Regions Bank v. Weber
53 So. 3d 1284
La. Ct. App.2010Background
- Relator Stephen J. Schmidt seeks a stay pending arbitration of Regions Bank’s action to collect on Schmidt’s guaranty.
- Bank obtained note and guaranty; note contains arbitration clause, guaranty is signed by Schmidt personally.
- Jourdan River Estates, LLC filed Chapter 11; bank sues Schmidt and Weber for debt.
- Trial court denied Schmidt’s exception of prematurity and his motion for stay; Schmidt sought supervisory relief.
- Court concludes arbitration clause scope includes Schmidt’s dispute; equity estoppel applies to compel arbitration.
- Case remanded to district court with instructions to stay proceedings pending arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether to stay proceedings or compel arbitration. | Schmidt argues note’s arbitration clause governs dispute. | Regions contends no signature by Schmidt on note bars arbitration. | Arbitration is favored; stay granted and arbitrable scope recognized. |
| Whether Schmidt can compel arbitration as a non-signatory to the note. | Note and guaranty are intertwined; Schmidt should arbitrate. | Non-signatory cannot enforce arbitration unless estoppel or related doctrines apply. | Equitable estoppel permits Schmidt to arbitrate against Regions. |
| Whether the arbitration clause covers the dispute between Schmidt and Regions. | Note and guaranty are sufficiently intertwined to cover the dispute. | Scope may be contested; Regions waived rights by suit but may not defeat arbitration. | Clause covers the dispute; doubt resolved in favor of arbitration. |
| What law governs the arbitration agreement and its enforcement. | FAA governs arbitrability; federal law favors arbitration. | State law can apply; Regions argues against compelled arbitration. | FAA governs; Louisiana law mirrors federal arbitration policy; arbitration favored. |
| Role of equitable estoppel in allowing non-signatories to compel arbitration. | Equitable estoppel permits non-signatories to compel based on intertwined claims. | Estoppel arguments should be narrow and limited. | Equitable estoppel applies; Regions estopped from objecting to Schmidt’s arbitration. |
Key Cases Cited
- Saavedra v. Dealmaker Developments, LLC, 8 So.3d 758 (La.App. 4 Cir. 2009) (threshold arbitrability and scope of arbitration in review)
- Aguillard v. Auction Management Corp., 908 So.2d 1 (La. 2005) (presumption of arbitrability; stay pending arbitration)
- Lakeland Anesthesia, Inc. v. United Healthcare of Louisiana, Inc., 871 So.2d 380 (La.App. 4 Cir. 2004) (strong presumption in favor of arbitration; federal-law guidance)
- International River Center v. Johns-Manville Sales Corp., 861 So.2d 139 (La. 2003) (arbitration ordinance and enforcement; FAA alignment)
- Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1 (U.S. Supreme Court, 1983) (FAA governs arbitrability; policy favoring arbitration)
- Grigson v. Creative Artists Agency, L.L.C., 210 F.3d 524 (5th Cir. 2000) (equitable estoppel for non-signatories to compel arbitration)
- Hurley v. Fox, 520 So.2d 467 (La.App. 4 Cir. 1988) (significance of conduct and signatures in arbitration agreements)
- Bartley, Inc. v. Jefferson Parish School Bd., 302 So.2d 280 (La.1974) (speedy resolution via arbitration; avoid preliminary litigations)