E-Filed Document Aug :46: CA Pages: 38 IN THE SUPREME COURT OF THE STATE OF MISSISSIPPI NO CA-01655

Transcription

1 E-Filed Document Aug :46: CA Pages: 38 IN THE SUPREME COURT OF THE STATE OF MISSISSIPPI NO CA JANE DOE APPELLANT VS. HALLMARK PARTNERS, LP; SJP ONE, LLC; NEW HORIZONS DEVELOPMENT, LLC; VERONICA MOORE; NEW HORIZONS MANAGEMENT, LLC; SECURITY ENGINEERS, INC.; AND JOHN DOES 1-10 APPELLEE On Appeal from the Circuit Court of the First Judicial District of Hinds County, Mississippi (Cause No. 25CI1:14-cv-434-JAW) APPELLEE'S BRIEF ORAL ARGUMENT NOT REQUESTED A. La Verne Edney (MB No ) Everett E. White (MB No ) Adria H. Jetton (MB No ) BAKER, DONELSON, BEARMAN, CALDWELL & BERKOWITZ, PC One Eastover Center 100 Vision Drive, Suite 400 Jackson, Mississippi Telephone: (601)

2 CERTIFICATE OF INTERESTED PARTIES The undersigned counsel of record certifies that the following listed persons or entities have an interest in the outcome of this case. These representations are made in order that the justices of the Supreme Court or the judges of the Court of Appeals may evaluate possible disqualification or recusal. 1. Honorable Jeff Weill, Sr. Hinds County Circuit Court Judge 2. Jane Doe - Appellant 3. Hallmark Partners, LP Appellee 4. SJP One, LLC Appellee 5. Veronica Moore Appellee 6. New Horizons Management, LLC Appellee 7. Security Engineers, Inc. Appellee 8. John Does Appellee 9. Jesse Mitchell, III and Jessica McLaurin of The Mitchell Firm, PLLC - Attorneys for Appellant 10. La Verne Edney, Everett E. White, and Adria H. Jetton of Baker, Donelson, Bearman, Caldwell & Berkowitz, PC - Attorneys for Appellee(Hallmark Partners, LP, SJP One, LLC, Veronica Moore, and New Horizons Management, LLC) 11. Patrick Patronas, Leslie M. Hand, and Bryan A. Grayson of Lloyd, Gray, Whitehead & Monroe, PC Attorneys for Appellee (Security Engineers, Inc.) /s/ Everett White Attorney for Appellee -ii-

3 TABLE OF CONTENTS PAGE CERTIFICATE OF INTERESTED PARTIES... ii TABLE OF CONTENTS... iii TABLE OF AUTHORITIES... iv STATEMENT OF THE ISSUES...1 STATEMENT REGARDING ORAL ARGUMENT...2 INTRODUCTION...3 STATEMENT OF THE CASE...4 SUMMARY OF ARGUMENT...7 ARGUMENT...10 I. Legal Framework...10 II. III. IV. The trial court properly found that Plaintiff s premises liability claims were within the scope of this broad Arbitration Agreement...12 The Court should reject Plaintiff s novel paradigm for analyzing the scope of arbitration clauses...15 A. There is no such thing as a limited-broad arbitration clause...16 B. The Court must consider the full text of the Arbitration Agreement, including the two exceptions...17 C. The Court must consider both the allegations concerning the alleged incident and the allegations concerning Defendants alleged conduct...19 The Court should reject Plaintiff s arguments that the nature and location of the incident render the dispute outside the scope of this broad Arbitration Agreement...21 A. The nature of the incident does not render the dispute outside the scope of the Arbitration Agreement...21 B. The location of the incident does not render the dispute outside the scope of this Arbitration Agreement...24 V. The Court should not declare the Arbitration Agreement void as a matter of public policy...27 CONCLUSION...29 CERTIFICATE OF SERVICE iii-

4 TABLE OF AUTHORITIES CASES Page(s) BKD Twenty-One Mgmt. Co. v. Delsordo, 127 So. 3d 527 (Fla Dist. Co. App. 2012)...26, 27 BriovaRX, LLC v. Transcript Pharmacy, Inc., 163 So. 3d , 12, 16, 20, 25 Cappaert v. Junker, 413 So. 2d 378 (Miss. 1982)...27, 28 Citifinancial v. Murray, 340 F.Supp. 2d 743 (S.D. Miss 2004)...18 Cleveland v. Mann, 942 So. 2d 108 (Miss. 2006)...20 Community Care Ctr. of Vicksburg, LLC v. Mason, 966 So. 2d 220 (Miss. Ct. App. 2007)...14 E. Ford, Inc. v. Taylor, 826 So. 2d 709 (Miss. 2002)...10, 11 Federal Insurance Company v. Singing River, No. 1:15-cv-236, 2015 WL (S.D. Miss. Nov. 24, 2015)...28 Freese v. Mitchell, No CA-01045, 2014 WL IP Timberlands Operating Co. v. Denmiss Corp., 726 So. 2d 96 (Miss. 1998)...10 Jones v. Haliburton Co., 583 F.3d 228 (5th Cir. 2009)...18, 22, 23, 24 Jones v. Haliburton Co., 625 F.Supp. 2d 339 (S.D. Tex. 2008), affirmed 583 F. 3d 228 (5th Cir. 2009)...22, 23 Marmet Health Care Center, Inc. v. Brown, 132 S. Ct (2012)...28, 29 Page v. Captain D s, LLC, No. 2:12cv105, 2012 WL (S.D. Miss. Nov. 27, 2012)...16, 17 -iv-

