RANDOLPH, Justice, for the Court:
¶ 1. This interlocutory appeal proceeds from an order of the Circuit Court of Harrison County, Mississippi, First Judicial District, which granted the "Motions to Compel Arbitration" of Pass Marianne, LLC ("Pass") and Alfonso Realty, Inc. ("Alfonso"). On appeal, this Court considers (1) whether Pass waived its right to
¶ 2. In 2005, Pass entered into a contract with Carl E. Woodward, LLC ("Woodward") for the construction of a new condominium development, Pass Marianne Condominiums, in Pass Christian, Mississippi. On February 8, 2005, Pass and Lemon Drop Properties, LLC ("Lemon Drop") entered into a "Preconstruction Sales and Purchase Agreement" ("Agreement") for Unit No. 209 within the Pass Marianne Condominiums. Regarding Alfonso, the Agreement provided that:
(Emphasis added.) The Agreement also contained the following provision:
¶ 3. Because of Hurricane Katrina, construction of the Pass Marianne Condominiums was not completed until 2007. On October 3, 2007, Pass executed a warranty deed conveying Unit No. 209 to Lemon Drop, and Woodward furnished a "Warranty of Completion of Construction" to Lemon Drop.
¶ 4. On October 28, 2008, Lemon Drop filed a Complaint in the circuit court against Pass and Woodward, which sought, inter alia, rescission of the Agreement due to alleged defects in design and construction. The Complaint failed to attach a copy of the Agreement. See Miss. R. Civ. P. 10(d) ("[w]hen any claim or defense is founded on an account or other written instrument, a copy thereof should be attached to or filed with the pleading unless sufficient justification for its omission is stated in the pleading.").
¶ 6. On June 5, 2009, Lemon Drop filed a "Motion to Amend Complaint," seeking to add Alfonso as a defendant.
(Emphasis added.) Thereafter, the circuit court granted Woodward's "Motion to Compel Arbitration" as to Pass's cross-claim against Woodward.
¶ 7. On August 27, 2009, after the circuit court granted the "Motion to Amend Complaint," Lemon Drop filed its "First Amended Complaint," which named Pass, Woodward, and Alfonso as defendants. Multiple claims were asserted against Alfonso which related to, and arose out of, the transaction.
¶ 8. On September 11, 2009, Pass filed its "Answer; Affirmative Defenses; and Motion to Compel Arbitration" in response to the "First Amended Complaint." On September 30, 2009, approximately one month after the "First Amended Complaint" was filed, Alfonso filed its "Answer, Affirmative Defenses and Motion to Compel Arbitration." Alfonso asserted that, because it had acted as Pass's agent, any claim against Alfonso would be subject to the Agreement's arbitration provision.
¶ 9. Following a hearing, the parties were ordered to participate in good-faith mediation. After mediation proved unsuccessful, the circuit court entered an order which granted the "Motions to Compel Arbitration" filed by Pass and Alfonso, concluding that as "[t]here has been no `unreasonable delay' coupled with `active participation' or any factors which have combined to waive its enforcement[,]" the arbitration provision "is valid and binding upon the parties."
¶ 10. Thereafter, Lemon Drop filed a petition for permission to file an interlocutory appeal, which was granted.
¶ 11. This Court will consider:
¶ 12. This Court has held that the right to compel arbitration can be waived where a party "actively participates in a lawsuit or takes other action inconsistent with the right to arbitration[,]" which "substantially invokes the judicial process to the detriment or prejudice of the other party." MS Credit Ctr. Inc. v. Horton, 926 So.2d 167, 179 (Miss.2006) (citations omitted).
¶ 13. In the case sub judice, Pass answered the original Complaint, but failed to assert arbitration as an affirmative defense, and instead demanded a jury trial. Thereafter, Pass joined in an agreed "Order Setting Trial Date" and engaged in discovery. Although the Complaint should have attached a copy of the Agreement, the absence thereof did not excuse Pass's failure to demand arbitration, since Pass acknowledged that its "closing attorney had all contracts of units which had closed in storage." See Miss. R. Civ. P. 10(d). Two-hundred-and-fifty-two (252) days after the Complaint was filed, Pass attempted to invoke a contingent affirmative defense of mandatory arbitration, dependent upon further rulings of a court, which is inconsistent with claiming an absolute right to arbitrate. See supra ¶ 6. Thus, Pass's participation in, and invocation of, the judicial process vis-a-vis arbitration was inconsistent with timely invocation of the arbitration process. This Court has held that:
In re Tyco Int'l (US) Inc., 917 So.2d 773, 780 (Miss.2005). Accordingly, under the facts presented, Pass waived its right to compel arbitration.
