*1
BILL WALKER,
TOPOLSKI and
TED
Appellants,
Plaintiffs
v.
REALTORS®,
OF
HELENA ASSOCIATION
Corporation,
Nonprofit
a Montana
INC.,
Respondent.
Defendant
No. 00-027.
Briefs June
Submitted on
19, 2000.
Decided December
For Zane K. Sullivan and John K. Tabaracci, & Sullivan Missoula.
CHIEF JUSTICE the Opinion TURNAGE delivered ofthe Court. enjoin This is an action to Ruling parties ¶1 arbitration. that the are Court, bound to arbitrate their the First Judicial District County, granted summary Lewis and Clark judgment in favor of (Association). REALTORS®, Helena Association of Topolski Inc. Ted appeal. and Bill Walker We affirm. The issues are:
¶2 1. Whether prohibits an to arbi- ¶3 trate between a member of a trade or professional organiza- nonmember, and, so, tion and a if whether the statute is preempted the Federal Act. 2. Whether the terms of memberships Walker’s
¶4 require the Association them to arbitrate with an individual who not a member of Association. voluntary organization The Association is a trade oflicensed real In salespersons.
estate brokers and December of Clare Kendall Agreement “Request submitted the Association form entitled (Nonmember).” form, to Arbitrate In Kendall consented to signing Ted regarding a real estate transaction in which arbitrate Walker, Topolski and Bill broker members of both agents. as had acted her and re- Topolski objected proceedings to arbitration participate, they agree-
fused that had not entered into stating As- ment contract with Kendall to with her. The citing the REALTORS® Code disagreed, provisions sociation subject. to which all Association members are Faced with Ethics proceed regard- real would with arbitration risk that Association to en- objections, Topolski less of their and Walker filed lawsuit join such action. summary The parties judgment. Both moved for District Court
found as a matter of and Walker were bound law summary proceed granted judgment Asso- ciation. legal authority applicable
Standard of review and reviewing grant summary judgment, applies this Court In 56(c), court, upon as based Rule the same evaluation does district Where, here, agreed that no material M.R.Civ.P. *3 in determine the district facts are Court must law-here, regarding arbitrability-is correct. court’s conclusion of 512, Direct, 63, 17, 17, MT Iwen U.S. 293 Mont. ¶ ¶ v. West 989, P.2d 27-5-114, presented, The statute invoked in both issues here § Act,
MCA, part §§ was in 1985 as of Uniform adopted -324, provides: MCA. It through 27-5-111 (1) controversy to ar- existing A written agreement submit except that exist at upon grounds bitration valid and enforceable of a contract. equity or for revocation law (2) any agreement A to arbitration contro- written submit is made is versy arising between the after the at law or in except upon grounds that exist valid enforceable Except permitted under equity for the revocation of contract. to: apply this subsection does not subsection (a) injury, on con- arising personal out of whether based claims tort; tract or
(b) or for the of real any by acquisition contract an individual services, the total con- money or or credit when personal property, paid $5,000 sideration to be or furnished the individual is or less;
(c)any agreement concerning relating or policies insurance annuity except contracts for those contracts between insurance companies; or
(d) compensation. claims for workers’ (3)A written between members of a profes- trade or organization sional any submit to arbitration controversies aris- ing between members of the professional trade or organization af- ter the is made is valid and except upon enforceable grounds that exist at law or in equity for the revocation of a con- tract.
Additionally, we recognized that both federal and poli- Montana cies Co., favor arbitration. See Holm-Sutherland Inc. v. Town of Shelby, 150, 9-10, 1999 MT 9-10, 295 Mont. ¶¶ 982 P.2d ¶¶ 9-10. ¶¶
Issue 1 Does prohibit § an agreement to arbitrate disputes between a member of a trade or professional organization and nonmember, and, so, if is the statute preempted by the Federal Arbitration Act? and Walker maintain that under 27-5-114(3),MCA, §
separate written agreement would be in order to bind them person who, arbitrate with a Kendall, like is not a member of the response, Association. In the Association has cited cases from other jurisdictions involving disputes between real estate brokers and salespeople which, here, like the members had agreed with their associations to particular disputes. However, kinds of case, involving a dispute between Association members and a non- member ofthe does not correspond to the factual scenar- ios the cases cited or, matter, the Association for that the facts to which subsection relates. As the points out, Association though, 27-5-114(3), MCA, agreements arbitrate,
does not limit “except upon grounds that exist at *4 equity law or in for the revocation of a contract.” The District Court also noted that subsection does not restrict the allowance of pre-dispute agreements to arbitrate to of pro members trade or only. fessional associations opinion Court, In the of the District the statute professional organiza-
simply clarifies that members of trade agree to future disputes. Nothing tions can in advance Act, -324, to the Montana Uniform Arbitration Sections 27-5-111 MCA,prohibits requiring the Helena of from Association Realtors that arise non-members. their members to arbitrate with general and federal ar- policies favoring This conforms with state bitration. reasoning District hold agree
We with the of the Court. We that § 27-5-114(3), MCA, prohibit not an to arbitrate dis- does of a a putes professional organization between a member trade or reason, question nonmember. For that we need not address the the Federal Act. preempted statute is
Issue 2 memberships Do terms of and Walker’s the As- is require them to arbitrate with individual who not sociation of the member Association? out, they Topolski point and Walker did District before
Court, signed Request Agreement that neither ofthem to Ar- further They which Kendall filed with the Association. state bitrate any other contract or that neither them has entered into They her. Kendall arbitrate a with maintain that un- with there must be a written arbi- der trate, has satisfied. requirement which not been from our Topolski point following language Agency,Inc., 2000 MT Solle v. Western States Ins. opinion 237, 999 328: Mont. P.2d arbitration of a compel court is asked parties agreed be arbi- inquiry
threshold should whether The for from the fact that inquiry trate. rationale such an comes party a matter of contract and cannot “arbitration is any he has not so to to submit which submit.” (citations omitted).
