Application of Doughboy Industries, Inc. to Stay Arbitration

Doughboy Industries, Inc. (Doughboy) (defendant), a buyer, had done business with Pantasote Company (Pantasote) (plaintiff), a seller, twice before the parties entered into an agreement. The transaction at issue began with Doughboy mailing two purchase orders to Pantasote. Pantasote called Doughboy to accept the purchase orders, and shipped the first part of the order the same day. A few days later, Doughboy received acknowledgements from Pantasote, which had used its own acknowledgement forms rather than the forms that Doughboy had provided. Doughboy’s purchase-order forms stated that purchase-order terms could only be altered in a writing signed by Doughboy. The acknowledgement form that Pantasote sent, however, stated that Doughboy would be subject to the terms of the acknowledgement form unless Doughboy objected to the terms within a specific timeframe. Pantasote’s acknowledgement form also contained a general arbitration clause that was not contained in Doughboy’s form. The parties did not object to each other’s forms at the time. When Doughboy later tried to change part of the orders, Pantasote objected and filed suit. Pantasote argued that the general arbitration clause in the acknowledgment form required Doughboy to arbitrate the dispute in New York, whereas Doughboy argued that it had not agreed to the arbitration and that Pantasote would have to litigate, most likely in Doughboy’s home state of Wisconsin. Accordingly, Doughboy moved to stay arbitration. The trial court denied the motion, and Doughboy appealed.