Opinion ID: 2326847
Heading Depth: 2
Heading Rank: 1

Heading: Challenge to the 1997 Agreement and Arbitration Provision

Text: The District argues that the PBC had no authority to include an arbitration provision in its contract. It contends that the whole contract under which Fairman claimed was void and unenforceable. Fairman argues in response that the District never challenged in the trial court the validity of the 1997 employment agreement, which contained the arbitration clause, or the arbitrability of the dispute. He contends that the District's position on appeal is inconsistent with the position that it took in the trial court, and therefore, barred by principles of judicial and equitable estoppel. He also argues that the District waived such arguments by not asserting them in the trial court. The doctrine of judicial estoppel precludes a party from taking one position on an issue in the trial court and the opposite position on appeal. Porter Novelli, Inc. v. Bender, 817 A.2d 185, 188 (D.C. 2003) (citing Plough Inc. v. National Acad. of Sciences, 530 A.2d 1152, 1159 n. 10 (D.C.1987)). In Porter Novelli, this court applied the doctrine and held that a commercial tenant was estopped from denying the validity of a holdover agreement where it had secured a stay on appeal premised upon the claim that the landlord was entitled to triple rent under the agreement. Id. at 187-88. Judicial estoppel is part of the broader doctrine of equitable estoppel. See id. at 188. The equitable estoppel doctrine provides that `a party with full knowledge of the facts, which accepts the benefits of a transaction, contract, statute, regulation, or order may not subsequently take an inconsistent position to avoid the corresponding obligations or effects.' Thoubboron v. Ford Motor Co., 809 A.2d 1204, 1212 (D.C.2002) (quoting First Am. Disc. Corp. v. Commodity Futures Trading Comm'n, 343 U.S.App. D.C. 71, 79, 222 F.3d 1008, 1016 (2000)) (other citation omitted). We agree with Fairman's arguments that application of either doctrine precludes the District from taking the position on appeal, contrary to its position in the trial court, that the 1997 agreement and the provision for arbitration are void. Not only did the District not challenge the validity of the 1997 agreement or its arbitration provision, but also it affirmatively asserted that the 1997 agreement was valid, when it sought to have the award, which was based on the 1999 amendment, vacated. [5] Indeed, the District represented to the trial court that if it granted its petition to vacate the award, the District stood ready to make payment in any amount owed under this [1997] agreement. Moreover, the District participated in lengthy arbitration proceedings without claiming that the contract was void and that the PBC could not enter a contract containing an arbitration provision. [6] It could have, but did not seek a stay to challenge the validity of the agreement to arbitrate. See D.C.Code § 16-4302(b) (2001) (providing that [o]n application, the Court may stay an arbitration proceeding commenced or threatened on a showing that there is no agreement to arbitrate). [A] party may not submit a claim to arbitration and then challenge the authority of the arbitrator to act after receiving an unfavorable result. Lopata, supra, 735 A.2d at 937 (quoting Nghiem v. NEC Electronic, Inc., 25 F.3d 1437, 1440 (9th Cir.), cert. denied, 513 U.S. 1044, 115 S.Ct. 638, 130 L.Ed.2d 544 (1994) (other citation and internal quotation marks omitted)). Participation in the arbitration proceeding without objection waives any claim that the award is void because there was no agreement to arbitrate. Lopata, 735 A.2d at 937 (citing Jaffe v. Nocera, 493 A.2d 1003, 1010 (D.C.1985)). The District's first challenge to the 1997 contract and the arbitration provision came well after the arbitrator had made a substantial award to Fairman based on the contract amendments. This challenge arose only after the parties had expended considerable time and resources in the arbitration proceeding and in the trial court during which the District accepted the validity of the 1997 contract and the arbitrability of the dispute under it. [7] For the first time on appeal (and only after the District realized that it would have to concede the flaw in the position that the trial court accepted at its urging) did the District switch positions and claim that the original contract under which the matter was arbitrated was void. The doctrine of judicial estoppel precludes a party from switching legal positions in this manner `according to the vicissitudes of self interest. . . .' Porter Novelli, supra, 817 A.2d at 188 (quoting Lofchie v. Washington Square Ltd. P'ship, 580 A.2d 665, 668 (D.C.1990) (concurring opinion)). Therefore, we reject the District's arguments that the 1997 contract and the arbitration clause are illegal and unenforceable. [8]