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Delta Administrative Services, L.L.C. v. Limousine Livery Ltd.

Court of Appeals of Louisiana, Fourth Circuit

June 17, 2015

DELTA ADMINISTRATIVE SERVICES, L.L.C.
v.
LIMOUSINE LIVERY, LTD., ET AL.

APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2014-05152, DIVISION “D-16” Honorable Lloyd J. Medley, Judge

Norman A. Mott, III Jessica R. Derenbeckzr SHIELDS MOTT LUND L.L.P., COUNSEL FOR PLAINTIFF/APPELLANT

Ellis B. Murov Andrew J. Baer DEUTSCH, KERRIGAN & STILES, LLP COUNSEL FOR DEFENDANT/APPELLEE

Court composed of Judge Edwin A. Lombard, Judge Roland L. Belsome, Judge Rosemary Ledet

Judge Rosemary Ledet

This is a declaratory judgment action seeking a determination that the parties had no agreement to arbitrate their underlying contractual dispute. The parties are Delta Administrative Services, L.L.C. (“DAS”) and Limousine Livery, Ltd. (“LLI”). DAS commenced this action against LLI seeking not only a declaratory judgment, but also an injunction to prevent LLI from proceeding with the arbitration proceeding that it had commenced. From the trial court's judgment dismissing DAS's declaratory judgment action and denying its request for an injunction, DAS appeals. For the reasons that follow, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Effective January 2010, DAS and LLI entered into an Administrative Services Contract (the “Agreement”) for DAS to provide payroll services and human resources advice to LLI. [1] The Agreement was a form contract that DAS was using at the time it entered into the relationship with LLI. Before sending the Agreement to LLI, David Lawrence, DAS's owner and manager, customized the form contract to conform to the agreed-upon arrangement that he had discussed with Aaron Dirks, LLI's president. The topics they discussed, however, did not include selecting a method of dispute resolution. Included in the Agreement that Mr. Lawrence sent to LLI was the following “either/or” provision, which is the subject to this appeal:

IX. GENERAL PROVISIONS

* * * * *

SELECT ONE "B" BELOW

B. Dispute Resolution and Governing Law. If at any time during the course of this Agreement or following the termination of the Agreement, there shall arise a dispute arising out of or under this Agreement or with respect to the Agreement, any part thereof, its terms, its interpretation, a breach thereof, or any aspect of the parties relationship and the transactions contemplated herein, the parties agree first to attempt in good faith to settle the dispute by mediation in accordance with the procedures of the Federal Mediation and Conciliation Service [“FMCS”], or by a procedure agreed to by both parties. Once mediation is elected, the parties agree to allow minimum of (60) days to resolve the dispute with mediation before resorting to arbitration, litigation, or some other dispute resolution procedure. If mediation fails, either party may elect to submit to alternative dispute resolution through arbitration. Such arbitration shall be in accordance with the Commercial Arbitration Rules of the American Arbitration Association, pursuant to the Federal Arbitration Act. No civil action concerning any dispute within the scope of this arbitration provision, which the parties intend to be broad in scope, shall be instituted before any court but shall be submitted to final and binding arbitration as herein provided. Such arbitration shall be conducted in accordance with the rules of such association before a single arbitrator. All arbitration proceedings shall take place at a location mutually agreed by the parties, otherwise in Jefferson Parish, Louisiana. All costs of arbitration, including attorneys' fees and other costs attendant thereto, shall be allocated among the parties according to the arbitrator's discretion who may award all costs to one party or allocate the costs between the parties. Further, arbitrator's award resulting from such arbitration may be confirmed and entered as a final judgment in any court of competent jurisdiction and enforced accordingly. The parties expressly agree that proceeding to arbitration and obtaining an award thereunder shall be a condition precedent to bringing or maintaining any action in any court with respect to any dispute arising under this Agreement, except for the institution of a civil action to maintain the status quo, subject to each party's right of adequate protection during the pendency of any arbitration proceeding. This Agreement shall not be effective until accepted and executed by ASO [DAS] in Metairie, Jefferson Parish, Louisiana; and shall be governed by and construed in accordance with the laws of the State of Louisiana.

B. Governing Law. This Agreement shall not be effective until accepted and executed by ASO [DAS] in Metairie, Jefferson Parish, Louisiana; and shall be governed by and construed in accordance with the laws of the State of Louisiana.

An authorized representative of both DAS (Mr. Lawrence) and LLI (Christy Dirks, LLI's owner) signed the Agreement. Neither party's representative, however, selected either of the options-the “B” provisions-in the “either/or' provision.[2]The Agreement thus became effective with both “B” provisions in it.

Subsequently, a contractual dispute arose between the parties;[3] and the contractual relationship between them was terminated. In his correspondence to

Mr. Dirks, dated January 3, 2013, regarding the termination, Mr. Lawrence stated:

We are in receipt of the letter written by Mr. Englehart dated December 28th, 2012 requesting the cancellation of our services for your company. . . .
Naturally if we have to depend on attorneys to collect any of monies outstanding we will refer to section IX (b) [of the Agreement] whereby attorneys fees will be added on top of anything else due from your company.[4]

Meanwhile, in an attempt to resolve their contractual dispute, LLI attempted to invoke the “Dispute Resolution and Governing Law” provision of the Agreement, which imposed as a condition precedent to arbitration that the parties submit to mediation either by the Federal Mediation and Conciliation Service (“FMCS”) or “by a procedure agreed to by both parties.” In late 2012, LLI, with DAS's knowledge and without any objection from DAS, attempted to have FMCS mediate the dispute. The parties then engaged in ...


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