BATTAGLIA, J.
American Bank Holdings, Inc., Petitioner, is engaged in the business of originating, making, and selling residential mortgage loans. Brian Kavanagh and Jeffrey Weber (collectively "Respondents") were employed by American as co-branch managers operating an office located at 9500 Harford Road, Baltimore, as well as originating residential mortgage loans. Respondents executed similar "Co-Branch Manager Employment Agreement[s]" with American, which, in relevant part, provided that American was to establish a "loss reserve"
Respondents' employment agreements each contained an arbitration clause, which, in relevant part, provided: "Any controversy or claim, other than petitions for equitable relief, arising out of or relating to this Agreement, or breach hereof (including arbitrability of any controversy or claim), shall be settled by arbitration, in Bethesda, Maryland and in accordance with the laws of the State of Maryland...."
Respondents terminated their employment agreements with American, but American allegedly failed to pay Respondents the funds due them from the loss reserve in accordance with the terms of their employment agreements. Respondents filed a "Complaint for Accounting"
American filed an Answer to Respondents' Complaint, generally denying many of Respondents' averments, specifically denying others, and asserting the affirmative defenses of accord and satisfaction and payment, as well as the "Preliminary Defense" that "this Court lacks jurisdiction to hear the case because [Respondents'] claims are subject to mandatory arbitration agreements set forth in the ... Employment Agreements." The circuit court set deadlines that included one in which to file motions to dismiss within two weeks; it was within that deadline that American filed a "Petition to Compel Arbitration and Stay All Proceedings and Request for Hearing," asserting that, because Respondents' claims arose out of their employment agreements, the court was required to compel arbitration.
Judge John Turnbull, II denied American's "Petition to Compel Arbitration and Stay All Proceedings and Request for Hearing," without a hearing, by Order that, in its entirety, provided:
American, then, filed a Notice of Appeal, which stated that "American Bank Holdings, Inc. hereby notes an appeal ... to the Court of Special Appeals including but not limited to an appeal of the Court's May 27,2011 Order denying Defendant's Petition to Compel Arbitration and Stay All Proceedings ... in the action."
The intermediate appellate court dismissed American's appeal, in an unreported opinion, concluding, inter alia, "[t]he denial of appellant's motion to compel arbitration is not final for the purposes of § 12-301
Under Section 12-301 of the Courts and Judicial Proceedings Article, Maryland Code (1974, 2006 Repl. Vol.),
A "final judgment" is defined as "a judgment, decree, sentence, order, determination, decision, or other action by a court... from which an appeal, application for leave to appeal, or petition for certiorari may be taken." Section 12-101(f) of the Courts and Judicial Proceedings Article. We have taken on the task to further refine just what constitutes a "final judgment." See Brewster v. Woodhaven Bldg. & Dev., Inc., 360 Md. 602, 609-10 n. 1, 759 A.2d 738, 742 n. 1 (2000); Peat, Marwick, Mitchell & Co. v. Los Angeles Rams Football Co., 284 Md. 86, 91, 394 A.2d 801, 804 (1978). In so doing, we have determined that a ruling of the circuit court, to constitute a final judgment, must be an "unqualified, final disposition of the matter in controversy," Gruber v. Gruber, 369 Md. 540, 546, 801 A.2d 1013, 1016 (2002) (quotation omitted), which decides and concludes the rights of the parties involved or denies a party the means of further prosecuting or defending rights and interests in the subject matter of the proceeding. Nnoli v.
The requirement that an order, to be a final judgment, must put a party out of court or otherwise terminate the proceedings has deep historical roots in Maryland, as Judge Irma Raker explained in Brewster:
There are, however, interlocutory orders,
With respect to an order denying a petition to compel arbitration filed as an independent action, we have stated, in dicta, that such an order is appealable. Hartford Accident & Indem. Co. v. Scarlett Harbor Assocs. Ltd. P'shp, 346 Md. 122, 126 n. 5, 695 A.2d 153, 155 n. 5 (1997), citing Litton Bionetics, Inc. v. Glen Constr. Co., 292 Md. 34, 437 A.2d 208 (1981). In the present case, however, the appealability of an order denying a petition to compel arbitration filed in a case that is extant is at issue.
