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Doe v. Hallmark Partners, LP

Supreme Court of Mississippi, En Banc

May 11, 2017

JANE DOE
v.
HALLMARK PARTNERS, LP, SJP ONE, LLC, VERONICA MOORE, NEW HORIZONS MANAGEMENT, LLC AND SECURITY ENGINEERS, INC.

          DATE OF JUDGMENT: 10/06/2015

         HINDS COUNTY CIRCUIT COURT TRIAL JUDGE: HON. JEFF WEILL, SR.

          ATTORNEYS FOR APPELLANT: JESSE MITCHELL, III JESSICA ROSHAUN McLAURIN

          ATTORNEYS FOR APPELLEES: ANDREA LA'VERNE FORD EDNEY ADRIA LYNN HERTWIG PATRICK PATRONAS TAFFINY SMITH STEWART

          MAXWELL, JUSTICE

         ¶1. Arbitration is a contractual agreement between parties. And only agreed-upon arbitrable disputes are subject to arbitration.[1] On de novo review, this Court first determines whether an arbitration agreement is contractually valid. If it is, we then decide whether the dispute at issue is within the arbitration agreement's scope.[2] If the arbitration agreement fails to meet both of these requirements, the dispute cannot be arbitrated. Such is the case here.

         ¶2. We find the lessee and landlord, in this case, do have a valid arbitration agreement between them as part of a lease agreement. But the lessee's premises-liability claim-a dispute that stems from a physical and sexual assault on the apartment complex premises-is not within the arbitration agreement's scope, as it does not arise under or relate to her "occupancy and leasing of the [apartment]." Because the dispute is outside the agreement's scope, the trial court erred by staying proceedings and ordering arbitration.

         ¶3. We reverse and remand for further proceedings consistent with this opinion.

         Background Facts and Procedural History

         I. Sexual Assault

         ¶4. On the morning of April 19, 2014, Jane Doe was kidnapped by two men while walking to her car at her apartment complex. According to Jane, the men forced her into her car at gunpoint, pistol-whipped her, and repeatedly raped her over an extended time. Jane screamed for help during the attack, which took place in the central parking lot near the leasing office. But neither apartment-complex staff nor security responded.

         II. Premises-Liability Suit

         ¶5. On July 7, 2014, Jane filed suit against the owners, managers, and individual staff of Hallmark Gardens Apartments[3] (Hallmark), Security Engineers, Inc. (SEI), and unknown John Does. In her complaint, Jane claimed Hallmark and SEI were negligent in their duty to keep the apartment complex reasonably safe. She further alleged Hallmark and SEI were aware of dangerous conditions on or near the complex.

         III. Motions to Compel Arbitration

         ¶6. Hallmark answered Jane's complaint denying liability and raising defenses. It also specifically sought to enforce arbitration. Jane and Hallmark had entered a lease agreement for "Apt. 9-C, of the Hallmark Gardens Apartments located at 987 East Northside Drive Jackson, MS 39206 (the 'Premises')." As an addendum to her September 20, 2013 lease, Hallmark and Jane executed an arbitration agreement on March 14, 2014, but dated it effective as of September 20, 2013.[4]

         ¶7. SEI likewise filed a motion to compel arbitration, citing the arbitration agreement between Jane and Hallmark. Though a nonsignatory, SEI argued its close legal relationship with Hallmark and Jane's similar claim against it allowed it to enforce the arbitration agreement between Hallmark and Jane.[5]

         ¶8. After considering extensive briefing and holding a hearing on the arbitration issue, the trial court granted Hallmark's and SEI's motions. The court found the arbitration agreement between Hallmark and Jane was valid and that Jane's claims were within the scope of the agreement, which both Hallmark and SEI could enforce.

         IV. Appeal

         ¶9. Jane now appeals, arguing: (1) the arbitration agreement is not a broad agreement without limitations; (2) her claims fall outside the agreement's scope; and (3) enforcement of the agreement offends public policy.

         Discussion

         ¶10. This Court reviews the grant of a motion to compel arbitration de novo. Tupelo Auto Sales, Ltd. v. Scott, 844 So.2d 1167, 1169 (Miss. 2003) (citing East Ford, Inc. v. Taylor, 826 So.2d 709, 713 (Miss. 2002)). Under Mississippi's two-prong test to determine arbitrability, this Court asks: (1) whether the parties have agreed to arbitrate the dispute, and (2) whether legal constraints external to the agreement prevent arbitration. Smith ex rel. Smith v. Captain D's, LLC, 963 So.2d 1116, 1119-20 (Miss. 2007) (quoting Rogers-Dabbs Chevrolet-Hummer v. Blakeney, 950 So.2d 170, 173 (Miss. 2007)).

         ¶11. Jane's first two claimed errors-the arbitration clause has limits and her claims do not fall within its scope-fall squarely within the test's first prong. Under this prong, this Court asks: (1) Is there a valid arbitration agreement? And, if so, (2) does the dispute fall within the scope of the agreement? Id. at 1120 (citing Rogers-Dabbs, 950 So.2d at 173).

         I. Validity of the Agreement

         ¶12. Jane initially argued the arbitration agreement was invalid. But she chose not to pursue this issue on appeal. Furthermore, we find no issue with the validity of the agreement itself.[6] So we focus on the next prong.

         II. Scope ...


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