WPC QYk jo1JڮD'tȟ[38V8g>c,;#7 9,0ԖG}nA*;mݽ̵,"_hVfOlݙJzZXl4ro 6f@ki"Y$;1jԛn;28 U ByT0K-7&gO@-.U6rAy|NU@Gu_u!:]CNg҃o[0;.:lv $(\uv;5Gk]v^qK ?z\F%(0]w)G,S;Wu gWM?BW@sKXOrA“,.8Bm?&s~ eeuN6O(t7OXV2M<'(HMZ%O# F UHQ % 0 ^ w@O4 0 0D U: UH IU:VUH D3 0D B@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@ AO] 0Dr D/ BHP LaserJet 4HPPCL5MS,,,,,,0nLd<09Z 0Courier (W1) RegularX(;d$X|XXX      TRY(3' LetterY(3' Letter3' Letter3' LetterT   $XxXXX        2    Itappearsthatthejudgmentofthetrialcourtmaynotbefinalsinceother   issueshavebeenreservedbythetrialcourtforlaterdisposition.However,we,inourdiscretionandinaccordancewithRule2,TennesseeRulesofAppellateProcedure,willentertaintheappealforthepurposeofexpeditingadecisionontheissuesbeforeus. dӀefgEhiDjDkRelgmӀ6S/%urier 3|xx((3n$ ;d!XXXX      TRY3' Letter3' 3' Letter3'T      0  (#$  0  H   $XxXXX        1    Thoughnotraisedasanissueinthiscase,itisnotbeyondtherealmof   reasontofindthatthisactionconstitutesawaiverofarbitration.Seee.g., x  WorldsourceCoilCoating,Inc.,etalv.McGrawConstructionCompany,Inc.,946F.2d 8  473(6thCircuit1991).   $XxXXX        1    Thoughnotraisedasanissueinthiscase,itisnotbeyondtherealmof   reasontofindthatthisactionconstitutesawaiverofarbitration.Seee.g., x  WorldsourceCoilCoating,Inc.,etalv.McGrawConstructionCompany,Inc.,946F.2d 8  473(6thCircuit1991).<6X9`("Courier 10cpi<09Z 0Courier (W1) Regular XkXXXXXk   Ad FILEDXkX   November2,1998  CecilCrowson,Jr.XXkAppellateCourtClerk ,cAZ"Arial Regular   $XxXXX        2    Itappearsthatthejudgmentofthetrialcourtmaynotbefinalsinceother   issueshavebeenreservedbythetrialcourtforlaterdisposition.However,we,inourdiscretionandinaccordancewithRule2,TennesseeRulesofAppellateProcedure,willentertaintheappealforthepurposeofexpeditingadecisionontheissuesbeforeus.<09Z 0Courier (W1) Regular....'dxd(3$ !   d-C<< CLevel 1Level 2Level 3Level 4Level 5($$   1  ' dxdP Pd ;d!XXXX      TRY3' Letter3' 3' Letter3'T  kkkk TR[A' LegalY3' LetterA' Legal 3' LetterT  7XXdd7mr*<,(j 8` `@E ` ttx$ rߛm񀀀@INTHECOURTOFAPPEALS   @$ATKNOXVILLEFRIZZELLCONSTRUCTIONCOMPANY,)  SEVIERCHANCERY 0x INC.,)kkC.A.kkNO.03A019805CH00161̀)̀PlaintiffAppellant)̀)̀)̀)̀)̀)vs.)  HON.TELFORDE.FOGERTY,JR. 8  Ѐ)  CHANCELLOR H  Ѐ)̀)̀)̀)̀)GATLINBURG,L.L.C.)  AFFIRMEDANDREMANDED  Ѐ)̀DefendantAppellee)C.PAULHARRISON,kkLong,Ragsdalekk&Waters,P.C.,Knoxville,forAppellant.BERNARDE.kkkkBERNSTEINkkkk&CELESTEH.HERBERT,kkkkBernsteinkkkk,Stair&kkkkMcAdamskkkk,kkkkL.L.P.kkkk,Knoxville,forAppellee.@$OPINION 0*x' ?(#McMurray,J.  Thefactsofthiscase,asmaterialtothisappeal,arerelativelysimple.ThepartiesenteredintoacontractfortheconstructionofahotelinGatlinburg,Tennessee.ThecontractwasastandardAssociatedGeneralContractorsConstructionManagercontractstyled"StandardFormofAgreementBetweenOwnerandConstructionManager."Theagreementcontainstwoprovisionslwhichllthatlaregermanetotheissuesunderconsiderationhere. 