Case Name: SANDERSON FARMS, INC. v. Roy R. GATLIN and Nelda T. Gatlin
Court: Mississippi Supreme Court
Jurisdiction: Mississippi
Decision Date: 2003-06-26
Citations: 848 So. 2d 828
Docket Number: No. 2000-IA-00790-SCT
Parties: SANDERSON FARMS, INC. v. Roy R. GATLIN and Nelda T. Gatlin.
Judges: DIAZ, EASLEY AND GRAVES, JJ., CONCUR. PITTMAN, C.J., AND WALLER, J., CONCUR IN RESULT ONLY. COBB, J., DISSENTS WITH SEPARATE WRITTEN OPINION JOINED BY SMITH, P.J. AND CARLSON, J.
Reporter: Southern Reporter, Second Series
Volume: 848
Pages: 828–864

Head Matter:
SANDERSON FARMS, INC. v. Roy R. GATLIN and Nelda T. Gatlin.
No. 2000-IA-00790-SCT.
Supreme Court of Mississippi.
June 26, 2003.
Richard 0. Burson, Laurel, Brooke Ferris, Richard A. Follis, Laurel, attorneys for appellant.
Lawrence E. Abernathy, III, Laurel, John Dudley Butler, Michael J. Quirk, attorneys for appellees.

Opinion:
McRAE, Presiding Justice,
for the Court.
¶ 1. In this permissive interlocutory appeal, Sanderson Farms, Inc. (Sanderson Farms) seeks review of an order of the Circuit Court of Jones County, Mississippi denying its motion to dismiss and motion to reconsider. Sanderson Farms asserts that the circuit court erred in refusing to dismiss the complaint of Roy R. and Nelda T. Gatlin who by executed contract agreed to binding arbitration of any disputes or controversies relating to or arising out of a Broiler Production Agreement executed January 1, 1997. The circuit court found that Sanderson Farms had breached the arbitration provision and thereby waived its protections and that the arbitration provision was unconscionable and unenforceable. We find that the circuit court did not err, affirm the order denying the motion to dismiss and motion to reconsider, and remand this case for further proceedings.
FACTS
¶ 2. Roy R. Gatlin (Roy) first contracted with Sanderson Farms to grow chickens for the company in November of 1980. Pursuant to contract, Sanderson Farms would deliver chickens to Roy's farm, and Roy would raise the chickens to maturity. Roy's original contract with Sanderson Farms contained no provision regarding arbitration. Roy was ranked in the top 50% of the company's growers and was authorized by Sanderson Farms to build two (2) additional broiler houses. Roy and Nelda Gatlin (Nelda) pledged their farm, which included their home and four (4) broiler houses, as security on a mortgage of over $250,000, to secure the necessary money to pay for the two (2) additional broiler houses.
¶ 3. In 1996, Roy joined the Mississippi Contract Poultry Growers Association (Mississippi Poultry Growers). During this time, the Mississippi Poultry Growers and Sanderson Farms were engaged in discussions and negotiations concerning proposed changes to the broiler contract, which was mandated for each grower who participated in Sanderson Farms broiler growing program. Correspondence between the Mississippi Poultry Growers and Sanderson Farms evidence the apprehension that poultry growers in Mississippi had with Sanderson Farms' proposed broiler contract which included an arbitration provision.
¶ 4. In January of 1997, Sanderson Farms presented a new fifteen (15) year contract to Roy. Only Roy signed the new contract. The new Broiler Production Agreement (broiler contract) contained a mandatory arbitration clause. The arbitration provision appeared on the sixth page of the eight-page contract buried in section twenty-seven and in no more than font size nine (9) as illustrated below. The bold face type was added by this Court to emphasize the phrases of the provision which are primarily at issue in this appeal. The arbitration provision provided that:
27. ARBITRATION. Any controversy or claim arising between the parties ., including but not limited to, disputes relating to this Agreement, the arbitra-bility of any dispute relating to this Agreement, or of any breach of this Agreement, whether such controversy or claim arises before, during or after termination of this Agreement, will be settled by binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association by a panel of three arbitrators. The Agreement to arbitrate will continue in full force and effect despite expiration, recision, or termination of this Agreement. By entering into this Agreement, the parties waive the right to have any dispute arising between them tried and adjudicated by a court of law. Without inconsistency with this agreement to arbitrate, either party may seek from a court any provisional remedy that may be necessary to prevent irreparable harm, pending the establishment of the arbitral panel or its determination of the merits of the controversy. Risk of loss of all or part of the Flock will be deemed irreparable harm. The seeking of any provisional remedy by either party shall be supplemental to, and not in place of, Sanderson's contractual right to repossess a Flock pursuant to Section 24.
