained in one of the Transaction Documents which is not complained of in Sullivan's lawsuit.

¶ 16. In its order granting certification for interlocutory appeal, the trial court certified the question of law: "Whether the arbitration provision relied upon by the defendants is enforceable and applicable to the claims of Plaintiff." To answer the question, we turn to the test followed in East Ford.

Did the parties enter a valid arbitration agreement?

¶ 17. Sullivan's Complaint is based on the Stock Purchase Agreement (Tritel) and the Mutual Release and Termination Agreement, neither of which contained an arbitration provision. However, all parties agree that both documents were part of the Transaction Documents.

¶ 18. The arbitration provision at issue was included in the Amended and Restated Employment Agreement. The provision, entitled "Resolution of Disputes," states in pertinent part:

All disputes, controversies and claims arising in connection with this Agreement that are not settled by agreement between the parties shall be finally settled under the Commercial Arbitration Rules of the American Arbitration Association ("AAA") in effect from time to time....

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Cite This Page — Counsel Stack

Bluebook (online)
882 So. 2d 129, 2004 WL 1470541, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sullivan-v-mounger-miss-2004.