|
A non-signatory to an arbitration agreement may compel arbitration when the agreement creates rights and responsibilities for the non-signatory and the party bringing the action relies on the contract with the arbitration clause in bringing its claims, the Supreme Court of Mississippi held.
In Fradella v. Seaberry, No. 2005-CT-00404-SCT, 2007 WL 852097 (Miss. Mar. 22, 2007), Seaberry entered into a contract to purchase property from Germany. Fradella served as the real estate agent for both parties.
A dispute arose when Seaberry discovered that the deed to the property listed acreage less than what Fradella represented. Fradella asked the court to compel arbitration of a claim brought by Seaberry, arguing that an arbitration agreement in the sales contract required arbitration of the dispute.
Seaberry argued that the arbitration obligation was not implicated because Fradella did not sign the contract. However, the Court disagreed and compelled arbitration. Fradella was mentioned in the arbitration agreement, which applied to disputes between the seller or the buyer and "the listing company or selling company and/or their agents or representatives." In addition, other aspects of the contract clearly created rights and responsibilities for Fradella.
The Court also noted that the arbitration agreement should be enforced against Fradella because Seaberry was attempting to enforce rights conferred by the contract. A party cannot bring an action to enforce its rights under a contract and simultaneously argue that another party to the contract should be denied its right to arbitrate under the contract.
Subscribe to a free weekly update on ADR case law and
legislation
|