Upon objection by any party, multiparty arbitration shall not be utilized. The parties herein agree to resolve all disputes by such arbitration using the American Arbitration Association office with the closet geographic proximity to Sanderson's local complex. The arbitration will take place at a location mutually agreed to by the parties. In reaching their conclusions, the arbitrators will apply to this Agreement the law which a Mississippi court would apply. The arbitration will have the authority to award actual money damages as provided in Section 15 (with interest on unpaid amounts from the date due), specific performance, and temporary injunctive relief, but the arbitrators shall not have the authority to award exemplary or punitive damages, and the parties expressly waive any claimed right to such damages. Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. The cost of such arbitration will be divided equally among the parties to the arbitration. Each party will bear the costs of their own expenses and attorney's fees. Failure to arbitrate all such claims or controversies arising under or related to this Agreement shall be deemed a breach of the Agreement. Notwithstanding anything to the contrary, either party may terminate the Agreement prior to or without arbitration in accordance with Sections 22, 23, 24, 25.
(emphasis added). "Cost" is not defined in the broiler contract. Additionally, on page eight (8) in no more than font ten (10) as illustrated below, above the signatures of the parties, the broiler contract states:
THE UNDERSIGNED DOES HEREBY DECLARE THAT THE TERMS OF THIS AGREEMENT HAVE BEEN COMPLETELY READ AND FULLY UNDERSTOOD. THIS AGREEMENT CONTAINS ARBITRATION LANGUAGE WHICH IS BINDING.
(emphasis in original). Sanderson Farms required Roy to accept the new contract containing the arbitration clause in order to keep doing business with the company. Roy, who was $250,000 in debt at the time, signed the contract. Everything ran smoothly for a year until December of 1997 when Roy heard rumors that Sander-son Farms was going to try to terminate his contract.
¶ 5. On Christmas Day, 1997, Sanderson Farms called Roy and told him to come into its office the next day. Sanderson Farms terminated its contract with Roy on December 26, 1997, to be effective January 1, 1998. There were still fourteen years remaining on the contract. Sanderson Farms' termination letter stated that termination came as the result of Roy's violation of section 23(c) of the contract which allowed termination if Roy "fails to comply with applicable federal, state or local laws or regulations." Sanderson Farms justified the termination by asserting that Roy had committed one violation of Mississippi Board of Animal Health, Regulation 13(V) which addresses disposal of dead poultry. This alleged violation later was found out to be untrue, and it was discovered that Roy had readily passed the Board of Animal Health's inspection. In fact, no complaint was ever filed and no adjudication of guilt was ever had against Roy for the alleged violation which Sanderson Farms argues supports the broiler contract termination.
¶ 6. Upon termination, Sanderson Farms took Roy's most recent shipment of chickens and sent them to another grower. Roy immediately contacted every poultry processing company in the area, but all refused to deliver chickens to him.
¶ 7. In February 1998, Roy filed a demand for arbitration against Sanderson Farms based on the company's termination of the contract. To initiate the arbitration, Roy paid the initial administrative fee of $2,000. Roy and Sanderson Farms then participated in mediation which led to no resolution of the matter but cost Roy an additional $750. In total, Roy paid $2,750. Pursuant to the arbitration provision in the contract, Roy called upon Sanderson Farms to split the expenses of the arbitration. The pertinent provision states:
The cost of such arbitration will be divided equally among the parties to the arbitration. Each party will bear the costs of their own expenses and attorney's fees.
Upon receiving the demand, Sanderson Farms claimed that the sentence reading "[ejach party will bear the costs of their own expenses" means that Roy must bear the costs of the initial filing fees. Sander-son Farms claims that the sentence "[t]he cost of such arbitration will be divided equally among the parties" only means that the actual costs of arbitration will be divided equally among the parties.