5 Pennzoil Exploration & Prod. Co. v. Ramco Energy Ltd., 139 F.3d 1061 (5th Cir. 1998)...11, 16 Pers. Sec. & Safety Sys. Inc. v. Motorola Inc., 297 F.3d 388 (5th Cir. 2002)...10 Raesly v. Grand Housing, Inc., 105 F.Supp. 2d 562 (S.D. Miss. 2000)...18 Rogers-Dabbs Chevrolet-Hummer, Inc. v. Blakeney, 950 So. 2d 170 (Miss. 2007)...10, 12 Ruppert v. Mav6 Holdings, LLC, 185 So. 3d Sawyers v. Herrin-Gear Chevrolet Co., 26 So. 3d 1025 (Miss. 2010)...18 Scruggs v. Wyatt, 60 So. 3d Smith ex rel. Smith v. Captain D s, LLC, 963 So. 2d 1116 (Miss. 2007)...18, 22, 23 Terminix Int l, Inc., LTD v. Rice, 904 So. 2d 1051 (Miss. 2004)...20 Trinity Mission of Clinton, LLC v. Barber, 988 So. 2d 910 (Miss. Ct. App. 2007)...20 Vidrine v. Balboa Ins. Co., 597 F.Supp. 2d 687 (S.D. Miss. 2009)...18 Woodard v. Pebble Creek, No. 3:06-cv (S.D. Miss. Dec. 17, 2007) v-

6 STATEMENT OF THE ISSUES 1. Whether Plaintiff s premises liability claims are within the scope of this broad arbitration agreement. 2. Whether the subject arbitration agreement is void as against public policy. -1-

7 STATEMENT REGARDING ORAL ARGUMENT The Hallmark Defendants oppose Plaintiff s request for oral argument. The Hallmark Defendants believe that the parties briefs will be sufficient for the Court to resolve the issues. -2-

8 INTRODUCTION When Plaintiff signed her lease at Hallmark Gardens apartments in 2013, she also signed an arbitration agreement. In that contract, she agreed to arbitrate virtually all claims worth more than $5,000 that in any way related to her occupancy and leasing of the subject property. The only two exceptions were for disputes regarding rent payments and damage to her personal property. Two years ago, Plaintiff was assaulted in the complex s parking lot in the middle of the day. She filed the subject lawsuit alleging that apartment complex and its hired security company failed to maintain a reasonably safe premises. The only question properly before this Court is: did Plaintiff agree to arbitrate these premises liability claims? Plaintiff contends that she did not. She argues, in the first place, that the traditional framework for analyzing the scope must be replaced. She proposed adoption of an entirely new (and plaintiff-friendly) scheme. Applying her newly-created scheme, she then argues that the dispute is beyond the scope because her rape claim was never contemplated and because the incident occurred in the parking lot and not in her apartment unit. Plaintiff also argues, for the first time, that this Court should invalidate all arbitration clauses in residential leases that cover premises liability claims. The Court should reject Plaintiff s arguments and affirm the trial court s finding that Plaintiff s claims are within the scope of this broad arbitration agreement. As an initial matter, Plaintiff is not asserting a rape claim; she is asserting a premises liability claim, and that is a claim that she agreed to arbitrate. The fact that the incident occurred -3-

9 in the parking lot, moreover, does not remove the claim from the scope of the agreement. The dispute is still over whether Defendants maintained a reasonably safe premises. As for the elements of Plaintiff s novel paradigm her new category of arbitration clause, her new restriction on considering certain language in arbitration agreements, and her new prohibition on considering allegations as to Defendants conduct they have never been recognized by any court and should be rejected out of hand. So should her attempt to invalidate the subject arbitration agreement on grounds of public policy. Plaintiff has not made, and cannot make, the required showing that the arbitration agreement is prohibited by statute or condemned by prior decisions of the court. Moreover, the federal policy favoring arbitration precludes states from invalidating entire categories of arbitration agreements. The Court should affirm. STATEMENT OF THE CASE Plaintiff is a former a resident of Hallmark Gardens. 1 On April 19, 2014, two teenagers attacked Plaintiff in the Hallmark Gardens parking lot as she was walking to her car. 2 Plaintiff filed this lawsuit on July 7, 2014, alleging that the apartment complex s security was inadequate, and that proper security would have prevented the incident. 3 1Hallmark Partners, LP owns Hallmark Gardens; New Horizons Management, LLC operates Hallmark Gardens; SJP One, LLC is the general partner of Hallmark Partners, LP; New Horizons Development, LLC developed Hallmark Gardens; and Veronica Moore is a former employee of New Horizons Management, LLC (collectively Hallmark Defendants ). R.35. New Horizons Development, LLC was dismissed without prejudice on January 28, R R R

10 She seeks recovery for the medical expenses and emotional injuries she sustained. 4 The Hallmark Defendants moved to compel arbitration on August 8, 2014, 5 because Plaintiff signed an arbitration agreement that covers Plaintiff s claims. 6 When Plaintiff signed the lease agreement ( Lease ) with Hallmark Gardens in September 2013, 7 she also signed a separate two-page Arbitration Agreement Addendum ( Arbitration Agreement ). Plaintiff signed this same Arbitration Agreement again in March 2014, because the original one contained a typographical error. 8 The Arbitration Agreement requires arbitration of all disputes where the amount at issue is more than $5,000, except for those relating to rent payments and personal property damage. 9 Specifically, it provides that any dispute, claim or controversy (except as expressly identified below) arising out of or in any way related to [Plaintiff s] occupancy and leasing of the subject property from [Hallmark Gardens]... where the claim or the amount in controversy exceeds $5, shall be submitted to JAMS... for final and binding arbitration. 10 The Agreement then carves out two categories of claims that are not subject to the Arbitration Agreement: claims relating to rent payment disputes and claims relating damage to the Lessor s property. At the end of 4R R The security company, Security Engineers, Inc. ( SEI ), filed its own motion to compel arbitration in September R R R R Id. -5-

