Opinion
No. A05-256.
Filed January 31, 2006.
Appeal from the District Court, Hennepin County, File No. Mp 04-16224.
Michael C. Mahoney, Mahoney Emerson, Ltd., and Thomas A. Foster, (for appellants)
William R. Skolnick, Rolin L. Cargill III, Skolnick Associates, P.A., (for respondent)
Considered and decided by Halbrooks, Presiding Judge; Klaphake, Judge; and Wright, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2004).
OPINION
Appellant challenges the district court's order denying his motion to compel arbitration. He alleges that the parties had an agreement to arbitrate despite the absence of a signed agreement because he informed respondent of the arbitration clause and because respondent's actions manifested an assent to be bound by arbitration. Because the parties had an express contract, any language not contained in the express contract is not part of the contract. Therefore, we affirm.
FACTS
Respondent Louisa Alben met and discussed with appellant Michael Mahoney her need for representation in a post-dissolution property-settlement matter. Respondent decided to retain appellant, and appellant faxed a retainer letter to her that respondent signed and faxed back to appellant. Appellant contends that, after receiving the signed retainer letter from respondent, he then sent her a document entitled Legal Services Agreement, which contained an arbitration clause that is currently at issue. Respondent denies ever seeing, discussing, or signing the Legal Services Agreement. Appellant proceeded to represent respondent for slightly more than one year, during which time appellant sent respondent monthly billing statements, and respondent frequently contacted appellant regarding questions and concerns about the bills.
Respondent initiated this action against Michael Mahoney in his personal capacity, along with Mahoney and Hagbert, the firm Mahoney was with at the time this cause of action arose, as well as Mahoney and Emerson, the firm Mahoney is currently with. Because Mahoney was the primary defendant in the district court, this opinion refers to him as the singular appellant.
Respondent eventually became dissatisfied with appellant's billing practices, discharged him as her attorney, and filed a complaint alleging fraudulent billing, breach of fiduciary duty, deceit and collusion, and unjust enrichment. Appellant answered, alleging numerous affirmative defenses, including that the matter was subject to arbitration, and asserted several counterclaims against respondent.
Appellant moved to compel arbitration pursuant to the Legal Services Agreement. Appellant filed an affidavit stating that he sent the Legal Services Agreement to respondent and that they had previously discussed and agreed to its terms. Respondent filed an affidavit averring that she never saw or discussed the Legal Services Agreement with appellant and did not agree to be bound by it. It is undisputed that there is no signed Legal Services Agreement. The district court denied appellant's motion. This appeal follows.
DECISION
An appellate court will review de novo a district court's decision denying a motion to compel arbitration. Johnson v. Piper Jaffray, Inc., 530 N.W.2d 790, 795 (Minn. 1995). "Determining whether a party has agreed to arbitrate a particular dispute is a matter of contract interpretation." Id. In an action to compel arbitration, this court looks to the parties' intentions as evidenced by the arbitration agreement's language. Minn. Fed'n of Teachers v. Indep. Sch. Dist. No. 361, 310 N.W.2d 482, 484 (Minn. 1981). It should be noted, however, that whether a contract exists is generally an issue for the fact-finder and thus deserves deference. Morrisette v. Harrison Int'l Corp., 486 N.W.2d 424, 427 (Minn. 1992) (holding that a "finding may only be overturned if it is manifestly contrary to the evidence").
"When considering a motion to compel arbitration, the court's inquiry is limited to (1) whether a valid arbitration agreement exists, and (2) whether the dispute falls within the scope of the arbitration agreement." Amdahl v. Green Giant Co., 497 N.W.2d 319, 322 (Minn.App. 1993). If the district court finds that an agreement to arbitrate exists, it must grant the motion to compel. Id. But if there is no agreement to arbitrate or if the controversy sought to be arbitrated is not within the scope of the contract's arbitration clause, the district court may interfere to protect a party from being compelled to arbitrate. Atcas v. Credit Clearing Corp. of Am., 292 Minn. 334, 341, 197 N.W.2d 448, 452 (1972), overruled on other grounds by Onvoy, Inc. v. SHAL, LLC, 669 N.W.2d 344 (Minn. 2003).
