WPC" |4qg>k]FAC?4u`͵v*'+&>R>TRi-tQ?jpU!eAlŒNʼnT8ClP3Do>^&$QCUhy8Ҥڴ]qCح' (%_l`)ٲ(QF'9F ; G^v]Z u&ZCʭLcBv|;aZ/)R?P)KmWf_ė0)r֣p K2:m\7K{+t r&[_>ؐ7 fh5 2B+돣rsyȻC]!9VQ'=;mQ%+ؗ67,hZf&K_>=8/ŏRQã3_r'dᐹC&ѦFB'Z!6ذ 0BL’a:Zz +gPM 8OjvJ4i rK_.]#U"N %- 0:3 0Um 0 0 0 0t 0T 01 0  0 0C 0 0 0 0u 0C 0 0 0 0@[ 0 0o 0@ 0 0 0 0f 0( 0C 0}(U)>U*- ^ : wF 4J ^ m mo N  $ 0~! 0D2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2"2" Bv"\\IB01S01\CLERK1NAS,,,,0(9 Z6Times New Roman RegularX($USUS.,*+ (_2623  ..*G+M (_25   /%` ` hp x /23  ..  5+ ` hp x 5  *D+M (_24   ," hp x ,23  ..  5+ ` hp x 5  *A+M (_23  ` ) hp x )23  ..  5+ ` hp x 5  *>+M (_22   &hhp x &23  ..  5+ ` hp x 5  *;+M (_21   #p x #23  ..  5+ ` hp x 5  *8+M (_20  h  p x 23  ..  5+ ` hp x 5  *5+M (_19   pp x 23  ..  5+ ` hp x 5  *2+M (_18    x 23  ..  5+ ` hp x 5  * (_1723  Ԁ*GM (_16   /%` ` hp x /23  Ԁ  5+ ` hp x 5  *DM (_15   ," hp x ,23  Ԁ  5+ ` hp x 5  *AM (_14  ` ) hp x )23  Ԁ  5+ ` hp x 5  *>M (_13   &hhp x &23  Ԁ  5+ ` hp x 5  *;M (_12   #p x #23  Ԁ  5+ ` hp x 5  *8M (_11  h  p x 23  Ԁ  5+ ` hp x 5  *5M (_10   pp x 23  Ԁ  5+ ` hp x 5  (2M &_9    x 23  Ԁ  5+ ` hp x 5  ( &_823  (GM &_7   /%` ` hp x /23   5+ ` hp x 5  (DM &_6   ," hp x ,23   5+ ` hp x 5  (AM &_5  ` ) hp x )23   5+ ` hp x 5  (>M &_4   &hhp x &23   5+ ` hp x 5  (;M &_3   #p x #23   5+ ` hp x 5  (8M &_2  h  p x 23   5+ ` hp x 5  (5M &_1   pp x 23   5+ ` hp x 5  &2M $_    x 23   5+ ` hp x 5  ($    (?2$ !USUS.,    0  \  `&Times New Roman%2A`Arial ##Xd#/ /B011C83|xU   .($USUS.,    1    _ԀXXThepartiesagreedthatUnitedStatesFederallawandTennesseelawwouldgovernthearbitrationissue  presentedinthisappeal.(.(3($ !USUS.,      0  (#$  0   d !USUS.,  _"X<XXX"dX"X<  $z\   @ #"X<X"d\##X<XX"X<=#"X<XXX<" }X"X<INTHECOURTOFAPPEALSOFTENNESSEE  ?+ ` hp x X?#"X<X" }#" }X"X<@..ATNASHVILLE & #"X<X" }##X<XX"X<#"X<XXX<"dX"X<September5,2002Session L #"X<X"d##X<XX"X# "X<XXX<_Balaton_ԀPower,Inc.( _Balaton_)isaCanadianpowercompanyincorporatedand $ " headquarteredinVancouver,BritishColumbia,withafieldofficelocatedinBoise,Idaho.From %!# Augustof2000toFebruaryof2001,_Balaton_Ԁmaintainedanadministrative/marketingofficein &!$ Franklin,Tennessee.- /#  1      ׀_Balaton_ԀhiredRonaldE.BrownasthePresidentandCEOoftheFranklin '"% officeandsignedanemploymentcontracttothateffectonJuly27,2000.Theemploymentcontract z(#& containedanarbitrationclause,whichisthecentralissueonappeal. f)$'  R*%( $z\ $8<XXdd8 $  _  OnDecember5,2000,Mr.Brownsubmittedaletterofresignationfromhispositionas  PresidentandCEO.Atthattime,Mr.Brownexercisedtheoptioninhisemploymentcontracttobe  appointedSeniorVice-PresidentofMarketingforBalaton.Hecontinuedworkinginthatposition  untilFebruary12,2001.Onthatdate,BalatoninformedMr.BrownbyaletterwrittenbyRodney t E.Smith,PresidentofBalaton,ofhisimmediatesuspensionwithoutpay. ` ?+ ` hp x X?E+ ` hp x X E  BetweenFebruary12,2001,andApril27,2001,Balatoninvestigatedseveralallegations 8  againstMr.Brown.InaletterdatedApril27,2001,Balatonterminatedtheemploymentagreement $ t withMr.Brown.Thatletterstatedthat,whiletheinvestigationwasongoing,the preliminaryresults  ` aresuchthatthecompanynowexercisesitsrighttoterminatetheEmploymentAgreementandyour  L  servicesforjustcause.TheterminationwaseffectiveasofFebruary12,2001.Mr.Brownthen  8  filedsuitagainstBalatonforbreachoftheemploymentagreement#X<XX"X<#"X<XXX<allegingthathehadbeen $  wrongfullyterminatedanddeprivedofsalary,benefits,andstockoptions.     