Opinion ID: 1848826
Heading Depth: 1
Heading Rank: 2

Heading: Interference with Subagency/Fraud

Text: The second cause of action was Old Republic's direct dealing with C-S in disregard of the alleged exclusive agency. It was arbitrated in connection with Lanier's fraud claim. Lanier's theory of the case both in arbitration and in litigationwas that Old Republic engaged in a plan or scheme to gain control of the marketing of the timber program and to put Lanier out of business. Arbitration Brief, at 17. Also, he argued, [t]here is no doubt that Old Republic's actions were intentional and designed with the specific purpose to steal the program from Lanier and then drive him out of business, thereby eliminating its main competition. Id. In his brief to this Court, he makes the same arguments, stating: Clearly, the elimination of Lanier to gain control of the program was [Old Republic's] main goal. Brief of Appellee, at 49. Under this theory, one of the means by which Old Republic sought to implement the scheme was misrepresentation regarding the question whether an exclusive agency existed. Another means was its dealings with C-S. Old Republic's plan to steal the program, according to Lanier, began in, or around, December 1991, and included its dealings with C-S. Id. at 18. Indeed, Lanier's relationship with C-S was an integral part of his program. In order to demonstrate Old Republic's methods and intentions toward Lanier's agency, Lanier presented to the arbitration panel evidence of the mid-1992 correspondence and transactions between Old Republic and C-S leading to the dissolution of the subagency. His arbitration brief outlined those facts in detail as evidence that Old Republic intentionally set about destroying [his] agency. Id. at 13-15. To the arbitration panel, Lanier argued strenuously that these transactions warranted the imposition of punitive damages against Old Republic under Lanier's fraud claim. In his brief to this Court, under the heading Degree of Reprehensibility, he relies on the same factsset forth in substantively identical termsto justify the jury's punitive damages award on his expirations and subagency claims. Brief of Appellee, at 39-40. He argues that those transactions paint a vivid picture of connivance and deceit.  Id. at 39 (emphasis added). Moreover, the compensatory -damages calculations Lanier submitted to the arbitration panel mirror the calculations he presented to the jury. To the arbitration panel, he argued that the value of [his] exclusive rights to the program include[d the] investment or override opportunity he enjoyed through his subagency with C-S. Arbitration Brief, at 9. He argued that [w]ithout Old Republic's behind the scenes involvement, C-S would have continued as a sub-agent. Id. at 10. Both to the panel and to the jury, Lanier presented the expert testimony of Dave Borden, who testified that Lanier's compensable loss was $2.94 million, which included the difference between the value of Lanier's agency before  Chancy-Stoutamire went direct  and the value of his agency after his relationship with Old Republic was terminated. (Reporter's Transcript, at 1048.) (Emphasis added.) See Clerk's Record, at 1603. Relying, apparently, on this testimony, the jury awarded precisely $2.94 million in compensatory damages. Lanier thus was awarded damages in the litigation for the same injuries for which he had sought damages in arbitration. This, he could not do. See Silcox v. United Trucking Serv., Inc., 687 F.2d 848, 852 (6th Cir.1982). Additionally, Lanier conceded to the panel: Even though there is a claim for conversion of expirations still pending in the lawsuit, Old Republic has denied any liability.... The claims which have been presented to this panel are not part of the conversion claim and a jury will never be asked to consider them.  The issues which have been presented to this panel comprise the heart of Lanier's claims against Republic.  Arbitration Brief, at 22 (emphasis added). Finally, it must not be overlooked that Lanier's subagency claim arose under the Agreement containing the arbitration clause. This is so, because the subagency itself arose under the Agreement, that is, it relat[ed] to the interpretation of the contract and matters of performance. Lanier I, 644 So.2d at 1262. The Agreement was expressly referenced in the January 1991 letter of intent, which set forth the purposes of the relationship between Lanier and C-S. Those purposes were further described in the Lanier-to-Jordan letter, which described the proposed subagency contract as an addendum to J.T. Lanier & Associates, to be contracted as a sub-agent under [the] Agreement.  (Emphasis added.) Thus, because the subagency arose under the Agreement, claims against a party to the Agreement for that party's interference with the subagency also arise under the Agreement. These and many similar considerations convince us that the nucleus of operative facts, Wesch v. Folsom, 6 F.3d 1465, 1471, which Lanier characterizes as connivance and deceit for purposes of his interference-with-subagency claim, constitutes the same cause of action that he presented to the arbitration panel as a basis for his fraud claim. Thus, the interference-with-subagency claim was within the scope of the submission, Fink, 238 Conn. at 196, 680 A.2d at 1252, of the fraud claim ordered to arbitration by Lanier I. Consequently, the arbitration panel had subject-matter jurisdiction of that cause of action, and the exception advanced in § 26, Restatement (Second) of Judgments, on which Lanier relies, does not apply. [6] For these reasons, the judgment of the trial court is reversed and the cause is remanded for disposition consistent with this opinion. REVERSED AND REMANDED. HOOPER, C.J., and MADDOX, HOUSTON, COOK, SEE, LYONS, BROWN, JOHNSTONE, and ENGLAND, JJ., concur.