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A party's tort claims were arbitrable due to the broad wording of the arbitration agreement and the fact that the transaction involved interstate commerce, the Supreme Court of Arkansas held.
In Pest Management, Inc. v. Langer, No. 06-748, 2007 WL 538178 (Ark. Feb. 22, 2007), upon its inspection of a home prior to its purchase by Alfred Langer, Pest Management created an inspection graph and certified that there was no infestation or it had been properly treated before, with no indication of any other problems.
When Langer asked that Pest Management perform pursuant to the contract for continued treatment of the home, Pest Management found insufficient crawl space under the home and requested that Langer excavate. A subsequent investigation by the State Pest Control Board ("The Board") revealed other problems with the home that were missed by Pest Management. The Board ordered Pest Management to bring the treatment up to standards.
Pest Management removed floorboards to gain access and found other problems of which the cost to repair would possibly cost more than the value of the house. Langer filed suit for damages and Pest Management moved to compel arbitration. The circuit court held that tort claims were not arbitrable.
On appeal, the Court rejected Langer's argument that none of the claims were subject to arbitration. It was clear by the language in the contract that the arbitration clause and inspection graph were tied to the contract. Further, the Court agreed with Pest Management that the tort claims were subject to arbitration due to the broad wording of the arbitration agreement and Arkansas's strong policy in favor of arbitration.
Additionally, the Supreme Court found the circuit court's reliance on Terminix International Co. v. Stabbs in finding Langer's tort claims not to be arbitrable, to be misguided. That case involved a contract in which the Arkansas Arbitration Act was applied, rather than the Federal Arbitration Act ("FAA"). Terminix International Co. v. Stabbs, 930 S.W.2d 345 (Ark. 1996). In this case, the parties' contract indicated that the subject matter of the dispute involved commerce making the FAA applicable to the dispute. See Allied-Bruce Terminix Cos., Inc. v. Dobson, 513 U.S. 265, 281 (1995).
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