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IN THE SUPREME COURT OF THE STATE OF MONTANA
1995

PAUL CASAROTTO and PAMELA CASAROTTO,

Plaintiffs and Appellants,

and
DANIEL L. and DEB HUDSON, and D&D SUBWAY CORPORATION,
Defendants.

APPEAL FROM: District Court of the Eighth Judicial District, In and for the County of Cascade, The Honorable John M: McCarvel, presiding.
~ud~e COUNSEL OF RECORD: For Appellant: Grant D. Parker (argued) and Philip D. Tawney, Mullendore, Tawney & Watt, Missoula, Montana For Respondent: Alan G. Schwartz (argued) and Ian E. Bjorkman, Wiggin & Dana, New Haven, Connecticut
L. D. Nybo, Conklin, Nybo, Leveque & Murphy, Great Falls, Montana
For Amici Curiae:

Lawrence Anderson, Attorney at Law, Great Falls,
Montana (Montana Trial Lawyers Association)

Michael A. Bowen and Michael G. McCarty,

Foley & Lardner, Milwaukee, Wisconsin (International Franchise Association; Securities Industry Association; Snap-On Tools Corporation)
Submitted: August 22, 1995
Decided: August 31, 1995

Filed:

Justice Terry N. Trieweiler delivered the opinion of the Court.

Plaintiffs Paul and Pamela Casarotto filed this suit in the District Court for the Eighth Judicial District in Cascade County to recover damages which they claim were caused by the defendants' breach of contract and tortious conduct. Defendants Nick Lombardi and Doctor's Associates, Inc., (DAI) moved the District Court for an order dismissing plaintiffs' complaint, or in the alternative, staying further judicial proceedings pending arbitration of plaintiffs' claims pursuant to a provision in DAI's franchise agreement with plaintiffs which required that disputes "arising out of or relating to" that contract be settled by arbitration. The District Court granted defendants' motion, and ordered that further judicial proceedings be stayed until arbitration proceedings were completed in accordance with the terms of the parties' agreement. Plaintiffs appealed from that order, and on December 15, 1994, we reversed the order of the District Court and remanded this case to that court for further proceedings. Casarotto v. Lombardi (1994), 268
Mont. 369, 886 P.2d 931. Following this Court's decision, the defendants petitioned the Supreme Court of the United States for a writ of certiorari. That petition was granted, and on June 12, 1995, the United States Supreme Court ordered that the December 15, 1994, judgment of this Court be vacated, and remanded this case to the Supreme Court of Montana for further consideration in light of that Court ' s decision in Allied-Bruce Terminix Cos. v. Dobson (1995), 513 U. S .
, 115 S. Ct. 834, 130 L. Ed. 2d 753. Having further considered
-
our prior decision in light of Dobson, we now reaffirm and reinstate our prior opinion. FACTUAL BACKGROUND Paul and Pamela Casarotto entered into a franchise agreement with DAI which allowed them to open a Subway Sandwich Shop in Great Falls, Montana. DAI's franchise agreement included on page nine a provision which required that controversies or claims related to the contract shall be settled by arbitration in Bridgeport, Connecticut. However, the franchise agreement did not include notice on the front page to the effect that the contract was subject to arbitration, as required by

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Montana Law