The denial of petitions to compel arbitration filed in existing actions has been the subject of two of our recent opinions, Addison v. Lochearn Nursing Home, LLC, 411 Md. 251, 983 A.2d 138 (2009) and Schuele v. Case Handyman & Remodeling Services, LLC, 412 Md. 555, 989 A.2d 210 (2010), which Respondents argue are dispositive of the instant action. We disagree.
In Addison, FutureCare-Lochearn, Inc., a nursing home, sued Beulah Addison for breach of contract, alleging that she was delinquent in paying for nursing home care and services. Ms. Addison counterclaimed, alleging she was unable to pay because a FutureCare employee embroiled her in a real estate scam, depriving her of equity in her former home and, thus, prevented her from paying the bill. FutureCare responded by filing an Answer generally denying liability, as well as a "Motion to Compel Arbitration of Counterclaims, Motion to Stay, and Request for Attorney's Fees," asserting that Ms. Addison had signed a "Resident and Facility Arbitration Agreement," requiring the submission of her counterclaims to arbitration.
Ms. Addison, in response, filed a "Motion to Dismiss the Interlocutory Appeal." Id. at 259, 983 A.2d at 143. The Chief Judge of the intermediate appellate court denied Ms. Addison's motion to dismiss and after oral argument a panel of the intermediate appellate court, upon Future-Care's request, certified the denial of the motion to compel arbitration as a final judgment under Rule 8-602(e) and reversed the decision of the circuit court denying that motion. Ms. Addison petitioned for certiorari and initially presented the question of whether the Court of Special Appeals erred in compelling arbitration of her counterclaims;
Id. at 261, 983 A.2d at 144 (emphasis added).
We initially determined that the Court of Special Appeals erred in certifying the circuit court's decision as a final judgment under Rule 8-602, when the trial court was asked to certify that same order as final pursuant to Rule 2-602, but declined to do so. We turned, then, to whether the order denying FutureCare's motion to compel arbitration filed in an existing action was appealable under Section 12-303 of the Courts and Judicial Proceedings Article or under the collateral order doctrine, answering both questions in the negative. Addison, however, is not dispositive of the issue presented in the instant case because we operated under the assumption that the order denying FutureCare's motion to compel arbitration was not a final judgment under Section 12-301 of the Courts and Judicial Proceedings Article, which now is directly presented in the present case.
Shortly after deciding Addison, in Case Handyman,
We concluded, after supplemental briefing, that although Case Handyman had not requested that the circuit court certify its order denying its motion to compel arbitration filed in an existing action as final under Rule 2-602, as had the moving party in Addison, we could not so certify that order as final, under Rule 8-602, because, in order to do so, the order must be "final in the traditional sense," which we opined is not the case with an order denying a motion to compel arbitration filed in an existing action, because the case remained in court as a result. Id. at 570-72, 989 A.2d at 215-16. Although the Case Handyman analysis is suggestive of the result in the present case, it is not dispositive, because the certification issue was evocative of the holding.
In the present case we are squarely presented with whether a circuit court's denial of a motion or petition to compel arbitration filed in an existing action is a final judgment and, therefore, immediately appealable, without regard to certification by a trial or appellate court. American argues that an order denying its petition to compel arbitration is an appealable final judgment regardless of whether it was filed as an independent action or filed in an existing action.
