Jack Nelson Jones Professional Association

September 18-24, 2017

Helton v. Joseph D. Calhoun, LTD, 2017 Ark. App. 418 (September 6, 2017)

This appeal comes from the Faulkner County Circuit Court, honorable Mike Murphy presiding. This case concerns the enforceability of an arbitration agreement.

Bill Helton retained Joe Calhoun, LTD (Calhoun) to represent him in an infringement lawsuit. Their fee agreement provided that: “[a]ny fee dispute or other controversy arising out of or relating to this engagement must be resolved by the first-initiated binding arbitration (by ADR, Inc., and its rules) or court proceeding administered in Little Rock; and judgment upon any arbitration award may be enforced in any court having jurisdiction.”

 After the infringement lawsuit had concluded, Helton refused to pay Calhoun, and Calhoun filed an arbitration complaint with ADR, Inc., in Little Rock, alleging that Helton owed him more than $30,000 in attorney’s fees. On November 13, 2013, the arbitrator served Helton with Calhoun’s arbitration complaint and provided notice that a response must be submitted by December 16, 2013. On December 13, 2013, Helton submitted a response by fax disagreeing with the fee amount he owed to Calhoun. On March 17, 2014, the arbitrator mailed Helton a letter notifying him of an April 1, 2014 hearing. On March 31, 2014, Calhoun initiated a conference call with Helton and the arbitrator, in which Helton denied receiving notice of the April hearing date and informed the arbitrator he did not intend to attend. The arbitration hearing occurred on April 1, 2014. On October 3, 2014, the arbitrator entered a judgment awarding Calhoun $43,278.82. The arbitrator sent Helton a copy of the judgment the same day.

On January 5, 2015, Calhoun filed a petition for registration of a foreign judgment in the Faulkner County Circuit Court. Calhoun informed the court of the arbitration award and asked the court to register the judgment. On that same day, the Faulkner County Circuit Clerk sent Helton notice of the petition by certified mail along with a copy of the arbitration award. The court set a hearing date for March 3, 2015. On February 3, 2015, Calhoun sent notice of the hearing date to Helton by regular mail. Helton did not appear at the March 3 hearing, and the court orally noted that Helton had been notified of the proceedings by both regular and certified mail. On the same day as the hearing, the circuit court entered an order confirming the arbitration award. On March 9, 2015, Calhoun served Helton with the confirmation order by certified mail.

On July 27, 2015, Helton filed a motion to dismiss and to set aside the arbitration judgment. He argued that the court should set aside its confirmation of the judgment because (1) he did not receive a proper summons along with the petition; (2) the Arkansas Arbitration Act (AAA) was unconstitutional; (3) he did not enter into a valid agreement to arbitrate; and (4) Faulkner County was an improper venue for the petition. Following a hearing, the court entered an order denying Helton’s motion to dismiss and ordering him to provide Calhoun with a verified schedule of all his real and personal property. Helton appealed.

On appeal, Helton first argued that he did not receive a summons along with Calhoun’s petition. He claimed that section 205 of the AAA applied to the petition and that section 205(b) requires a summons pursuant to Arkansas Rule of Civil Procedure 4. The Court pointed out, however, that section 205 does not require a summons. Section 205 provides that “notice of an initial motion to the court under … must be served in the manner provided by law for the service of a summons in a civil action.”

Helton claimed that if the AAA did not require a summons, the AAA violated his procedural due-process rights. He cited caselaw that held that strict compliance with the Rule 4 requirements for a summons is necessary to satisfy due-process requirements. However, the Court noted that Helton failed to cite any authority that a Rule 4 summons applies to a petition for confirmation of an arbitration award, and thus his constitutional argument was undeveloped. The Court explained that it would not reverse when a point on appeal is unsupported by convincing arguments or sufficient citation to legal authority. The Court further noted that arbitration is a form of alternative dispute resolution outside of conventional litigation. The confirmation of an arbitration award is a continuation of the arbitration process rather than a lawsuit in the ordinarily understood sense. It cannot be likened to filing suit, and it has been described as a mere summary proceeding whereby the court converts an arbitration award into a final judgment. It is not a trial or a separate proceeding but a means for enforcement of an unsatisfied award. Accordingly, the Court rejected Helton’s unsupported, undeveloped argument that the AAA violated his due-process rights because it did not require a summons pursuant to Rule 4.

Helton next argued that no valid agreement to arbitrate existed. He pointed out that the arbitration provision in the contract provided that a fee dispute must be settled through arbitration or a court proceeding in Little Rock. He claimed that the provision was ambiguous and that Calhoun should have filed a motion to compel arbitration pursuant to section 207 of the AAA. Subsection 207(a)(2) provides that “on a motion of a person showing an agreement to arbitrate and alleging another person’s refusal to arbitrate pursuant to the agreement . . . the court shall proceed summarily to decide the issue [and i]f the court finds that there is an enforceable agreement to arbitrate, it shall order the parties to arbitrate.” However, in this case, the Court pointed out that Helton did not refuse to participate in the arbitration proceeding. Instead, he responded to Calhoun’s petition for arbitration on December 13, 2013, and contested only the amount of fees he owed to Calhoun. Thus, because Helton did not refuse to arbitrate, the Court reasoned that the AAA did not require Calhoun to file a motion to compel arbitration under section 207.

Helton lastly argued that Faulkner County was an improper venue for the petition because the arbitration agreement provides that disputes must be resolved through an action in Little Rock, which is located in Pulaski County, not Faulkner County. According to the Court, Helton’s argument was misplaced. The agreement provided that a fee dispute must be resolved by “the first-initiated binding arbitration (by ADR, Inc., and its rules) or court proceeding administered in Little Rock; and judgment upon any arbitration award may be enforced in any court having jurisdiction.” The Court pointed out that Calhoun filed the petition in Faulkner County to confirm the award, not to initiate the proceedings. Accordingly, the arbitration agreement did not prevent Calhoun from filing the confirmation petition in Faulkner County. Therefore, the Court affirmed the circuit court’s order denying Helton’s motion to dismiss and to set aside the judgment confirming the arbitration award. Affirmed.