ThetrialcourtenteredanOrderdirectingthepartiestosubmitthecausetoamediator.Mr.   Brownsoughtadefaultjudgment,baseduponBalatonsfailuretoanswertheComplaint.Balaton   respondedandfiledtheAffidavitofthePresidentandDirector,RodneySmith.Theirresponse p arguedthatdefaultjudgmentswereunfavored,particularlywhenthedefendantdemonstratesa \ meritoriousdefensetothecomplaint.BalatonansweredtheComplaintsoonthereafterandargued H thatMr.Brownfailedtostateaclaimuponwhichreliefcouldbegrantedandthatthetrialcourt 4 lackedjurisdictionovertheactionastheEmploymentAgreementmandatedarbitrationinaccordance  p withthelawsofBritishColumbia,Canada.BalatonthenfiledaMotiontoDismissarguingthatthe  \ employmentagreementstipulatedthatalldisputesweretobearbitratedand,therefore,thetrialcourt H lackedjurisdiction. 4   Thetrialcourtenteredaschedulingorderdirectingthepartiestocomplywiththecourts   previousOrderofmediation,settingthedatefordiscoverycompletion,andsettingFebruary6,2002,  asthedatefortrial.ThetrialcourtdeniedtheDefendantsMotiontoDismissonOctober2,2001,  thatOrderstating:   X X?+ ` hp x X?TheCourtfindsthattheEmploymentContractinthismattercontemplatesinSection X  8.1thefilingofacomplaintin acourtofcompetentjurisdiction,thattheChancery D! CourtforWilliamsonCounty,Tennesseehasjurisdictionoverthepartiesandthe 0"  subjectmatterofthiscase,andthatthereisnorequirementthatthecasebebrought #l! inBritishColumbiaasurgedbytheDefendant. $X"  X XE+ ` hp x X E  OnOctober5,2001,BalatonfiledaMotiontoCompelArbitration,basedupontheargument %0!$ that [m]ediationisnottheagreeduponmeansfortheresolutionofthisdisputeandisnotlikelyto &"% besuccessfulandthat [t]hepartiestothiscontractintendedforanydisputetobearbitrated '#& accordingtothelawsofBritishColumbia. (#'   OnOctober22,2001,thetrialcourtheardBalatonsMotiontoCompelArbitration.Thetrial |*%) courtdeniedtheMotiontoCompelArbitration,findingthat theinconsistenciesbetweenparagraphs h+&* 8.1and8.2oftheemploymentagreementcannotbereconciled.#X<XX"X` (#` (#  X X?+ ` hp x X?8.10 ` Thisagreementshallbegovernedbyandconstruedinaccordancewiththe  lawsoftheProvinceofBritishColumbia,Canadaorinsuchjurisdiction  whereintheCompanysRegisteredHeadOfficeislocatediftheCompany  decidestorelocatesaidRegisteredHeadOfficeandanyactionorproceeding   inrespectofitorallegingabreachofitwillbecommencedandmaintained v! onlyinacourtofappropriatejurisdiction.b" ` `  8.20 ` Anydispute,controversyorclaimarisingoutoforrelatingtothisagreement :$" orthebreachofitshallbesettledbyarbitrationinaccordancewiththelaws &%v # oftheProvinceofBritishColumbia,Canadaorotherappropriatejurisdiction &b!$ per8.1aboveand,unlessthepartiesagreetoreferthesametoasingle &N"% arbitrator,shallbereferredtotwoarbitrators,onetobechosenbyeachofthe ':#& partiesandthearbitratorsshall,beforeenteringonthereference,appointan (&$' umpire.)