¶ 8. Then in 1999, prior to any hearing, Roy was informed that he owed an additional $8,250 in arbitrator's compensation, expenses to be reimbursed to arbitrator, administrative fee for hearing, and miscellaneous expenses. The $8,250 charge was only an estimate. More fees could be charged once the arbitration proceeding began. Additionally, the $8,250 charge was to be paid up front before arbitration will even be initiated. However, the record does not indicate whether the $8,250 charge was Roy's half of the arbitration costs or whether that was the total of the arbitration costs. Since prior to the issuance of the bill for the additional $8,250 charge, the American Arbitration Association had been notified by Sanderson Farms and informed that it would be paying "one-half $) of the cost of the arbitration itself, including arbitrator compensation and expenses, reporting service cost, hearing fees and, if necessary hearing room rental," it can only be assumed that the bill issued to Roy for the additional $8,250 represented his one-half Qk) of the additional arbitration costs.
¶ 9. In September of 1999, after receiving Sanderson Farms' letter refusing to split the fees, Roy and Nelda filed this suit in the Circuit Court of Jones County, Mississippi. Their complaint alleged intentional infliction of emotional distress and willful and intentional breach of contract in arbitrarily terminating the broiler contract and in refusing to pay arbitration fees in accordance with the broiler contract. The complaint sought compensatory damages, attorneys fees, simple tort damages, and punitive damages. The filing fee in Jones County cost Roy and Nelda $94.00.
¶ 10. Sanderson Farms filed a motion to dismiss arguing that Roy had signed a broiler contract wherein he agreed to binding arbitration and that the circuit court should dismiss the action as arbitration is the proper forum for any disputes between the two. In their response to the motion to dismiss the Gatlins argued that Sander-son Farms had breached the contract and waived any right to submit the dispute to arbitration by refusing to pay the required fees under the arbitration agreement. Sanderson Farms filed a rebuttal memorandum claiming that Nelda had no actionable claim since she had no contractual relationship with the company and arguing that it had not breached the arbitration agreement or waived its right to arbitration. Roy and Nelda's rebuttal memorandum argued that the initial filing fees and up front costs required for arbitration were indeed costs of arbitration under the contract language, and that Sanderson Farms' refusal to pay its one-half share was a breach of the arbitration provision which constituted a waiver of any right to arbitrate.
¶ 11. Two separate evidentiary hearings were held in the circuit court. Roy and Nelda presented the circuit court with a letter confirming that they indeed had initiated arbitration and paid up front fees totaling $2,750. They also presented a letter from Sanderson Farms to the Supervisor of Case Administration for the American Arbitration Association which denies that by agreement Sanderson Farms is required to split the initial arbitration fees. Sanderson Farms' letter dated March 10, 1998, states in pertinent part:
I am in receipt of your letter dated March 3, 1998 regarding the $750.00 outstanding for the filing fee in this dispute. This will advise that contrary to what Mr. Butler [Roy and Nelda's Attorney] may have told you in your telephone conversation, the contract at issue does not provide that a non-filing party is responsible for paying one-half ( ]é) of the filing fee. The contract provides that "the cost of . arbitration will be divided equally among the parties to the arbitration. Each party will bear the cost of their own expenses and attorneys' fees." It is Sanderson Farms' position that the "cost of arbitration" was never intended to include the filing fee for initiation of proceedings. The filing fee is Mr. Gatlin's expense which the contract requires he bear....
Sanderson Farms intends to pay one-half (fé) of the cost of the arbitration itself, including arbitrator compensation and expenses, reporting service costs, hearing fees and, if necessary, hearing room rental. However, the contract at issue does not require Sanderson Farms to finance the filing of a claim against it. Therefore, it is Mr. Gatlin who is responsible for paying the outstanding balance of $750.00.
(emphasis added). At the second hearing, Roy and Nelda asserted that they would be willing to go ahead with arbitration if the circuit court would appoint or pick the arbitrator. In so many words, Sanderson Farms rejected this suggestion and asserted that arbitration should be conducted as provided for in the contract.
