Irwin v. Pinetree Retirement Planning

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ST ATE OF MAfNE CUMBERLAND, ss. SUPERIOR COURT CIVIL ACTION DOCKET NO: CV -1 0-64fi !~f\L - ClAfY\- ~/;)'1,!")O)i CAROLINE fRWIN and ELIZABETH OSMER, Plaintiffs, ORDER v. PINETREE RETfREMENT PLANNINC, P.A., SrATF or: n" Clmmor/nrrd , "'." (,I(1r1,'" (){f: S" JVII\INE Defendant ,\ '1" ¢ ildt' .: ;; ", ?O11 ICIJ F<f::~C: ,.,~.},n/.E'~.",!, F.:' 'l. r.\~. Pbinti ffs Caroline Irwin and ElizZlbeth Osmer worked as insurance agents for defendant Pinetree Retirement Planning, P.A., pursuant to identical Agency Agreements governing the terms of the commercial relationship. The plaintiffs filed this Zlction against Pinetree seeking a declaration that the wri ttcn Agency Agreements arc unconscionable, ilJegcll, Zlnd void or voidable, and that the plZ1intiffs were employees rather than independent contractors as specified in those Agreements. They also allege violations of the Title 26, section 629 prohibi bon agZlinst unfair ernployment agreernents, various wage violations, and fraud. Defendant [:Jinetree now moves to stay these proceedings and compel arbitrL1tion pursui1nt to the clause contained in the Agency Agreements. Ms. Irwin and Ms. Osmer oppose arbitn1tion on a number of grounds. First, they chlim that the Agreements arc unenforceable so the arbitr'ltion clause should have no legcll effect. Similarly, they contend that they were fraudulently induced to enter the Agreements so they should not be compelled to arbi tratc. They argue 1 thtlt their cJaims under Mtline's employment ltlw should be substcll1tively exempt from arbitratioll, <1nd that the plain langutlge of the arbitration clause does not re<Jch their claims because the claims do not "arise out of or relate to" the Agreements. Maine's Uniform Arbitration Act instructs: fA] provisioll in a written contract to submit to arbitration any controversy thereafter arising between the parties is valid, enforceable and irrevocable, save upon such grounds as exist elt Jawor in equity for the revocation of any contract. This chapter also applies to arbitration agreements behveen employers and employees ... unless otherwise provided in the agreement. 14 M.R.S. § 5927 (2010). vVhcther a contract or agreement exists is a separate question from whether it is valid and enforceable. Sleeper Forms v. Agwoy, Inc., 211 F. Supp. 2d 197, 201 (D. Me. 20(2); see Prilllo Poillt Corp. v. Flood S' Call/dill M.~c!" Co., 388 U.s. 395,403-04 (1967) (claim of fraud in the inducement of contract general1y docs not necessarily invalidate an arbitration clause where the clause itself was not procured by fraud). The Agency Agreements at issue in this case indisputably did exist, so "Maine's 'broad presumption favoring substantive tlrbitrelbility governs further considertltion of the action."' MocolII!wr v. MncQllillll-T'wccdie, 2003 ME 121, (1,[ 13, 834 A.2d '131, 136 (quoting V.r.P., f/lc. v. Firs! Tree Dev., fIC, 2001 ME 73, 9l 4, 770 A.2d 95, 96). The court htls not been directed to tlny law or authority indicating thtlt Welge tllld employment elctions tlre not arbitrable, and the plain lclilguelge of section 5927 strongly indictltes thtlt the plcli n tiffs' claims arc subject to the Arbitration Act. While Maine docs have"a broad presumption in favor of arbitration," hmvever, it is also a fundtlmental principle of contract law that "tllllbiguities ill a contract elre to be interpreted against the drafter." Bnrrct! 