11 the Arbitration Agreement, there is a summary that explains the Agreement provision by provision. 11 Plaintiff initialed next to each of the 13 provision summaries. 12 Plaintiff responded to the Hallmark Defendants motion on September 9, She argued that her claims were outside the scope of the Arbitration Agreement; that the Agreement was unconscionable; and that the Agreement did not apply to nonsignatory Defendants. Defendants filed their Reply on October 17, 2014, 14 and the Court heard argument on November 24, The trial court granted Defendants motion on October 6, In its order, the trial court determined that the Arbitration Agreement was a broad agreement and thus applied to any dispute that touched matters covered by the parties contract. 16 The court then analyzed the factual allegations in the Complaint, including the allegations relating to the Hallmark Defendants alleged failure to provide adequate security, and correctly found that the nature of Plaintiff s claims all relate to the Plaintiff s occupancy and leasing of the subject property and are therefore within the scope of the arbitration agreement R Id. 13R R R R R

12 Plaintiff filed her Notice of Appeal on November 4, 2015, 18 and her appellate brief ( Brief ) on June 28, Plaintiff did not raise the issues of unconscionability or application to non-signatories in her Appeal. SUMMARY OF ARGUMENT The trial court properly compelled arbitration of Plaintiff s claims. It found that the dispute was over the condition of the property, and that related to Plaintiff s occupancy and leasing of the property. The ruling is supported by common sense and the law. The Southern District compelled arbitration of a similar premises liability claim against an apartment complex arising out of a rape, and Mississippi courts routinely compel arbitration of personal injury tort claims. Cases from other jurisdictions do the same. On appeal, Plaintiff makes three kinds of arguments: legal standard arguments, substantive arguments, and policy arguments. Most of the arguments are novel. All of them are unpersuasive. Plaintiff s legal standard arguments are revolutionary. She invents a new category of arbitration clause ( limited-broad ). She invents a new rule of construction for arbitration agreements (cannot consider exclusions). And she invents a new 18R Plaintiff makes a number of unsupported or disputed allegations in her Brief. For example, she claims that there were multiple instances of criminal activity near Hallmark Gardens and that there was no security at Hallmark Gardens at the time of the incident. Because these allegations are entirely irrelevant to the issues here, it is unnecessary for the Hallmark Defendants to address them. -7-

13 limitation on the kinds of factual allegations that a court may consider (only those relating to the incident that caused injury). The Court should reject each component of Plaintiff s proposed scheme. This is a broad arbitration clause, and the court should apply the broad standard. There is no such thing as limited-broad. The Court, moreover, should consider the full text of the arbitration agreement, including the exceptions, and all of the factual allegations underlying Plaintiff s claims, including those relating to Defendants alleged conduct. Under the umbrella of her fictional framework, Plaintiff asserts two substantive arguments for why she thinks her claims are outside the scope. They relate to the nature and location of the incident that caused her injury. The first is that she never agreed to arbitrate a rape claim. The second is that the arbitration agreement does not apply because she could have been a guest in the parking lot that day. The flaws in these arguments are many. As an initial matter, Plaintiff is asserting a premises claim, not a rape claim, as noted earlier. Further, it is not necessary that the parties contemplate the precise manner in which the plaintiff might be injured by an unsafe condition on the premises. The question is whether a dispute over injuries caused by an allegedly unsafe premises is related to or touches the occupancy and leasing of the subject property, which it plainly does. The two employment cases on which Plaintiff relies are distinguishable. In both cases, the courts found the arbitration clause in the employment agreement did not cover claims arising from the employer assaulting the plaintiff. Here, however, the Defendants did not assault Plaintiff; it was two teenagers who assaulted her. On top of -8-

14 this, the main case that Plaintiff relies on actually compelled arbitration of the premises liability claim. With respect to the location of the incident, the Court should reject Plaintiff s hypothetical and engage in a reality-based analysis. Plaintiff walked to her car in the Hallmark Gardens parking lot that day because she lived there. She was, in fact, a resident, not a guest. And as a resident, she had signed a contract agreeing to arbitrate certain claims, including claims that the parking lot was not maintained in a safe condition. It is entirely irrelevant that the Hallmark Defendants may have an independent duty under tort law to maintain the common areas. The Lease does not have to be the sole fount of the duty in order for the claim to be within the scope of a broad arbitration agreement. Finally, Plaintiff s policy arguments are a non-starter. At the end of her Brief, she asks the court to invalidate all arbitration clauses in residential leases that cover premises liability claims. Yet she failed to cite a single case that invalidated an arbitration clause, and did not in any way satisfy the stringent standard for invalidating a contract on public policy grounds. In any event, federal law does not allow courts to void entire categories of arbitration agreements. -9-