In order to address this issue, we turn to the provisions of the Maryland Uniform Arbitration Act ("MUAA"), enacted in 1965. Enactment of MUAA was intended to eviscerate the "well-established" common law rule that "unless an agreement to arbitrate has been consummated by an award, it will not bar a suit at law or in equity with respect to the question agreed to be arbitrated." Tomlinson v. Dille, 147 Md. 161, 167, 127 A. 746, 748 (1925) (citation omitted). MUAA's purpose was "to provide for enforcement of written agreements to submit existing and future controversies to arbitration, to provide for court proceedings to compel or stay arbitration pursuant to written agreements," and "to provide procedures by which arbitration may be had" in Maryland. 1965 Maryland Laws, Chapter 231. MUAA was codified as Sections 1 through 23 of Article 7, Maryland Code (1957, 1968 Repl. Vol.). The only provisions with which we are
Maryland Code (1957, 1968 Repl. Vol.), Article 7, Section 18 (emphasis added).
Section 18, however, was repealed in 1973 as part of the Code revision process,
Governor's Commission to Revise the Annotated Code of Maryland, Commission Report No. 3F to the General Assembly, 27 (July 16, 1973) (emphasis added).
Seizing on the fact that no substantive changes were intended to MUAA during the revision process, American argues that the order denying its petition to compel arbitration filed in an existing action is immediately appealable, because former Section 18 permitted an appeal from an order denying an application to compel arbitration. American's argument misses the mark, however, because under former Section 18(b) of Article 7, Maryland Code (1957, 1968 Repl. Vol.), an appeal from an order denying an application to compel arbitration could be taken only "in the manner and to the same extent as from orders or judgments in a civil action", which anticipated, then, only final judgments, i.e., those that terminated judicial proceedings. See generally Brewster, 360 Md. at 611, 759 A.2d at 742 (explaining that the final judgment rule was "well established" as early as 1835). The denial of American's petition to compel arbitration filed in an existing action, thus, is not immediately appealable as a final judgment, because that denial did not put the parties out of court by terminating the proceedings. The parties, here, remained in court.
The case proceeded to trial, with "no further steps being taken" by Trionfo & Sons "to compel arbitration of the dispute," and a verdict was returned in favor of LaRosa & Sons. Id. at 604, 381 A.2d at 731. Trionfo & Sons appealed, presenting the question of whether the circuit court erred "in failing to grant [Appellant's] Motion Raising Preliminary Objection, and order arbitration in these proceedings?" Id. at 604, 381 A.2d at 731 (alteration in original).
After disposing of Trionfo & Sons's argument on the merits, the Court of Special Appeals turned to the issue of whether Trionfo & Sons "waived, or should be estopped
Trionfo is distinguished by American as unreliable, because the case was decided before the merger of actions in law and equity in 1984. In so doing, American fails to cite another of the Court of Special Appeals's opinions, that of Regina Construction Corp. v. Envirmech Contracting Corp., 80 Md.App. 662, 565 A.2d 693 (1989), which has not been cited in any forum for the proposition that an order denying a petition to compel arbitration filed in an existing action is immediately appealable as a final judgment. In Regina, Envirmech sued Regina Construction and Regina moved to dismiss, because Envirmech had "`failed to take any step to resolve this case by Arbitration, as provided in the contract between the parties' and that the court therefore `does not have any jurisdiction over this case....'" Id. at 663-64, 565 A.2d at 694. Envirmech, however, argued, "that a motion to dismiss was not the appropriate vehicle to raise that defense — that if Regina desired to invoke the arbitration clause, it should have filed a petition to compel arbitration." Id. at 664, 565 A.2d at 694. The circuit court ruled in favor in Envirmech, "that the dispute was not covered by the arbitration clause" and Regina Construction immediately appealed. Id. at 665, 565 A.2d at 695.
