Opinion ID: 859475
Heading Depth: 2
Heading Rank: 1

Heading: Validity of the Arbitration Agreement

Text: ¶14. The trial court found that the arbitration agreement was valid and enforceable. HCCL argues that the arbitration agreement is not valid because it fails to include an express waiver of its right to a jury trial. HCCL also contends that the contract is ambiguous, providing for both arbitration and the institution of legal or equitable proceedings. Conversely, Myrick maintains that the arbitration agreement is unambiguous, binding, and enforceable.
¶15. “The mere fact that the parties disagree about the meaning of a provision of a contract does not make the contract ambiguous as a matter of law.” Delta Pride Catfish, Inc. v. Home Ins. Co., 697 So. 2d 400 (Miss. 1997). When determining whether a valid arbitration agreement exists, we employ ordinary principles of contract law. Terminix Int’l., Inc. v. Rice, 904 So. 2d 1051, 1055 (¶9) (Miss. 2004). One principle instructs courts that, in determining whether a contract is ambiguous, they must review the document as a whole. Cherokee Ins. Co. v. Babin, 37 So. 3d 45, 48 (¶8) (Miss. 2010). If the contract is not ambiguous, the court should “accept the plain meaning of a contract as the intent of the parties . . . .” Ferrara v. Walters, 919 So. 2d 876, 882 (¶13) (Miss. 2005). Typically, we construe ambiguities against the drafter of the contract. Gulf Ins. Co. v. Neel-Schaffer, Inc., 904 So. 2d 1036, 1049 (¶44) (Miss. 2004). But in the case of arbitration, that doctrine “must succumb to the federal policy” “to construe ambiguities concerning the scope of arbitrability in favor of arbitration.” Id. at 1049-50 (¶¶44-45). We address two issues of ambiguity: 7 whether the parties intended to arbitrate and what exactly is “aesthetic effect.” The latter will be discussed in section five below. Reviewing the contract as a whole, the Court finds no ambiguity regarding whether the parties intended to arbitrate. ¶16. The parties’ contract provides for the resolution of claims and disputes. First, the parties must mediate: 4.5.1 Any Claim arising out of or related to the Contract, except Claims relating to aesthetic effect and except those waived . . . shall, be subject to mediation as a condition precedent to arbitration or the institution of legal or equitable proceedings by either party. Then, the parties must arbitrate: 4.6.1 Any Claim arising out of or related to the Contract, except Claims relating to aesthetic effect and except those waived . . . shall, after decision by the Owner5 or 30 days after submission of the Claim to the Owner, be subject to arbitration. Prior to arbitration, the parties shall endeavor to resolve disputes by mediation in accordance with the provisions of Paragraph 4.5. 4.6.2 Claims not resolved by mediation shall be decided by arbitration . . . . ¶17. HCCL contends that the language in section 4.5.1 – that “mediation [is] a condition precedent to arbitration or the institution of legal or equitable proceedings” – does not reflect a clear intent to arbitrate. HCCL claims that the disjunctive “or” allows it to choose whether to arbitrate or to litigate its claims, therein creating ambiguity. Conversely, Myrick states that a review of the contract as a whole shows no ambiguity. We agree. ¶18. Reviewing the contract as a whole, the arbitration agreement is not ambiguous. Section 4.5 provides mediation as a method of alternative dispute resolution for those claims subject to arbitration and those claims which are not. Sections 4.6.1 and 4.6.2, which directly 5 Throughout the contract, Lamier, on behalf of HCCL, replaces the term “Architect” with the term “Owner.” 8 address arbitration, state clearly that mediation is a condition precedent to arbitration, and arbitration is the sole method of dispute resolution for all claims, except those related to aesthetic effect. The language in section 4.5 (mediation) is consistent with the parties’ agreement to arbitrate. Thus, no ambiguity exists regarding whether the parties intended to arbitrate. HCCL’s argument is without merit.
