Opinion ID: 2628131
Heading Depth: 1
Heading Rank: 1

Heading: analysis

Text: Anderson first asserts that the Court of Appeals did not have jurisdiction to review the district court's denial of Dillard's motion to compel arbitration. Anderson relies on K.S.A. 5-401(c)(3), which precludes an arbitration contract from requiring arbitration for any future tort claims. The question of appellate jurisdiction is a question of law subject to de novo review. Foster v. Kansas Dept. of Revenue, 281 Kan. 368, 369, 130 P.3d 560 (2006). The Court of Appeals concluded that it had jurisdiction over Dillard's appeal pursuant to NEA-Topeka v. U.S.D. No. 501, 260 Kan. 838, 842-43, 925 P.2d 835 (1996), which held that the denial of a motion to arbitrate is a final and appealable order. Anderson, slip op. at 5. Anderson's argument presumes that Dillard's motion to compel arbitration was invalid because the arbitration contract could not apply to future tort claims. However, Anderson cites no authority for the proposition that a party to the litigation has the power to unilaterally determine the validity of an arbitration agreement. On the contrary, when an arbitration agreement is challenged, the district court has the authority to decide whether the agreement to arbitrate exists and whether the agreement includes the issue in dispute. MBNA America Bank v. Credit, 281 Kan. 655, 658, 132 P.3d 898 (2006). Thus, Dillard's properly raised the application of the arbitration agreement before the district court by filing its motion to compel arbitration. Once the issue was raised and decided by the district court, the district court's decision became a final and appealable order. See NEA-Topeka, 260 Kan. at 841, 925 P.2d 835. Anderson fails to address or distinguish the application of NEA-Topeka, and we find no merit in his argument. The Court of Appeals properly exercised jurisdiction over Dillard's appeal, and the matter is properly before us on Anderson's petition for review. Next, Anderson argues that the Court of Appeals reached the wrong result when it summarily concluded that Anderson's claims arose out of his employment at Dillard's and were therefore subject to the arbitration agreement. Anderson, slip op. at 7. Anderson argues that the acts giving rise to his claims occurred after the arbitration contract had been terminated by his dismissal. Because there was no clause extending the arbitration agreement to disputes arising after the termination of employment, Anderson argues that the district court properly denied Dillard's motion to compel arbitration. An arbitrator's power to resolve a dispute originates from an agreement to arbitrate between the parties. Without such an agreement to establish the parties' consent, the arbitrator has no jurisdiction. MBNA America Bank, 281 Kan. at 659, 132 P.3d 898. When deciding whether to compel arbitration, a court must first consider whether there is an agreement to arbitrate between the parties. If there is such an agreement, the court must then determine whether the arbitration agreement includes the specific point at issue. City of Wamego v. L.R. Foy Constr. Co., 9 Kan.App.2d 168, 171, 675 P.2d 912, rev. denied 234 Kan. 1076 (1984). An appellate court reviews an alleged arbitration agreement like any other contract, applying a de novo standard of review. See Skewes v. Shearson Lehman Bros., 250 Kan. 574, 582, 829 P.2d 874 (1992). The primary rule for interpreting written contracts is to ascertain the parties' intent. If the terms of the contract are clear, the intent of the parties is to be determined from the language of the contract without applying rules of construction. Liggatt v. Employers Mut. Casualty Co., 273 Kan. 915, 921, 46 P.3d 1120 (2002). According to the DEFINITIONS section of the Rules of Arbitration, the parties to this arbitration agreement include: `Dillard's' or the `Company' means Dillard's, Inc. and all present and past subsidiaries, Limited Liability Partnerships and affiliated companies, its Retirement, Pension and Benefit committees and its officers, directors, fellow associates, managers, supervisors and all agents in their personal or official capacities. `You' or the `associate' means the associate of Dillard's, Inc. who is covered by this Agreement and has a dispute resulting from termination of employment. (Emphasis added.) According to the plain language of the arbitration agreement, Anderson is a party to the arbitration agreement if two conditions are met. First, Anderson must be a Dillard's associate who is covered by the agreement; second, Anderson must have a dispute resulting from termination of employment. Anderson argues that the first condition was not met because he was not an associate . . . who is covered by this Agreement when Cole called the Lenexa Fire Department and the Spring Hill Police Department several days after Anderson's termination from Dillard's. However, we decline to address Anderson's argument because we believe the issue is resolved more directly by analyzing the second condition  whether Anderson has a dispute resulting from termination of [his] employment. According to the ACKNOWLEDGMENT OF RECEIPT OF RULES FOR ARBITRATION, employment with Dillard's is conditioned upon an employee's assent to Dillard's arbitration agreement. As a result, we interpret the phrase termination of [his] employment to apply only to the termination of employment with Dillard's. The key to determining whether Anderson is a party to the arbitration agreement is whether Anderson's dispute results from the termination of his employment with Dillard's. The language results from requires a cause and effect analysis. Anderson does not claim that he was wrongfully terminated by Dillard's. Rather, Anderson claims that he was terminated from his employment with the Lenexa Fire Department and suspended from his employment with the Spring Hill Police Department because Cole contacted them on behalf of Dillard's and informed them that Anderson had been arrested for shoplifting. Dillard's did not have a duty to inform Anderson's other employers that Anderson had been terminated from his employment with Dillard's, so Anderson's termination from Dillard's did not require Cole or any other Dillard's employee to contact the Lenexa Fire Department or the Spring Hill Police Department. Thus, Anderson's termination from Dillard's did not cause the actions that Anderson alleges as the basis for his claims. Because Anderson's claims do not rely on Cole's conduct at the time of the alleged shoplifting incident or the termination of Anderson's employment with Dillard's, we must conclude that Anderson's claims did not result from the termination of his employment with Dillard's as required by the arbitration agreement. Contrary to Dillard's argument that the agreement should be broadly construed, the language of the Definitions section of Dillard's Rules of Arbitration is clear and unambiguous in narrowly defining the parties subject to arbitration based on the scope of the dispute. The Court of Appeals' decision improperly interpreted the terms of the arbitration agreement to include claims arising out of employment with Dillard's rather than those resulting from the termination of employment with Dillard's. Consequently, we reverse the Court of Appeals' decision, affirm the district court's decision denying Dillard's motion to compel arbitration, and remand the matter to the district court for further proceedings. JOHNSON, J., not participating. BRAZIL, S.J., assigned. [1]