Stay pendng arbitration; § 7 of the Uniform Arbitration Act (UAA); MCL 691.1687; MCR 3.602(C); Motion to compel arbitration; Dismissal; Motion to rescind

The court agreed that “defendants’ claim on cross-appeal that the trial court, upon granting their motion to compel arbitration, erred by purporting to dismiss the case rather than staying it pending completion of arbitration.” Also, as to their motion to compel arbitration, the “trial court did not err by concluding that the arbitration provision in the operating agreement” (OA) was effective and applied to this dispute; but it “erred to the extent it determined that the entire dispute as pleaded by plaintiff is subject to arbitration.” Finally, defendants “failed to show that the trial court erred by declining to reach the merits of the motion to rescind in this case or that we should disrupt [its] decision to dismiss that motion without prejudice.” Plaintiff’s motion to compel arbitration challenge centered “on the interaction between the [OA’s] arbitration provision and the master agreement’s forum-selection provision. According to plaintiff, the master agreement’s forum-selection provision controls over the [OA’s] arbitration provision, and the trial court erred by concluding otherwise.” The court disagreed, in part. Neither party argued “that the contractual provisions at issue are ambiguous, nor do we see any reason to conclude as much. Instead, the parties argue that the relevant provisions unambiguously support their respective positions. The parties focus on three provisions from the” two agreements. The court failed “to see such a conflict. Taken together, the forum-selection and arbitration provisions make clear that (1) judicial proceedings, as to both . . . agreements, must be brought in the state or federal courts in Wayne County; and (2) claims that are related to or arise out of the [OA] are subject to the arbitration provision, whereas all other claims are not. This reading duly aligns with and gives effect to the plain language of both provisions, and we see nothing to indicate that the parties, in agreeing to these provisions, intended otherwise.” And the court found that “this case has proceeded consistently with these provisions: plaintiff” sued in circuit court, and “defendants then moved to invoke the arbitration provision on the basis that plaintiff’s claims arose out of or related to the” OA. Plaintiff argued, “in the alternative, that the trial court erred by ordering defendants[-Sam and Abulhassan] to arbitration because neither was a party to the” OA. The court agreed, in part. It failed “to see why those claims against Sam and Abulhassan would not be subject to arbitration, regardless of whether plaintiff agreed to arbitrate disputes with them individually.” The court found that by “the same token, however, Count VIII of plaintiff’s complaint brought a claim against Abulhassan individually for tortious interference with contractual relationships and/or business expectancies.” Given that Abulhassan “did not sign the [OA] and this claim does not arise from his alleged status as [defendant-]Lefty’s agent, plaintiff did not agree to submit this claim to arbitration and it is not subject the [OA’s] arbitration provision.” Thus, it, agreed “with plaintiff that the trial court erred to the extent that it ordered this claim to arbitration.” Affirmed in part, reversed in part, and remanded.