TRCM, LLC v. Twilight Partnership

706 So. 2d 1037, 1998 WL 18037
CourtLouisiana Court of Appeal
DecidedJanuary 21, 1998
Docket30331-CW
StatusPublished
Cited by2 cases

This text of 706 So. 2d 1037 (TRCM, LLC v. Twilight Partnership) 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
TRCM, LLC v. Twilight Partnership, 706 So. 2d 1037, 1998 WL 18037 (La. Ct. App. 1998).

Opinion

706 So.2d 1037 (1998)

TRCM, LLC, Plaintiff-Respondent,
v.
The TWILIGHT PARTNERSHIP, et al., Defendants-Applicants.

No. 30331-CW.

Court of Appeal of Louisiana, Second Circuit.

January 21, 1998.
Writs Denied March 13, 1998.

*1038 McLeod Verlander by David E. Verlander and Pamela G. Nathan, Monroe, for Defendants-Applicants Twilight Partnership, Dr. Frank X. Cline, Jr., Dr. Myron B. Bailey, Individually and in His Capacity As Trustee of the Myron Bailey, III Minority Trust, Country Lake, Inc., Dr. Rifat M. Nawas, Dr. R. Louis Gavioli and Dr. Sidney L. Bailey.

Jones, Walker, Waechter, Poitevent, Carrere & Denegre by Edward D. Wegmann, New Orleans, for Defendants-Applicants Dr. Douglas C. Brown and Achnacary, Inc.

Hayden, Moore & Ryan by G. Scott Moore, Monroe, for Defendant-Applicant Dr. Rifat M. Nawas.

Ward, Nelson & Pelleteri by Joseph R. Ward, Jr., Lisa A. Condrey, Lynn H. Frank and James E. Brouillette, New Orleans, for Plaintiff-Respondent.

Before MARVIN, C.J., and HIGHTOWER and STEWART, JJ.

MARVIN, Chief Judge.

In this action by TRCM alleging vices of consent to nullify a contract containing an arbitration provision, we initially declined to exercise supervisory review of the trial court's ruling denying the motions of the applicant-defendants to compel arbitration. We found no palpable error in the trial court's reliance on George Engine Co., Inc. v. Southern Shipbuilding Corp., 350 So.2d 881 (La.1977).[1]

The supreme court thereafter granted a supervisory writ on December 12, 1997 and remanded this matter to us. We ordered additional briefing and argument and now render our opinion on the merits as directed by the supreme court.

Distinguishing the arbitration provision in this contract from the one in George Engine, supra, we reverse the ruling of the trial court, rendering and remanding with directions to enforce the arbitration provision.

DISCUSSION

The issue is jurisdictional: Whether the substantive contract containing the arbitration provision that any controversy arising out of the agreement or the ... validity thereof is to be resolved by the court or by an arbitration panel. One or more vices of consent in the inducement of the contract, if proved to the satisfaction of the proper forum [either the court or the arbitration panel], of course, would nullify the contract.

We find no gross difference in the language of the federal and Louisiana arbitration laws discussed hereafter, but note that the federal courts generally decline to enforce arbitration only in those instances *1039 where it is alleged and proved that a vice of consent in the inducement of the specific agreement to arbitrate clause itself vitiates the clause. See Prima Paint Corp. v. Flood and Conklin Mfg. Co., 388 U.S. 395, 87 S.Ct. 1801, 18 L.Ed.2d 1270(1967). See discussion and authorities cited in Freeman, supra, discussed and distinguished in Sun Drilling, supra. See discussion and authorities cited in Stone v. Stone, 292 So.2d 686 (La.1974). Louisiana courts are not as consistent. Compare Louisiana cases cited in the first paragraph. Also compare Bodman, Murrell & Webb v. Acacia Foundation of L.S.U., Inc., 246 So.2d 323 (La.App. 1st Cir.1971), writ denied, 258 La. 766, 247 So.2d 864 (1971).

Case Posture

To the action of TRCM alleging vices of consent [misrepresentations] in the inducement of its contract with the defendant Twilight partnership, the partnership and its members, also defendants, filed an exception of prematurity, a motion to stay, a motion to compel arbitration and a motion for sanctions. These pleadings sought to have TRCM's petition dismissed, or alternatively stayed, and TRCM ordered to submit the dispute to arbitration. Twilight relies on paragraph 19(I) of the contract:

Any controversy or claim arising out of or relating to this agreement or the breach or validity thereof shall be settled by arbitration in Monroe, Louisiana by a panel of three arbitrators in accordance with the rules of the American Arbitration Association. Judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof, and the parties consent to the jurisdiction of the Louisiana courts for this purpose.

State and Federal Law

We italicize the identical statutory language:

After defining interstate commerce in 9 U.S.C. § 1 as commerce among the several states, the federal law in 9 U.S.C. § 2 states that a written provision in a contract:

... evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.

La. R.S. 9:4201 states:

A provision in any written contract to settle by arbitration a controversy thereafter arising out of the contract, or out of the refusal to perform the whole or any part thereof, or an agreement in writing between two or more persons to submit to arbitration any controversy existing between them at the time of the agreement to submit, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.

Other Louisiana provisions relating to actions to enforce an arbitration provision in a contract require that the

... court in which suit is pending, upon being satisfied that the issue involved in the suit or proceedings is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until an arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with the arbitration. § 4202.

Section 4203 then provides the procedure for judicially enforcing an arbitration provision and states in part:

The court shall hear the parties, and upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not an issue, the court shall issue an order directing the parties to proceed to arbitration in accordance with the terms of the agreement. If the making of the arbitration agreement or the failure or refusal to perform is an issue, the court shall proceed summarily to the trial thereof.

Both state and federal jurisprudence reflect a strong legislative policy favoring arbitration. *1040 Any doubt as to whether a controversy is arbitrable should be resolved in favor of arbitration. Russellville Steel Co., Inc. v. A & R Excavating, Inc., 624 So.2d 11 (La.App. 5th Cir.1993); cases cited supra.

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Cite This Page — Counsel Stack

Bluebook (online)
706 So. 2d 1037, 1998 WL 18037, Counsel Stack Legal Research, https://law.counselstack.com/opinion/trcm-llc-v-twilight-partnership-lactapp-1998.