¶ 12. The circuit court entered an order denying Sanderson Farms' motion to dismiss. The circuit court found that Sander-son Farms was indeed by contract obligated to pay one-half of the filing and initial fees for arbitration and that its refusal to do so was a breach of the agreement which constituted a waiver of any right to arbitration. Sanderson Farms immediately filed a motion to reconsider or, in the alternative, to amend order to grant certification for interlocutory appeal and a motion to stay. The circuit court denied both motions. Since the alleged breach by Sanderson Farms in 1998, Roy and Nelda have been waiting five years for a hearing on this matter.
¶ 13. On May 12, 2000, Sanderson Farms filed with this Court a petition for interlocutory appeal. On September 26, 2000, the Panel of Banks, P.J., and Smith and Mills, JJ. granted Sanderson Farms permission to proceed with this interlocutory appeal and stayed proceedings below. See M.R.A.P. 5. Sanderson Farms presents the issue as whether the circuit court erred in denying its motion to dismiss and motion to reconsider. Since the issues which properly address the circuit court's findings are broader, this Court will identify the areas upon which the circuit court rests its ruling: specifically whether a breach constituted waiver of the protections of the arbitration provision; whether the arbitration provision is unconscionable; and whether portions of the arbitration provision may be severed.
DISCUSSION
¶ 14. Oddly enough, Sanderson Farms did not file a motion to compel in the circuit court. However, in its motion to dismiss for failure to state a claim, it essentially asserted that "federal law mandates that this Court enforce the arbitration provisions of the Broiler Production Agreement and compel Plaintiffs to submit their disputes to binding arbitration." So essentially, Sanderson Farms' motion to dismiss is in essence a motion to compel. In any event, this Court conducts de novo review on both motions to dismiss and the denial of motions to compel. Poindexter v. Southern United Fire Ins. Co., 838 So.2d 964, 966-67 (Miss.2008); East Ford v. Taylor, 826 So.2d 709, 713 (Miss.2002) (citing Webb v. Investacorp, Inc., 89 F.3d 252, 256 (5th Cir.1996)).
¶ 15. A two-prong inquiry is used when determining whether a motion to compel should be granted. The first prong has two components: (1) Whether there is a valid arbitration agreement; and (2) Whether the parties' dispute is within the scope of the arbitration agreement. East Ford, 826 So.2d at 713. Here the outcome of the first prong is undisputed. The second prong concerns "whether legal constraints external to the parties' agreement foreclosed arbitration of those claims." Id. (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985)). This second prong includes the consideration of applicable contract defenses available under state contract law which may invalidate the arbitration agreement. Id. (citing Doctor's Assocs., Inc. v. Casarotto, 517 U.S. 681, 686, 116 S.Ct. 1652, 134 L.Ed.2d 902 (1996)).
I. DID THE CIRCUIT COURT ERR IN DENYING SANDERSON FARMS' MOTION TO DISMISS?
¶ 16. The Federal Arbitration Act ("FAA"), 9 U.S.C. § 1 et seq., provides that an agreement to submit any controversy to arbitration, where the underlying transaction involves interstate commerce, is enforceable subject only to any contract defense recognized under state law. The Federal Arbitration Act states, in relevant part, that:
A written provision in any maritime transaction or 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.
9 U.S.C. § 2 (emphasis added). The FAA allows state courts to deny compulsion of arbitration upon a finding that law or equity demands revocation of the contract. "[S]tate law, whether of legislative or judicial origin, is applicable if that law arose to govern issues concerning the validity, re-vocability, and enforceability of contracts generally." Perry v. Thomas, 482 U.S. 483, 492, 107 S.Ct. 2520, 96 L.Ed.2d 426 (1987). Furthermore, Section 3 of the FAA provides a "default exception" whereby an individual is precluded from seeking enforcement of an arbitration provision if that individual is "in default in proceeding with such arbitration." 9 U.S.C. § 3.