Solle, and Walker concede at While them and bylaws can create contract between Association’s agree by- not that the contractual force ofthe they do member of the Association. can extend to one who not a laws a mem- relationship This noted that the between Court has is contractual nonprofit corporation and that corporation ber in nature.
It
precedent
bylaws
corporation,
is well established
that the
of a
together
incorporation,
with the articles of
the statute under which
incorporated,
it was
and the member’s
constitute a
application,
corporation.
duly
contract between the member and the
en-
acted,
bylaws
binding upon
are
all members of the corporation
presumed
or association who are
to know them and contract in ref-
Jur.2d,
erence to them. 18 Am.
168.
Corporation
This contractual
relationship through
bylaws
corporate
extends itself into the areas
rights
of correlative
and duties of individual union members with
general
bylaws
their
charter
and individual cooperative members
their respective
with
association charters. On
becoming member
corporation
subscribing
bylaws,
association and
to its
one
thereby agrees
regulations.
to submit to its rules and
Ranch,
Appeal
Two
16, 23,
1. Article Section of the bylaws Association’s that provides by members will abide the Code of Ethics of the National Associa- Realtors, tion of which includes “the obligation to arbitrate contro- arising versies out of real by estate transactions as specified Code of Ethics.” Ethics, Article 17 of the Code of p. provides part: in “In the
event clients of REALTORS® wish arbitrate contractual dis- putes arising transactions, out of real estate REALTORS® shall arbitrate those regulation accordance with the of their Board, provided the agree by clients to be bound the decision.” Ten, 44, 107, 3. Part p. Section ofthe Arbitration Manual ofthe Na- tional provides: Association Realtors “Aclient of a REALTOR® principal may invoke the arbitration facilities of the Board in a business principal arising with REALTOR® out anof agency relationship, provided agrees by the client to be bound arbitration.” undisputed It is that Kendall Topolski’s was and Walker’s underlying
client matter at Under issue. Article of the Code Realtors, ofEthics ofthe National Association of Topolski and Walker agreed client, disputes brought by arising to arbitrate out anof agency relationship, long agreed by so as the client to be bound the ar Here, client, agreed bitration. Kendall has to be bound arbitra- Topolski’s forth in Article being clearly set tion. In addition to Associa- clients as a result of to arbitrate with Walker’s by- in the Association’s clearly referenced membership is also tion Arbitra- 1(a), of Ethics and laws, V, and in the Code Article Section By Realtors. their volun- Association of Manual of the National tion in the tary memberships We conclude provisions. these
be bound not more clear. could obligation to arbitrate Walker’s dismissing correct that the District Court was We hold pro Walker, and Kendall are bound Topolski, this action because Court is affirmed. The decision of the District ceed arbitration. HUNT, concur. NELSON and REGNIER JUSTICES *6 dissenting. TRIEWEILER JUSTICE majority opinion. the I dissent from ¶20 MCA, 27-5-114(1), provides that written Section ¶21 in combination with When read is valid and enforceable. (3) (2) statute, I that sub- conclude same subparagraphs parties between requires written paragraph controversy. to submit arbi- agreements refers to which Subparagraph future, agreements refers to be- arising in the controversy tration (3) makes clear that dispute. Subparagraph to the parties tween the orga- professional a trade or members of agreements between written dispute are enforceable when to submit to arbitration nization organization. professional the trade or members of arises between Helena Association Furthermore, cited all of the authorities mem- realtors who are Inc., among various Realtors, involve by the asso- presented of the authorities of an association. None bers the association nonmember of contention that a support ciation bylaws to which member based on against a can enforce arbitration any authority for majority cite does the agreed. Neither the member that conclusion. be require interpret To case prior our consistent with is also
tween 328, 999 P.2d Inc., MT Agency, States Ins. Solle v. Western law. example. good is a majority opinion in the is cited Rep. St. which repeating: is worth language The quoted threshold compel a court is asked The ratio- to arbitrate. agreed the parties inquiry should be is a that “arbitration from the fact comes inquiry nale for such an matter ofcontract party and a cannot to submit to arbi- any dispute tration which he has not so to submit. added.) Solle, 22 (emphasis case, In this the parties to the not agreed upon ar- brokerage agreement
bitration. The entered into Kendall and pre- pared by the Association of Realtors did not include an arbitration provision. fact, In there is no indication that Clare Kendall was ever a procedure aware of known as arbitration until after the dispute in reason, case arose. For that I would conclude that neither Kend- all nor the Helena Association of Realtors have met the threshold re- quirement of demonstrating that “the parties agreed to arbitrate.” Therefore, I would reverse judgment ofthe District Court.