The judicial determination that an order to stay or compel

arbitration is a "final order" subject to appellate review has resulted in

often contradictory and inconsistent rulings, dependent upon the

application of state or federal law, and if the appeal relates to a

motion to compel arbitration or an order on a motion to stay

arbitration. See 6 A.L.R. 4th 652, Appealability of state court's order

or decree compelling or refusing to compel arbitration, (originally

published in 1981); 13 Cyc. of Federal Proc. § 57.90.50 (3d.ed.); 21

Williston on Contracts § 57.61 (4th ed. 2013).

 

Recently, in a twenty-six page opinion which engendered a dissent

and thirty-eight footnotes, Maryland's highest court held that the

denial of a petition to compel arbitration was not a final appealable

judgment. The majority opinion and dissent each address the public

policy argument whether allowing immediate appeals from orders

denying or granting arbitration further or impede the benefits of

alternate dispute resolution.

 

Significantly, both the majority opinion and the dissent agreed that

appeal of a denial or grant of arbitration filed in a separate and

independent action is immediately appealable as a final order.

American Bank Holdings, Inc. v. Kavanagh, 436 Md. 457, 82 A.3d 867

(Md. 2013).

 

 

Brian Kavanagh and Jeffrey Weber were employed by American as

co-branch managers in Baltimore, Maryland, for the purpose of

originating, making and selling residential mortgage loans. Their

employment agreement provided them with a bonus of a percentage

of a loss reserve funded with funds earned by them, which was

payable to them six months after termination of their agreements.

Each employment agreement contained an arbitration clause which

provided that any controversy or claim should be settled by arbitration

and in accordance with the laws of the State of Maryland, but which

excluded arbitration of claims for equitable relief.

 

After they terminated their employment, they asserted American

failed to pay them the funds due them from the loss reserve after

numerous requests to American to account for the loss reserve, which

they alleged was approximately $250,000. They filed a complaint for

accounting.

 

American filed a denial and raised as a preliminary defense that the

court lacked jurisdiction to hear the case because the claims were

subject to mandatory arbitration, and filed in the case a petition to
compel arbitration and to stay all proceedings.