Kirk v. Atkins
Dallas Court of Appeals, No. 05-21-00639-CV (February 1, 2023)
Justices Nowell, Smith, and Miskel (Opinion, linked here
Atkins sued Kirk for breach of contract, fraudulent misrepresentation, and conversion in connection with her investment in his company. The parties’ “investor agreement” included a broad ADR provision that required “[a]ny disputes or controversies arising out of or relating to” that agreement to be resolved through AAA arbitration. That agreement also contained a fairly standard “Remedies” provision stating that, “The parties shall have all remedies for breach of this Agreement available to them provided by law or equity.” Kirk sought to compel arbitration of the parties’ dispute. In response, Atkins did not contest the validity or scope of the arbitration provision, but argued that the agreement’s express reservation of “all remedies” conflicted with the agreement to arbitrate and rendered that ADR provision ambiguous. The trial court agreed and denied the motion to compel arbitration. But the Dallas Court of Appeals reversed.
The appeals court held the ADR and “Remedies” provisions of the agreement could and should be reconciled. “The ADR paragraph, in which the arbitration clause is found, controls the process of resolving disputes between the parties,” the Court explained, “while the remedies paragraph describes the substantive relief that may flow from decisions on those controversies.” The two provisions therefore were not in conflict, the ADR provision was not ambiguous, and the motion to compel arbitration should have been granted.