Opinion ID: 1589494
Heading Depth: 2
Heading Rank: 2

Heading: Whether the 2002 arbitration agreement is unenforceable because the designated arbitration forum is unavailable.

Text: ¶ 36. In Stephens, this Court stated, Arbitration is about choice of forum  period. Stephens, 911 So.2d at 525. In the admissions agreement signed on April 24, 2002, Covenant Health proposed to have any disputes administered by AAA as follows: The Resident and Responsible Party agree that any and all claims, disputes and/or controversies between them and the Facility or its Owners, officers, directors or employees shall be resolved by binding arbitration administered by the American Arbitration Association and its rules and procedures. The AAA announced nearly seven years ago that it no longer accept[s] the administration of cases involving individual patients without a post-dispute agreement to arbitrate. [11] The AAA continues to administer health-care arbitrations in which businesses, providers, health care companies, or other entities are involved on both sides of the dispute. Id. The AAA stated that the policy was a part of its ongoing efforts ... to establish and enforce standards of fairness for alternative dispute resolution.... [12] The Senior Vice President of the AAA was quoted as follows: Although we support and administer pre-dispute arbitration in other case areas, we thought it appropriate to change our policy in these cases since medical problems can be life or death situations and require special consideration. Id. ¶ 37. Another alternate-dispute-resolution organization, the American Healthcare Lawyers Association (AHLA), has made a similar announcement about healthcare arbitrations. Owens v. Nexion Health at Gilmer, Inc., 2007 WL 841114, at  (E.D.Tex. Mar.19, 2007). The AHLA also has announced that it would administer an arbitration without a post-dispute agreement only if ordered to do so by a court. Id. Covenant Health argues that AHLA's policy is relevant to this case and speculates that the AAA is likely to follow the AHLA's lead and administer disputes if ordered to do so. The AAA has made no such announcement. ¶ 38. The Court of Appeals correctly found that it should not speculate whether the AAA might agree to administer the dispute. Moulds, ___ So.3d at ___, 2008 WL 3843820, at . However, the Court of Appeals went on to find that the arbitration agreement allows the circuit court to choose an arbitrator if the agreed forum is unavailable. Id. We do not share this reading. The language referred to by the Court of Appeals relates only to selection of an arbitrator and not more generally to the choice of forum or the rules and procedures to be utilized. Assuming arguendo that the forum was chosen by the parties to be the AAA, and it refused to accept the dispute, this defeats the primary stated purpose of arbitration, that being to avoid crowded dockets (speed of resolution) and involvement of courts (reduce costs of resolution). Thus, a court should not become a party to redrafting or reforming agreements. A court should not be used to reform a contract to select a forum not anticipated by either of the parties. To do so, the court must become involved and assume powers over parties. Courts' involvement is limited to determining whether to compel agreed-upon arbitration vel non. As the court's participation and involvement increase, the reason for arbitration in the first place becomes greatly diminished, and its purpose defeated. ¶ 39. U.S. Supreme Court and Mississippi precedent supports this conclusion, as follows: The U.S. Supreme Court has stated that, `arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed to submit.' ... The Supreme Court has also said that, section 4 of the FAA does not confer a right to compel arbitration of any dispute at any time; it confers only the right to obtain an order directing that ` arbitration proceed in the manner provided for in [the parties'] agreement. ' B.C. Rogers Poultry, Inc. v. Wedgeworth, 911 So.2d 483, 487-88 (Miss.2005) (emphasis in original) (quoting AT & T Techs., Inc. v. Commc'ns Workers of Am., 475 U.S. 643, 648, 106 S.Ct. 1415, 1418, 89 L.Ed.2d 648, 655 (1986); Volt Info. Scis. v. Bd. of Trs., 489 U.S. 468, 475, 109 S.Ct. 1248, 1253, 103 L.Ed.2d 488, 497 (1989)). In B.C. Rogers Poultry, this Court affirmed the denial of a motion to compel arbitration because the dispute concerned contracts entered into before the parties had instituted an arbitration agreement. Id. at 493. In AT & T Techs., Inc., the U.S. Supreme Court held that arbitrability should be decided by courts, not arbitrators. Id. at 651. In Volt Info. Scis., the U.S. Supreme Court held that arbitrations should be governed by the rules chosen by the parties, not by FAA-mandated rules. Id. at 476, 109 S.Ct. 1243 (California statutory rules applied in accordance with the arbitration agreement's terms). ¶ 40. In Magnolia Healthcare, Inc. v. Barnes, 994 So.2d 159 (Miss.2008), a plurality of this Court would have held that an arbitration agreement was unenforceable because the parties' forum choice was no longer available. Id. at 162. In Barnes, the arbitration