Is it "and" or is it "or"? Michigan Court of Appeals case applies conjunctive language of arbitration clause
A recent Michigan Court of Appeals opinion emphasizes the nuances of conjunctive language and the importance of vigilant contract drafting.
In Paine, D.D.S. v. Godzina, D.D.S, (No. 363530; LC No. 2022-017694-CB), the parties entered an agreement whereby the defendant, Layne Godzina, was to be employed by the plaintiff, Geoffrey Paine, as an associate dentist at Paine’s practice. Godzina later terminated the agreement and opened his own dental practice about a quarter of a mile from Paine’s practice. Paine then sued for breach of contract and tortious interference with the contract. Godzina sought summary disposition on the basis that Paine’s claim was subject to an arbitration clause in their agreement, which stated:
Any dispute, controversy or claim between the Associate and the Employer concerning questions of fact arising under this Agreement and concerning issues related to wrongful termination (including but not limited to racial discrimination, sexual discrimination, sexual harassment, discrimination with respect to hire, tenure, terms, conditions or privileges of employment, or a matter directly or indirectly related to employment because of race, color, religion, national origin, age, sex, height, weight or marital status) shall be submitted within ninety (90) days of the occurrence giving rise to the dispute or claim to the American Arbitration Association for resolution pursuant to its Rules of Commercial Arbitration[.] (Emphasis Added).
The trial court denied the defendant’s motion. On appeal, Godzina claimed “the arbitration clause, which provides that ‘[a]ny dispute, controversy or claim between the Associate and the Employer concerning questions of fact arising under this Agreement and concerning issues related to wrongful termination’ must be submitted to arbitration, means that arbitration is required for either ‘questions of fact arising under this Agreement’ or ‘issues related to wrongful termination.’”
However, the Michigan Court of Appeals, in a per curiam opinion, disagreed with Godzina – and affirmed the trial court’s decision that the express language at issue “means that arbitration is required for cases that involve both questions of fact arising under the agreement and issues related to wrongful termination.
The Paine court referenced People v Bylsma, 315 Mich App 363, 383 (2016) in explaining that the general rule is the word “and” is used to “join a conjunctive list to combine items.” Applying the general rule, the word “and” in the arbitration clause combines the item “questions of fact arising under this Agreement” with the item “concerning issues related to wrongful termination,” such that both items must be present to require arbitration. The Paine court determined there were no other provisions in the agreement that added context to the arbitration clause, such that the word “and” should be interpreted as the word “or.” In doing so, the court concluded the instant matter was not subject to arbitration under the parties’ agreement.
The Paine holding is a refreshing reminder for clients and lawyers alike to draft and review contracts judiciously, as Michigan courts interpret them based on the express and plain language.
McDonald Hopkins’ attorneys have extensive experience evaluating and preparing contracts of all kinds in order to ensure they contain precise language and effectuate the intended outcomes. If you have questions about the language of a contract, contact a member of our business litigation or trade secret, non-compete and unfair competition team.