The Court of Special Appeals prefaced its analysis of the appealability of the denial of Regina Construction's motion by explaining that a motion to dismiss is not "the proper way in which to invoke an arbitration agreement", and "had the court denied the motion solely on that ground with leave to file a proper motion to compel arbitration, we would have regarded the order as interlocutory and non-appealable." Id. at 671, 565 A.2d at 698. The Regina court, however, concluded that the order denying Regina's motion to dismiss was immediately appealable as a denial of a motion to compel arbitration, because "the sole basis of the denial of the motion was the court's conclusion that the dispute was not arbitrable." Id. In so doing, the court determined Trionfo was not dispositive, concluding, without analysis, that, "[w]ith the adoption of the revised Maryland Rules in 1984, the distinctions between law and equity procedure were abolished. There is now but one form of action in the circuit courts. The distinction found important in Trionfo, therefore, no longer exists." Id. at 671, 565 A.2d at 698 (citation omitted). The distinction
As we have reiterated, an appealable "final judgment" under Section 12-301 of the Courts and Judicial Proceedings Article decides and concludes the rights of the parties involved or denies a party the means of further prosecuting or defending rights in the subject matter of the proceeding. Nnoli, 389 Md. at 323-24, 884 A.2d at 1219-20; Brewster, 360 Md. at 611, 759 A.2d at 742; Peat, Marwick, Mitchell, & Co., 284 Md. at 91, 394 A.2d at 804. An order denying a request to compel arbitration, styled as a motion or petition, filed in an existing action does neither and cannot be viewed as a final judgment, unlike that situation when a Petition to Compel Arbitration filed on its own is denied, which terminates the action.
McDONALD, J., dissents.
McDONALD, J., dissenting.
We granted a writ of certiorari in this case to decide whether a party to a contract that provides for arbitration may pursue an immediate appeal when a circuit court denies its motion to compel arbitration.
The Respondents argue that the answer is "no." In their brief and at oral argument before this Court, that answer rested in large part on two propositions: (1) that a code revision bill covertly effected a substantive change in a key legislative policy underlying the Maryland Uniform Arbitration Act; and (2) that, in any event, this Court has already decided the question in their favor in two recent cases — Addison v. Lochearn Nursing Home, LLC, 411 Md. 251, 983 A.2d 138 (2009) and Schuele v. Case Handyman and Remodeling Services, LLC, 412 Md. 555, 989 A.2d 210 (2010).
The Majority opinion rejects both of those propositions — correctly, in my view. However, the Majority opinion then outlines an alternative theory — quite at odds with the argument of Respondents — to reach the same result. For the reasons explained below, that alternative theory is inconsistent with the General Assembly's intent when it enacted and later recodified the Maryland Uniform Arbitration Act. Accordingly, the answer the Majority opinion reaches is a mistake.
To understand, a little history is necessary.
The Uniform Arbitration Act was a model law developed by the National Conference of Commissioners on Uniform State Laws ("Uniform Law Commissioners"). The 1956 version of the Act
To further this policy favoring alternative dispute resolution via arbitration, the Act provided for an immediate appeal if a trial court refused to compel a party to participate in arbitration. Section 19 of the Uniform Act provided, in pertinent part:
Uniform Arbitration Act (1956), § 19. The reference to "Section 2" in (a)(1) makes clear that the Act contemplated immediate appeals of orders in pending court proceedings, as Section 2 required that applications to compel arbitration be filed in a related court proceeding when such a proceeding existed and the court had jurisdiction to consider applications to compel arbitration. See Uniform Arbitration Act (1956), § 2(c). Thus, under the Act, if a party in a pending court proceeding moved to compel arbitration pursuant to an alleged pre-dispute arbitration agreement and the court denied that motion, that party had a right to immediately appeal that order.
This understanding of the Uniform Arbitration Act is also reflected in other contemporary writings of the drafters of the Act. Shortly after the Act was adopted by the Uniform Law Commissioners, the Chairman of the Commissioners wrote a law review article about how it worked. M. Pirsig, The New Uniform Arbitration Act, 11 Bus. Law. 44 (1955-56). In that article, he described the appeal provision of the Uniform Act:
Id. at 51 (emphasis added) (internal footnote omitted). Other commentators likewise noted that a denial of a motion to compel arbitration would be immediately appealable under the model law — a drafting decision that was part of the Act's policy favoring arbitration when an agreement between the parties provided for arbitration. See, e.g., S. Gotshal, Arbitration and the Lawyer's Place in the Business Community, 11 Bus. Law. 52, 54 (1955-56).