9.; Ї@% ARTICLE14    @\ \  AssignmentandGoverningLaw    8  14.1 ` ...x   8  14.2 ` ThisAgreementshallbegovernedbythelawofthe P placewheretheprojectislocated.    @% ARTICLE16  8  @XX% Arbitration    8  16.1 ` Allclaims,disputesandothermattersinquestions `  arisingoutof,orrelatingto,thisAgreementorthebreachthereof,exceptwithrespecttotheArchitect/Engineer'sdecisiononmattersrelatingtoartisticeffect,andexceptforclaimswhichhavebeenwaivedbythemakingoracceptanceoffinalpaymentshallbedecidedbyarbitrationinaccordancewiththeConstructionIndustryArbitrationRulesoftheAmericanArbitrationAssociationthenobtainingunlessthepartiesmutuallyagreeotherwise.Thisagreementtoarbitrateshallbespecificallyenforceableundertheprevailingarbitrationlaw.      Wewillfirstnotethatthe"placewheretheprojectislocated"isGatlinburg,Tennessee,thereforeparagraph14.2,Article14,ifeffective,makesTennesseelawthegoverninglawconcerningthecontract.Ifthisprovisionisineffective,then,inanyevent,Tennesseelawgovernssincethecontractwasenteredintohereandtheprojectislocatedhere.  Adispute,relatingtothecontract,arosebetweentheparties.ThedisputegaverisetoacomplaintintheChanceryCourtforSevierCountybykkFrizzellkkforthepurposeofenforcingamechanic'slienandforbreachofcontract.Frizzell,theappellanthere,specificallychargedinitscomplaint,(styled"ComplainttoEnforceMechanic'sLienandforBreachofContract") 6 +6 thatthedefendant,Gatlinburg,L.L.C.,appelleehere,"breachedtheconstructionmanagementcontractbyfailingtopaytheamountowedundertheconstructioncontract."Ajudgmentfordamagesoverandabovetheamountclaimedtobesubjecttothemechanic'slienwasalsosought.Gatlinburg,L.L.C.,fileditsanswer,acounterclaimandathirdpartyaction.Thereafter,Frizzellsubmittedademandforarbitration.kkk kkk  %  1      kkInitsanswerGatlinburgdeniedthatit )  owedFrizzellasallegedinthecomplaintbutontheotherhand,initscounterclaim,soughtdamagesfromFrizzell.Frizzellfiledamotiontostaythecourtproceedingspendingarbitrationbasedonthecontractprovision.GatlinburgopposedthemotionandamendedthecounterclaimtoallegethatFrizzellfraudulentlyinduced 3`'* Gatlinburgtoenterintothecontract.Itisthisclaimlwhichllthatlconstitutesthebasisofthisappeal.  lThemotiontostaywasheardbythecourtllThecourtheardthemotiontostayl.Thecourtnotedinitsorderthatthe"issuepresentedtothecourtiswhetherthearbitrationproceedingshouldgoforwardorwhetherthiscourtshouldtakejurisdictionofallorlsomeofthellsomelissuesasbetweenFrizzellandGatlinburg."Thecourtchosetoretainjurisdictiontoconsiderthelegalissueoffraudintheinducementofthecontractenteredintobythepartiesintheprimarycaseandorderedthepartiesnottosubmitthisissuetothearbitrators.Thecourtfurtherdeterminedthatthearbitratorsintheprimarycaseshouldresolvetheconstructiondisputesbetweenthosepartiesandrenderadecisiontothecourt.  