May 14, 2009
JOYCE EVANS, APPELLANT/CROSS-APPELLEE,
DREYFUSS BROTHERS, INC. & TENACITY 919 L STREET, LLC, APPELLEES/CROSS-APPELLANTS.
Appeals from the Superior Court of the District of Columbia (LTB14188-05 & CAB4685-06) (Hon. Judith E. Retchin, Trial Judge).
The opinion of the court was delivered by: Reid, Associate Judge
Argued October 15, 2008
Before REID, Associate Judge, and KING and FARRELL,*fn1 Senior Judges.
This case involves a question as to whether the dispute between appellant, Joyce Evans, and appellees, Dreyfuss Brothers, Inc. & Tenacity 919 L Street, LLC, concerning the alleged breach of a settlement agreement and a consent judgment agreement, must be resolved in the first instance through an arbitration proceeding. The trial court lifted its stay and dismissed Ms. Evans' consolidated actions on the ground that arbitration is required. We affirm the judgment of the trial court.
The record before us shows that as of January 2004, Ms. Evans was a shareholder in the L Street Cooperative Association, Inc. ("the Cooperative"), the owner of a building located at 919 L Street in the Northwest quadrant of the District of Columbia. She occupied one of the units in the apartment building. On January 29, 2004, the President and Secretary of the Cooperative entered into a Replacement Redevelopment Agreement ("the Replacement Agreement") with Tenacity Group, LLC ("Tenacity"); the original agreement had been signed on January 12, 2004. The Replacement Agreement provided that each member of the Cooperative would be given an opportunity to purchase his or her unit under certain conditions, or would be paid a relocation allowance if he or she chose not to acquire the unit. An arbitration clause was included in the Replacement Agreement which provided, in part:
Any dispute, claim or controversy arising out of or relating to the provisions of this Agreement shall be settled by a decision of a single neutral arbitrator under the auspices of, and in accordance with the applicable rules of, the Judicial Arbitration and Mediation Services, Inc. ("JAMS"). The decision of the arbitrator shall be final, binding and non-appealable, and judgment based on the arbitration decision may be entered in either the United States District Court for the District of Columbia, or the Superior Court of the District of Columbia . . . .
A dispute arose out of the Replacement Agreement, and Tenacity and five of the unit owners of the Cooperative, including Ms. Evans, proceeded to arbitration before a JAMS arbitrator.*fn2
While that arbitration was pending, Dreyfuss Brothers, Inc., t /a 919 L Street or t/a Tenacity 919 L Street, LLC, served a Complaint for Possession, which had been filed in the Landlord & Tenant Branch of the Superior court on May 2, 2005, on the arbitration respondents, including Ms. Evans ("L&T action"). Ms. Evans lodged an answer and plea of title to the complaint on August 26, 2005. In addition, on October 4, 2005, the arbitration respondents filed a motion, in the L&T action, to stay the arbitration.*fn3
On January 20, 2005, Tenacity and Ms. Evans entered into a settlement agreement under which Ms. Evans agreed to vacate her unit and deliver the keys to Tenacity no later than April 30, 2006, in exchange for a monetary consideration of $215,000 for pain and suffering, provided she met certain conditions. These conditions included: a prohibition on disparagement, or objection to any of Tenacity's actions; the dismissal of Ms. Evans' Housing and Urban Development ("HUD") discrimination complaint against Tenacity, with prejudice, and any other complaints filed, including those with JAMS. The settlement agreement further provided that if Ms. Evans breached the agreement, she would "lose all of [her] rights and benefits under the [settlement] [a]greement." Yet another paragraph of the settlement agreement included essentially the same arbitration clause as appeared in the Replacement Agreement, and one other paragraph contained a confidentiality provision under which Ms. Evans agreed not to disclose the terms of the settlement agreement. In light of the settlement agreement, Dreyfuss Brothers, Inc. and Ms. Evans filed a consent judgment agreement in the L&T action on January 26, 2006, which memorialized the settlement agreement. The settlement agreement was not attached to the consent judgment agreement, "[d]ue to privacy concerns," but was "incorporated by reference."
On April 30, 2006, Ms. Evans vacated her unit and turned in her keys. Tenacity did not pay Ms. Evans the monetary consideration mentioned in their settlement agreement. Rather, on May 2, 2006, Tenacity sent Ms. Evans a letter advising her that she had "defaulted under numerous provisions of the settlement agreement . . . and thus [was] not entitled to any of the rights and/or benefits set forth in the Settlement Agreement." Specifically, Tenacity accused Ms. Evans of (1) making disparaging comments about Tenacity to other residents of and employees associated with the L Street building, as well as to members and staff of the District's legislature; (2) failing to dismiss her HUD discrimination complaint against Tenacity; and (3) failing to abide by the confidentiality provision.
