Arbitration clause enforced despite lack of required language relating to "enforceability."
Lisa Rouleau sued Orchard, Hiltz & McCliment in an effort to avoid arbitration of a contract dispute. She pointed out that while the contract included a clause purporting to require mandatory arbitration of any dispute, the contract did not contain the language explicitly stating that an arbitration award would be enforceable in Circuit Court. For decades, Michigan has required that this language be included in a contract in order to make arbitration a mandatory alternative to litigating disputes.
The Court looked to a case that arose during the period when medical malpractice claims were subject to arbitration (health care providers had demanded legislation allowing the practice, but then demanded it be discarded when arbitrators treated patient-victims better than jurors). Under this earlier case, the Court had held that if the contract explicitly provided for arbitration according to the American Arbitration Association's rules, it would govern the parties' controversy, regardless of the absence of the "court enforcement" language. The Court applied this precedent in ruling that Rouleau's case was subject to mandatory arbitration and that she had waived her right to normal legal procedure.