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SMITH, Justice.
Equity. Fulton Superior Court. Before Judge Daniel.
Appellants, William H. Taft and Kevin P Kilroy, each sued appellees, H. Dyar Burttram, Jr., and Robert Rosenberg, officers of appellee Norris and Hirshberg, Inc., for malicious prosecution, libel, abuse of process, slander, wrongful interference with an employment relationship, and intentional infliction of emotional harm. Taft and Kilroy appeal the trial court's grants of appellees' motions to stay the lawsuits pending arbitration. The appeals have been consolidated. We reverse.
Norris and Hirshberg, a securities brokerage business, hired Taft and Kilroy as account executives in August 1983. Taft and Kilroy resigned in August 1984, to join a similar business. They allege that the appellees altered their employment records to show that they were terminated for cause, and that the appellees mailed libelous material and related slanderous charges about them to various people involved in the securities business.
In October 1984, after requesting the return of certain information and records to Norris and Hirshberg, appellee Burttram swore out warrants charging Taft and Kilroy with theft by taking. He contended that they had stolen client lists, confirmation slips, and other information regarding Norris and Hirshberg's clients when they left Norris and Hirshberg to join the other business. Taft and Kilroy were arrested on November 2, 1984.
On November 6, a Fulton County Magistrate dismissed the charges for lack of probable cause. He stated that the controversy was best suited for civil court. The appellees subsequently requested Taft and Kilroy to submit the dispute to arbitration. Taft and Kilroy filed the complaints initiating these lawsuits five days later, on December 12, 1984.
1. Taft and Kilroy contend that the trial court erred in staying their lawsuits pending arbitration.
Under the agreement that the appellants signed prior to their employment with Norris and Hirshberg, they "[agreed] to arbitrate any dispute, claim, or controversy" that the National Association of Securities Dealers [NASD] requires to be arbitrated. The NASD requires its members to arbitrate " any dispute, claim, or controversy arising out of or in connection with the business of any member of the Association . . ." (Emphasis supplied.) As the appellees note, this procedure broadly encourages the members to arbitrate their disputes.
When the appellees failed to abide by this policy, in swearing out criminal warrants against the appellants "instead of seeking to arbitrate, this was the clearest kind of waiver on their part of an agreement to arbitrate." 1 Morales Rivera v. Sea Land of Puerto Rico, 418 F2d 725, 726 (1st Cir. 1969). Any other holding would be contrary to the clear federal policy of encouraging parties to resolve disputes through arbitration, rather than a resort to the courts. See Sweater Bee By Banff, Ltd. v. Manhattan Indus., 754 F2d 457, 461 (2nd Cir. 1985), as the dispute involved in the criminal case and this case, and the parties involved in both cases for all practical purposes are identical. 2 The appellees, in choosing the forum of criminal law rather than arbitration in their first attempt to sort out their dispute with Taft and Kilroy, waived their right to compel arbitration. To put it simply, appellees cannot run with the hare and the hounds. Accordingly we find that the trial court should have denied appellees' motions for stay of these lawsuits pending arbitration.
2. Following the holding in Division 1, we need not reach appellants' remaining enumerations of error.
Rogers & Hardin, Robert M. Axelrod, Phillip S. McKinney, for appellees.
1  Here, the party who initiated legal proceedings subsequently seeks arbitration, and the party who defended that action claims waiver by inconsistency. This distinguishes this case from waiver cases in which the party defending the initial action seeks arbitration belatedly and the party initiating the action claims waiver. See, e.g., Sweater Bee, infra.
2  Compare Amalgamated Local No. 55, etc. v. Metal & Alloy Div., 396 FSupp. 667 (W.D.N.Y. 1975).
Thursday May 21 16:43 EDT

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