%(` `  #X<XX"X< /#"X<XXX< X XE+ ` hp x X E  Thereisnoquestionthat,ifthepartiesmadeanagreementtoarbitrate,thatagreementmust +&* beenforcedbythisCourt.Theissueis,however,whethertheabovecitedparagraphs,together,show  thatthepartiesintendedarbitrationtobethesolerequiredmethodofcontractresolution.  8   ` Becausethecontractinthiscaseisonethatinvolvesinterstatecommerce,the t [FederalArbitrationAct]appliestoensurethatthearbitrationagreementbetweenthe ` partiesisenforcedaccordingtoitsterms....L    8   ` ThepurposeoftheFAAis toensuretheenforceability,accordingtotheir $ t terms,ofprivateagreementstoarbitrate.Mastrobuonov.ShearsonLehmanHutton,  ` Inc.,514U.S.52,57,131L.Ed.2d76,115S.Ct.1212(1995);VoltInfo.Sciences,  L  Inc.,489U.S.at476,109S.Ct.1248.However,partiescannotbeforcedtoarbitrate  8  claimsthattheydidnotagreetoarbitrate.AstheUnitedStatesSupremeCourthas $  stated,    8  8`   Arbitrationunderthe[FAA]isamatterofconsent,notcoercion,and   partiesaregenerallyfreetostructuretheirarbitrationagreementsas   theyseefit.Justastheymaylimitbycontracttheissueswhichthey   willarbitrate,sotoomaytheyspecifybycontracttherulesunder p whichthatarbitrationwillbeconducted.\` x` x 8  VoltInfo.Sciences,Inc.,489U.S.at479,109S.Ct.1248(citationsomitted).H   8   ` TheFAAs proarbitrationpolicydoesnotoperatewithoutregardtothe  p wishesofthecontractingparties.Mastrobuono,514U.S.at57,115S.Ct.1212.  \ Because arbitrationisamatterofcontract[,]...apartycannotberequiredtosubmit H toarbitrationanydisputewhichhehasnotagreedsotosubmit.AT&TTechs.,Inc. 4 v.CommunicationsWorkersofAm.,475U.S.643,648,89L.Ed.2d648,106S.Ct.   1415(1986).Whenpartiesagreetoarbitration,theFAAensuresenforcementofthat   agreementbywithdrawing thepowerofthestatestorequireajudicialforumforthe  resolutionofclaimswhichthecontractingpartiesagreedtoresolvebyarbitration.  SouthlandCorp.,465U.S.at10,104S.Ct.852.However,consistentwiththeFAA,  partiesmayagreethatonlycertainissueswillbesubmittedtoarbitrationorthatthey l willnotarbitrateatall.Cf.MitsubishiMotorsCorp.v.SolerChryslerPlymouth, X  Inc.,473U.S.614,628,87L.Ed.2d444,105S.Ct.3346(1985).D!   8   ` Therefore,thequestionessentiallybecomes whatthecontracthastosay #l! aboutthearbitrabilityofpetitionersclaim....Mastrobuono,514U.S.at58.$X"   FrizzellConst.Co.,Inc.v.Gatlinburg,L.L.C.,9S.W.3d79,834(Tenn.1999). %0!$   Thequestionofwhetherpartiesintendedthecontracttorequirearbitrationisclearlyoneto '#& bedecidedbythecourt. (#' 8   ` ThefirstprinciplegleanedfromtheTrilogyisthat arbitrationisamatterof |*%) contractandapartycannotberequiredtosubmittoarbitrationanydisputewhichhe h+&* hasnotagreedsotosubmit.Warrior&Gulf,supra,at582;AmericanMfg.Co.,  supra,at570571(BRENNAN,J.,concurring).Thisaxiomrecognizesthefactthat  arbitratorsderivetheirauthoritytoresolvedisputesonlybecausethepartieshave  agreedinadvancetosubmitsuchgrievancestoarbitration.GatewayCoalCo.v. t MineWorkers,414U.S.368,374(1974).