Jones v. Paradies
380 S.W.3d 13
Mo. Ct. App.2012Background
- PCA entered into a Management Agreement with The Paradies Shops, Concessions, and Arch to manage airport concessions, containing an arbitration clause.
- The arbitration clause requires arbitration in Atlanta, Georgia for disputes arising out of or relating to the agreement.
- Defendants served as PCA directors and affiliates, signing the agreement only in their corporate capacities, not in their individual capacities.
- Plaintiffs, Arch partners, sued the defendants in their individual capacities for tortious interference with the Management Agreement and for conspiracy to tortiously interfere.
- Defendants moved to dismiss or stay, seeking arbitration of the dispute in Georgia; trial court denied, holding individuals were not bound.
- The court addressed whether non-signatories may enforce an arbitration clause and whether estoppel or agency theories permit it.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| May non-signatories enforce the arbitration clause? | Non-signatories are not bound to arbitration simply by corporate signatures. | Individual defendants may enforce if acting for corporation and estoppel applies. | No; non-signatories may not enforce. |
| Can plaintiffs be estopped to deny arbitration against non-signatories? | Estoppel should bind because arbitration clause exists in contract with the signatory. | Estoppel applies to signatory suing non-signatory for breach; not here. | Estoppel does not apply. |
| Can non-signatories enforce arbitration when claims derive from a contract claim covered by the clause? | Arbitration should extend to closely related contract claims. | Derivation from contract does not authorize compelling arbitration of non-signatories. | No; no authority to compel arbitration for non-signatories. |
Key Cases Cited
- State ex rel. Union Pacific R. Co. v. David, 331 S.W.3d 666 (Mo. banc 2011) (consent-based arbitration principle)
- M & I Marshall & Ilsley Bank v. Sader & Garvin, L.L.C., 318 S.W.3d 772 (Mo. App. W.D.2010) (unilateral arbitration right requires agreement)
- Springfield Iron & Metal, LLC v. Westfall, 349 S.W.3d 487 (Mo. App. S.D.2011) (agents signing as representatives not bound individually)
- Nitro Distributing, Inc. v. Dunn, 194 S.W.3d 339 (Mo. banc 2006) (arbitration when non-signatory; intertwined claims not sufficient)
- Netco, Inc. v. Dunn, 194 S.W.3d 353 (Mo. banc 2006) (estoppel limits inapplicability to tort claims)
- Zipper v. Health Midwest, 978 S.W.2d 398 (Mo.App. W.D.1998) (officer acting for corporation for tort purposes, not here)
- Fields v. R.S.C.D.B., Inc., 865 S.W.2d 877 (Mo.App. E.D.1993) (officer acting for corporation; not controlling here)