628 So.2d 354 (Ala. 1993), 1920473, Allied-Bruce Terminix Companies, Inc. v. Dobson

Docket Nº:1920473.
Citation:628 So.2d 354
Opinion Judge:ALMON, Justice.
Party Name:ALLIED-BRUCE TERMINIX COMPANIES, INC., et al. v. G. Michael DOBSON, Wanda C. Dobson, Steven Gwin, and Jan Gwin.
Attorney:Joseph P. Jones, Jr. and T. Julian Motes of Sirote & Permutt, P.C., Mobile, and Robert A. Wills of Wills and Simon, Bay Minette, for appellants. Alan R. Chason of Chason & Chason, P.C., Bay Minette, for appellees.
Case Date:August 13, 1993
Court:Supreme Court of Alabama
 
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Page 354

628 So.2d 354 (Ala. 1993)

ALLIED-BRUCE TERMINIX COMPANIES, INC., et al.

v.

G. Michael DOBSON, Wanda C. Dobson, Steven Gwin, and Jan Gwin.

1920473.

Supreme Court of Alabama.

August 13, 1993

Rehearing Denied Sept. 24, 1993.

Joseph P. Jones, Jr. and T. Julian Motes of Sirote & Permutt, P.C., Mobile, and Robert A. Wills of Wills and Simon, Bay Minette, for appellants.

Alan R. Chason of Chason & Chason, P.C., Bay Minette, for appellees.

ALMON, Justice.

The defendants, Allied-Bruce Terminix Companies, Inc. ("Terminix Service"), and Terminix International Company ("Terminix International") appeal from an order of the trial court denying their motion to compel arbitration of the tort and breach of contract claims filed against them by Michael Dobson, Wanda Dobson, Steven Gwin, and Jan Gwin. The issue for our review is whether the arbitration clause contained in a termite bond is enforceable under the Federal Arbitration Act, 9 U.S.C. § 1 et seq. ("FAA").

In August 1987, Steven Gwin allowed the termite bond on his house in Fairhope, Alabama, to expire, and he purchased a replacement bond from Terminix Service. Terminix Service is an Arkansas corporation that does business in several states, including Alabama, Arkansas, Florida, Georgia, Mississippi, Louisiana, Oklahoma, and Texas. The bond was guaranteed by Terminix International, a limited partnership that has its principal place of business in Memphis, Tennessee.

In 1991, Steven and Jan Gwin agreed to sell the house to Michael and Wanda Dobson. The sales contract required the Gwins to provide written evidence from a licensed pest control company that the company had performed a visual inspection of the house and had observed no active infestation of termites or damage from active infestation. The contract also required that the termite bond be transferred to the Dobsons at the closing of the sale. Because of the existing bond on the house, Terminix Service agreed to perform the inspection and to issue the required

Page 355

statement. At the closing, the Gwins furnished Dobson with a standard Veterans' Administration ("VA") form; the V.A. form provided that Terminix Service had observed no visible evidence of active infestation during the inspection.

The Dobsons later discovered termite damage to the house, and they brought an action against the Gwins, alleging fraud, and against Terminix Service and Terminix International, alleging fraud in connection with the representations in the V.A. form, and alleging breach of contract. The Gwins cross-claimed against Terminix Service and Terminix International. Terminix Service and Terminix International moved to stay the proceedings and to compel the Dobsons and the Gwins to submit their claims to arbitration pursuant to an arbitration clause in the bond. The trial court denied this motion, and the defendants appeal.

Predispute arbitration agreements are unenforceable under Alabama law. Ala.Code 1975, § 8-1-41. However, if an arbitration agreement is voluntarily entered into and is contained in a contract that involves interstate commerce, then the FAA preempts state law and renders the agreement enforceable. A.G. Edwards & Sons, Inc. v. Syvrud, 597...

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