¶ 17. This Court in East Ford, summarized the policies of the FAA:
The Federal Arbitration Act provides that arbitration agreements "shall be valid irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. The Act establishes a " 'federal policy favoring arbitration,' . requiring that "we rigorously enforce agreements to arbitrate.' " Shearson/Am. Exp., Inc. v. McMahon, 482 U.S. 220, 226, 107 S.Ct. 2332, 2337, 96 L.Ed.2d 185 (1987) (citations omitted). "Absent a well-founded claim that an arbitration agreement resulted from the sort of fraud or excessive economic power that 'would provide grounds for the revocation of any contract,' the Arbitration Act 'provides no basis for disfavoring agreements to arbitrate statutory claims by skewing the otherwise hospitable inquiry into arbitrability.' " Id. (citations omitted). "[Qjuestions of arbi-trability must be addressed with a healthy regard for the federal policy favoring arbitration . The Arbitration Act establishes that, as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability." Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). This Court has adopted this preference for arbitration. See Smith Barney, Inc. v. Henry, 775 So.2d 722 (Miss.2001); I.P. Timberlands Operating Co. v. Denmiss Corp., 726 So.2d 96, 103-104 (Miss.1998); Hutto v. Jordan, 204 Miss. 30, 36 So.2d 809, 812 (1948).
It has been recognized that in order to determine whether legal constraints exist which would preclude arbitration, "courts generally . should apply ordinary state-law principles that govern the formation of contracts." Bank One, N.A. v. Coates, 125 F.Supp.2d 819, 827 (S.D.Miss.2001) (quoting Webb v. Investacorp, Inc., 89 F.3d 252, 257 (5th Cir.1996)). However, "[cjourts may not . invalidate arbitration agreements under state laws applicable only to arbitration provisions." Doctor's Assocs., Inc. v. Casaroto, 517 U.S. at 687[702], 116 S.Ct. at 1665 (quoting Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265, 281, 115 S.Ct., 834, 843, 130 L.Ed.2d 753 (1995); Perry v. Thomas, 482 U.S. 483, 492 n. 9, 107 S.Ct. 2520, 2527 n. 9, 96 L.Ed.2d 426 (1987)). In other words, the usual defenses to a contract such as fraud, un-conscionability, duress, and lack of consideration may be applied to invalidate an arbitration agreement, so long as the law under which the provision is invalidated is not applicable only to the arbitration provisions.
826 Soüd at 713-14.
A. DID SANDERSON FARMS BREACH THE BROILER CONTRACT SPECIFICALLY THE ARBITRATION PROVISION?
¶ 18. Sanderson Farms argues that it did not breach the arbitration provision. It argues that its interpretation of the cost splitting portion of the provision is correct. Sanderson Farms asserts that its denial of payment of one-half the fees was not a breach of the arbitration agreement. Roy argues that indeed Sanderson Farms did breach the arbitration provision; and therefore, it is not entitled to its protections. The arbitration provision provided in pertinent part that:
The cost of such arbitration will be divided among the parties to the arbitration. Each party will bear the cost of their own expenses and attorney's fees,
(emphasis added). The broiler contract does not define "cost" or "expenses." Sanderson Farms, the drafter of the broiler contract, had the opportunity to clarify the meaning of these terms but did not.
¶ 19. When terms in a contract are not defined, we "give the words in the document their commonly accepted meaning." Parkerson v. Smith, 817 So.2d 529, 541 (Miss.2002). "Cost" is defined as "among or equivalent paid or charged for something; the outlay or expenditure (as of effort or sacrifice) made to achieve an object; loss or penalty incurred in gaining something; and expenses incurred in litigation." Webster's New Collegiate Dictionary 255 (1979). Also, "expense" is defined as "the act or practice of expending money; the act or process of using up; something expended to secure a benefit or bring about a result." Id. at 399. Under these definitions, the filing and administrative fees charged by the American Arbitration Association are "costs" which by contract Sanderson Farms agreed to divide equally with Roy. Even applying the legal definitions to these terms leads to the same result. "Cost" is defined as "the amount paid or charged for something; price or expenditure." Black's Law Dictionary 282 (7th ed.2000). "Expense" is defined as "an expenditure of money, time, labor, or resources to accomplish a result." Id. at 478. Administration fees and filing fees are encompassed in the definition of "cost" for which Sanderson Farms contracted to "divide equally among the parties." Additionally, if Sanderson Farms meant "cost" to include filing fees and administrative fees, then it could have specifically stated that in its contract. Furthermore, any ambiguity as to the definition of "cost" and "expense" are to be resolved in favor of Roy, since Sanderson Farms as the contracting party had the duty to make such terms unambiguous. Miss. Transp. Comm'n v. Ronald Adams Contractor, Inc., 753 So.2d 1077, 1085 (Miss.2000) (collecting authorities).
