Curly and Coy Bernard, Gregory B. Bonnett, Judy F. Casey, Linda S. and Ronald C. Corley, David C. and Jane Gallien, Mickey and Peggy Gilcrease, Gordie Greening, Billy W. and Linda S. House, Roger R. and Mary B. House, George Reed and Melinda L. Terry VS Gregory James Hildebrand and Peter E. Dahlstrom

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STATE OF LOUISIANA COURT OF APPEAL FIRST CIRCUIT NUMBER 2008 CA 0268 CURL Y AND COY BERNARD GREGORY B BONNETT JUDY F CASEY LINDA S AND RONALD C CORLEY DAVlD C AND JANE GALLIEN MICKEY AND PEGGY GILCREASE GORDIE GREENING BILLY W AND LINDA S HOUSE ROGER F AND MARY B HOUSE GEORGE REED AND MELINDA L TERRY VERSUS GREGORY JAMES HILDEBRAND AND PETER E DAHLSTROM f Judgment Rendered AUG 6 2008 Appealed from the 19th Judicial District Court in and for the Parish of East Baton Rouge State of Louisiana Docket Number 547 837 Honorable Curtis A Counsel for Plaintiffs Aub A Ward Baton Rouge Calloway Judge LA and Lee Bowie Jackson MS Thomas K Potter III Appellants Curly Coy Gregory B Bonnett Judy F Casey Linda S and Ronald C Corley David C and Jane Gallien Mickey and Peggy Gilcrease Gordie Greening Billy W and Linda House Roger F and Mary B House George Reed and Melinda L Terry and Bernard Counsel for Defendants Appellees James Hildebrand and Peter E Nashville TN Gregory and Dahlstrom Ryan E Baton Jackson Rouge LA BEFORE Disposition PARRO KUHN AND DOWNING JJ REVERSED AND REMANDED S KUHN J Plaintiffs For the reasons appeal a trial that follow court judgment dismissing we reverse their suit with prejudice and remand FACTUAL AND PROCEDURAL HISTORY Plaintiffs herein to manage claim employees of Kansas City Southern Railroad and They contracted with brokers Gregory Hildebrand and spouses a are their retirement accounts against their brokers on their Peter Dahlstrom Alleging fraud and negligence plaintiffs filed August 4 2005 with the Dispute Resolution Division of the National Association of Securities Dealers NASD under its Code of Arbitration Procedure In so doing each of the plaintiffs voluntarily signed NASD Arbitration Uniform Submission an Agreement that contained the following language submit the present matter in to controversy as set forth in the attached statement of claim arbitration in accordance with the Constitution By Laws Rules The undersigned parties hereby Regulations and organization or Code of Arbitration Procedure of the sponsoring undersigned parties hereby state that they have read the procedures and rules of the sponsoring organization relating to The arbitration The undersigned parties further award s agree to abide by and perform rendered pursuant to this Submission Agreement Hildebrand and Dahlstrom answered the arbitration also identical Uniform Submission arbitration panel participated signing and submitting Agreements Thereafter the in prehearing conference an initial any parties selected and an began conducting discovery At pre was some point the arbitration panel requested that the parties produce dispute arbitration agreement existing able to produce such an agreement 2 between them Neither of the any parties Consequently by letter dated May 19 2006 the plaintiffs advised the arbitration panel that Plaintiffs further informed the not be found pre dispute agreement and agreements they panel withdraw were a dispute agreement could pre that based upon the lack of any ingJ their requesting that the arbitration proceeding uniform be submission dismissed without prejudice On May 31 2006 NASD issued that it had been notified that the matter and informing them that the letter a to all of the them parties advising parties had either settled matter was being removed or withdrawn the from the arbitration docket The letter continued If this case has not settled or should notify this office by June 8 2006 NASD Dispute Resolution will not been withdrawn not have After June 8 reopen this case On June 7 2006 the defendants wrote to NASD plaintiffs request to withdraw their claims dismissed without 2006 has please elapsed forcefully objecting The defendants the to have their uniform submission agreements and prejudice to argued that the Uniform Submission Agreements constituted binding arbitration agreements in and of themselves They further argued that because they had answered the arbitration and proceedings dismissed provided with were already underway the plaintiffs NASD prejudice in pertinent part as s response Page 12 ofNASD s 2006 follows prejudice In addition there