The logic of the Uniform Act's provision on appeals is straightforward. If the public policy expressed in the Uniform Act favors arbitration of disputes, that policy is likely to be frustrated unless an immediate appeal from a lower court decision denying arbitration is available. By definition, arbitration is an alternative to dispute resolution through litigation in the courts; if a party to an arbitration agreement must fully litigate the dispute judicially before that party can obtain appellate review of a decision denying an obligation to arbitrate, the benefits of resort to alternative dispute resolution are moot. See 21 Williston on Contracts § 57:61 (4th ed. 2013) (noting that an appeal of an order denying a motion to compel arbitration is immediately appealable under both the Uniform Arbitration Act and the Federal Arbitration Act).
The Uniform Arbitration Act, or substantially similar legislation, has been adopted in 49 jurisdictions. See 7-IA Uniform Laws Annotated 2 (2009 & 2013 Cum. Supp.).
The Maryland General Assembly adopted the text of the Uniform Arbitration Act (1956) virtually verbatim in 1965. Chapter 231, Laws of Maryland 1965. In particular, the Legislature adopted the provision of the Uniform Act concerning appeals that allowed for immediate appeals of orders denying motions to compel arbitration. See Maryland Code, Article 7, § 18 (1968 Repl. Vol.). As indicated above, the Respondents in this case concede that the original enactment of the Maryland Uniform Arbitration Act provided for an immediate appeal of such an order.
In 1973, the General Assembly, in one of the first episodes of the code revision saga in Maryland, created the Courts & Judicial Proceedings Article ("CJ") and incorporated the Maryland Uniform Arbitration Act as part of that article. Chapter 2, First Special Session, Laws of Maryland 1973. As is the general rule in modern code revision, the purpose of the revision was to make changes in the form and style, not the substance, of the statutory law. See A. Wilner, Blame it on Nero: Code Creation and Revision in Maryland (February 14, 1994), available through the Archives of Maryland Online at <http://www.aomol.net/megafile/msa/speccol/sc2900/sc2908/html/history.html>. In a contemporary law review article describing the creation of the Courts & Judicial Proceedings Article, the director of the code revision effort confirmed that its purpose was to "clarify[] the logical relationship among code provisions related to the judicial system, while avoiding any substantive change in these provisions...." See W.H. Adkins, II, Code Revision in Maryland: the Courts and Judicial Proceedings Article, 34 Md. L. Rev. 7, 9 (1974).
In the code revision process, most of the Maryland Uniform Arbitration Act became Subtitle 2 of Title 3 of the new article. But the appeal provision of the Maryland Uniform Arbitration Act — former Article 7, § 18 — was subsumed into Title 12 of the new article, which consolidated provisions
For example, in their report explaining the incorporation of the Maryland Uniform Arbitration Act, the revisors stated:
Report No. 3F of the Governor's Commission to Revise the Annotated Code (July 16, 1973) at 27 (emphasis added). In another report concerning Title 12 of the new article, the revisors reiterated that former Article 7, § 18 was one of several statutes now subsumed into the new Courts & Judicial Proceedings § 12-301 — the final judgment rule. See Report No. 3B of the Governor's Commission to Revise the Annotated Code (September 21, 1972) at 4. The revisors explained that the purpose of eliminating a number of special statutory appeal provisions was not to limit appeal rights under those statutes but to eliminate a "trap for ... unwary" drafters of future legislation.