When Ms. Evans did not receive the monetary payment to which she believed she was entitled, she lodged a complaint against Tenacity in the Civil Division of the Superior Court on June 16, 2006, alleging Tenacity's breach of the settlement agreement, requesting rescission of that agreement, and seeking injunctive relief (temporary restraining order and preliminary injunction) to regain possession of her apartment unit. On June 19, 2006, Tenacity filed a motion to dismiss Ms. Evans' Civil Division complaint. On that same day, the trial court heard testimony and arguments on Ms. Evans' request for a temporary restraining order.*fn4 After hearing closing argument from Ms. Evans' counsel, the trial court summarized its reasons for denying Ms. Evans' motion for a temporary restraining order.
After the parties could not reach agreement during required mediation of Ms. Evans' complaint, the trial court entertained Tenacity's motion to dismiss and Ms. Evans' opposition. During a status hearing on July 7, 2006, the trial court announced that it considered Tenacity's dismissal motion to be "meritorious," and that "the case has to go to arbitration in light of the contract that was entered into." The court orally granted Tenacity's motion to dismiss, "referr[ed] the matter to arbitration pursuant to the settlement agreement," and stayed the case at Ms. Evans' request.
On July 12, 2006, the trial court held a hearing on Ms. Evans' request for a preliminary injunction.*fn5 That same day, Ms. Evans filed in the L&T branch a motion to enforce the terms of the consent judgment agreement that had been lodged in January 2006. On July 17, 2006, Tenacity filed an emergency motion to show cause why Ms. Evans and her counsel should not be held in contempt for violation of the July 7, 2006 order referring her Civil Division complaint to arbitration. Ms. Evans responded on July 20, 2006 with a motion to alter the order granting Tenacity's motion to dismiss her complaint. Both motions were opposed.
Since Ms. Evans at that point had one complaint filed with the Civil Division and another with the L&T branch, both pertaining to the same settlement agreement and consent judgment agreement, the trial court referred the L&T action to the judge assigned to Ms. Evans' Civil Division complaint for rescission, breach of contract and injunctive relief. That judge held a status conference on July 20, 2006 to consider both Ms. Evans' motion to enforce the consent judgment agreement and her motion to alter the trial court's order referring the matter to arbitration.*fn6 Counsel for Ms. Evans argued that she could not afford to pay the costs of arbitration, because the arbitrators' rates are "$300 an hour" and because she occupied "section 8" subsidized housing.
The trial court issued two orders on August 3, 2006. In the order denying Ms. Evans' motion to alter the dismissal order, the trial court again asserted that "[t]he dispute . . . should be resolved by arbitration pursuant to [the parties'] settlement agreement." The trial court explained: "Where plaintiff [Ms. Evans] entered into a settlement agreement with the benefit of counsel which includes an arbitration provision, the Court does not find enforcement of the arbitration provision to be unconscionable especially where plaintiff already has sought to arbitrate a dispute related to the settlement agreement, and the arbitration rules provide for flexibility in the assignment of arbitration costs." In the second order, the trial court denied Tenacity's emergency motion to hold Ms. Evans and her counsel in contempt.*fn7
In August and September 2006, Ms. Evans filed appeals of the trial court's orders relating both to her L&T and Civil Division cases. While these appeals were pending, Ms. Evans filed an emergency motion to lift the stay which the trial court had granted at her request; Tenacity opposed the motion. The trial court issued an order on February 28, 2007, denying Ms. Evans' motion to lift the stay, noting the appeals before this court, and requiring her "to show cause why [her] case should not be dismissed with prejudice for failure to proceed with arbitration." The trial court expressed its view that the stay must remain in place "until arbitration has been concluded." Nevertheless, since Ms. Evans "does not intend to pursue arbitration because she cannot afford arbitration, and Defendant does not intend to pursue arbitration because it is not seeking any relief," the court concluded that it was "senseless to stay a case in perpetuity where neither party seeks to proceed with arbitration." Subsequently, this court dismissed Ms. Evans' appeals on March 14, 2007 because they were taken from non-final and non-appealable orders.
On March 22, 2007, the trial court denied Ms. Evans' motion to clarify its show cause order. In her response to the show cause order, Ms. Evans complained about the trial court's dismissal and show cause orders, asserting that the show cause order was "moot because the Court already dismissed this case on July 7, 2006," and that "[t]o the extent that the Court has not already dismissed the case, Evans, without waiving her right to appeal, informs the Court that she consents to this case being dismissed without prejudice."*fn8 After reviewing Ms. Evans' April 10, 2007 response to the show cause order, the trial court entered an order on April 23, 2007, lifting the stay and dismissing the case without prejudice.
