From Mondaq, Jason R. Brost discusses a recent case in which the court said that an arbitration clause was enforceable in a dispute based on a separate agreement signed at the same time and in the course of the same transaction. Jason writes:
The dispute arose out of Theodore Wood’s resignation from his employment with Parks IP Law, LLC and creation of his own firm邑ood IP, LLC. As part of this separation, the parties entered into two agreements: a Separation Agreement, which included an agreement to arbitrate any disputes in Atlanta, Georgia, and a Promissory Note, which did not include an arbitration provision but did include a venue provision stating that “[a]ny action or proceeding” between the parties “must be brought in the State of Georgia, Fulton County . . . .” When Parks IP brought suit alleging a breach of the Promissory Note, Wood moved to compel arbitration, but the trial court denied his motion.
On appeal, Parks IP argued that the arbitration provision in the Separation Agreement did not apply to the Promissory Note, because the Promissory Note did not reference the Separation Agreement. The Eleventh Circuit disagreed. Noting that documents executed at the same time in the course of the same transaction are construed together under Georgia law, the court found that this applied to the Separation Agreement and the Promissory Note. While the Promissory Note did not reference the Separation Agreement, the Separation Agreement did reference the Promissory Note, as the Promissory Noted spelled out the terms by which debts discussed in the Separation Agreement were to be paid.
Read the full story at Eleventh Circuit Finds That Arbitration Clause In One Agreement Applies To Disputes Regarding A Related Agreement – Litigation, Mediation & Arbitration – United States