¶ 20. Sanderson Farms argues that what it meant by "cost" was actual costs of arbitration; specifically the arbitrator's compensation and expenses, reporting service costs, and hearing fees. We have repeatedly stated that "our concern is not nearly so much what the parties may have intended as it is what they said, for the words employed are by far the best resource for ascertaining intent and assigning meaning with fairness and accuracy." IP Timberlands Operating Co. v. Denmiss Corp., 726 So.2d 96, 104 (Miss.1998) (quoting Whittington v. Whittington, 608 So.2d 1274, 1278 (Miss.1992); UHS-Qualicare v. Gulf Coast Cmty. Hosp., Inc., 525 So.2d 746, 754 (Miss.1987)). Since we are not concerned with what Sanderson Farms may have meant, but didn't say, we find this argument has no merit.
¶ 21. By refusing to pay one-half of the $2,750 cost which amounted to filing and administrative fees and/or the $8,250 cost of arbitration fees and compensation, Sanderson Farms breached the arbitration provision. Sanderson Farms' breach can be used to support the defense of waiver as will be discussed below.
B. IF SANDERSON FARMS DID IN FACT BREACH THE ARBITRATION PROVISION, THEN DID IT WAIVE ITS RIGHT TO ARBITRATION?
¶ 22. Sanderson Farms argues that it at no time waived its right to arbitrate. It argues that since it did not breach the arbitration provision, it can not be found to have waived its right to arbitration. Roy argues that Sanderson Farms' breach of the arbitration provision supports a finding of waiver. He argues that since Sanderson Farms waived its right to arbitrate, it is not entitled to the provision's protection.
¶ 23. We recognize that there are strong federal policies in favor of arbitration and that waiver is not a favored finding. Russell v. Performance Toyota, Inc., 826 So.2d 719, 724 (Miss.2002) (collecting authorities). However, it is simple contract law that a party may waive the protections of any provision of a contract. "[A] party to a contract may by words or conduct waive a right to which he would otherwise have been entitled" Scott Addison Constr., Inc. v. Lauderdale County Sch. Sys., 789 So.2d 771, 775 (Miss.2001) (quoting Canizaro v. Mobile Communications Corp., 655 So.2d 25, 29 (Miss.1995) (citations omitted)). "[W]aiver may be express or it may be implied when the party actively participates in litigation or acts inconsistently with its rights to proceed with arbitration." Siam Feather & Forest Prods. Co. v. Midwest Feather Co., 503 F.Supp. 239, 242 (S.D.Ohio 1980) (citing American Locomotive Co. v. Gyro Process Co., 185 F.2d 316 (6th Cir.1950), aff'd mem. 663 F.2d 1073 (6th Cir.1981)). See Cornell & Co. v. Barber & Ross Co., 360 F.2d 512, 513 (D.C.Cir.1966); Cox v. Howard, Weil, Labouisse, Friedrichs, Inc., 619 So.2d 908, 914 (Miss.1993). "[Wlaiver may be inferred from the actions and conduct of the parties." Brent Towing Co., Inc. v. Scott Petroleum Corp., 735 So.2d 355, 359 (Miss.1999) (quoting Mariana v. Hennington, 229 Miss. 212, 226, 90 So.2d 356, 362 (1956)).
¶ 24. Sanderson Farms waived its right to arbitration by refusing to pay its one-half of the costs associated with filing and administrative fees and/or the additional charges presented for payment one month before the scheduled arbitration hearing. This refusal amounts to an act, inconsistent with the right to arbitrate. By waiving its right to arbitrate, Sanderson Farms has relinquished the right to seek the protections of the arbitration provision in the broiler contract.
¶ 25. Furthermore, the FAA itself provides that a party in default essentially waives his right or is precluded from invoking the arbitration agreement. Section 3 of the FAA provides that a party may compel arbitration and stay trial court proceedings if he "is not in default in proceeding with such arbitration." 9 U.S.C. § 3. As discussed above, Sanderson Farms breached the arbitration agreement and is thereby in default. So even under the FAA's own rules, Sanderson Farms is precluded from seeking the protections of the provision.
C. IS THE ARBITRATION PROVISION AT ISSUE PROCEDURALLY AND SUBSTANTIVELY UNCONSCIONABLE?
¶ 26. Since we have already found Sanderson Farms in default under the arbitration provision and further found such default to support the defense of waiver, we need not address this issue.