15 ARGUMENT I. Legal Framework This Arbitration Agreement is subject to the Federal Arbitration Act ( FAA ). 20 The FAA states that arbitration agreements shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. 21 The FAA establishes a liberal policy favoring arbitration and a strong federal policy in favor of enforcing arbitration agreements. 22 This Court has adopted this preference for arbitration. 23 Consequently, [a]ll doubts concerning the scope of arbitrable issues, the construction of contract language, and asserted defenses to arbitration must be resolved in favor of arbitration. 24 Indeed, arbitration must be compelled [u]nless it can be said with positive assurance that an arbitration clause is not susceptible of an interpretation which would cover the dispute at issue. 25 This Court uses a two-prong inquiry to determine whether parties should be compelled to arbitrate under the FAA: (1) whether the parties agreed to arbitrate the dispute, and (2) whether legal constraints external to the parties agreement bar arbitration of the dispute. 26 The first prong has two considerations: (1) whether there is 20The parties stipulated in the Arbitration Agreement that their relationship affects interstate commerce and that this agreement shall be governed by the Federal Arbitration Act and, if not, by Mississippi law. R Rogers-Dabbs Chevrolet-Hummer, Inc. v. Blakeney, 950 So. 2d 170, 173 (Miss. 2007) (quoting 9 U.S.C. 2 (1947)). 22Pers. Sec. & Safety Sys. Inc. v. Motorola Inc., 297 F.3d 388, 392 (5th Cir. 2002)(citing Texaco Exploration & Prod. Co. v. AmClyde Engineered Prods. Co., 243 F.3d 906, 909 (5th Cir.2001)). 23E. Ford, Inc. v. Taylor, 826 So. 2d 709, 713 (Miss. 2002). 24Freese v. Mitchell, No CA-01045, 2014 WL , at * 22 (Miss. May 15, 2014). 25IP Timberlands Operating Co. v. Denmiss Corp., 726 So. 2d 96, 107 (Miss. 1998) (quoting Wick v. Atlantic Marine, Inc., 605 F.2d 166, 168 (5th Cir. 1979)). 26E. Ford, 826 So. 2d at

16 a valid arbitration agreement and (2) whether the parties dispute is within the scope of the arbitration agreement. 27 Plaintiff acknowledges that the only issue on this appeal is whether the dispute is within the scope of the Arbitration Agreement. 28 In analyzing whether a dispute is within the scope of the arbitration clause, courts first determine whether the subject clause is narrow or broad. [C]ourts distinguish narrow arbitration clauses that only require arbitration of disputes arising out of the contract from broad arbitration clauses governing disputes that relate to or are connected with the contract. 29 Because the subject Arbitration Agreement contains not only the phrase arising out of, but also the phrase in any way relating to, it is unquestionably a broad clause. 30 Broad arbitration clauses, like the one here, are not limited to claims that literally arise under the contract, but rather embrace all disputes between the parties having a significant relationship to the contract regardless of the label attached to the dispute. 31 Put another way, [i]f the allegations underlying th[e] claims touch matters covered by the parties agreements, then those claims must be arbitrated Id. 28Brief at 14 ( This appeal focuses on the first step whether the parties agreed to arbitrate the dispute and further narrowed to whether Jane s claims fall outside the scope of the arbitration agreement. ). 29Pennzoil Exploration & Prod. Co. v. Ramco Energy Ltd., 139 F.3d 1061, 1067 (5th Cir. 1998). 30Id. 31Id. 32BriovaRX, LLC v. Transcript Pharmacy, Inc., 163 So. 3d 311, 316 (Miss. 2015) (internal quotations and citations omitted). -11-

17 Courts focus on the factual allegations in the complaint rather than the legal causes of actions asserted. 33 The polestar consideration is whether the parties agreed to arbitrate the dispute at issue. 34 A trial court s ruling on a motion to compel arbitration is reviewed de novo. 35 II. The trial court properly found that Plaintiff s premises liability claims were within the scope of this broad Arbitration Agreement The Court s analysis here is relatively straight-forward. The question is: do Plaintiff s premises liability claims relate to her occupancy and leasing of the subject property? Or, stated differently, can the Court say with positive assurance that Plaintiff s underlying allegations do not touch matters covered by the Lease? The Court s first step is to analyze the factual allegations underlying Plaintiff s claims. 36 Plaintiff alleges that she was attacked by two teenagers in the Hallmark Gardens parking lot in April She further alleges that the Hallmark Defendants (1) failed to take any action to maintain safe premises by providing adequate security measures.; 38 (2) failed to adequately and/or timely warn Hallmark Gardens residents of known dangers; 39 and that [i]f adequate security had been provided, [she] would not have suffered the grave and life-changing harm that has permanently 33Id. (citing Scruggs v. Wyatt, 60 So. 3d 758, 766 (Miss.2011) (quoting Waste Mgmt., Inc. v. Residuos Industriales Multiquim, S.A., 372 F.3d 339, 344 (5th Cir.2004))). 34Rogers-Dabbs, 950 So. 2d at Id. (citing E. Ford, 826 So. 2d at 713). 36Scruggs, 60 So. 3d at 766 (the Court must focus on factual allegations in the complaint rather than the legal causes of action asserted. ) 37R R Id. (emphasis added). -12-

18 scarred her and forever changed her life. 40 In short, Plaintiff claims that the Hallmark Defendants were negligent for failing to provide adequate security and failing to warn her about alleged dangers. This is the quintessential premises liability claim, as Plaintiff admits in her Brief. 41 After analyzing the allegations, the next step is analyzing the subject Arbitration Agreement. The Arbitration Agreement, as noted earlier, covers any claim (with two exceptions) arising out of or in any way related to Lessee s occupancy and leasing of the subject property from Lessor where the claim or amount in controversy exceeds $5, The two exceptions, or carve-outs, are for (1) any amount relating to rent payment disputes as provided for in the Lease Agreement and (2) any amount relating to damage to the Lessor s property as provided for in the Lease Agreement. 43 Those two carve-outs, as well as any other claims for $5,000 or less, shall be brought in a court of competent jurisdiction. 44 The trial court properly held that (a) this was a broad Arbitration Agreement and (b) the dispute was within its scope. 45 The trial court rejected Plaintiff s argument that her claims exceeded the scope of the Agreement because they sounded in tort, noting that the mere fact that a Plaintiff brings tort claims and not breach-of-contract claims is a distinction without a difference, as far as arbitration is concerned. 46 The 40Id. 41Brief at R Id. 44Id. 45R R