¶19. Next, HCCL complains that the arbitration agreement failed to include an express waiver of its right to a jury trial; thus, it is invalid. Myrick counters that there is no such requirement. ¶20. Mississippi Code Sections 11-15-101 to 11-15-143 address arbitration agreements in construction contracts. The statutes provide, in pertinent part, that: Two (2) or more parties referred to in Section 11-15-101 may agree in writing to submit to arbitration any controversy existing between them at the time of the agreement, or they may include in a written contract a provision for the settlement by arbitration of any controversy thereafter arising between them relating to such contract or the failure or refusal to perform the whole or any part thereof. Such agreement or provision shall be valid, enforceable and irrevocable without regard to the justiciable character of the controversy. Miss. Code Ann. § 11-15-103 (Rev. 2003). The arbitration provision in question provides that “[a]ny Claim arising out of or related to the Contract, except Claims relating to aesthetic effect and except those waived . . . shall . . . be subject to arbitration.” HCCL claims that the provision must provide an express waiver of a jury trial, but caselaw does not support its position. ¶21. HCCL cites two cases in support of its position, but its reliance on these cases is misplaced. In B.C. Rogers Poultry, Inc. v. Wedgeworth, the Court addressed whether an 9 arbitration agreement applied retroactively to disputes arising from previous contracts which did not contain arbitration provisions. B.C. Rogers Poultry, Inc. v. Wedgeworth, 911 So. 2d 483 (Miss. 2005). The Court stated, “[t]his Court remains unconvinced, as the law requires, that Wedgeworth knowingly, intelligently, and voluntarily waived his fundamental right to a jury trial, when all contracts in effect at the time of the alleged tortious conduct . . . failed to contain arbitration clauses.” Id. at 487 (¶10). The circumstances of B.C. Rogers simply are not applicable to this case. ¶22. In Pre-Paid Legal Services, the Court decided whether language contained in a prepaid, legal-services plan constituted a binding agreement to arbitrate. Pre-Paid Legal Servs., Inc. v. Battle, 873 So. 2d 79 (Miss. 2004). The provision stated: K. Settlement of Disputes: In the event of a dispute, the parties will agree on an impartial attorney who will decide such dispute and that decision will be binding on all parties to such dispute. Id. at 81 (¶3). Also, the document did not require the plaintiffs’ signatures. Id. The Court found that this language was insufficient to create a binding arbitration agreement, reasoning: [H]ere there was no notice, no discussion, and no negotiation of the arbitration agreement. Further, based upon the language in this clause, we do not find that an average citizen would realize that he or she is giving up his or her right to a trial by jury under the broad, general language contained in the pre-paid legal expense agreement. Id. at 84 (¶15). Further, the Court found that the agreement was ambiguous because it also contemplated litigation. Id. at 84 (¶16). Thus, the Court affirmed partial summary judgment in favor of the plaintiffs and remanded to the trial court for further proceedings. Id. at 84 (¶¶18-19). 10 ¶23. Unlike the provision in Pre-Paid Legal Services, the arbitration provision in HCCL’s and Myrick’s contract is clear and unambiguous. In Harry Baker Smith Architects II, PLLC v. Sea Breeze I, LLC, those parties utilized a similar arbitration provision, and the Court of Appeals found that the provision articulated clearly the parties’ agreement to arbitrate.6 Harry Baker Smith Architects, 83 So. 3d 395, 398 (¶11) (Miss. Ct. App. 2011). Also, despite HCCL’s claim that it did not intend to waive its right to a jury trial, the parties clearly negotiated the contract. Lamier, on behalf of HCCL, negotiated the contract, sometimes initialing deletions and additions to the contract. HCCL is a sophisticated business, not “an average citizen.” Thus, HCCL should have been aware of the consequences of the arbitration agreement which it negotiated. ¶24. No caselaw suggests that, to be valid, an arbitration agreement must include an express statement which waives the right to a jury trial. In contrast, this Court has stated that: [T]he Constitution does not “confer the right to a trial, but only the right to have a jury hear the case once it is determined that the litigation should proceed before a court. If the claims are properly before an arbitral forum pursuant to an arbitration agreement, the jury trial right vanishes.” McKenzie Check Advance of Miss., LLC v. Hardy, 866 So. 2d 446, 455 (¶30) (Miss. 2004) (citations omitted). Section 11-15-103 requires only a written agreement to arbitrate. The language in the contract is an express, written agreement between the parties to arbitrate 6 The arbitration provision provided that: “Claims, disputes, and other matters in question between the parties that are not resolved by mediation shall be decided by arbitration which, unless the parties mutually agree otherwise, shall be in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association.” Harry Baker Smith Architects, 83 So. 3d at 398 (¶11). 11 claims arising out of the contract, except those related to aesthetic effect. Thus, we find that HCCL’s argument is without merit.