¶ 14. Lemon Drop first argues that Alfonso has no right to compel arbitration as a nonsignatory. But under the Agreement, Alfonso is Pass's express agent. See supra ¶ 2 (Alfonso "represent[s] the SELLER and IS NOT a Buyer's agent...."). "An express agent is one who is `in fact authorized by the principal to act on their behalf.'" McFarland v. Entergy Miss., Inc., 919 So.2d 894, 902 (Miss.2005) (citation omitted). Consistent with Mississippi law and the law of other states, Alfonso, as Pass's agent, had the right to compel arbitration based on the Agreement between Pass and Lemon Drop.
¶ 15. Lemon Drop alternatively argues that, even if Alfonso had the right to compel arbitration, Pass waived that right. But this Court previously has rejected the proposition "that one defendant may waive [a] defense on behalf of all defendants." Am. Family Life Assurance of Columbus v. Ellison, 4 So.3d 1049, 1052 (Miss.2009). In Ellison, the plaintiff filed a complaint against AFLAC and two of its agents, in their individual and corporate capacities, for breach of the duty of good faith and fair dealing. See id. at 1050. In its answer, AFLAC "asserted improper venue as one of its affirmative defenses." Id. The two agents filed a separate answer, but "failed to raise the defense of improper venue and, thus, waived it." Id. at 1050-51. Yet this Court recognized that the defense of improper venue was a personal defense that did not belong to one defendant exclusively, such that the agents' waiver did not waive the defense for AFLAC. See id, at 1051-52.
¶ 16. The same logic is controlling in this case. Pass's waiver is not imputed to Alfonso. We previously have stated that arbitration pertains to forum. See Covenant Health & Rehab. of Picayune, LP v. Estate of Moulds, 14 So.3d 695, 697 (Miss. 2009). Moreover, arbitration is in the nature of an affirmative defense. See Miss. R. Civ. P. 8(c). As arbitration is a forumrelated defense (i.e., an appropriate venue), emanating from arbitration law and provided for contractually in this case, a demand to arbitrate must be timely raised. The "Motion to Compel Arbitration" filed by Alfonso is akin to the Rule 12(b)(3) motion to transfer venue at issue in Ellison.
¶ 17. Although this is a matter of first impression for this Court, recent decisions in other states support the same conclusion. The only courts faced with this identical question have enforced arbitration agreements pleaded by nonsignatory agents for alleged wrongful acts related to their behavior as agents, holding that the principal's waiver of its right to arbitrate did not operate as a waiver of the agent's right to arbitrate under the same agreement. See Garcia, 340 S.W.3d at 869-70; Kiskadee Commc'ns, 2011 WL 1044241, at *6. In Garcia, the plaintiffs "asserted that [the principal's] express waiver ... must be imputed to Garcia because he acted as [a nonsignatory] agent of [the principal], and his right to arbitration was therefore derivative of [the principal]." Garcia, 340 S.W.3d at 869-70. But the Texas appellate court rejected that assertion, determining that "[t]he [plaintiffs] cite no authority for this proposition, and we cannot agree that one party's waiver of the right to arbitration can be imputed to another." Id. at 870 (emphasis added). See also Kiskadee Commc'ns, 2011 WL 1044241, at *6 ("[p]laintiff reasons that [defendantagents] should be bound by [the principal's] alleged waiver of the arbitration clause because `[j]ust as acts of an agent within the scope of the agent's powers bind his principal as a matter of law, acts of the principal are equally binding on the agent.' Plaintiff, however, does not cite any legal authority for this proposition. On the contrary, `[a] principal cannot bind its agent.' Accordingly, [the principal's] alleged waiver of the arbitration clause could not bind the [defendant-agents].") (citation omitted) (emphasis added). Like the plaintiffs in Garcia and Kiskadee Communications, Lemon Drop has failed to cite any legal authority to support the contention that Pass's waiver should bind Alfonso.
¶ 18. Given the presumption against the waiver of arbitration, and Alfonso's prompt "Motion to Compel Arbitration" after Lemon Drop filed its "First Amended Complaint," there can be no dispute that Alfonso timely and properly asserted its
¶ 19. While Pass waived its right to compel arbitration, that waiver is not imputed to its agent, Alfonso. As there is no evidence of waiver by Alfonso, it should be entitled to proceed in arbitration. Therefore, as to Alfonso, the order of the Circuit Court of Harrison County granting arbitration is affirmed. But regarding Pass, the order of the Circuit Court of Harrison County granting arbitration is reversed and remanded for further proceedings consistent with this opinion.
