Glassman, Edwards, Wyatt, Tuttle & Cox, P.C. v. B. J. Wade
404 S.W.3d 464
| Tenn. | 2013Background
- A law firm filed two fraud and breach-of-fiduciary-duty suits against its former partner Wade and former paralegal Crowe in the Chancery Court for Shelby County.
- Wade and Crowe moved to dismiss or compel arbitration under the Tennessee Uniform Arbitration Act (TUAA), attaching unsigned employment agreements and Wade’s executed Shareholder’s Agreement.
- The Firm contends the Shareholder’s Agreement is void for lack of mutual assent and fraud; it also contends the employment agreements are unenforceable due to lack of executed forms.
- The Chancery Court consolidated the cases, stayed discovery except on arbitrability, and ordered mediation to resolve all issues, directing disclosure of documents for a meaningful resolution.
- Wade and Crowe sought appellate review of the discovery and mediation orders; the Court of Appeals denied, and the Tennessee Supreme Court granted extraordinary review.
- The Court vacated the discovery and mediation orders, remanding for a limited ruling on whether arbitration is required and restricting discovery to arbitrability issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court erred by ordering broad discovery prior to arbitrability. | Glassman argues discovery must be limited to arbitrability under TUAA. | Wade/Crowe contend discovery beyond arbitrability is improper and should be stayed or limited. | Yes; discovery restrained to arbitrability issues only. |
| Whether the trial court erred in ordering mediation on all issues before arbitration. | Glassman asserts mediation on the merits outside TUAA's scope is improper. | Wade/Crowe contend mediation is permissible as a condition precedent and part of dispute resolution. | Yes; mediation on merits prior to arbitration was improper. |
| Whether the TUAA requires summary resolution on arbitrability before merits. | Glassman relies on TUAA to prioritize arbitrability issues first. | Wade/Crowe argue for procedural flexibility in handling arbitration issues. | Yes; TUAA directs prompt determination of arbitrability prior to merits. |
| Whether the trial court had authority to order discovery and mediation beyond TUAA limits. | Glassman claims TUAA permits discovery as needed for arbitrability. | Wade/Crowe contend court exceeded TUAA boundaries by addressing nonarbitrability issues. | Yes; court exceeded TUAA limits and must remand for limited arbitrability-discussion. |
| What is the proper remedy on remand regarding arbitrability and discovery scope? | Glassman seeks continued access for necessary arbitration-related documents. | Wade/Crowe seek restriction to issues governing enforceability of arbitration clauses. | Remand to determine enforceability of any arbitration agreements with discovery limited to that issue. |
Key Cases Cited
- Benton v. Vanderbilt Univ., 137 S.W.3d 614 (Tenn. 2004) (arbitration favored; TUAA framework)
- Arnold v. Morgan Keegan & Co., 914 S.W.2d 445 (Tenn. 1996) (TUAA interpretation and limited judicial involvement)
- Tuetken v. Tuetken, 320 S.W.3d 262 (Tenn. 2010) (TUAA governs mediation when arbitration chosen)
- Haley v. Univ. of Tenn.-Knoxville, 188 S.W.3d 518 (Tenn. 2006) (court rules on statutory-substantive rights; limits of supreme court rules)