Court Opinion

ID: 9756621
Source: CourtListenerOpinion
Date Created: 2023-08-28 21:42:27.663334+00
Date Added: 2024-06-11T09:56:57.999609
License: Public Domain

RICHARD H. EDELMAN, Justice,
dissenting.
The Federal Arbitration Act (“FAA”) provides for: (1) stays of proceedings in which an issue is referable to arbitration and the applicant for the stay is not in default in proceeding with such arbitration; and (2) orders compelling arbitration when a party has failed or refused to comply with an arbitration agreement. 9 U.S.C.A. §§ 3, 4 (West 1999);1 E.E.O.C. v. *889Waffle House, Inc., 534 U.S. 279, 289, 122 S.Ct. 754, 151 L.Ed.2d 755 (2002). Although there is a liberal federal policy favoring arbitration agreements, absent some ambiguity in the agreement, it is the language of the contract that defines the scope of disputes subject to arbitration. E.E.O.C., 584 U.S. at 289, 122 S.Ct. 754. The FAA directs courts to place arbitration agreements on equal footing with other contracts, but it does not require parties to arbitrate when they have not agreed to do so. Id. at 293, 122 S.Ct. 754. Its purpose was to make arbitration agreements as enforceable as other contracts, not more so. Id. at 294, 122 S.Ct. 754. Therefore, we look first to whether the parties agreed to arbitrate a dispute, not to general policy goals, to determine the scope of the agreement. Id. While ambiguities in the agreement should be resolved in favor of arbitration, we do not override the clear intent of the parties, or reach a result inconsistent with the plain text of the contract, simply because the policy favoring arbitration is implicated. Id. Arbitration under the FAA is a matter of consent, not coercion. Id.
In this case, the applicable contract language provides that with regard to the specified disputes, including the one in this case, either party “may” submit it to an arbitration association for binding arbitration. This language is permissive, rather than mandatory, in the sense that either party has a right to require arbitration, but neither is required to arbitrate if the other does not invoke the right.2 At the time Feldman filed its motion (the “motion”) to compel arbitration and stay proceedings, it had not (and still has not) attempted to submit the dispute to an arbitration association.
The majority holds that filing the motion was itself sufficient to invoke Feldman’s rights to compel arbitration and stay the proceedings. However, at the time Feld-man filed its motion, Settlement Capital was under no obligation to arbitrate because Feldman had not submitted the dispute to an arbitration association and was not required to do so. Because no obligation to arbitrate existed at that time, Settlement Capital was not then in breach of any such obligation, and Feldman thus had no right to compel arbitration under section 4.
Similarly, in that Settlement Capital had not submitted the dispute to an arbitration association, it was within the trial court’s discretion to conclude that the matter was not yet referable to arbitration (or, alternatively, Settlement Capital was in default in proceeding with arbitration),3 such that the requisites had not been met to stay the proceedings under section 3. Moreover, because the plain meaning of the language of the agreement in these respects is unambiguous, there is nothing to construe in *890favor of arbitration. Therefore, the trial court did not abuse its discretion in denying the motion, and Feldman’s mandamus petition should be denied.

. Where an issue is referable to arbitration, but a party is not in breach of an arbitration agreement, Section 3 allows courts only to *889stay proceedings, not compel arbitration. See Hill v. G.E. Power Sys., Inc., 282 F.3d 343, 347 (5th Cir.2002).

. The majority cites cases purportedly holding that an agreement to arbitrate is mandatory even if it uses permissive terms such as “may.” If this is true, parties are legally incapable of contracting for arbitration that is required only if one or the other requested it, contrary to the principles stated in E.E.O.C., above. See also Briggs & Stratton Corp. v. Local 232, Int’l Union, Allied Indus. Workers of Am., 36 F.3d 712, 715-716 (7th Cir.1994) ("The dispute does not come within § 4 of the Arbitration Act because no one has demanded arbitration.... It does not come within § 3 because, given the contractual nature of arbitration, a dispute that neither side wants to arbitrate is not ‘referable to arbitration' — and perhaps because the union, by refusing to submit its own demand is 'in default.’ ").

. See Briggs, 36 F.3d at 716 (“This is not to say that a dispute is ‘referable to arbitration' only if a party has made a formal demand; ... requests in the course of litigation may suffice.”).