216 So. 3d 906
La. Ct. App.2015Background
- DAS and LLI entered an Administrative Services Contract in Jan 2010; form contract was customized but no dispute-resolution election was made.
- The Agreement contained an “either/or” dispute-resolution provision with two options labeled B, including arbitration, but neither party selected B in signing.
- The contract thus contained both B provisions, creating potential ambiguity about whether arbitration was intended.
- A dispute arose and the parties engaged in two mediations in 2012 and 2014; DAS participated without objection.
- In 2014, LLI initiated AAA arbitration; DAS objected claiming no agreement to arbitrate; the trial court later denied declaratory relief and injunctive relief, finding consent to arbitrate by signing and performance, which DAS appealed.
- The appellate court affirmed, holding the arbitration agreement was ambiguous due to dual provisions but ultimately not manifestly erroneous to find consent by performance, and that arbitration should proceed under the contract’s terms.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of arbitration agreement given dual B provisions | DAS: no mutual consent to arbitrate; both Bs rendered arbitration not chosen | LLI: arbitration authorized by signature and by performance; two Bs create ambiguity but consent exists | Arbitration agreement found ambiguously; consent by performance upheld |
| Use of extrinsic evidence to interpret arbitration clause | DAS: extrinsic evidence cannot prove intent to arbitrate; focus should be on signing | LLI: extrinsic evidence admissible to resolve ambiguity in contract interpretation | Extrinsic evidence considered; contract ambiguity resolved in favor of arbitration; consent by performance supported |
| Standard of review for contract interpretation and consent | DAS: trial court erred in overturning lack of consent | LLI: proper standard and de novo review of contract interpretation | Court applied proper de novo/manifest-error framework and affirmed ruling |
Key Cases Cited
- Lakeland Anesthesia, Inc. v. United Healthcare of Louisiana, Inc., 871 So.2d 380 (La. Ct. App. 4th Cir. 2004) (ambiguous arbitration clause interpreted in favor of arbitration; extrinsic evidence considered)
- J. Caldarera & Co. v. Louisiana Stadium & Exposition Dist., 725 So.2d 549 (La. Ct. App. 5th Cir. 1998) (three-factor framework for resolving arbitration ambiguities: intent, contract interpretation, arbitration presumption)
- Hodges v. Reasonover, 103 So.3d 1069 (La. 2012) (Louisiana law favors arbitration as preferred ADR method)
- Aguillard v. Auction Management Corp., 908 So.2d 1 (La. 2005) (arbitration enforceability under La. Rev. Stat. §9:4201 et seq.)