Thisappealresultedfromthisjudgmentofthetrialcourt.kkkk  %  2      ׀ '  Theappellantpresentsthefollowingissuesforourconsideration:8  0`     I. ` Whetherthetrialcourterredinfailingtofind x-!$ thatthecontractbetweenFrizzellandGatlinburginvolvedinterstatecommerceasdefinedundertheFederalArbitrationAct? ` `    81%( 8  0`     II. ` Whetherthetrialcourterredinholdingthateven    ifthecontractbetweenFrizzellandGatlinburginvolvedinterstatecommercethattheFederalArbitrationActdidnotapply. ` `    kkThekkissueofwhetherthearbitrationprovisionsofacontractrequirethataclaimforfraudintheinducementofthecontractbesubmittedtoarbitrationhasbeenaddressedandkkresolvedinthiskjuridictionkkjurisdictionk.Seec%  cdCityofBlainev.JohnColemanHayes&Assoc., 0  818S.W.2d33(Tenn.App.1991)de,infra.efTfgfgefghhehkhcourtyhkkcourtkhresolvedtheissuehiikkagainstrequiringtheissuetobearbitrated.We,therefore,agreewiththeresultreachedbythetrialcourt.  TheUniformArbitrationActwaspassedbyourLegislaturein1983andisnowcodifiedasT.C.A.29-5-301-29-5-320.TheprovisionsoftheactpertinenttothecontroversybeforeusareT.C.A.29-5-302whichprovidesinpertinentpartasfollows:̀8  29-5-302.Agreementstosubmittoarbitration- *! Jurisdiction.- (a)Awrittenagreementtosubmitany +" existingcontroversytoarbitrationoraprovisioninawrittencontracttosubmittoarbitrationanycontroversythereafterarisingbetweenthepartiesisvalid,enforceableandirrevocablesaveuponsuchgroundsasexistatlaworinequityfortherevocationofanycontract;...      CityofBlainev.JohnColemanHayes&Assoc.,818S.W.2d33 4P(+ (Tenn.App.1991),isaveritabletreatiseonthesubjectofwhether"fraudintheinducement"issubjecttoarbitration.In 7,/ Blain,JudgekkkkCrawfordkkkkcomparedandcontrastedthevariousresolu   tionsoftheissueinotherjurisdictionsincludingthepositionadvancedbytheUnitedStatesSupremeCourt.  InBlain,JudgekkkkCrawfordkkkkspeakingforthiscourtnoted: 8 8   ` In1983,whentheTennesseelegislaturepassedtheUniformArbitrationAct,theyhadfullknowledgeofthelongestablishedrightofapersontoseekrescissionofacontractprocuredbyfraud.Withthisknowledge,wefinditlogicalforthelegislaturetointendtoexceptactionsforrescissionfromadecisionbyarbitratorsandgivingthelanguageofthestatuteitsusualandordinarymeaning,thelegislaturedidjustthat.ThislegislativeintentisexemplifiedbyJusticeBlackinthePrima x [PrimaPaintCorp.v.FloodandkkkkConklinkkkkkkkkMfgkkkk.Co.,388 h U.S.395,87kkkkS.Ctkkkk.1801,18kkkkL.Edkkkk.2d1270(1967)]dissent."Fraud,ofcourse,isoneofthemostcommongroundsforrevokingacontract.Ifthecontractwasprocuredbyfraud,then,unlessthedefraudedpartyelectstoaffirmit,thereisabsolutelynocontract,nothingtobearbitrated."87kkkkS.Ctkkkk.at1810.Itwouldbedifficulttoimproveonthislanguage.    