Hicks v. Cadle Co.
2014 Ohio 872
Ohio Ct. App.2014Background
- Hicks appeals denial of motion to compel arbitration over appellees' amended counterclaims.
- Counterclaims allege violations of Ohio’s Pattern of Corrupt Activities Act, intentional infliction of emotional distress, and tortious interference.
- Note contains a broad arbitration clause: “any claim or controversy arising out of or relating to the agreement.”
- Buckeye Retirement Co., LLC purchased the note from Bank of America in 2002 and later assignments/relationships ended by 2004; Cadle, TCC, and United acted in debt collection capacity.
- Arbitration venue provision originally in Tennessee; Ohio action arises in 2011 seeking to prevent asset transfers and enforce arbitration award; prior arbitrations occurred in Colorado.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether amended counterclaims fall within the note’s arbitration clause | Hicks: counterclaims arise from the note and related conduct | Cadle et al.: counterclaims relate to torts not grounded in the note | No; claims do not arise from or relate to the note. |
| Whether defendants are bound by the note’s broad arbitration clause | Hicks: assignees bound by arbitration provisions | Cadle et al.: assignees bound by the clause | Not bound; the note terminated before the alleged conduct; no surviving contractual right. |
| Appropriate standard for arbitrability and scope under Fazio framework | Hicks: scope depends on contact and contract; claims outside scope | Cadle: broad clause should cover related disputes | Fazio-based analysis applied; claims do not fall within scope. |
Key Cases Cited
- Academy of Medicine of Cincinnati v. Aetna Health, Inc., 108 Ohio St.3d 185 (Ohio 2006) (broad vs. narrow arbitration clause; test for scope of arbitrability)
- Fazio v. Lehman Bros., Inc., 340 F.3d 386 (6th Cir. 2003) (proper method: could action proceed without contract; even real torts can be arbitrable if touching the agreement)
- Litton Fin. Printing Div. v. NLRB, 501 U.S. 190 (U.S. 1991) (contract survival and pre-expiration rights affect arbitrability)
- Alexander v. Wells Fargo Fin. Ohio 1, Inc., 122 Ohio St.3d 341 (Ohio 2009) (statutory rights can require underlying agreements to prove claims)
- Dodeka, L.L.C. v. Keith, 11th Dist. Portage No. 2011-P-0043, 2012-Ohio-6216 (Ohio 2012) (assent to arbitration necessary when no contract)
- Taylor v. Ernst & Young, L.L.P., 130 Ohio St.3d 411 (Ohio 2011) (scope determination for arbitration)