Opinion ID: 1553718
Heading Depth: 2
Heading Rank: 4

Heading: whether the arbitration agreement applies to sawyers's claims against american.

Text: ¶ 30. Sawyers submits that the arbitration agreement applies only to claims between Sawyers and Herrin-Gear; that the trial court erred in finding that Sawyers is equitably estopped from pursuing her claims against American in court; and that the trial court erred in enforcing the arbitration agreement as to American based on its finding that American is Herrin-Gear's agent. Sawyers and Herrin-Gear are the only parties who signed both the arbitration agreement and the GAP waiver; however, all of Sawyers's claims against American presume the existence of a contractual relationship between Sawyers and American. American asserts that it may compel arbitration as a nonsignatory to the arbitration agreement based on the doctrines of equitable estoppel and agency, and further, that nothing in the arbitration agreement specifically prevents a third party from participating in arbitration or enforcing the terms of the arbitration agreement. ¶ 31. Sawyers cites Qualcomm, Inc. v. American Wireless License Group, LLC, 980 So.2d 261, 269 (Miss.2007), in support of her contention that only the parties listed in the arbitration agreement have the ability to compel arbitration. However, Sawyers fails to consider that, in Qualcomm, the Court was faced with the unique situation of non-signatories attempting to enforce an arbitration provision against other non-signatories. Id. The Court went on to state that [t]here are exceptions to the general rule that non-signatories may not be bound, which our Court has repeatedly recognized. For instance, a non-signatory may be able to enforce an arbitration agreement against a signatory where the non-signatory has a close legal relationship with a signatory of the agreement. Id. (citing B.C. Rogers Poultry, Inc. v. Wedgeworth, 911 So.2d 483, 491-92 (Miss.2005)). In today's case, American was acting on Herrin-Gear's behalf in administering the GAP waiver. Sawyers entered into the GAP waiver with Herrin-Gear and had no agreement with American; however, it is apparent from the parties' actions that an agreement existed between Herrin Gear and American to the extent that American supervised payment to Sawyers under the GAP waiver. Also, American was listed on the GAP waiver as the administrator. Herrin-Gear and American unquestionably maintained a close legal relationship. ¶ 32. In Wedgeworth, this Court stated: [S]tate law principles might provide for the arbitration of disputes between a nonsignatory and a signatory to a contract, where there are allegations of substantially interdependent and concerted misconduct. A non-signatory should have standing to compel arbitration where the non-signatory has a close legal relationship, such as, alter ego, parent/subsidiary, or agency relationship, with a signatory to the agreement. See Terminix Int'l, Inc. v. Rice, 904 So.2d 1051 (Miss.2004) quoting Washington Mut. Fin. Group, LLC v. Bailey, 364 F.3d 260, 267 (5th Cir.2004) (A nonsignatory party may be bound to an arbitration agreement if so dictated by the ordinary principles of contract and agency.). See also Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc., 10 F.3d 753, 757 (11th Cir.1993); J.J. Ryan & Sons, Inc. v. Rhone Poulenc Textile, S.A., 863 F.2d 315 (4th Cir.1988); Interocean Ship. Co. v. Nat'l Ship. & Trading Corp., 523 F.2d 527, 539 (2d Cir.1975). However, a third party who is a nonsignatory to a contract should not be able to enforce an arbitration agreement, under the intertwined claims test, where there is no alter ego, parent/subsidiary, agency, or other form of close legal relationship alleged, and where the intertwined claims do not depend on the agreement.... Wedgeworth, 911 So.2d at 491-92. ¶ 33. As we have already discussed supra, Sawyers's allegations against Herrin-Gear and American involved substantially interdependent and concerted misconduct between Herrin-Gear (a signatory) and American (a nonsignatory), which maintained a close legal relationship, such as,... [an] agency relationship. Wedgeworth, 911 So.2d at 492. ¶ 34. Also, in Fradella v. Seaberry, 952 So.2d 165, 175 (Miss.2007), this Court held: But for the real estate contract containing the arbitration clause at issue, the Seaberrys could not bring a claim of breach of contract. Because the Seaberrys rely on the document for their breach of contract claim, they cannot deny Fradella the benefit of the arbitration clause within the real estate contract that she relied upon to delineate her duties and responsibilities with regard to the transaction. Id. at 175. In today's case, Sawyers relied on her agreements with Herrin-Gear and the alleged representations of Herrin-Gear in filing suit against American. Because Sawyers relies on these agreements and alleged representations, she cannot deny American the benefit of the arbitration agreement which was an integral part of the transaction at issue. As such, arbitration of Sawyers's claims against American is appropriate. ¶ 35. We do not come to this conclusion flippantly, acknowledging that the doctrine of equitable estoppel is indeed an extraordinary remedy which courts should invoke cautiously, only when necessary `to prevent unconscionable results.' Wedgeworth, 911 So.2d at 491 (citing Harrison Enters., Inc. v. Trilogy Commc'ns, Inc., 818 So.2d 1088, 1095 (Miss.2002)). With this premise in mind, we are constrained to find that this issue is without merit.