19 trial court found that the dispute was over whether Defendants failed to provide a safe environment and that the nature of the Plaintiff s claims all relate to the Plaintiff s occupancy and leasing of the subject property. 47 The trial court s ruling is well-reasoned and consistent with Mississippi law. Plaintiff is admittedly asserting premises liability claims, and premises liability claims unquestionably relate to her occupancy and leasing of the subject property. Plaintiff would not have been on the premises but for her Lease, and her claims that the premises was not properly maintained is virtually the only kind of claim that could have been contemplated by the parties, since disputes over rent and personal property damages were excluded. 48 As for Mississippi law, there are not many cases directly on point, but the two that the undersigned found both compelled arbitration. In Woodard v. Pebble Creek, 49 the Southern District compelled arbitration of similar premises liability claims stemming from an alleged rape at an apartment complex. 50 Similarly, in Community Care Ctr. of Vicksburg, LLC v. Mason, 51 the court reversed a denial of motion to compel arbitration, finding that the nursing home resident s negligence and premises liability claims were within the scope of broad arbitration clause. For the reasons set forth in the following sections, this Court should reject Plaintiff s novel arguments and affirm the trial court s ruling. 47R R No. 3:06-cv (S.D. Miss. Dec. 17, 2007). 50R So. 2d 220 (Miss. Ct. App. 2007). -14-

20 III. The Court should reject Plaintiff s novel paradigm for analyzing the scope of arbitration clauses Although not framed this way in her Brief, Plaintiff offers two substantive arguments for why her claims should be outside the scope of the Arbitration Agreement. The first is that she never agreed to arbitrate a rape claim. 52 And the second is that, since the incident occurred in the parking lot and not her apartment, she should be treated as a random invitee and allowed to pursue her claims in Hinds County Circuit Court. 53 Stated differently, Plaintiff argues that the nature of the incident and the location of the incident render her claims outside the scope of the Arbitration Agreement. Both of these arguments fail, but before addressing why they fail, it is first necessary to address the fictitious legal framework that serves as the foundation for Plaintiff s two arguments. Plaintiff, in essence, proposes an entirely new paradigm for analyzing the scope of arbitration clauses. It takes a bit of untangling to identify the elements of this paradigm, but Plaintiff sets forth three in her Brief: (A) a new category of arbitration clause ( limited-broad ); (B) a new prohibition on considering exclusionary language in arbitration clauses; and most importantly, (C) a new injuryonly analysis, where the court must focus only on allegations relating to a plaintiff s injury and must disregard allegations regarding a defendant s alleged conduct. The Court should reject each element of Plaintiff s newly-invented approach. 52Brief at Id. at

21 A. There is no such thing as a limited-broad arbitration clause The first sentence of Plaintiff s argument introduces her new category: [t]here are three categories of arbitration clauses: 1) narrow arbitration clauses, 2) limited-broad arbitration clauses, and 3) broadest arbitration clauses. 54 This is simply not true. Courts only recognize two: narrow and broad. Indeed, Plaintiff admits that she made up this limited-broad category to describe a difference in arbitration clauses that she perceived, but which courts have not yet detected. 55 In reality, she invented this category to avoid the expansive reach of broad clauses. The entire argument is misguided. There is an unbroken line of Mississippi cases stretching two decades that classify arbitration clauses as either narrow or broad, with corresponding standards for each. 56 If the clause contains the phrase related to, then it is broad, and the broad standard applies. The Arbitration Agreement here is unquestionably broad it contains the phrase in any way related to so the standard for broad clauses applies. Namely, [i]f the allegations underlying th[e] claims touch matters covered by the parties agreements, then those claims must be arbitrated. 57 Of course, even broad arbitration clauses have limits, but that is not the issue. The point is that there is not a different standard for limited-broad and broadest broad, as Plaintiff argues. In fact, the Page decision, which was the catalyst for 54Id. at Id. at 14, n20. 56See, e.g., Pennzoil, 139 F.3d 1061; BriovaRX, LLC, 163 So. 3d 311; Page, No. 2:12cv105, 2012 WL BriovaRX, LLC, 163 So. 3d at 316 (internal quotations and citations omitted). -16-

22 Plaintiff s invention, applied the traditional broad standard. 58 The court in Page actually compelled arbitration of plaintiff s tort claims stemming from alleged sexual harassment at work. 59 Although the court observed that the particular arbitration clause was broader than other clauses which were limited to the employment relationship, the court did not suggest creating a new legal standard for broad clauses. In fact, the Court acknowledged that it would be hard pressed to deny arbitration of plaintiff s state law claims even if the subject arbitration agreement were limited to employment related disputes. 60 The Court here should apply the broad standard to this broad Arbitration Agreement and disregard Plaintiff s proposed limited-broad standard. B. The Court must consider the full text of the Arbitration Agreement, including the two exceptions The second element of Plaintiff s new legal framework is a prohibition on considering any language in an arbitration clause that limits the types of disputes to be arbitrated. 61 As noted earlier, the subject Arbitration Agreement only applies to claims for more than $5,000, and expressly carves out two types of disputes that are not subject to arbitration: (1) any amount related to rent payments, and (2) any amount related to the lessor s property. 62 These carve-outs are helpful in understanding what the parties agreed to arbitrate. If the parties agreed not to arbitrate disputes over rent, damage to personal property, or other claims for less than $5,000, then they necessarily did agree to 58Page v. Captain D s, LLC, No. 2:12cv105, 2012 WL , at *7 (S.D. Miss. Nov. 27, 2012). 59Id. 60Id. 61Brief at R

