Court Opinion

ID: 5115565
Source: CourtListenerOpinion
Date Created: 2021-10-02 19:53:20.431093+00
Date Added: 2024-06-11T08:21:50.811937
License: Public Domain

COURTNEY HUDSON GOODSON, Justice, dissenting. The majority affirms the circuit court’s denial of the motion to compel arbitration because, in its estimation, Courtyard Gardens failed to produce conclusive evidence that Ronald Quarles had the actual authority to bind the decedent to the agreement. I dissent because the majority has misallo-cated the burden of proof and decides the issue as one of law when questions of fact remain as to Ronald Quarles’s actual or apparent authority to enter into the arbitration agreement. Both Courtyard Gardens and the Estate agree that the provisions of the Federal Arbitration Act (FAA) govern this case. While the substantive issues are determined by the FAA, the procedural issues are determined by Arkansas law. England v. Dean Witter Reynolds, Inc., 306 Ark. 225, 811 S.W.2d 313 (1991). When there is no Arkansas law on the subject, we look to the decisional law of other jurisdictions for guidance. See Showmethemoney Check Cashers, Inc. v. Williams, 342 Ark. 112, 27 S.W.3d 361 (2000). In the context of motions to compel arbitration, courts apply a standard similar to that applicable to a motion for summary judgment. SmartText Corp. v. Interland, Inc., 296 F.Supp.2d 1257 (D.Kan.2003) (collecting cases). Initially, the party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration and proving that the contract evidences a ^transaction involving interstate commerce. Custom Performance, Inc. v. Dawson, 57 So.3d 90 (Ala.2010). Once the moving party has properly supported his or her motion to compel arbitration, the burden then shifts to the nonmov-ant to present evidence tending to show that the arbitration agreement is invalid or inapplicable to the case. Id. If the party opposing arbitration presents sufficient evidence to create a fact issue as to the existence of a valid arbitration agreement, then the issue must be resolved by the trial court or by a jury, if one is requested. SSC Selma Operating Co., LLC v. Gordon, 56 So.3d 598 (Ala.2010). Accord England, supra. Here, Courtyard Gardens met its only burden of showing the existence of an arbitration agreement, as the arbitration agreement itself constitutes sufficient evidence that a contract calling for arbitration exists. See Gordon, supra. It was then the Estate’s burden to demonstrate that the agreement was invalid. The Estate countered by questioning Ronald Quarles’s authority to enter into the agreement. Properly applying the principles set forth above, the circuit court found that, based on the record developed thus far, a question of fact remained for resolution by a trier of fact. In light of the aforementioned authorities, I would uphold the circuit court’s ruling. In my view, the majority wrongly places the burden of proof at this stage of the proceeding on Courtyard Gardens and apparently expects it to have conclusively resolved the agency issue at this juncture. Not only is it wrong to place the initial onus on Courtyard Gardens, but it also strikes me as being fundamentally unfair to penalize Courtyard Gardens for not marshalling its evidence at this preliminary stage. In this instance, the circuit court’s dispositive ruling was that the arbitration agreement failed due to the unavailability of the NAF to conduct the arbitration. With that finding, it became [^completely unnecessary for the parties to try the agency issue to a conclusion. Yet, the majority now holds that Courtyard Gardens is to be deprived of the opportunity to litigate this issue because it failed to prove that Ronald Quarles had the authority to enter into the agreement, a burden that it did not have at that point in the proceedings. I simply cannot agree to affirm on this basis. Ordinarily, agency is a question of fact to be determined by a jury. Evans v. White, 284 Ark. 376, 682 S.W.2d 733 (1985). The question of agency becomes one of law only where the facts are undisputed and where only one inference can be reasonably drawn from them. Id. The existence of an agency cannot be shown by proving the acts and declarations of the agent, but the agent himself may testify in regard to his agency and the extent of his authority. Pakay v. Davis, 367 Ark. 421, 241 S.W.3d 257 (2006). This court has held many times that, while one cannot prove agency or the extent of an agent’s authority by the declarations or the acts of an agent, a party can prove agency by the agent himself. Griffin v. Flemister, 252 Ark. 907, 481 S.W.2d 718 (1972). Circumstantial evidence may be sufficient to establish agency, and the declarations of the purported agent may be used to corroborate other evidence of agency. Hawthorne v. Davis, 268 Ark. 131, 594 S.W.2d 844 (1980). The relationship of agency cannot be inferred from mere relationship or family ties unattended by conditions, acts, or conduct clearly implying an agency, but such relation is competent evidence when considered with other circumstances as tending to establish the facts of agency. Griffin, supra. While I agree with the majority that the acts and declarations of Ronald Quarles do not establish an agency relationship as a matter of law, that is not to say that Courtyard Gardens could not have proven that he had actual or apparent authority to enter into the | M arbitration agreement. That remained to be seen, and the issue would have been resolved had the circuit court not invalidated the arbitration agreement on purely legal grounds. As it stands, Courtyard Gardens met its initial burden of establishing the existence of the agreement. At that juncture, nothing more was required of it. Therefore, I cannot in good conscience uphold the denial of the motion to compel arbitration for the reasons stated by the majority. On this issue, the circuit court’s reasoning and analysis were correct. The result reached by the majority falls short of being right.