Case Title: TPR, Inc. v. Paychex, Inc.

Citation: 

Docket Number: 2020 ME 79

State: maine

Court: Maine Supreme Court

Date: 2020-06-02T00:00:00Z

Document:
MAINE SUPREME JUDICIAL COURT 
 
 
 
 
 
Reporter of Decisions 
Decision: 
2020 ME 79 
Docket: 
Yor-19-229 
Submitted 
On Briefs: April 14, 2020 
Decided: 
June 2, 2020 
Revised: 
January 28, 2021 
 
Panel: 
MEAD, GORMAN, JABAR, and HUMPHREY, JJ., and HJELM, A.R.J. 
 
 
TPR, INC.  
 
v. 
 
PAYCHEX, INC. 
 
 
HUMPHREY, J. 
 
[¶1]  Paychex, Inc., appeals from an order entered by the Superior Court 
(York County, O’Neil, J.) denying its motion to compel arbitration of, and dismiss 
all counts in, a complaint filed against it by TPR, Inc.  Because the court did not 
make the statutorily required determination as to whether the parties agreed 
to arbitrate the dispute, we vacate the order and remand for further 
proceedings. 
I.  BACKGROUND 
 
[¶2]  We derive the following undisputed facts and procedure from the 
parties’ pleadings and affidavits and the court’s record.  See Snow v. Bernstein, 
 
 
2 
Shur, Sawyer & Nelson, P.A., 2017 ME 239, ¶ 2, 176 A.3d 729; Stenzel v. Dell, Inc., 
2005 ME 37, ¶ 6, 870 A.2d 133. 
 
[¶3]  In 2017, TPR and Paychex entered into a contract whereby Paychex 
would provide payroll services to TPR.  In January of 2019, TPR filed a 
complaint against Paychex in which it asserted claims for breach of contract, 
fraud, and negligence.   
[¶4]  Paychex moved to dismiss TPR’s complaint and to compel 
arbitration, see 14 M.R.S. § 5928 (2020), arguing that its contract with TPR 
contains an arbitration clause that covers TPR’s claims.  With its motion, 
Paychex submitted an affidavit with an attached exhibit that Paychex 
represented to be the operative contract between it and TPR and that contains 
an arbitration clause.  TPR, opposing Paychex’s motion, submitted its own 
affidavit asserting that the exhibit submitted by Paychex is not the operative 
agreement between the parties.  At a nontestimonial hearing on the matter, TPR 
presented the court with a different document—which it represented to be the 
actual operative agreement—that does not contain any arbitration clause.1   
 
1  To further complicate matters, at the hearing, Paychex acknowledged that the exhibit it 
submitted with its motion was not the operative agreement but was instead a prior contract between 
the parties; with the court’s permission, Paychex then introduced a third version of the document—
again containing an arbitration provision—that it asserts is the true agreement.  Thus, the parties 
continue to dispute, and the court has not yet resolved, which of these documents constitutes the 
operative agreement between TPR and Paychex. 
 
 
3 
 
[¶5]  On May 14, 2019, the court denied Paychex’s motion, explaining 
that, because the parties continue to dispute which document constitutes the 
operative agreement, “[a]t this preliminary stage—when factual disputes must 
be resolved in favor of the non-moving party—the Court cannot conclude as a 
matter of law that the parties entered into a valid agreement to arbitrate.”   
 
[¶6]  Paychex timely appealed.2  See M.R. App. 2B(c)(2)(D).   
II.  DISCUSSION 
 
[¶7]  “We review a trial court’s decision on a motion to compel arbitration 
for errors of law and for facts not supported by substantial evidence in the 
record.”  Stenzel, 2005 ME 37, ¶ 6, 870 A.2d 133 (quotation marks omitted). 
 
[¶8]  Title 14 M.R.S. § 5928(1) provides that if a party opposing a motion 
to compel arbitration “denies the existence of [an] agreement to arbitrate, the 
court shall proceed summarily to the determination of the issue so raised.”  
Although we have never explained the process by which a court ruling on a 
motion to compel arbitration should “summarily” resolve quintessentially 
factual disputes—such as the one presented here—at this stage, we have 
repeatedly affirmed trial court determinations reached at this stage of 
 
2  As the parties agree, interlocutory orders denying motions to compel arbitration are 
immediately appealable.  See 14 M.R.S. § 5945(1)(A) (2020).   
 
 
4 
proceedings regarding the existence and enforceability of arbitration 
agreements based on affidavits and exhibits.  See, e.g., Snow, 2017 ME 239, ¶¶ 7, 
20-23, 176 A.3d 729; Stenzel, 2005 ME 37, ¶¶ 6, 9-13, 870 A.2d 133. 
 
[¶9]  The trial court denied Paychex’s motion without making the finding 
regarding arbitrability required by section 5928(1).  Rather, perhaps because 
Paychex misleadingly framed its motion as primarily a motion to dismiss the 
complaint, see infra n.3, the court denied the motion based entirely on the mere 
existence of a material factual dispute between the parties.  We agree with the 
trial court that the sparse record developed thus far does not permit such a 
determination as a matter of law; rather, in the confusing record presented to 
the court, the only clarity is that the parties dispute which of two exhibits—the 
one with the arbitration clause or the one without—constitutes their 2017 
agreement.3  Accordingly, we vacate the judgment and remand for the court to 
“proceed summarily” to determine whether the parties agreed to arbitrate 
 
3  In addition to the manner in which the parties presented multiple versions of the purported 
agreement to the court, the confusion seems to have been exacerbated by the conjunction of 
Paychex’s motion to compel arbitration with its motion to dismiss TPR’s complaint.  The substance 
of Paychex’s motion, however, makes clear that its motion to dismiss was predicated upon the court 
granting its motion to compel arbitration—essentially, Paychex asked the court to compel arbitration 
of all of TPR’s claims and then dismiss the (resulting empty) complaint.  We do not address whether 
dismissal, rather than a stay, would be proper in such a circumstance, see 14 M.R.S. § 5928(4) (2020); 
we note the issue only to explain why the pendency of the motion to dismiss did not obviate 
resolution of the factual dispute regarding the existence of an arbitration agreement. 
 
 
5 
TPR’s claims.  14 M.R.S. § 5928(1).  This summary procedure may include, if the 
court deems it necessary, a period of limited discovery followed by adjudication 
pursuant to a summary judgment standard or even, should a genuine dispute 
remain, a testimonial hearing.4  See Guidotti v. Legal Helpers Debt Resolution, 
L.L.C., 716 F.3d 764, 773-76 (3d Cir. 2013). 
The entry is: 
Judgment vacated.  Remanded for further 
proceedings consistent with this opinion. 
 
 
 
 
 
 
 
 
Dawn M. Harmon, Esq., Perkins Thompson, P.A., Portland, for appellant 
Paychex, Inc.  
 
Neal L. Weinstein, Esq., Old Orchard Beach, for appellee TPR, Inc.  
 
 
York County Superior Court docket number CV-2019-11 
FOR CLERK REFERENCE ONLY 
 
4  Because the very existence of an agreement to arbitrate remains unproved, we do not, despite 
TPR’s urging, address whether TPR’s fraud claim would fall within the scope of the arbitration 
provision in Paychex’s version of the contract nor, indeed, whether the initial resolution of that 
question belongs to a court rather than to an arbitrator.  See Snow v. Bernstein, Shur, Sawyer & Nelson, 
P.A., 2017 ME 239, ¶ 10, 176 A.3d 729; V.I.P., Inc. v. First Tree Dev. Ltd. Liab. Co., 2001 ME 73, ¶ 4, 770 
A.2d 95.