Williams v. Litton

865 So. 2d 838, 2003 WL 22998796
CourtLouisiana Court of Appeal
DecidedDecember 23, 2003
Docket03-805
StatusPublished
Cited by3 cases

This text of 865 So. 2d 838 (Williams v. Litton) 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
Williams v. Litton, 865 So. 2d 838, 2003 WL 22998796 (La. Ct. App. 2003).

Opinion

865 So.2d 838 (2003)

Joseph and Stacey WILLIAMS
v.
Thomas C. LITTON, et al.

Nos. 03-805.

Court of Appeal of Louisiana, Third Circuit.

December 23, 2003.
Rehearing Denied February 11, 2004.

*841 Kenneth N. Simmons, Many, LA, Jack L. Simms, Jr., Leesville, LA, for Plaintiffs/Appellees, Joseph Williams, Stacey Williams.

Keith Carter, Rogers, Hearne & Carter, Shreveport, LA, for Defendants/Appellants, Thomas C. Litton, Ronald Dockens.

Mark A. Begnaud, McCoy, Roberts, & Begnaud, Ltd., Natchitoches, LA, for Defendant/Appellant, Weight Loss Development-Denver, LLC.

Court composed of BILLIE COLOMBARO WOODARD, GLENN B. GREMILLION, and ELIZABETH A. PICKETT, Judges.

WOODARD, Judge.

The Defendants appeal an interlocutory ruling, denying a stay of proceedings pending arbitration. We find that the trial court erred in denying their motion. Accordingly, we reverse the ruling, and remand to the trial court to issue a stay, pending arbitration.

* * *

On October 25, 2002, Mr. Litton, Mr. Dockens, and the two Plaintiffs, Joseph Williams and Stacey Williams, formed Weight Loss Development-Denver, L.L.C. (WLD) in order to establish LA Weight Loss Centers, Inc., franchises in different parts of the United States. All four members signed an Operating Agreement which included an arbitration clause. However, the Plaintiffs became displeased with the company's direction and management; therefore, they stopped making their required capital contributions. WLD treated their failure to pay as a forfeiture of their memberships. Plaintiffs filed suit against WLD, its managing member, Mr. Thomas C. Litton, and its only other current member, Mr. Ronald Dockens.

On February 6, 2003, the Plaintiffs filed a "petition relative to limited liability company its dissolution and other related matters," alleging several causes of action against WLD, Mr. Litton, and Mr. Dockens. The Defendants filed a motion to dismiss or, alternatively, to stay proceedings, pending arbitration. Subsequently, the Plaintiffs amended their petition to allege new causes of action, including fraudulent inducement and claims implicating public policy. During pre-trial hearings, the parties agreed that the trial court should dispose of the arbitration issue before conducting any further proceedings.

The trial court concluded that the Plaintiffs' claim that they were fraudulently induced to sign the Operating Agreement was an inarbitrable claim. Accordingly, it denied the Defendants' motion to dismiss or stay the proceedings, pending arbitration. Defendants appeal this ruling. Thus, we must decide whether the trial court was correct.

* * *

PROCEDURE

Initially, we must address confusion in the procedural posture of this case. The Defendants filed, both, this appeal, bearing docket number 03-805, and a writ application, bearing docket number 03-867, which were consolidated. The Plaintiffs argue that the writ was untimely filed. However, we need not address the issue since the denial of Defendants' motion is properly appealable; therefore, we dismiss the writ[1] and review the issues in this appeal.

The Defendants assign, as error, the trial court's failure to incorporate into *842 its written judgment all of the issues agreed upon at the hearing and oral ruling on the motion. Specifically, at the hearing, the trial court agreed that, after it decided the arbitration issue, it would certify the judgment for appeal purposes or do whatever was necessary to allow this court to review its decision and stay further proceedings until we had conducted a review. However, the written judgment did not certify the ruling for appeal nor did it order a stay of the proceedings. Subsequently, the trial court did stay the proceedings so that the Defendants could appeal, but it did not certify the judgment; rather, it found that its ruling constituted an interlocutory judgment and was appealable under La.Code Civ.P. art. 2083. We agree, and therefore, find no error in the trial court's failure to certify its initial judgment.

"[J]urisprudence has held that a judgment refusing to order arbitration is an appealable, interlocutory ruling pursuant to La.Code Civ.P. art. 2083 due to the irreparable injury that would occur were an immediate appeal not available."[2] Defendants argue that there are no deadlines or time delays in which to appeal an interlocutory judgment. However, in Warren v. Southern Energy Homes, Inc.,[3] this court found that La.Code Civ.P. art. 2087 governs the delay for perfecting a devolutive appeal from an interlocutory judgment and that the delay begins to run the day after the trial court's oral ruling.

Notwithstanding, under Article 2087, the appeal is timely. This article allows a party sixty days to appeal. The sixty days begins when the delay for applying for a new trial or JNOV expires. We recognize that no motion for a new trial is allowed in the case of an interlocutory decree.[4] However, in the instant case, the Defendants moved the trial court to reconsider its judgment and amend it to comport with its oral rulings. In response, the trial court did stay the proceedings to allow the Defendants to appeal the interlocutory judgment. Arguably, then, the delay did not begin to run until May 7, 2003, the date the trial court ruled on the motion to reconsider.

However, even assuming that the delay began to run from the trial court's original oral ruling, the appeal is timely. The trial court rendered its oral ruling, denying arbitration on March 14, 2003. Thus, the delay for applying for a new trial, seven days exclusive of legal holidays, would have ended on March 25. The sixtieth day from March 25 was Saturday, May 24. The Defendants appealed on May 21, just before the deadline. Accordingly, the appeal is timely, and we turn to its merits.

CHOICE OF LAW

The trial court did not explicitly determine whether the Federal Arbitration Act (FAA) or Louisiana's arbitration laws govern this dispute. The Operating Agreement provides that Louisiana law governs it. Notwithstanding, Defendants assert that the FAA governs the arbitration provision because the Agreement affects interstate commerce. Further, the Plaintiffs' petition maintains that WLD's purpose was to develop franchise operations in different parts of the United States. The trial court relied on, both, Louisiana cases decided under the FAA, as well as well as on the state supreme court's decision in George Engine,[5] decided *843 under Louisiana arbitration laws. Thus, it implicitly concluded that an analysis of fraud in the inducement of the contract would be the same under the FAA as it would under Louisiana law.

While there is no material difference in the language of the applicable provisions of the FAA and those of Louisiana's arbitration laws, there is a critical difference in the way Louisiana has interpreted that language under the state's arbitration laws and the way that the U.S. Supreme Court has interpreted the same language under the FAA. Thus, the trial court erred in denying Defendants' motion without deciding which law governed. Nonetheless, as the particular facts of this case lead to the same result under either law, we need not remand.

JURISDICTION TO DECIDE ARBITRABILITY

Our first inquiry concerns whether the trial court had jurisdiction to consider the validity and enforceability of the arbitration provision.[6] As the U.S. Supreme Court outlined in Kaplan,[7] an arbitration dispute often presents three distinct issues.

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865 So. 2d 838, 2003 WL 22998796, Counsel Stack Legal Research, https://law.counselstack.com/opinion/williams-v-litton-lactapp-2003.