`   8   ` Thesecondrulewhichfollowsinexorablyfromthefirst,isthatthequestion L  ofarbitrabilitywhetheracollectivebargainingagreementcreatesadutyforthe 8  partiestoarbitratetheparticulargrievanceisundeniablyanissueforjudicial $ t determination.Unlessthepartiesclearlyandunmistakablyprovideotherwise,the  ` questionofwhetherthepartiesagreedtoarbitrateistobedecidedbythecourt,not  L  thearbitrator.Warrior&Gulf,supra,at582583.SeeOperatingEngineersv.Flair  8  Builders,Inc.,406U.S.487,491(1972);Atkinsonv.SinclairRefiningCo.,370U.S. $  238,241(1962),overruledinpartonothergrounds,BoysMarkets,Inc.v.Retail   Clerks,398U.S.235(1970).Accord,MitsubishiMotorsCorp.v.SolerChrysler   Plymouth,Inc.,473U.S.614,626(1985).    8   ` TheCourtexpresslyreaffirmedthisprincipleinJohnWiley&Sons,Inc.v.   Livingston,376U.S.543(1964).The thresholdquestiontherewaswhetherthe p courtoranarbitratorshoulddecideifarbitrationprovisionsinacollectivebargaining \ contractsurvivedacorporatemergersoastobindthesurvivingcorporation.Id.,at H 546.TheCourtansweredthattherewas nodoubtthatthisquestionwasforthe 4 courts. Underourdecisions,whetherornotthecompanywasboundtoarbitrate,  p aswellaswhatissuesitmustarbitrate,isamattertobedeterminedbytheCourton  \ thebasisofthecontractenteredintobytheparties....Thedutytoarbitratebeing H ofcontractualorigin,acompulsorysubmissiontoarbitrationcannotprecedejudicial 4 determinationthatthecollectivebargainingagreementdoesinfactcreatesucha   duty.Id.,at546547(citationsomitted).    AT&TTechs.,Inc.v.CommunicationsWorkersofAmerica,475U.S.643,64849(1986).    Further,wereviewthisissuedenovo,withnopresumptionofcorrectness. l 8   ` Therearenofactualdisputesonappeal;theinterpretationofthearbitration D! clauseofthecontractisaquestionoflaw.RappConstr.Co.v.JayRealtyCo.,809 0"  S.W.2d490,491(Tenn.App.1991).Thereforeourreviewofthejudgmentbelowis #l! denovoupontherecordwithnopresumptionofcorrectnessofthetrialcourts $X" conclusionoflaw.Tenn.R.App.P.13(d);Carvellv.Bottoms,900S.W.2d23,26 $D # (Tenn.1995).%0!$   InRe:EstateofWyatt,No.02A019706PB00132,1998WL477668,at*2(Tenn.Ct.App.1998). '#&   Apartycannotberequiredtoarbitrateunlessarbitrationwastheexclusiveremedyforwhich )$( thepartiescontracted.Inthisdeterminationweturntoordinaryrulesofcontractconstruction. |*%)  h+&* 8   ` Courtsshouldgenerallyapply ordinarystatelawprinciplesindeciding  whetherthepartiesagreedtosubmitcertainissuestoarbitration.SeeFirstOptions  ofChicago,Inc.v.Kaplan,514U.S.938,944,131L.Ed.2d985,115S.Ct.1920  (1995)(citingMastrobuono,514U.S.at6263,115S.Ct.1212).UnderTennessee t law,thelawgoverningthiscontract,the cardinalrule[ininterpretingcontracts].. ` .istoascertaintheintentionofthepartiesandtogiveeffecttothatintention, L  consistentwithlegalprinciples.BobPearsallMotors,Inc.v.RegalChrysler 8  Plymouth,Inc.,521S.W.2d578,580(Tenn.1975).Courtsmaydeterminethe $ t intentionoftheparties byafairconstructionofthetermsandprovisionsofthe  ` contract,bythesubjectmattertowhichithasreference,bythecircumstancesofthe  L  particulartransactiongivingrisetothequestion,andbytheconstructionplacedon  8  theagreementbythepartiesincarryingoutitsterms.PenskeTruckLeasingCo.v. $  Huddleston,795S.W.2d669,671(Tenn.19909).Nosingleclauseinacontractis   tobeviewedinisolation;rather,thecontractistobe viewedfrombeginningtoend   andallitstermsmustpassinreview,foroneclausemaymodify,limitorilluminate   another.CockeCountyBd.ofHighwayCommrsv.NewportUtils.Bd.,690S.W.2d   231,237(Tenn.1985).p   FrizzellConstr.,9S.W.3dat85.TheserulesofconstructionarefurtherelaboratedinCobleSystems, H Inc.v.GiffordCo.,627S.W.2d359(Tenn.Ct.App.1981). 