23 arbitrate some other kind of claims of more than $5,000 (e.g., personal injury premises liability claims). Plaintiff, not surprisingly, does not want courts to consider these provisions when determining the scope of the Arbitration Agreement. She thinks the Court should focus only on the related to phrase Plaintiff relies on her employment cases, Jones 64 and Smith, 65 which both contained arbitration clauses that purported to include all tort law claims. She contends that because these courts only compelled arbitration of some but not all tort claims, then any attempt to generally require arbitration of tort claims must be disregarded. 66 This is a non-sequitur. The fact that Jones and Smith found that some of the tort claims were not related to the plaintiff s employment is irrelevant to whether this Court can consider the entire agreement when deciding the scope. That is, just because arbitration clauses cannot possibly cover all torts (all clauses have limits), does not mean that parties are prohibited from excluding certain types of disputes from arbitration. The parties here agreed that some types of disputes would be subject to arbitration and others would not. Courts have routinely enforced such provisions. 67 And if courts enforce carve-outs, 63Brief at Jones v. Haliburton Co., 583 F.3d 228 (5th Cir. 2009). 65Smith ex rel. Smith v. Captain D s, LLC, 963 So. 2d 1116 (Miss. 2007). 66Brief at See, e.g., Sawyers v. Herrin-Gear Chevrolet Co., 26 So. 3d 1025 (Miss. 2010)(enforcing an agreement that did not require claims for replevin of the vehicle to be arbitrated); Vidrine v. Balboa Ins. Co., 597 F.Supp. 2d 687 (S.D. Miss. 2009)(enforcing arbitration agreement with a separate section entitled Matters not Covered by Arbitration ); Citifinancial v. Murray, 340 F.Supp. 2d 743 (S.D. Miss 2004) (enforcing agreement that excepted specific claims from arbitration); Raesly v. Grand Housing, Inc., 105 F.Supp. 2d 562 (S.D. Miss. 2000) (enforcing arbitration agreement that did not require actions to enforce monetary obligations or foreclosure actions to be arbitrated). -18-

24 this Court can certainly consider them in determining whether Plaintiff agreed to arbitrate the subject claims. C. The Court must consider both the allegations concerning the alleged incident and the allegations concerning Defendants alleged conduct The first two elements of Plaintiff s proposed paradigm the limited-broad clause and the prohibition on considering the exceptions lead up to the third, which is the heart of her scheme and which will be referred to as the injury only analysis. In her injury-only analysis, Plaintiff asks the Court to ignore all allegations concerning Defendants conduct and focus exclusively on the allegations surrounding the incident and her resulting injuries. 68 Plaintiff begins this argument by correctly noting that courts focus on allegations and not causes of action, but then she tries to tell the Court which allegations to consider, announcing that the only relevant allegations are those relating to her injury and how it occurred. 69 The corollary to this specious argument is that the other factual allegations underlying her claims should not be considered. This includes allegations of Defendants alleged conduct. Plaintiff thus chastises the trial court for considering the allegations in the Complaint relating to Defendants conduct, e.g., that Defendants failed to provide a safe environment to its tenants, and failed to prevent foreseeable criminal attacks, and failed to provide adequate security. 70 Simply stated, Plaintiff s injury-only analysis is not the law. Courts look at all of the factual allegations underlying Plaintiff s claims to determine the nature of the 68Brief at Id. at R

25 dispute and whether the dispute is within the scope of an arbitration clause, including (and perhaps especially) the allegations concerning what the defendants supposedly did wrong. Last year in BriovaRX, for example, this Court expressly considered the allegations concerning the defendants conduct. The court there found that the allegations underlying [plaintiff s] tort claims touch[ed] matters covered by the agreement because the agreement covered how customer information could be used, and the complaint alleged that defendants misused customer information. 71 Likewise, the Court of Appeals in Ruppert v. Mav6 Holdings, LLC 72 considered the nature of the defendants alleged breaches of fiduciary duties in determining whether plaintiffs claims were within the scope. 73 So have a host of other Mississippi cases. 74 The Court should therefore consider all of the allegations underlying Plaintiff s claims, including the allegations concerning Defendants conduct, to determine whether Plaintiff s claims are within the scope of the Arbitration Agreement So. 3d at So. 3d 1033, (Miss. Ct. App. 2015). 73Id. 74See, e.g., Cleveland v. Mann, 942 So. 2d 108, 113 (Miss. 2006) (considering allegations that the doctor negligently performed an operation when determining if the claims were subject to the arbitration agreement); Terminix Int l, Inc., LTD v. Rice, 904 So. 2d 1051, 1055 (Miss. 2004) (considering Terminix s actions in performing the contract when determining that the claims were within the scope of the arbitration agreement); Trinity Mission of Clinton, LLC v. Barber, 988 So. 2d 910, 920 (Miss. Ct. App. 2007) (considering that the claims related to the care the resident received while at the facility when determining that the claims were within the scope of the arbitration agreement). -20-

26 IV. The Court should reject Plaintiff s arguments that the nature and location of the incident render the dispute outside the scope of this broad Arbitration Agreement Just as the Court should reject Plaintiff s fictional framework, it should reject her substantive arguments as well. Plaintiff summarized her arguments this way: Jane and Hallmark executed a limited-broad clause that never contemplated such an heinous crime be allowed to occur in Hallmark s parking lot,[sic] therefore the scope of the arbitration agreement does not encompass Jane s rape claims. 75 In other words, she argues that both the nature and location of the incident render her claims beyond the scope. These are her only two substantive arguments, and they both fail for a host of reasons. A. The nature of the incident does not render the dispute outside the scope of the Arbitration Agreement Plaintiff tries to present the issue here as whether a rape claim falls within the scope of an arbitration agreement concerning a lease agreement. 76 The fundamental flaw with this reasoning is this: Plaintiff is not asserting a rape claim. That is, she is not alleging that agents of Defendants raped her. Plaintiff s claim against the Hallmark Defendants is for their alleged negligent failure to maintain its premises in a reasonably safe condition. 77 That claim, if it is to be characterized, is a premises liability claim, not a rape claim, and it is exactly the sort of dispute contemplated in the Arbitration Agreement. 75Brief at Id. at 8. 77Id. at