agreement called for the use of AHLA rules, but did not require AHLA administration. Id. at 160. The plurality cited AHLA rules, which require a post-dispute agreement to arbitrate. Id. The plurality concluded that, because the patient's injuries occurred after AHLA's policy was implemented, and there was no post-dispute agreement, there was no valid agreement to arbitrate. Id. at 162. The Barnes rationale applies here. Assuming there were no substantively unconscionable provisions in the agreement, and further assuming Covenant Health prevailed on all other issues, the agreement called for the AAA to administer disputes, and the trial court was required to chose an arbitrator; the arbitrator would still be bound to apply AAA rules, which would require Braddock to agree, post-dispute, to be bound to arbitrate, which he has expressly disavowed his interest in doing. ¶ 41. In National Iranian Oil Co. v. Ashland Oil, 817 F.2d 326 (5th Cir.1987), the Fifth Circuit Court of Appeals held that an arbitration agreement was unenforceable because the chosen forum was no longer available. Id. at 328; see also Northrop Grumman Ship Sys. Inc. v. The Ministry of Def. of the Republic of Venezuela, 575 F.3d 491 (5th Cir.2009). National Iranian Oil Co. (NIOC) drafted the agreement, which called for arbitrations to occur in Tehran and to be governed by Iranian law. Id. at 334. After the revolution in Iran, NIOC attempted to institute arbitration proceedings in Mississippi. Id. at 327-28. For NIOC to prevail, it was required to show that the situs was merely a minor consideration and that the essence of the bargain was to arbitrate. Id. at 333. Here, Covenant Health prescribed AAA administration. Both of the agreements in this case (November 2000 and April 2002) have the same language requiring AAA administration. Moulds remained in the nursing home for two years after the AAA announced its new policy. Covenant Health replaced the original agreement with another agreement with different terms. Administration by the AAA was a contract requirement, which remained a part of the agreement, if it was otherwise enforceable. ¶ 42. Covenant Health urges that, even if the clause requiring AAA administration is stricken from the contract, arbitration still should be compelled here. Covenant Health cites clause E6, claiming that it offers proof that the parties agreed generally to arbitrate without regard to which organization should administer it. This argument fails for two reasons. It ignores the fact that Covenant Health has conceded, and this Court has agreed, that E6 is unenforceable. It also misreads the language of E6, in which the parties agree that if mediation fails, they will arbitrate the dispute, claim and/or controversy as set forth below [in the arbitration agreement.] ¶ 43. The courts of several other states have dealt with the AAA/AHLA policy-change issue. We find no other state court that has held that an arbitration may go forward if the arbitration agreement requires AAA administration. See Mathews v. Life Care Ctrs. of Am., Inc., 217 Ariz. 606, 177 P.3d 867 (2008) (enforced agreement that required AAA arbitrators, but not AAA administration); Hill, 2008 WL 1901198, at -17 (held agreement unconscionable, but did not reach on forum choice); Owens v. Nat'l Health Corp., 263 S.W.3d 876 (Tenn.2007) (court enforced agreement that called for either AAA or AHLA administration, but the court noted that AHLA would administer if ordered); Blue Cross Blue Shield v. Rigas, 923 So.2d 1077 (Ala.2005) (enforced agreement that required AAA rules, but not AAA administration); Broughsville v. OHECC, LLC, 2005 Ohio 6733, 2005 WL 3483777 (Ohio Ct.App.2005) (enforced agreement which called for an AHLA procedure). ¶ 44. Here, the Court of Appeals held that the arbitration agreement allows the circuit court to pick an arbitrator if the forum is unavailable. Moulds, ___ So.3d at ___, 2008 WL 3843820, at . We find no basis for such an interpretation of the agreement. The agreement requires that the arbitration be administered by the AAA in accordance with the rules and procedures of that organization. The language referred to by the Court of Appeals relates only to the selection of an arbitrator, not the overall rules and administration of the arbitration. The rules of the organization referenced in the agreement, the AAA, require that it refuse to administer arbitrations of this type of case, unless the parties agree post-dispute to be bound by arbitration. Thus, not only are our courts being asked to rewrite the agreement in favor of the drafter, but also now to select a forum not anticipated by either party. We decline. The whole purpose of arbitration is to avoid dispute resolution in a court of law. In declining, we follow the rationale espoused by a plurality of this Court in Barnes, 994 So.2d at 161-62. ¶ 45. We find that Covenant Health sought to have its disputes administered by the AAA. That forum refuses to arbitrate without a post-dispute agreement. There is no post-dispute agreement. This court declines to order the contract rewritten and declines to order the lower court to pick a forum.