2 il. McD01l0ld Illves/II/ellts, l/lc., 2005 ME 43, (IllS, 870 A.2d 146, 149. The Agrecmcnts' arbitration clausc provides: Any dispute or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by binding JrbitrJtion conducted in Auburn, MJine, in accordance with the rules of the American Arbitration Association .... (Compl. Ex. A § 25.) The substance of the plaintiffs' complaint is that they were deceived Jbout the precise scope and meaning of certain clauses in the Agreements, that the Agreements Jre unenforceable, that contrary to the terms of the Agreements the plJintiffs ,vere employees Jnd not independent contrJctors, Jnd that they arc therefore entitled to recover unpJid wJges and overtime. While the plaintiffs do not C111ege breach of contrC1ct, it would be disingenuous to say that their clC1ims do not reI C1te to the Agency Agreements. The Agreements purportedly governed the working relationship between the plC1intiffs and the defendant. The question of whether the Agreements are vC1lid C1nd controlling, or whether they are unenforceC1ble C1nd the lC1ws governing employment relC1tionships generally should C1pply, is centrJI to the plC1intiffs' cJse. The plJintiffs' claims C1re inextricC1bly related to the substance of the Agreement C111d plainly fall within the ambit of the arbitrC1tion cbuse. See Barrett, 2005 ME 43, (II 21,870 A.2d C1t'151 (wllere C1rbitration c1C1use WC1S contC1ined ill contrC1ct of <ldhesion, c]C1use's broad LlnguC1ge did not ellcompC1ss c1<lims unrelC1ted to the SubstC1llce of the contrJct). FinC1l1y, the plC1intiffs' claim for frC1ud in the inducement of the Agreement as a whole does not pI'event the action from being submitted to an C1rbitr<ltor. The United States Supreme Court squC1rely addressed this question Linder the C1nC1logoLis federal Arbitration Act in 1967 by requiring "that when C1 contr<lct contains a mandatory arbitration clause, Cl claim of fraud in the inducement of the contract must be resolved by an tlrbi trator, not the courts." Barretl, 2005 ME 43,9126, R70 A.2d at 152 (Alexander, J., concurring) (citing Prima Paint Corp., 388 U.s. Clt 403-04); sce Maxwcll v. Greentrcc Fin. Servicing Corp., 1997 Me. Super. LEXIS 162 (May 19,1997) (Brennan, ].); Murphy v. Miley, 1992 Me. Super. LEXIS 47 (Apr. 8, 1993) (Fritzsche, J.); Sleeper Farms, 211 F. Supp. 2d 197, 201 (D. Me. 20(2). The courl notes thtlt this is not <:1 case in which the arbitration clCluse would divert the pltlintiffs' claims into Cl lribunCll thClt is controlled by the defendant or is otherwise inherently suspect. See Barretl, 2005 ME 43, (I[ 3, 870 A,2d tit 148 (arbitrCltion to be conducted by defendtlnt's Clffiliate org<:mizalion); id. 91 30,870 A.2d Clt 154 (AlexClnder, J., concurring) (discussing the dClnger of limiting ClfbitrCltion to internal industry forums); Hooters of America, Inc. v. Pln'llips, 173 F.3d 9JJ, 93R-40 (4th Or. 1999) (arbitrc1tion clause unenforceClble where employer controlted forum cllld process). The entry is: The defendant's motion to compel arbitration pursuant to Section 25 of the Agency Agreements is granted. This action is stayed pe thClt the pcwties may file and respond to offers of jt gm· (0) days of this order pursuant to Maine Rule DATE:~(,2P/( 4 mitted within ten CAROLINE IRWIN ET AL VS PINETREE RETIREMENT PLANNING PA UTN:AOCSsr -2010-0133246 CASE #:PORSC-CV-2010-00645 01 0000007728 BIRGEL CUNNINGHAM, ANNE ONE PORTLAND SQUARE PO BOX 586 PORTLAND ME 04112-0586 F CAROLINE IRWIN ;:,.P.: :L F ELIZABETH OSMER PL R;....,::..TN;.;,D::....-_;;;;.12::...;,../2;; ;.; ; .1;. ./2; ; .0: . ; ; .,: . 10 RTND 12/21/2010 --------'-------'----:.....;;;;..~ 02 000000167 3 ..::.G~A~RC=IA~,.....;P~E:::;.;T~E~R--'95 MAIN STREET PO BOX 3200 AUBURN ME 04212-3200 F ELI ZABETH OSMER ;:,.P.: :L F PINETREE RETIREMENT PLANNING PA ::..D=E::..F _ R_T_N;.;,D::..-_O..:,..2::...;.../2_8..:,../;...2;;;;.0..:,..1::..;;:.1 .....;R;.;,T::..N;.;,D~_0..:...2::...;.../2::..8..:.../;...2..:...0..:...1~1

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