Arbitration is a form of “alternative dispute resolution” used to resolve legal disputes outside of court. Unlike mediation, the parties agree to be bound by the decision of the court-appointed arbitrators. Iowa Code § 679A governs arbitration disputes in Iowa. This case involved a dispute between real estate agents over the commission to be paid upon the sale of commercial property. When Agent I learned through a family member (Agent II- also a real estate agent) that a parcel of commercial property was available for sale and that another real estate agent (Agent III) had an interested buyer, he contacted Agent III and the parties allegedly made an oral agreement to “share any real estate commissions on the sale of the building and any commissions on the sale of planned renovated condominiums.” Agent I claimed that he was left out of the commission upon the sale of the property.
At trial, Agent III filed a motion to compel arbitration as both he and Agent I were members of the Des Moines Area Association of Realtors and the National Association of Realtors, organizations that require arbitration in the event of contractual disputes. The trial court granted Agent III’s request for arbitration, because the agents’ membership in these organizations preempted state law. Agent I disputed the arbitration proceedings.
On appeal, two issues were presented to the court: 1) Whether an order compelling arbitration is a final judgment of the court; and 2) if there was no final judgment, whether the court can even hear the case before a final judgment is made at the trial court level The appellate court cited prior case law holding that an order compelling arbitration is not a final judgment of the court. Therefore, there is no right to an appeal until the disputes of the parties have been finally decided by the trial court. The court also said that allowing Agent I to appeal before following through with the suit at the trial court would only increase court costs and delay a final decision. Bassman v. Knapp, No. 9-152/08-0743 (Iowa Ct. App., May 6, 2009).