is insufficient evidence to as only be dated November 16 The Panel has determined that it does not have the dismissal with claims could authority to grant a the Panel has determined that grant any additional relief Uniform Forms Guide sets forth the general guidelines for the withdrawal ofa claim follows If you wish to withdraw your claim after the claim has been served and filed but before the respondent has served and filed the answer you may withdraw the claim without prejudice by informing the respondent in writing and copying the designated NASD Dispute Resolution office and all other parties If you wish to withdraw your claim after the claim has been served and filed but after the answer has been served and filed sic by the respondent you may not withdraw the claim without prejudice unless the respondent agrees to a withdrawal without prejudice or with the arbitrator s consent After you receive the notice that identifies the selected arbitrator s you may withdraw your claim without prejudice either with the respondent s agreement or with the arbitration panel s consent 3 NASD Dispute Resolution procedure will permit a Withdrawal after Respondents have answered only if the without Prejudice parties agree to a Withdrawal without Prejudice Pursuant to NASD Dispute Resolution procedure this matter has been closed as Withdrawn with Prejudice Pending the foregoing Dahlstrom against Hildebrand and asserting the arbitration facts same and The defendants by response in the NASD the Nineteenth claims that responded to Judicial District Court they originally had submitted the lawsuit by filing a motion compel arbitration proceedings however after receiving NASD defendants filed revised motion a to stay and dismiss to argued that the Uniform Submission Agreements bound their claims withdrawn They with further claimed that NASD Accordingly they did requested that the Following trial not seek trial court to act s have the trial court a hearing the trial their motion court to dismiss court the plaintiffs closing the arbitration on to to According arbitrate dismiss the suit the judgment dismissing new as the merits panel did and dismiss to its written reasons the trial that was Thus April claims with plaintiffs stay but Agreements constituted binding Because the on to for judgment the plaintiffs withdrew from arbitration the forum in which it should have been heard for arbitrate to denied the defendants motion concluded that the Uniform Submission irrevocable agreements decided the response compel arbitration but rather what the arbitration mirror stay and to Therein the defendants adjudication an as of s to claims plaintiffs granted operate d prejudice filed suit had plaintiffs 12 2007 prejudice subsequently denied This appeal the trial the matter the trial court Plaintiffs filed court signed a a motion followed DISCUSSION The purpose of arbitration is their differences any doubt out of concerning court The to allow parties to achieve speedy settlement of positive law of Louisiana favors arbitration and the scope of arbitrable issues should be resolved in favor of 4 Arkel Constructors arbitration L L C et seq which On treatment La Meric Duplantier v 1 Cir App 25 7 965 So 2d 455 459 07 echoes the Federal Arbitration Act unquestionably embodies liberal federal a Architects FAA 9 US C S 1 policy favoring arbitration d agreements appeal plaintiffs arbitrate their claims required argue that the trial court erred in Submission of the Uniform is p 7 2006 1950 2006 1951 Such favorable Inc finding Agreements they executed they Rather they contend that a pre dispute that by virtue bound were arbitration to agreement respectfully disagree We Pursuant to LSA R S 9 4201 in any written contract to settle by arbitration a controversy thereafter arising out of the contract or out of the refusal to perform the whole or any part thereof or an agreement in writing A between provision two or more persons existing between them at to submit in or equity for the suit or matter save upon such revocation of any a difference with any controversy contract grounds as exist at Emphasis added provides In addition LSA C C art 3099 A submission is arbitration the time of the agreement to submit shall be valid irrevocable and enforceable law to covenant another one and bind themselves persons who have by which arbitrators name to reciprocally perform to a law decide the what shall be arbitrated Louisiana Civil Code article 3102 further states Parties may submit