4 8   ` Fromthefourcornersoftheagreementthen,whatdidthepartiesintendwhen  \ thisagreementwasexecuted?Thereareotherrulesofconstructionthatcanbe H appliedtohelpresolvetheapparentconflict.Firstandmostimportantistheprimary 4 rulethattheintentofthepartiesmustprevail.OhioCas.Co.,Inc.v.Travelers   IndemnityCompany,493S.W.2d465(Tenn.1973).Second,thecourtswillconstrue   thewritingsoastoavoidtheconflictifpossible.Bartlettv.PhillipsCareyMfg.  Co.,216Tenn.323,392S.W.2d325(1965).Third,iftheprovisionsareso  repugnantthattheycannotstandtogether,thefirstshallbegiveneffectandthelatter  rejected.17Am.Jur.2dContracts,267;Bartlettv.PhillipsCaryMfg.Co.,supra; l Smithartv.JohnHancockMut.LifeInsuranceCompany,167Tenn.513,71S.W.2d X  1059(1934).Fourth,writtenortypewrittentermswillcontrolprintedpartsofan D! agreementwherethereisanapparentinconsistency.17Am.Jur.2dContracts,271; 0"  Tindellv.Bowers,31Tenn.App.474,216S.W.2d752(1949).Fifth,doubtful #l! languageinacontractshouldbeinterpretedmoststronglyagainstthepartywhodrew $X" orpreparedit.17A.Jur.2dContracts,276.Thislastruleistobeapplied,however, $D # onlywhereotherrulesofconstructionfailtogivecertaintytothewrittenexpression. %0!$ 17Am.Jur.2dContracts,276;Crouchv.Shepard,44Tenn.383(1867).&"%   CobleSystems,627S.W.2dat363.Itshouldalsoberememberedthatcourtsareprecludedfrom (#' creatingcontractsfortheparties.BobPearsallMotors,Inc.v.RegalChryslerPlymouth,Inc.,521 )$( S.W.2d578,580(Tenn.1975). |*%)  h+&*   Inreviewingthiscontractandthelanguageofthe GoverningLawssectionthatisalleged  tocontainanarbitrationagreement,wecannotsaythislanguageconstitutesanagreementtoarbitrate  asthesolemethodofdisputeresolution.Thesectionisambiguousandtheintentofthepartiesis  notclearfromreadingthelanguageaswritten.Section8.1contemplatesacauseofactionforbreach t oftheagreementbeing commencedandmaintainedonlyinacourtofappropriatejurisdiction. ` Section8.2requiresarbitrationinthesameappropriatejurisdictionsetoutin8.1.Numerouscases L  fromotherstatescitedbyBalatonPowerhaveharmonizedachoiceoflawprovisionwithan 8  arbitrationclauseinthesamecontract.However,noneofthosecasescontainthemandatory $ t  commencedandmaintainedlanguageinthecontractatissue.Thelanguageofsection8.1  ` providesthatalegalactionforbreach willbecommencedandmaintainedinacourtoflaw.The  L  conflictbetweenthesetwosectionsisunavoidable.Exceptthroughastrainedreadingthatignores  8  oravoidswords,thetwosectionscannotbereconciled. $    DuetotheunresolvableambiguityofthelanguageandTennesseesrulesofcontract   interpretation, thefirstsectionshouldbegiveneffectandthelatterrejected.CobleSystems,627   S.W.2dat363.Assuch,thetrialcourtwascorrectinrejectingBalatonsMotiontoCompel   Arbitration.Wefindnocontractualagreementbetweenthepartiesgivinguptheirrighttoredress p inacourtoflaw. \   Mr.BrownalsoarguedthatBalatonPoiwerhadwaiveditsrighttoarbitration.However,as 4 wefindthatBalatonhasnorighttoarbitration,thatissueismoot.  p   Therulingofthetrialcourtisaffirmed. H    `     h     ___________________________________      `     h     WILLIAMB.CAIN,JUDGE  #X<XX"X<5#