27 Moreover, the parties were not required to contemplate the precise manner of injury in order for Plaintiff s claims to be covered by the Arbitration Agreement. The question is: did the parties contemplate arbitration of the premises liability claims? And the answer is yes, for all of the reasons discussed in the prior section. To support her argument that rape is beyond the scope, Plaintiff again leans on her two employment-related cases, Jones 78 and Smith. 79 Jones and Smith both involved arbitration clauses in employment agreements and tort claims stemming from alleged sexual assault by the plaintiffs employers. 80 Jones was allegedly raped in her barracks by her Halliburton co-workers while on assignment in the Middle East; 81 and Smith was allegedly raped by her supervisor at Captain D s. 82 Both cases are distinguishable from this case on multiple grounds. In the first place, while the Jones court found that some claims were outside the scope of the arbitration agreement, the plaintiff was actually compelled to arbitrate her premises liability claim. 83 This fact was omitted from Plaintiff s multi-colored chart comparing Jones to this case. 84 But the District Court could not have stated it more clearly: The Court also believes that Ms. Jones s premises liability claim must be arbitrated. The basis for Ms. Jones s premises liability claim is that Defendants owed her 78Jones, 583 F.3d Smith, 963 So. 2d Jones, 583 F.3d at 230; Smith, 963 So. 2d at Jones, 583 F.3d at Smith, 963 So. 2d at Jones v. Haliburton Co., 625 F.Supp. 2d 339, 351, n.10 (S.D. Tex. 2008), affirmed 583 F. 3d 228 (5th Cir. 2009). 84Brief at

28 a duty as an invitee. 85 The District Court, which was affirmed by the Fifth Circuit, went on to note that, because Ms. Jones lived in employer-provided housing, the issue at least touched on her employment. 86 If Jones premises liability claim was within the scope of a broad arbitration clause, then so is Plaintiff s. The Jones court, moreover, was careful to limit its holding to the facts of the case. It observed that, even though certain tort claims were outside the scope in that case, they could be within the scope in another case, depending on the particular allegations of sexual assault. 87 Furthermore, the fact that the court compelled arbitration of some claims and not others shows that, contra to Plaintiff s injury only analysis, the court there did consider defendant s alleged conduct and the nature of the claim asserted. 88 Next, Jones and Smith are also distinguishable because the Defendants here did not commit the alleged crime. A chief reason that the courts in Jones and Smith found that the intentional torts and negligent supervision claims were outside the scope of the arbitration clauses was that employer committed the alleged assault. 89 The Court in Smith said it this way: [Plaintiff s] sexual assault claim against Captain D s and its employee is clearly not within the scope of the arbitration agreement. 90 Likewise, the Jones court noted that in this instant action, unlike in Barker [a similar case], Jones has claimed that Haliburton/KBR is vicariously liable for the assault, and this distinction strengthens our holding that Jones claims were beyond the scope of the 85Jones, 625 F.Supp. 2d at, 351, n Id. 87Jones, 583 F.3d at See Jones, 583 F.3d See Jones, 583 F.3d 228; Smith, 963 So. 2d Smith, 963 So. 2d at

29 arbitration clause regarding the related to portion. 91 In other words, when the plaintiffs in those cases signed their employment agreements they did not agree to arbitrate claims arising out of their employers own sexual assaults. Here, however, the sexual assault was not committed by any employee or agent of the Hallmark Defendants. There is therefore no sexual assault claim against the Defendants; nor is there a claim for negligently hiring or training an employee who committed sexual assault. There are only allegations of failure to warn and failure to provide adequate security, and those are qualitatively different. They are also fairly typical premises liability allegations against an apartment complex. In sum, Plaintiff is not asserting a rape claim. She is asserting a premises liability claim. The parties were not required to contemplate the precise manner in which the injury occurred in order for Plaintiff s claims to be within the scope; it is enough that the nature of the dispute was contemplated. The employment cases on which Plaintiff relies are inapposite for a multitude of reasons. The Court should find that the nature of the particular incident that harmed Plaintiff does not render the dispute beyond the scope. B. The location of the incident does not render the dispute outside the scope of this Arbitration Agreement In addition to arguing that the nature of the incident renders her claims outside the scope of arbitration, Plaintiff also argues that the location of the incident (parking lot) renders the dispute outside the scope. She summarized her argument as follows: Because Jane s claims are based upon Hallmark s negligence of its premises and common areas, Jane s rape does not relate to her occupancy or leasing of the apartment 91Jones, 583 F. 3d at

30 unit she possessed. 92 She reasons that, because the parking lot is a common area, she stood in the shoes of any other guest or invitee on the premises, 93 and is thus freed from the Arbitration Agreement. Plaintiff does not cite any case law to support this argument, but she does invoke intuition, claiming that it would be counterintuitive to make her arbitrate her premises liability claim but allow a guest to bring a similar claim in court. 94 This could-have-been-a-guest argument fails. She was, in fact, a resident, and one who had signed a binding Arbitration Agreement. Her car was in the Hallmark Gardens parking lot that day because she lived there. The fact that Defendants may also owe common law duties to non-residents does not alter her status as a resident. Why, moreover, would it be counterintuitive to compel arbitration of a resident s claim and not a guest s claim? One person agreed to arbitrate and the other did not. Underneath Plaintiff s argument is the unstated belief that the Lease must be the sole source of the duty owed in order for the claim to be within the scope. That is not the law, however. Broad arbitration agreements apply to all disputes that even touch the parties agreement, regardless of the source of Defendants duty. 95 Here, the Arbitration Agreement is not limited to the confines of Plaintiff s apartment, as she alleges. The text of the Arbitration Agreement itself applies to claims arising out of or in any relating to Plaintiff s occupancy and leasing of the subject 92Brief at Id. 94Id. at See BriovaRX, LLC, 163 So. 3d at