After this court dismissed Ms. Evans' first appeals, and following the trial court's April 23, 2007 order, neither Ms. Evans nor Tenacity proceeded to arbitration. Rather, Ms. Evans filed an appeal on May 3, 2007 of (1) the trial court's August 3, 2006 order which she stated denied her motion to enforce the settlement agreement in the L&T action (Appeal No. 07-CV-957) (the two August 3, 2006 orders actually denied Ms. Evans' motion to alter the trial court's order granting the motion to dismiss the complaint, and denied Tenacity's motion to hold Ms. Evans' counsel in contempt; these orders did not rule on the merits of Ms. Evans' enforcement action),*fn9 and (2) the trial court's orders of July 7, 2006 (dismissing her case and compelling arbitration), June 19, 2006 (denying her motion for a temporary restraining order), and April 23, 2007 (lifting the stay and dismissing her case without prejudice) (Appeal No. 07-CV-454). Tenacity filed a cross-appeal on July 6, 2007, of the July 7, 2006 order in so far as it lifted the stay (Appeal No. 07-CV-678).*fn10
We begin with Tenacity's argument that this court lacks jurisdiction to hear Ms. Evans' appeal since "an order ordering arbitration is not a final order for purposes of appeal." In addition, Tenacity contends that Ms. Evans has waived her appeal of the trial court's April 23, 2007 order which lifted the stay and dismissed the case without prejudice. In her reply brief, Ms. Evans insists that the court has jurisdiction to review (1) the consent judgment entered in the L&T branch because it is a final order; and (2) the order dismissing her rescission case in favor of arbitration because, it too, is a final order. Furthermore, she contends that even if the rescission order is not final, this court should use its pendent jurisdiction to hear the case due to "substantial considerations of fairness." In addition, in her reply brief, she maintains that she has not waived her appeal of the April 23, 2007 order because "both the substantive legal errors raised by [her] and the relief requested in [her] brief are directed toward that specific order."
Since subject matter jurisdiction raises a legal question, we conduct a de novo review.*fn11 Under D.C. Code § 11-721 (a)(1), this court has jurisdiction over "final orders and judgments of the Superior Court of the District of Columbia." As we have said previously, "any lack of finality is a bar to appellate review."*fn12 To determine finality, we generally examine whether a challenged order "'dispose[s] of the whole case on its merits so that the court has nothing remaining to do but execute the judgment or decree already rendered.'"*fn13
The District of Columbia Uniform Arbitration Act specifies certain orders are final and thus appealable.*fn14 These do not include orders requiring arbitration, in contrast to orders denying motions to compel arbitration, which are appealable.*fn15 Moreover, an order which imposes a stay of litigation pending arbitration is not final and appealable.*fn16 With the exception of the issue of arbitrability, which must be determined by the trial court, questions concerning the arbitration proceeding generally are the province of the arbitrator, for example, procedural issues and waiver questions.*fn17
In analyzing the jurisdictional issue, we focus on the order of July 7, 2006, and the related order of April 23, 2007. Contrary to Tenacity's contention that the April 23, 2007 order is not properly before us because Ms. Evans made no argument in her main brief concerning this order, we read Ms. Evans' brief as implicitly discussing both orders, each of which must be interpreted as orders (1) favoring or compelling arbitration, and (2) determining arbitrability based on the explicit arbitration provision in the settlement agreement, and the incorporation of the settlement agreement into the consent judgment agreement. Moreover, Ms. Evans specifically listed the April 23, 2007 order in her notice of appeal.
The July 7, 2006 order was not appealable, as we concluded in dismissing Ms. Evans' first appeals on March 14, 2007. While an order which effectively denies arbitration is appealable, see D.C. Code § 16-4317 (a)(1), an order dismissing a case in favor of arbitration, which is interpreted as "a motion to compel arbitration," is not appealable.*fn18
Some courts treat dismissals in favor of arbitration "as if they were orders to stay litigation," and they are not appealable.*fn19 Therefore, since the July 7, 2006 order dismissed Ms. Evans' complaint, thereby compelling arbitration, but stayed her case, it was not a final order.*fn20
The trial court's April 23, 2007 order lifted the stay imposed in the July 7, 2006 order, and dismissed Ms. Evans' case "without prejudice," just as she had requested. "[A] dismissal without prejudice 'renders the proceedings a nullity and leaves the parties as if the action had never been brought.'"*fn21 Hence, the trial court's April 23, 2007 order may be interpreted as a final order in the sense that there is nothing more for the trial court to do when confronted with the unwillingness of either party to comply with the court's order and to proceed to arbitration. Or, the April 23, 2007 order may be interpreted as a non-final, non-appealable order which has not resolved the merits of Ms. Evans' complaint against Tenacity, but which gives her the option of proceeding to arbitration, as the settlement agreement requires as a matter of law, or filing another lawsuit and starting the process again.*fn22 We need not pause to determine which of these interpretations is appropriate here because under either interpretation, we would affirm the trial court's order.