either all their differences or only some of them in particular and likewise they may submit to arbitration a lawsuit already instituted or only in contemplation and generally every of thing which they Despite plaintiffs assertions provisions clearly are to concerned in or the contrary the allows for post which may plain language dispute agreements may agree to the submission to arbitration of they to arbitrate dispose of the 2 Thus 5 parties existing controversies without Indeed pre dispute arbitration agreements actually were invalid in Louisiana until 1928 See also Saint v Martel 127 La 73 98 53 So 432 440 1910 Acts No 262 foregoing any See 1928 La do contract to previous containing the numerous exact language same 138 F 3d 1339 Fleury v as we 258 F we 26 F D Minn 1116 Binding Arbitration Law agreement exists pendinl one matter LSA R S an with prejudice of the parties 4 contest the arbitration 3 a to court v First arbitrate their panel s res judicata and decision to that the trial court to Louisiana s valid arbitration expressly authorized to must to arbitration upon the Once an arbitration be confirmed unless deem the withdrawal of their claims to be with improper as to six ofthe ten plaintiffs The plaintiffs further maintain that under the arbitration rules they may still arbitrate their claims albeit with a panel However whether NASD will allow the plaintiffs to challenge the withdrawal with prejudice the case to a See LSA R S 9 4202 4203 and for the first time on appeal argue that such a designation was who withdrew their claims before the defendants answered the arbitration despite is proceed prejudice new Mayo S D N Y 1998 According when 9 4201 4217 arbitration award award has been rendered the award is plaintiffs 2005 689 plaintiffs assertion stay proceedings andor compel the parties of American v N D Cal 2003 688 Supp 2d Reynolds finding that by virtue of their Uniform s do find merit in the dismissing the present The Benacquisto binding brokers Nevertheless application 1097 Supp 2d Menter v Agreements See Dean Witter arbitrate Supp 2d 966 968 agree with the trial court against their erred in Corp to Agreements the plaintiffs obligated themselves Submission claims Inc Reynolds Montauk Securities Accordingly Equities Corp those executed herein to constitute 11th Cir 1998 1342 373 F Express Financial Corp Dean Witter Pamela v have found Uniform Submission courts irrevocable and enforceable agreements Inc Corp 5th Cir 1998 146 F 3d 242 246 Moreover General Motors so number and arbitration classification of their withdrawal or to fe file a new arbitration suit are matters to be determined by NASD not this court jurisprudence stating that the failure of a party to arbitrate in accordance with the terms of an agreement also may be raised through a dilatory exception raising the objection of prematurity although typically the exception is often pleaded alternatively or in addition to a party s motions to stay andor compel In the event an exception of prematurity is sustained the suit is dismissed without prejudice See LSA 4 We are fully cognizant ofthe c c P art 933 A The defendants herein have not filed a seeking dismissal of the suit with their motion dilatory exception raising prejudice be construed as brought before the right to enforce the claim sued on prematurity is intended merely to retard the progress 926 In the determination has accrued the one objection of A suit is LSA C C P art 423 prematurity Moreover of the action rather than to defeat it 6 the ripe of 923 and exception LSA CC P arts the defendants simply do not argue that the matter is not yet Indeed they argue exactly the opposite instant matter Nor can premature only if it is for judicial grounds modification 30 289 Savage 4 p La 728 So 2d 1288 only confirm vacate or to 714 So 2d 926 Louisiana 2003 1721 p Thus subseauent 578 2 Cir 6 26 98 App LL C Health Ctr Family See Farmers Cotton Co correction of the award La 11 20 98 98 2322 575 or for the vacation in accordance with arbitration law established are 3 La the rendition of modify andor correct 3 Cir an v writ denied Physician Corp App an 928 Inc v Larrison 870 So 2d 7 4 04 arbitration award a court may See LSA R S 9 4209 award 4211 An award properly within matters La 732 that an award be in defendants argument award alleged is belied award or an on RS In the instant case appeal that NASD s Investment 326 Corporation 4203 where the court refused to lift though the arbitrator closed the rendition