Opinion ID: 2382863
Heading Depth: 2
Heading Rank: 1

Heading: The Requirement of an Evidentiary Hearing.

Text: Hercules is correct in stating that the threshold question whether an arbitration clause was validly concluded or fraudulently induced is one which the court must initially decide before referring a dispute to arbitration. Haynes v. Kuder, supra note 6, 591 A.2d at 1289-90; American Fed'n of Gov't Employees, Local 3721 v. District of Columbia, 563 A.2d 361, 362 (D.C.1989); Poire v. Kaplan, supra note 6, 491 A.2d at 532-33. We do not agree, however, with Hercules' contention that Judge Bowers failed adequately to consider this threshold question or that he was required to conduct a trial on the merits of Count XI before dismissing it with prejudice. In Haynes, the plaintiff had alleged, in moving to stay arbitration, that the arbitration clause in her retainer agreement with her former attorney, Kuder, had been fraudulently induced. The trial court rejected that allegation and compelled arbitration without holding an evidentiary hearing on the issue of fraudulent inducement. On appeal, Ms. Haynes contended that this was error in that she was entitled to such a hearing. We affirmed, concluding that the procedure to resolve `denials of the existence of [an] agreement to arbitrate' under [D.C.Code § 16-4302(a) (1989)] mirrors the familiar summary judgment procedure. 591 A.2d at 1290. Because the trial court in Haynes had the benefit of affidavits and other material outside the pleadings, we applied the standard for summary judgment under Super.Ct.Civ.R. 56 in evaluating the dismissal of Ms. Haynes' claim. 591 A.2d at 1290. Judge Bowers' decision, on the other hand, was based strictly on the submitted pleadings; our proper analogue on review of his dismissal of Count XI is therefore not Rule 56 but Super.Ct.Civ. Rules 12(b)(6) & 12(c). See Bell v. Jones, 566 A.2d 1059, 1060 (D.C.1989); American Ins. Co. v. Smith, 472 A.2d 872, 873-74 (D.C.1984). Under Rules 12(b)(6) and 12(c), a plaintiff is entitled to a trial of an issue of law or fact including the issue whether an arbitration clause was fraudulently inducedonly if the complaint alleges facts sufficient to support a claim upon which relief may be granted. Vicki Bagley Realty, Inc. v. Laufer, 482 A.2d 359, 362-64 & n. 7 (D.C. 1984); Healey v. Barker Found., 469 A.2d 1244, 1246 (D.C.1983); Cole, Raywid & Braverman v. Quadrangle Dev. Corp., 444 A.2d 969, 972 (D.C.1982). Therefore, in determining whether the trial court erred in granting Shama judgment on Count XI of Hercules' complaint without conducting an evidentiary hearing on that claim, we must consider whether Hercules alleged facts in its complaint sufficient to withstand a motion to dismiss under Rules 12(b)(6) or 12(c). To do that, we first examine the legislative and judicial authority for enforcing agreements to arbitrate. We then consider the elements of common law fraud in the inducement and evaluate the adequacy of Hercules' pleadings against those elements.