Assuming that the trial court's April 27, 2007 order may be viewed as a final, appealable order, we turn to Ms. Evans' arguments on appeal. In an effort to circumvent the principle that a dismissal without prejudice "leaves the parties as if the action had never been brought," and in order to forestall our affirmance of the trial court's judgment, Ms. Evans makes three arguments. First, she maintains that the trial court's order compelling arbitration is improper because Tenacity never showed that Ms. Evans "has previously refused to arbitrate," as required by D.C. Code § 16-4302 (a). Such a showing is impossible, Ms. Evans argues, because "[i]nstead of seeking to arbitrate a dispute with [her], Tenacity simply accepted possession of the Residence from [her] and transferred the property to a third party without ever demanding arbitration." This argument actually claims that Tenacity breached the settlement agreement by not immediately giving Ms. Evans the monetary consideration mentioned in the settlement agreement. That claim involves the interpretation of the settlement agreement which is a matter, in the first instance, for the arbitrator. More fundamental, however, Ms. Evans misreads § 16-4302. That provision does not include the words "previously refused to arbitrate"; it reads, in part: "On application of a party showing an agreement [to arbitrate] and the opposing party's refusal to arbitrate . . . ." Although Ms. Evans agreed to arbitrate an initial matter with Dreyfuss Brothers, Inc. (t/a Tenacity) regarding the Replacement Agreement, she has steadfastly resisted arbitration in this matter, and indeed, she has stated in writing that she has no intent of proceeding to arbitration. Hence, Ms. Evans' § 16-4302 (a) statutory argument must fail since the settlement agreement requires arbitration and by her actions Ms. Evans has refused to arbitrate her claim regarding Tenacity's alleged breach of the settlement agreement.
Second, Ms. Evans contends that the trial court's order favoring arbitration was improper because Tenacity's "conduct is totally inconsistent with a party who desires to arbitrate a dispute," and therefore, Tenacity has "waived its right to seek arbitration of any dispute arising out of the [s]ettlement [a]greement." But the question of waiver is an initial question for the arbitrator.*fn23 Third, Ms. Evans maintains, even though she consented to it, that the trial court's dismissal order is improper because the arbitration provision in the settlement agreement is unenforceable and unconscionable since the costs of arbitration for her are prohibitive, and both the settlement agreement and the consent judgment agreement are silent as to who will bear the costs. She argues that "the trial court was required to conduct a hearing so that [she] could prove that she would likely incur the prohibitively expensive arbitration costs." But here, the trial court gave Ms. Evans an opportunity to present evidence, even though she did not raise the cost issue until her motion to alter the trial court's dismissal order. In fact, Ms. Evans presented testimony that the hourly rate of an arbitrator is $300 per hour, but Tenacity showed in response that JAMS' rules of procedure allowed flexibility in the allocation of the costs of arbitration. After considering the evidence, the trial court concluded in one of its August 3, 2006 orders that "the arbitration rules provide flexibility in the assignment of arbitration costs."
Nevertheless, Ms. Evans presses her argument, relying on a Supreme Court decision, which she interprets as holding "that a party may invalidate an arbitration agreement on the ground that arbitration would be prohibitively expensive."*fn24 But, in that case, the Court "address[ed] the question whether an arbitration agreement that does not mention arbitration costs and fees [as in the case before us] is unenforceable because it fails to affirmatively protect a party from potentially steep arbitration costs."*fn25 The Court "conclude[d] that an arbitration agreement's silence with respect to such matters does not render the agreement unenforceable."*fn26 Furthermore, said the Court, "where . . . a party seeks to invalidate an arbitration agreement on the ground that the arbitration would be prohibitively expensive, that party bears the burden of showing the likelihood of incurring such costs."*fn27 Ms. Evans did not satisfy her burden. Although she had the opportunity to "make her record" on the cost issue by showing what actual costs she personally was likely to incur, she failed to do so, and we reject her effort to have this case remanded for a second opportunity on the cost issue.*fn28
Accordingly, for the foregoing reasons, we affirm the judgment of the trial court.*fn29