Whether the parties’ dispute was subject to arbitration; MCL 691.1687(2); Fromm v Meemic Ins Co; Interpretation of contracts under the Uniform Commercial Code; MCL 440.2206(1); Effect of the addition of terms to a contract; MCL 440.2207; Leave to amend; Futility; Weymers v Khera; Intervention; MCR 2.209(A) & (B)

The court held that the trial court did not err by finding it was the proper body to determine whether a dispute was subject to arbitration, or by finding the parties did not agree to arbitrate. But it found the trial court abused its discretion by denying defendant’s motion for leave to amend and a motion to intervene by one of defendant’s affiliates. Thus, it affirmed in part, reversed in part, and remanded for the trial court to re-evaluate the requests for leave to amend and intervention, and “provide explanations sufficient to facilitate any further appellate review.” After defendant’s affiliate filed an arbitration demand, plaintiff filed suit seeking a declaration from the trial court on the issue of whether an agreement to arbitrate existed between the parties. The trial court found it was the proper body to make this determination and later granted plaintiff’s motion for entry of judgment and final order of dismissal. On appeal, the court rejected defendant’s argument that the trial court erred by finding it was for the trial court, not an arbitrator, to decide whether an enforceable arbitration agreement existed between the parties. “Under state and federal law, the threshold question of whether there exists an arbitration agreement between parties is for a court to decide.” In this case, “the parties dispute whether there is an agreement to arbitrate, and in such a case, courts should avoid ordering arbitration.” The court also rejected defendant’s claim that even if the trial court correctly determined it was the proper body to address the issue, it prematurely entered judgment for plaintiff because there were genuine issues of material fact as to the existence of such an agreement. “Although the parties dispute which terms and documents control, there is no genuine factual dispute about whether the parties agreed to arbitrate. They did not.” It noted that neither the parties’ 2017 purchase order, nor their 2020 purchase order, created an agreement to arbitrate. Finally, the court agreed with defendant that the trial court abused its discretion by denying its motion for leave to amend its answer to add counterclaims, noting it “provided no explanation for its denial of the motion, other than stating there was a ‘lack of merit [i]n the grounds presented.’ This was insufficient.” It also agreed with defendant that the trial court abused its discretion by denying the affiliate’s motion to intervene without a hearing and by explaining only that it lacked merit.