Nothing in the revisors' notes, reports, or other contemporary legislative materials suggested that the code revision bill would limit appeal rights previously granted or, in particular, eliminate an existing appeal right under the Maryland Uniform Arbitration Act. Indeed, in certain respects,
The Respondents ignore the contemporary legislative history and argue that the code revision bill silently reversed the legislative policy expressed in the original enactment of the Maryland Uniform Arbitration Act favoring such appeals. The Majority opinion correctly rejects the argument that the code revision committee was effecting a covert change in the right to appeal a denial of a motion to compel arbitration. See Majority slip op. at pp. 473-75, 82 A.3d at 876-77.
In 1989, the Court of Special Appeals had occasion to review the legislative history of the Maryland Uniform Arbitration Act and, unsurprisingly, concluded that a denial of a motion to compel arbitration would be immediately appealable as a final order under CJ § 12-301. Regina Construc. Corp. v. Envirmech Contracting Corp., 80 Md.App. 662, 565 A.2d 693 (1989) (Wilner, J.). In that case, a subcontractor in a construction project sued the general contractor to enforce an alleged commitment of the general contractor to provide financial assistance to the subcontractor in connection with the project. The general contractor sought to have the action dismissed or stayed on the ground that the parties' contract provided for the referral of disputes to arbitration.
On behalf of the intermediate appellate court. Judge Wilner reviewed the original enactment of the Maryland Uniform Arbitration Act, including its provision for an immediate appeal, and the subsequent code revision. He concluded:
80 Md.App. at 670, 565 A.2d 693. Accordingly, the court held that the matter was properly before it as a final judgment under CJ § 12-301,
But it is sometimes the case that one loses sight of a cogent answer to one question when a related question demands a more complex analysis. Over the years, a parallel body of case law has developed, largely in the Court of Special Appeals, that analyzes the appealability of decisions concerning arbitration clauses, including motions to compel arbitration, from a different perspective. In my view, the intermediate appellate court arrived at the correct answer in those cases, although by a more convoluted route than the court in Regina.
The case that spawned much of the later case law was Town of Chesapeake Beach v. Pessoa Construc. Co., 330 Md. 744, 625 A.2d 1014 (1993). Unlike the instant case or Regina, Town of Chesapeake Beach did not involve a denial of a motion to compel arbitration. Rather, it concerned a denial of a petition to stay arbitration — a less favored order under the Uniform Arbitration Act. This Court concluded that an appeal of such an order in that case was viable because a circuit court could have designated it as a final judgment under Rule 2-602, and therefore an appellate court could properly enter a final judgment pursuant to Rule 8-602(e)(1);
Even though Town of Chesapeake Beach did not involve an order denying a motion to compel arbitration, it is an important decision for our purposes. Subsequent appellate decisions have relied on its holding and rationale to conclude that an order denying a motion to compel arbitration may be certified as final under Rule 2-602 and Rule 8-602(e), seemingly on the assumption that such an order is not a final judgment under CJ § 12-301. But, until the instant case, Maryland courts have not revisited that assumption.
In 2002, the Court of Special Appeals applied the reasoning of Town of Chesapeake Beach in a case involving an appeal of a denial of a motion to compel arbitration
The Court of Special Appeals continued to apply the Town of Chesapeake Beach analysis in subsequent cases concerning denials of motions to compel arbitration, again without any reference to its own, more directly applicable, decision in Regina. See, e.g., Commonwealth Equity Services, Inc., v. Messick, 152 Md.App. 381, 831 A.2d 1144 (2003); All State Home Mortgage, Inc. v. Daniel, 187 Md.App. 166, 977 A.2d 438 (2009). Thus, cases concerning the immediate appealability of a denial of a motion to compel arbitration were decided as an application of Rule 2-602 or Rule 8-602(e)(1) — appellate court certification of an order as a final judgment — rather than on the basis that the order was a final judgment under CJ 12-301, as Regina had determined.
Eventually, our Court weighed in on this line of analysis in two recent cases — Addison v. Lochearn Nursing Home LLC, 411 Md. 251, 983 A.2d 138 (2009) and Schuele v. Case Handyman and Remodeling Services, 412 Md. 555, 989 A.2d 210 (2010).
