Fox v. Tanner

Summary

The Wyoming Supreme Court affirmed the denial of a motion by Dorian Fox and The Investment Center, Inc. to compel arbitration. The court held that the appeal was permissible under Wyoming's Uniform Arbitration Act and that the district court properly considered the validity of the arbitration agreements and the allegations of fraud. The opinion discusses the Federal Arbitration Act, fraud-based contract defenses, and the requirement of clear and unmistakable consent to arbitrate arbitrability.

Holdings

1. An order denying an application to compel arbitration is appealable under Wyo. Stat. Ann. § 1-36-119, and a direct appeal is proper even though Wyoming's appellate rules do not specify a separate procedure for reviewing such an order.
2. A court, rather than an arbitrator, decides a gateway dispute concerning whether the parties agreed to arbitrate, unless there is clear and unmistakable evidence that the parties agreed to submit arbitrability to arbitration.
3. Generally applicable contract defenses, including fraud, may invalidate an arbitration agreement under the Federal Arbitration Act, and Wyoming law recognizes that fraud will vitiate a contract.
4. The court did not need to apply Prima Paint's rule requiring arbitration of a general fraud-in-the-inducement challenge because the plaintiffs were challenging the arbitration provision itself rather than merely attacking the contract as a whole.

Questions Presented

1. Whether the denial of the motion to stay proceedings and compel arbitration was appealable.
2. Whether the court or an arbitrator should decide the threshold issue of fraudulent inducement and arbitrability.
3. Whether the arbitration agreements were enforceable when the plaintiffs challenged the arbitration provisions and alleged fraud relating to their dealings with Barber.

Disposition

affirmed