Opinion ID: 2242002
Heading Depth: 2
Heading Rank: 7

Heading: Jurisdiction of the Indiana Trial Court

Text: Finally, this appeal originally focused on whether Indiana courts have subject-matter jurisdiction over this case. [17] The Agreement initially stipulated that (1) Indiana law governs; (2) the parties may challenge an error of law by instituting an action at law within the State of Indiana to determine such legal issue; and (3) by explicit written agreement all arbitration proceedings shall take place in Indiana. The Indiana Uniform Arbitration Act prescribes that [t]he making of an agreement described in section 1 providing for arbitration in this state confers jurisdiction on [an Indiana court] to enforce the agreement under this chapter and to enter judgment on an award thereunder. IND. CODE § 34-4-2-17 (1993). An agreement described in section 1 is a written agreement. IND.CODE § 34-4-2-1 (1993). Although the subject-matter jurisdiction of our courts is generally created by statute or constitutional provision, State ex rel. Hight v. Marion Superior Court, 547 N.E.2d 267, 269 (Ind.1989), these sections of the Act essentially enable the parties to control by contract whether an Indiana court may review an action to enforce or set aside the award. [18] The original written agreement therefore effectively provided the basis for jurisdiction to be vested in Indiana courts. Although in most situations there will be only one state that qualifies for jurisdiction over the award under its version of the Uniform Act, the Indiana version does not purport to confer exclusive jurisdiction on Indiana if more than one state has jurisdiction pursuant to its own laws. In this case, SouthShore argues that the award is reviewable only in Illinois, irrespective of what the Agreement might have originally provided, because the arbitration took place there. NICTD responds that the physical location was purely for the convenience of the arbitrators and that the parties contemplated no reformation of the written agreement, which specified Indiana governing law and agreed to arbitration in Indiana. NICTD concedes that it waived the Agreement's original stipulation that all arbitration proceedings take place in Indiana, but contends that this did not rise to the level of a waiver of the contract's provision for arbitration in Indiana so as to confer jurisdiction on Indiana courts. Arbitration provisions can be waived and the existence of waiver depends upon the circumstances of each case. Kendrick Mem'l Hosp., Inc. v. Totten, 408 N.E.2d 130, 134-35 (Ind.Ct.App.1980). Neither party directs us to any Indiana cases addressing the effect of a parol decision to arbitrate outside Indiana for apparent logistical convenience when the written agreement specifically provides for arbitration in Indiana. However, we agree with NICTD that these facts are too murky to constitute a basis for finding waiver of the original agreement to arbitrate in Indiana. Waiver of a contractual right requires an intentional relinquishment of a known right. Jackson v. DeFabis, 553 N.E.2d 1212, 1218 (Ind.Ct.App. 1990). At best there is a parol agreement here memorialized by the arbitrator that was found to be sufficient basis for jurisdiction in Illinois as a matter of Illinois law. Although NICTD waived the requirement that all arbitration proceedings occur in Indiana, the written agreement, indicating governing Indiana law and a right to sue in Indiana, remained intact. This is not sufficient, as a matter of Indiana law, to constitute a waiver of the explicit contractual right to seek judicial review in a court in Indiana. Nor is this an explicit written revision of the Agreement. [19] It is of course true that conduct inconsistent with an arbitration agreementnotably filing a lawsuit in a court of competent jurisdictioncan effect a waiver of the right to arbitrate. See, e.g., McNall v. Farmers Ins. Group, 181 Ind.App. 501, 506, 392 N.E.2d 520, 523 (1979) (amendment to right to arbitration may be implied by acts, omissions, or conduct); Shahan v. Brinegar, 181 Ind.App. 39, 44-45, 390 N.E.2d 1036, 1041 (1979) (Court of Appeals would not order arbitration where parties had already litigated disputed issues in trial court). In that circumstance, however, the party filing suit has acted inconsistently with the arbitration agreement and has in effect abandoned it. There is nothing inherently inconsistent in agreeing to conduct arbitration in Chicago for convenience, but treating all other provisions of the Agreement as unaffected. Indeed, because Indiana law is specified as controlling, that is at least facially a wholly sensible approach. Accordingly, we conclude that the Indiana trial court had jurisdiction over the subject matter, even if it may be bound by full faith and credit to enter a judgment of dismissal upon final resolution of this matter in Illinois. Chicago, Rock Island & Pacific Ry. Co., 270 U.S. at 616-17, 46 S.Ct. at 422-23 (where two states had concurrent jurisdiction over the same claim, the first judgment reached had to be given full faith and credit in the second state, regardless of which lawsuit was filed first).