of court 37 965 an case award because the noted that the proper not file La a by requires maiority of a award no motion s The in this matter is controlled Inc Builders App 2 Cir 1 28 04 to and dismissed the arbitration parties had a confirm the to court stay and allow the parties remedy in such 197 November 16 2006 letter constituted See Lincoln Thirteen or there has been exception of resjudicata in the trial and arbitrators to be be signed by the arbitrators by the fact that defendants did 9 4202 by the Henry Ericsson Co v Accordingly by default the defendants remedy by LSA the merits of all as Furthermore LSA R S 9 4208 1941 writing and Emphasis added them an 203 to parties the scope of the award and intended 2 So 2d 195 756 and binds the Housing Authority of New Orleans decided finally ordinarily concludes v Raintree 866 So 2d litigate prior failed to pay arbitration fees situation is set even to the The forth in LSA R S 9 4203 It would be Procedure which are that any award comply with the applicable provisions of the Code of Arbitration We note that the codal provisions submitted by the defendants admitted into evidence expected were not only applicable to actions filed on or after April 16 2007 7 According to LSA R S 9 4202 order for arbitration that there is to if any proceed court a party applies for such written arbitration agreement a arbitration under that arbitration agreement default in proceeding with Manville Sales Pursuant to LSA R S 9 4203 refus ed under to sub judice we perform find the long La as the 12 3 03 party in default is a a 3 p as a applicant is So 2d 861 party who has written agreement for arbitration withdrawal of their claims plaintiffs I stay and shows a the issue is referable 2 and action in an International River Center the arbitration 2002 3060 Corp shall stay the trial of not in Johns v 139 141 fail ed In the d to or case to be tantamount to a default Pursuant to LSA R S default the court must determine of the agreement and 2 whether If it determines that those directing the parties 6 On a facts proceed 1 whether there is to statutes we find the trial the defendants appeal remedy in dispute a as to case the of making party has failed to comply with the agreement are not in issue the shall issue court arbitration in accordance with the Because dismissal with agreement applicable to two which addresses the 9 4203 prejudice is court result a not posit the alternative argument that Supp 2d 612 M D La 2006 is terms order of the contemplated by judgment to be in error s an the 6 the decision in Greening v Western Reserve present suit Although the judicata in their motion to stay and dismiss we note that they did not file a peremptory defendants referenced this argument exception raising the objection of res judicata in the trial court or in this court Such an exception must be specially Life Assurance Co of Ohio 439 F pleaded and cannot be raised Even so our courts by the court on its own motion LSA CCP consistently look beyond the caption style the substance ofthe pleadings the nature ofthe what it is erroneously called to the res See Draten v proceeding art 927 8 and form of pleadings to thus a pleading is construed for what it Winn Dixie of Louisiana Inc 94 0767 p 3 La App determine from really is not for I Cir 3 3 95 Murrell 42 070 p 3 La App 2 Cir 4 25 07 956 So 2d 697 700 However even the most liberal interpretation to the defendants motion and assuming that the defendants did properly according raise the peremptory exception pleading the objection of res judicata we find it to be without merit 652 2d So 675 676 Murrell Ordinarily v to determine whether res judicata bars an issue the court should examine both the pleadings and the entire record in the first suit However in the present matter the defendants failed to present any evidence to definitively establish the parties and the claims involved in Greening Moreover Greening only dealt with the prescriptive period applicable to the plaintiffs claims an issue that has the court in Greening merely ruled that the plaintiffs claims in that addressed the merits ofthose claims 8 not been raised in the instant suit case had prescribed and Finally therefore never CONCLUSION Accordingly we reverse proceedings consistent with to be shared the the judgment and remand the matter for further opinions expressed herein Costs of this appeal equally by the parties REVERSED AND REMANDED 9 are

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