In Addison and Case Handyman, this Court rejected appeals involving denials of motions to compel arbitration.
In Addison, a nursing home sued one of its residents to recover delinquent payments. The resident counterclaimed, alleging fraudulent acts by a nursing home employee, and the nursing home sought to compel arbitration of the counterclaim. The circuit court denied that motion and
Case Handyman involved a putative class action against a franchisor of home improvement companies by homeowners who had dealt with a franchisee that had gone bankrupt. The circuit court denied the franchisor's motion to have the dispute referred to arbitration pursuant to an arbitration clause in the home improvement contract. The Court of Special Appeals reversed that decision, holding that the arbitration clause was valid and enforceable. Consistent with the Town of Chesapeake Beach line of cases, this Court analyzed the appealability of the circuit court order on the assumption that it was an interlocutory order.
As noted earlier, Respondents argue that, in Addison and Case Handyman, this Court has already held that a denial of a motion to compel arbitration is not a final order for purposes of CJ § 12-301. A careful reading of the decisions reveals that neither case includes such a holding. The Majority opinion correctly rejects Respondents' effort to extrapolate those two cases. The question of whether the Legislature intended that such an order be treated as a final order has not been fully examined since Regina.
I agree with much of the Majority opinion as it shares my rejection of the cornerstone arguments of the Respondents. I part ways near the end of the Majority opinion when, by sleight of hand, it comes to the same ultimate conclusion as the Respondents — that an order denying a motion to compel arbitration is not immediately appealable.
To reach that conclusion, the Majority offers an original construction of a portion of the Uniform Arbitration Act that was codified in former Article 7, § 18(b); as best I can determine, no other court in Maryland or elsewhere has construed this provision as the Majority now does.
As indicated earlier in this opinion, former Article 7, § 18(b) was derived from § 19(b) of the Uniform Arbitration Act (1956) concerning appeals and provided that "The appeal shall be taken in the manner and to the same extent as from orders or judgments in a civil action." See
To its credit, the Majority opinion recognizes that Regina contradicts its theory and attempts to distinguish that decision, but I find its discussion unpersuasive. The Majority opinion rejects Judge Wilner's analysis in Regina in favor of an earlier decision of the Court of Special Appeals that rejected an appeal on the basis that applications under the Uniform Arbitration Act had to be filed in a court of equity.
In a footnote, the Majority opinion argues that the General Assembly has "acquiesced" in the idea that denial of a motion to compel arbitration is not a final judgment. Majority op. at 475 n. 19, 82 A.3d at 877-78 n. 19. The theory of "legislative acquiescence" is an inference drawn from legislative inaction following a contemporaneous interpretation of a statute by the Court. Sutherland Statutes and Statutory Construction § 49.9.
This case would seem to be an unlikely candidate for resort to a theory of legislative acquiescence for several reasons. First, as the Majority concedes, this Court has not previously decided directly whether denial of a motion to compel arbitration is a final order under CJ § 12-301. The only case that squarely addressed that question under current Maryland civil procedure — Regina — held that such an order is a final judgment. Second, even if this Court had previously addressed the issue, the inference of legislative acquiescence is most meaningful when bills have been introduced in the General Assembly to reverse the Court's holding, and the Legislature has declined to do so.
In sum, we have not decided the issue previously and the Legislature has not declined to overrule a decision we have not made. It is difficult to describe these circumstances as "legislative acquiescence."
The bottom line of the Majority opinion is that the Maryland Uniform Arbitration Act from its inception to the present allows an immediate appeal of denial of an application to compel arbitration that is filed as a separate action, but does not allow for an immediate appeal if the application is filed in a related pending proceeding — even if the dispute, the parties, and the alleged arbitration agreement are identical. But this result sacrifices fidelity to the legislative purpose to formality without substance.
