739 N.E.2d 857 | Ohio Ct. App. | 2000
On January 8, 1999, appellees, Gerald Smith and Sally M. Smith, filed a complaint against appellant, Whitlatch Co., alleging fraud, breach of contract, breach of express and implied warranties, negligence, and violations of Ohio condominium law and the Ohio Consumer Sales Practice Act ("CSPA"). The complaint arose out of a June 3, 1995 purchase contract executed by the parties for the sale of a condominium unit. The crux of the complaint was that the foundation of the condominium was cracking and that appellant attempted to conceal this defect.
The contract contained an arbitration clause, which specified: *684
"BUYER and SELLER agree that any controversy or claim arising out of, or related to this AGREEMENT, or the breach thereof, shall be settled by Arbitration in accordance with the Construction Industry Arbitration Rules and the Expedited Dispute Settlement Rules of the American Arbitration Association then in effect, unless the parties mutually agreed otherwise."
Appellant filed a motion to stay the proceedings pending arbitration. The trial court overruled the motion and determined that appellees' claim involved allegations of fraud in the inducement and rescission of the underlying contract, which were not subject to the arbitration clause. Appellant appeals and raises the following assignment of error:
"The trial court erred in denying appellant's motion pursuant to R.C.
In its sole assignment, appellant raises two separate issues. In its first issue, appellant asserts that to defeat a motion to stay, a party must demonstrate that the arbitration provision was fraudulently induced. In its second issue, appellant asserts that the arbitration clause was broadly worded and applies to all claims presented in appellees' complaint. Appellees counter that a case cannot be referred to arbitration when a party claims fraud in the inducement, claims a violation of the CSPA, or requests a rescission of the contract. They further argue that arbitrators do not have jurisdiction to hear cases involving the CSPA. We will analyze appellant's issues concurrently.
As an initial matter, it must be noted that public policy in Ohio encourages the resolution of disputes through arbitration. Kelm v. Kelm (1993),
"To defeat a motion for stay brought pursuant to R.C.
Appellees cite our holding in Painesville Twp. Local School Dist. v. Natl. Energy Mgt. Inst (1996),
Appellant's assignment of error has merit. The judgment of the trial court is reversed, and this cause is remanded with instructions that the trial court stay proceedings pending arbitration. Judgment accordingly.
FORD, P.J., and CHRISTLEY, J., concur.