Supreme Court Sends Memphis Firm’s Case Against Ex-Partner Back to Trial Court to Rule on Arbitration Agreement

April 30, 2013

The Tennessee Supreme Court has sent a dispute between a Memphis law firm and a former partner and paralegal back to the trial court to determine whether arbitration is appropriate.

The law firm of Glassman, Edwards, Wyatt, Tuttle & Cox, P.C. filed a lawsuit against B.J. Wade, a former partner, and Shannon Crowe, a former paralegal, alleging fraud and breach of their duties to the firm. Mr. Wade and Ms. Crowe both asked the trial court to send their cases to arbitration, as required by agreements they maintain govern resolution of each case. The firm, however, asserts that none of the agreements require arbitration.

The trial court consolidated the cases and initially ordered the parties to proceed with limited discovery to determine whether the cases were subject to arbitration. When disagreement arose, however, the trial court expanded the scope of discovery to include “all necessary documents to conduct a meaningful attempt at resolution of this matter.” The trial court also ordered the parties to mediation in an attempt to resolve all of their disputes. The Tennessee Supreme Court granted the request of Mr. Wade and Ms. Crowe for an immediate appeal.

In a unanimous opinion issued today, the Supreme Court concluded that the trial court erred in ordering discovery without limiting the scope of discovery to the issue of the enforceability of the arbitration provisions and erred in ordering the parties to mediation in an effort to resolve all aspects of their disputes.

The Supreme Court ordered that the case be returned to the trial court to determine whether arbitration was required of any dispute between the parties under any of the agreements at issue. The Court also held that discovery must be limited to the issue of whether the arbitration clauses contained in the agreements are enforceable.

To read the Glassman v. B.J. Wade Opinion, authored by Justice Janice M. Holder, visit the Opinions section of TNCourts.gov.