¶ 20.
WALLER, C.J., CARLSON AND DICKINSON, P.JJ., LAMAR, CHANDLER AND PIERCE, JJ., CONCUR. KING, J., CONCURS IN PART AND DISSENTS IN PART WITH SEPARATE WRITTEN OPINION JOINED BY KITCHENS, J.
KING, Justice, concurring in part and dissenting in part:
¶ 21. I concur with the Majority's result that Pass waived its contractual right to compel arbitration. However, I dissent from the Majority's holding that Pass's waiver of arbitration does not operate as a waiver of its agent's right to arbitrate. I agree that Alfonso does have the right, as an express agent of Pass, to compel Lemon Drop into arbitration based on the agreement between Pass and Lemon Drop. Sawyers v. Herrin-Gear Chevrolet Co., Inc., 26 So.3d 1026, 1037 (¶ 32) (Miss.2010) (citations omitted). Even so, in recognition of the application of agency principles, I respectfully dissent to the Majority's conclusion that Pass's waiver of arbitration is not imputed to Alfonso.
¶ 22. The Majority has held that American Family Life Assurance of Columbus v. Ellison, 4 So.3d 1049, 1052 (¶¶ 11-13) (Miss.2009), is applicable to the instant case, and a particular defendant cannot waive a defense on behalf of all defendants. I do not find Ellison applicable. In Ellison, Ellison filed a complaint against AFLAC and two agents, in their individual and corporate capacities, for a breach of duty of good faith and fair dealing. Id. at 1050 (¶ 2). AFLAC filed its answer and asserted improper venue as one of its affirmative defenses. The two agents filed a separate answer, but "failed to raise the defense of improper venue and, thus, waived it." Id. at 1051 (¶ 11).
¶ 23. The instant case is distinguishable from Ellison. The complaint does not specify that Alfonso is being sued in its individual capacity, and if the claims were against Alfonso in its individual capacity, the arbitration agreement would not apply. "A third party who is a non-signatory to a contract should not be able to enforce an arbitration agreement ... where there is no alter ego, parent/subsidiary, agency, or other form of close legal relationship alleged...." Sawyers, 26 So.3d at 1039 (¶ 32) (citation omitted).
¶ 24. In Ellison, this Court recognized that the defense of improper venue was a personal defense that did not belong to one defendant exclusively. Id. at 1051 (¶ 11). Thus, this Court held that the agents' waiver of venue did not waive the defense for AFLAC. Id. The Majority applies the holding from Ellison and states that "a motion to compel arbitration is no less personal than a motion to transfer venue." (Maj. Op. at ¶ 16). In seeking to support its position with Ellison, the Majority fails to realize that, under the facts of Ellison, any other holding would be completely contrary to agency law. While it is true
¶ 25. The right to arbitrate is purely contractual. Qualcomm Inc. v. American Wireless License Group, LLC, 980 So.2d 261 (Miss.2007). Pass's contractual right to arbitration was extended to Alfonso, only as an agent of Pass. Accordingly, Alfonso's right to arbitration is not a personal defense and should be governed according to the principles of agency.
¶ 26. "[A]n agent is one who stands in the shoes of his principal; he is his principal's alter ego ..." Aladdin Constr. Co., Inc. v. John Hancock Life Ins. Co., 914 So.2d 169, 175 (¶ 10) (Miss.2005) (citation omitted). Pass waived its right to invoke arbitration. Thus, Alfonso, stepping into the shoes of Pass, had no right to assert a separate right to arbitration for actions taken solely as the agent of Pass, where Pass had chosen to waive that right.
¶ 27. The Majority seems to suggest that a motion to compel arbitration and a motion to transfer venue are so similar that they must be treated the same. That view is overly simplistic. Arbitration is a matter of contractual agreement, while venue is not.
¶ 28. For the aforementioned reasons, I dissent to the Majority's conclusion that Pass's waiver of arbitration is not imputed to Alfonso.
KITCHENS, J., JOINS THIS OPINION.
Moreover, Lemon Drop asserted that Alfonso "knew about the alleged defects and poor workmanship in the construction of the Project and Property on and before October 3, 2007[,]" but failed to "fully and completely disclose" all such defects.
While venue may be subject of a contractual agreement, contrary to the suggestion of the Majority, venue is generally not a matter of contract.