Blaine,atpage38. '  Ѐ  ItiswellsettledinTennesseecontractlawthatfraudintheinducementrenderscontractsvoidableattheinstanceofthepartyuponwhomfraudwasperpetrated.Itisclearthatanindividualinducedbyfraudtoenterintoacontractmayelectbetweentworemedies.Hemaytreatthecontractasvoidableandsuefortheequitableremedyofrescissionorhemaytreatthecontractasexistingandsuefordamagesatlaw.Vancev.kkkkSchulderkkkk,547S.W.2d 7,/ 927,931(Tenn.1977);kkkkDerryberrykkkkv.Hill,745S.W.2d287,291   (Tenn.App.1987);Grahamv.FirstAm.kkkkNat'lkkkkBank,594S.W.2d723,   726(Tenn.App.1979).Thus,whenapartytoacontractseeksrescissioninacourtofcompetentjurisdictionandallegesfacts,whichifprovedtotherequisitedegree,wouldjustifyrescissionofacontract,theveryexistenceofthecontractisinlimbountiltheissueisresolved.Torequirearbitrationpursuanttothetermsofacontractconcerningthevalidityorveryexistenceofthecontractistopresupposethevalidityandexistenceofthecontractatleastforsomepurposes.WedonotunderstandthistobethelawinTennessee.Ithasbeenheldthatfraudvitiateseverycontractabinitio.Samuelv.King,158Tenn.546,14S.W.2d X  963(1929).Therefore,ifthereisnocontract,thereisnoarbitrationclause.  Astotheissuesasframedbytheappellant,unlessanduntilitisestablishedthatthereisacontractinexistence,aconsiderationofwhetherthecontractiscontrolledbyorsubjecttotheFederalArbitrationActispremature.Whetherthecontractshouldberescindedandvoidedisaquestionthatcanbeansweredonlyafteratrialonthemerits.Ifitisrescinded,thereisnothingtoarbitrate.Ontheotherhand,ifthecontractisfoundtobevalidandbinding,thedisputesbetweentheappellantandtheappelleearesubjecttoarbitration. 6 +. Ї  Weaffirmthejudgmentofthetrialcourtinreservingtheissueoffraudintheinducementasaquestiontobedeterminedbythecourt.Costsofthisappealareassessedtotheappellantandthiscauseisremandedtothetrialcourtforsuchotherandfurtheractionasmaybenecessary.Ӏ________________________________̀DonT.McMurray,J.CONCUR:___________________________________HoustonM.Goddard,PresidingJudge___________________________________WilliamH.Inman,SeniorJudge  (#p   7xXXdXXd7р@INTHECOURTOFAPPEALS   @$ATKNOXVILLEFRIZZELLCONSTRUCTIONCOMPANY,)  SEVIERCHANCERY X INC.,)kkC.jjA.kkNO.03A019805CH00161̀)̀PlaintiffAppellant)̀)̀)̀)vs.)  HON.TELFORDE.FOGERTY,JR. 0  Ѐ)  CHANCELLOR   Ѐ)̀)̀)GATLINBURG,L.L.C.)  AFFIRMEDANDREMANDED  Ѐ)̀DefendantAppellee)XxXXXx$,XXX$@  & JUDGMENT  H!   ThisappealcameontobeheardupontherecordfromtheChanceryCourtofSevierCounty,briefsandargumentofcounsel.Uponconsiderationthereof,thisCourtisofopinionthattherewasnoreversibleerrorinthetrialcourt.kki%  i#XxXXXx$:#kk  Weaffirmthejudgmentofthetrialcourtinreservingthe *! issueoffraudintheinducementasaquestiontobedeterminedbythecourt.Costsofthisappealareassessedtotheappellantandthiscauseisremandedtothetrialcourtforsuchotherandfurtheractionasmaybenecessary.XxXXXx (2p&)    `     h     PERCURIAM#XxXXXx;=#