D. IF PORTIONS OF THE ARBITRATION PROVISION HAVE BEEN WAIVED BY SANDER-SON FARMS, THEN MAY THOSE PORTIONS BE SEVERED FROM THE PROVISION?
¶ 27. Sanderson Farms argues that if this Court finds portions of the arbitration provision unenforceable due to uneonscio-nability or waiver, then those portions should be severed from the provision and the rest of the arbitration provision or the broiler contract should be allowed to stand. Since we have already found that Sander-son Farms breached the arbitration agreement and thereby waived its protections, the only just outcome is to strike the entire arbitration agreement from the contract. We do however add that not only did Sanderson Farms default and waive the application of the arbitration provision, but also other provisions which are referenced therein which assert to limit damages.
CONCLUSION
¶ 28. By failing to pay its half of the required arbitration fees under the broiler contract, Sanderson Farms has breached the arbitration provision and therefore waived its right to compel its protections. The circuit court did not err in denying Sanderson Farms' motion to dismiss ands its motion to reconsider. Having found the learned trial judge to be correct, his ruling is hereby affirmed, and this case is remanded for further proceedings consistent with this opinion.
¶ 29. AFFIRMED.
DIAZ, EASLEY AND GRAVES, JJ., CONCUR. PITTMAN, C.J., AND WALLER, J., CONCUR IN RESULT ONLY. COBB, J., DISSENTS WITH SEPARATE WRITTEN OPINION JOINED BY SMITH, P.J. AND CARLSON, J.
. There has been some dispute as to whether the font size illustrated in the record has been adjusted and reduced in size for production to this Court. Since the font size of the Broiler Production Agreement is immaterial and irrelevant to our holding, we need not clarify the issue.
. This Court does have the authority to review issues broadly to effectuate its complete hold ing on an issue. In Dillard, we were called upon to examine whether the trial court erred in dismissing the action based on lack of standing to bring suit. Dillard v. Musgrove, 838 So.2d 261, 263 (Miss.2003). The trial court did not address the merits. Not only did this Court affirm the trial court's dismissal, but we went a step further and ruled that the SLRP Retirement Fund for the Legislators was constitutional even though this issue was never considered by the trial judge. Id. at 264-66.
. There is an argument that could be made concerning the application of the arbitration agreement to Nelda Gatlin. However, since counsel for Sanderson Farms during the hearing on the motion to reconsider conceded that the contract does not bind Nelda, there is no reason to go into details concerning this issue.
. Sanderson Farms also argues that the circuit court and this Court lack authority to review the issues of breach, waiver, and un-conscionability. It asserts that these issues are only proper before the arbitrator. Without addressing this issue in our discussion, we find that this argument is without merit. This Court has always had the authority to review the enforceability of contract provisions, in-eluding arbitration provisions. Such an argument is frivolous and flies in the face of this Court's equitable power. Furthermore, by statute, this Court is vested with the power to determine contract unconscionability and any assertion that such right is limited by the language of Sanderson Farms arbitration provision is contrary to law. Miss.Code Ann. § 75-2-302(1) (Rev.2002).
. This Court discussed waiver of arbitration provisions in Russell v. Performance Toyota, Inc., 826 So.2d 719, 723-24 (Miss.2002), where we found no waiver where a car dealership initiated self help repossession without any legal action.
This Court in University Nursing Assocs., PLLC v. Phillips, 842 So.2d 1270 (Miss.2003), found no waiver where the party seeking to invoke arbitration had filed a response to the complaint and objected to discovery requests.
This Court discussed waiver in Scott Addison Construction, Inc. v. Lauderdale County School System, 789 So.2d 771 (Miss.2001), wherein we found that an a contractor waived his right to object to the deletion of an arbitration provision from a contract after a dispute arose.
This Court in Brent Towing Co. v. Scott Petroleum Corp., 735 So.2d 355 (Miss.1999), found that a vendor's acceptance of a late payment waived his right to claim breach of the contract resulting from that late payment.
As evidenced by these four (4) cases, this Court has never faced a situation such as this where one party refuses to abide by the contract language and pay its share of the arbitration costs.