31 property. 96 A natural reading of the subject property includes the entire premises. But even if the Court disagrees, the agreement here is the Lease, 97 and the Lease is the reason that Plaintiff was in the parking lot that day. Given these facts, it cannot be said with positive assurance that the dispute does not touch the Lease or relate to the occupancy and leasing of the subject property. Although there is not a reported Mississippi case that has addressed this point, a Florida appellate court considered similar facts in BKD Twenty-One. 98 The court there reversed the lower court s denial of a motion to compel arbitration of a resident s premises liability claims. 99 In BKD, the plaintiff signed a broad arbitration agreement as part of his lease of an apartment in a retirement living facility. 100 Several months later, the plaintiff fell and fractured his shoulder on a catwalk that connected his apartment to the dining room (i.e., a common area). The plaintiff then asserted the same type of premises claims as Plaintiff does here. 101 The trial court denied the motion on grounds that plaintiff s claims did not arise out of the terms of the contract and therefore was not subject to arbitration. 102 The appellate court reversed, finding that plaintiff s tort claims were within the scope of the 96R R The Arbitration Agreement is an addendum to the Lease. 98BKD Twenty-One Mgmt. Co. v. Delsordo, 127 So. 3d 527 (Fla Dist. Co. App. 2012). 99Id. at Id. 101Id. 102Id. -26-

32 arbitration clause even though the incident occurred on the catwalk. 103 The same is true here. In short, Plaintiff s premises liability claims are within the scope of the broad Arbitration Agreement even though the incident occurred in the parking lot instead of Plaintiff s apartment. V. The Court should not declare the Arbitration Agreement void as a matter of public policy Plaintiff s final argument is entirely unsupported. She asks the court to declare that all arbitration clauses within residential leases, like this one, are void as against public policy if they require arbitration of claims regarding a lessor s common law duty to maintain the common areas of its premises. 104 She believes that enforcement such arbitration clauses would be harmful to tenants because it would (somehow) remove accountability of a premise owner s common law duty. 105 In other words, Plaintiff thinks compelling arbitration is tantamount to taking away her claim. The only case Plaintiff cites is Cappaert v. Junker. 106 The court there declared an exculpatory clause void as a matter of public policy because the clause contravene[d] long established common law rules of tort liability. 107 Like her other arguments, Plaintiff s public policy argument fails. First, Plaintiff does not approach the high standard for invalidating a contract on public policy grounds. The power to invalidate contracts as a matter of public policy is 103Id. at Brief at Id So. 2d 378 (Miss. 1982). 107Id. at

33 easily abused and must not be done unless the contract is either prohibited by express terms or the fair implication of a statute, or condemned by some decision of the courts construing the subject matter. 108 Unlike the exculpatory clause in Cappaert, arbitration clauses do not remove liability they simply determine the forum and are not prohibited by any statute or condemned by courts. Indeed, as set forth below, arbitration clauses are favored. Plaintiff has not even argued, much less cited authority, that arbitration clauses contradict a statute or have been condemned by this Court. The Southern District recently declined to invalidate a contract for a similar lack of evidence. In Federal Insurance Company v. Singing River, 109 the court refused to invalidate an insurance policy because Singing River has not cited any binding authority for voiding any portion of the policy at issue and there is no precedent or statute that permits voiding the policy. 110 This Court should likewise decline to exercise the extreme remedy of invalidating an entire category of contracts. Second, federal policy strongly favors arbitration clauses and does not countenance States attempts to invalidate agreements to arbitrate certain types of disputes. Plaintiff asserts that there is no binding legal authority directly on point, 111 but that is not accurate. The United States Supreme Court s decision in Marmet Health 112 is one of several (binding) cases that addresses the issue. 108Cappaert, 413 So. 2d at No. 1:15-cv-236, 2015 WL (S.D. Miss. Nov. 24, 2015). 110Id. at * Brief at Marmet Health Care Center, Inc. v. Brown, 132 S. Ct (2012). -28-

34 In Marmet Health, the West Virginia Supreme Court held that arbitration agreements applying to personal injury or wrongful death claims against nursing homes were unenforceable as a matter of public policy. 113 The Supreme Court reversed, observing that the FAA does not contain an exception for personal injury or wrongful death claims; that the Act reflects an emphatic federal policy in favor of arbitration; 114 and that the FAA requires courts to enforce the bargain of the parties to arbitrate. 115 The Court went on to remind state courts that [w]hen state law prohibits outright the arbitration of a particular type of claim, the analysis is straightforward: The conflicting rule is displaced by the FAA. 116 For all of these reasons, this Court should decline Plaintiff s invitation to contravene the FAA by invalidating arbitration clauses in residential leases. CONCLUSION The central issue is whether Plaintiff s premises liability claims are within the scope of this broad Arbitration Agreement. The trial court properly found that they are within the scope, and this Court should affirm. Because Plaintiff s new paradigm and nature and location arguments raise a myriad of sub-issues, it may be helpful for the Court to analyze them through a series of questions and answers. Is the Arbitration Agreement subject to the FAA? Yes. The parties acknowledged that in the Arbitration Agreement itself Id. at Id. at 1203 (internal citations omitted). 115Id. (quoting Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 217 (1985)). 116Id. (citing AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 1747 (2011))(emphasis added). 117R