If the underlying concern of the Majority opinion is that arbitration has been extended and imposed on parties not within the original contemplation of the Legislature, I share that concern. One might reasonably question whether a system that prefers to funnel disputes away from the courts to alternative tribunals such as private arbitration is consistent with the basic design of our government, especially when the arbitration requirement derives from a contract involving parties with grossly unequal bargaining power.
A final observation: When it adopted the Maryland Uniform Arbitration Act, the General Assembly directed that it was to be "interpreted and construed so as to effectuate the general purpose to make uniform the law of the states which enact it." See Chapter 231, Laws of Maryland 1965, now codified at CJ § 3-232. Virtually every other state that has adopted the Uniform Arbitration Act provides for an immediate appeal of orders denying motions to compel arbitration, either as a final judgment or as a permissible interlocutory appeal. The reasons underlying that uniform statutory policy were described by the drafters of the Uniform Act, were adopted by the Maryland General Assembly, and were honored by the code revisors.
The Majority opinion posits instead that the Maryland statute never contemplated an immediate appeal from an order denying a motion to compel arbitration in a pending proceeding. If the Majority is correct, the inclusion of the word "Uniform" in the title of the "Maryland Uniform Arbitration Act" was a misnomer. See CJ § 3-234 (specifying short title of act).
In the end, the question is whether the Legislature intended that a denial of a motion to compel arbitration should be immediately appealable, whether filed in a pending proceeding or as an independent action. As explained above, in my view, the answer is "yes."
Addison v. Lochearn Nursing Home, LLC, 411 Md. 251, 261, 983 A.2d 138, 144 (2009).
Case Handyman, 412 Md. at 564, 989 A.2d at 215.
We have oft-noted that "[t]he General Assembly is presumed to be aware of this Court's interpretation of its enactments and, if such interpretation is not legislatively overturned, to have acquiesced in that interpretation." Jones v. State, 362 Md. 331, 337-38, 765 A.2d 127, 131 (2001), quoting Williams v. State, 292 Md. 201, 210, 438 A.2d 1301, 1305 (1981); see also Montgomery Cnty. v. Robinson, 435 Md. 62, 78, 76 A.3d 1159, 1168 (2013); Hoile v. State, 404 Md. 591, 628, 948 A.2d 30, 52 (2008). Under our jurisprudence, legislative inaction can be equated to acquiescence. In re Wallace W., 333 Md. 186, 197, 634 A.2d 53, 59 (1993).
Further, if the dissent is correct, any order that would adversely impact on arbitrability would run contrary to the legislative purpose of the Maryland Uniform Arbitration Act and would be immediately appealable, pursuant to the 1965 Maryland Uniform Arbitration Act. Why, then, in 1973 did the Legislature carve out as an interlocutory appealable order the grant of a motion to stay arbitration, pursuant to what is now Section 12-303(3)(ix) of the Courts and Judicial Proceedings Article? The grant of a motion to stay was appealable previously as a final judgment in the Uniform Act, as it was in Section 18 of Article 7, Maryland Code (1957, 1968 Repl. Vol.); in the comprehensive overhaul it was reenacted as an interlocutory order from which an appeal could lie, which would not have been necessary had all adverse actions relating to arbitration been deemed final judgments. Therefore, the major premise of the dissent that the Legislature did not deviate from the Uniform Act, also is erroneous.
The 1956 act was revised in 2000. See Uniform Arbitration Act (2000) in 7-IA Uniform Laws Annotated 1 (2009 & 2013 Cum. Supp.). Although a number of states have adopted the 2000 revision, the Maryland General Assembly has not done so.
S. Gotshal, supra, 11 Bus. Law. at 54 (emphasis added).
Chapter 2, First Special Session, Laws of Maryland 1973 at 359 (emphasis added).
L.J. Demaine & D.R. Hensler, "Volunteering" to Arbitrate Through Predispute Arbitration Clauses: The Average Consumer's Experience, 67 Law & Contemp. Prob. 55 (2004).
