Citation[]
Broussard v. Compulink Bus. Sys., Inc., 939 So.2d 506 (La. App. 2006) (full-text).
Factual Background[]
In December of 1999, Dr. Gerald Broussard (“Plaintiff”) contracted with Compulink Business Systems, Inc. (“Defendant”) to provide a medical services software package including training and support services. Plaintiff paid the $24,000 purchase price, and the system was installed. Plaintiff began having problems with the program almost immediately and notified Defendant of these problems in a January 31, 2000 letter. When Defendant failed to adequately respond, Plaintiff purchased a different medical software package and filed suit on August 17, 2000.
Trial Court Proceedings[]
On October 30, 2000, Defendant filed a dilatory exception of prematurity alleging that its "contract with Dr. Broussard provided that '[i]n the event of any dispute, the parties agree to waive their rights to a jury trial and submit to binding arbitration in, and under the jurisdiction of (California).'" Plaintiff contended that he never saw the arbitration provision. On February 13, 2001 the exception of prematurity was heard. The Defendant submitted a facsimile copy of the contract containing the arbitration agreement that contained the name and signature of “Danica Nelson, ins/bill mgt.” There was nothing further as to the identity of Danica Nelson.
To attest to the truthfulness of the document, the Defendant also submitted an affidavit of Janet Picarelli (Defendant's administrative assistant), which stated that the document was "true and correct" and "she received the document by fax from the Broussard Cataract and Eye Institute on December 27, 1999." The court held that the arbitration clause was binding because the Defendant proved that the Plaintiff had knowledge of it and because an agent of the Plaintiff had signed it. The Plaintiff appealed.
Appellate Court Proceedings[]
The appellate court reversed the lower court’s holding. The appellate court reasoned that the an arbitration clause may be "invalidated if, under general contract law, grounds exist to revoke this provision of the contract." In this situation, the party trying to enforce an arbitration clause has the burden of proving that a there was a valid contract to arbitrate.
The court concluded that the Defendant had not provided enough evidence to support its assertion that Danica Nelson had apparent authority to sign the arbitration agreement on behalf of the Plaintiff. The court noted, "[t]here was no testimony or documentation from which one could reasonably conclude that Compulink met its burden of proving apparent authority." Further, the Defendant did not offer any evidence to show that Ms. Nelson typically entered into similar contracts on the Plaintiff's behalf, nor did Defendant attempt to show that the Plaintiff gave any reason to believe that Ms. Nelson could enter into these agreements. Thus, the court reversed the lower court's holding and remanded for further proceedings consistent with its opinion.