Arbitration is a proceeding favored by the law as an efficient and inexpensive means of resolving disputes between contracting parties. Correll v. Distinctive Dental Servs., P.A., 607 N.W.2d 440, 445 (Minn. 2000); Ehlert v. W. Nat'l Mut. Ins. Co., 296 Minn. 195, 199, 207 N.W.2d 334, 336 (1973). Generally, contracting parties are free to determine the scope and extent of their arbitration agreement, Lucas v. Am. Family Mut. Ins. Co., 403 N.W.2d 646, 648 (Minn. 1987), and a written agreement to arbitrate is presumptively "valid, enforceable, and irrevocable." Minn. Stat. § 572.08 (2004). "Because the Minnesota Uniform Arbitration Act makes no provision for unwritten agreements, any alleged oral agreement cannot be enforced under the act." Anderson v. Federated Mut. Ins. Co., 465 N.W.2d 68, 69 (Minn.App. 1991), aff'd, 481 N.W.2d 48 (Minn. 1992).
"Arbitration provisions are generally considered binding, and a significant body of authority exists supporting their enforcement." Mikel D. Johnson, Note, Contracts — Into the Void: Minnesota Limits Application of the Prima Paint Doctrine — Onvoy, Inc. v. Shal, LLC, 31 Wm. Mitchell L.Rev. 579, 581 (2004). Thus, if an agreement to arbitrate exists, the court must compel binding arbitration. Minn. Stat. § 572.09(a) (2004); Michael-Curry Cos., Inc. v. Knutson Shareholders Liquidating Trust, 449 N.W.2d 139, 141 (Minn. 1989). Arbitrators derive their authority to resolve disputes from the parties' agreement to do so. Johnson, 530 N.W.2d at 795-96. Thus, "[t]he arbitration agreement must be entered into voluntarily by all parties involved." Larry E. Edmondson, Domke on Commercial Arbitration § 1.2 (3d ed. 2005). And parties may choose which controversies they agree to arbitrate. Michael-Curry Cos., 449 N.W.2d at 141. But parties cannot be required to submit to arbitration that which they did not agree to arbitrate. Johnson, 530 N.W.2d at 795; Edmondson, supra, § 1.2.
Here, while the district court did not explain in a memorandum its decision to deny appellant's motion to compel arbitration, it is a reasonable inference that the district court made a factual determination that the parties did not have a validly executed agreement to arbitrate disputes. That finding is supported by the record, in that appellant and respondent discussed matters relating to appellant's potential representation of respondent in a post-dissolution property-settlement matter and, following their conversation, appellant faxed to respondent a retainer letter. Respondent signed the retainer letter and faxed it back to appellant. The retainer letter outlines the scope and terms of the representation, the parties' roles, fees, etc. It does not contain an arbitration clause.
"Findings of fact and conclusions of law are unnecessary on decisions on motions pursuant to Rule 12 or 56 or any other motion except as provided in Rule 41.02 [involuntary dismissal]." Minn. R. Civ. P. 52.01.
Appellant claims that after receiving the signed retainer letter from respondent, he sent the Legal Services Agreement to her. To support his claim, appellant appends an unsigned copy of the Legal Services Agreement to his brief. It does not contain a signature block for a client to sign, ensuring that it would be binding. And it is undisputed that respondent never signed the Legal Services Agreement. Nevertheless, appellant contends that respondent implicitly assented to its terms by allegedly acting in conformity with it.
The Minnesota Supreme Court has stated that,
where there is an express contract, there can be no contract implied in fact or quasi contractual liability with respect to the same subject matter. The express contract excludes both. Parties to an express contract are entitled to have their rights and obligations with respect to its subject matter determined exclusively by its terms.
Schimmelpfennig v. Gaedke, 223 Minn. 542, 548, 27 N.W.2d 416, 420-21 (1947) (citation omitted); see also Reese Design, Inc. v. I-94 Highway 61 Eastview Ctr. P'ship, 428 N.W.2d 441, 446 (Minn.App. 1988) (citing Schimmelpfennig, 223 Minn. at 548, 27 N.W.2d at 420-21).
Here, there is an express contract — the retainer letter. The parties' written contract precludes the existence of an implied-in-fact contract, such as appellant describes. Consequently, any terms not included in the retainer letter are not part of the contract between appellant and respondent. Because the retainer letter does not contain an arbitration clause, the parties do not have an agreement to arbitrate. The district court's finding is not clearly erroneous.