African Methodist Episcopal Church, Inc. v. Smith, 1141100, 1141101, 1150055, 1150156.

Decision Date19 August 2016
Docket Number1141100, 1141101, 1150055, 1150156.
Citation217 So.3d 816
Parties AFRICAN METHODIST EPISCOPAL CHURCH, INC., and James L. Davis v. Kurtrina SMITH. Lincoln National Life Insurance Company v. Kurtrina Smith. Lincoln National Life Insurance Company v. Rickey Levins. African Methodist Episcopal Church, Inc., and James L. Davis v. Rickey Levins.
CourtAlabama Supreme Court

217 So.3d 816

AFRICAN METHODIST EPISCOPAL CHURCH, INC., and James L. Davis
v.
Kurtrina SMITH.


Lincoln National Life Insurance Company
v.
Kurtrina Smith.


Lincoln National Life Insurance Company
v.
Rickey Levins.


African Methodist Episcopal Church, Inc., and James L. Davis
v.
Rickey Levins.

1141100, 1141101, 1150055, 1150156.

Supreme Court of Alabama.

Aug. 19, 2016.


217 So.3d 818

Marc James Ayers, Jason A. Walters, and Ambria L. Lankford of Bradley Arant Boult Cummings LLP, Birmingham, for appellant Lincoln National Life Insurance Company.

Tom L. Larkin of The Larkin Law Firm, P.C., Birmingham, for appellants African Methodist Episcopal Church, Inc., and James L. Davis.

Leah O. Taylor and Rhonda P. Chambers of Taylor & Taylor, Birmingham, for appellees.

STUART, Justice.

Kurtrina Smith and Rickey Levins separately initiated actions against the African Methodist Episcopal Church, Inc. ("the AME Church"); James L. Davis, bishop and presiding officer of the AME Church's Ninth Episcopal District (Davis and the AME Church are hereinafter referred to collectively as "the Ninth District");1 and

217 So.3d 819

Lincoln National Life Insurance Company ("Lincoln National") (hereinafter collectively referred to as "the defendants"), after Lincoln National denied their respective claims for benefits under certificates of insurance issued pursuant to a group life-insurance policy Davis had purchased from Lincoln National on behalf of the Ninth Episcopal District ("the group policy"), which certificates, Smith and Levins allege, provided coverage for Smith's mother and Levins's father. The defendants thereafter moved the trial court hearing each action to compel arbitration pursuant to arbitration provisions they alleged were part of the group policy and the certificates of insurance issued pursuant to the group policy; however, the trial courts denied those motions, and the defendants appeal. We reverse and remand.

I.

In March 2012, the AME Church's Ninth Episcopal District held a conference for pastors at which a presentation was made describing a life-insurance program being offered by the Ninth Episcopal District.2 The ministers returned to their congregations and informed the members of those congregations of the program and the potential for them to obtain life-insurance coverage under it. Under the general terms of the program, certain members and employees of congregations in the Ninth Episcopal District could purchase life-insurance coverage and, upon the insured's death, benefits would be shared among the insured's designated beneficiary, his or her home congregation, and various charitable endeavors associated with the Ninth Episcopal District. After becoming aware of the program, Smith's family purchased coverage for her mother, Myrtle Smith, a member of St. John's African Methodist Episcopal Church in Montgomery; Levins's family similarly purchased coverage for Levins's father, Lawrence Levins, a member of Allen Temple African Methodist Episcopal Church in Bessemer. Smith and Levins were the respective designated beneficiaries of those policies.

Both Smith's mother and Levins's father died in 2013; however, when Smith and Levins thereafter sought benefits under the certificates issued pursuant to the group policy, Lincoln National denied their claims, stating that, for different reasons, coverage had not been effective for the deceased on the date of his or her death. On May 23, 2014, Levins sued the defendants in the Jefferson Circuit Court, asserting various claims stemming from the marketing and sale of coverage under the group policy and from Lincoln National's denial of his claim for benefits; on January 30, 2015, Smith filed a similar action in the Montgomery Circuit Court. Eventually, the defendants moved the trial court hearing each action to compel arbitration pursuant to the following arbitration provision they alleged was part of the group policy:

"The following provisions will apply after the procedures for claim appeals, complaints or any other grievances have been exhausted. In the event of any dispute, claim question or disagreement arising out of or relating to this policy, the parties will use their best efforts to settle such disputes. To this effect, they shall negotiate with each other in good faith to reach a proper resolution.

"Binding arbitration. Any controversy, dispute or claim by any policyholder, insured or beneficiary, or their respective assigns (each referred to herein as
217 So.3d 820
‘claimant’), arising out of or relating in any way to this policy and/or a certificate issued under this policy or the solicitation or sale thereof shall be submitted to binding arbitration pursuant to the provisions of the Federal Arbitration Act, 9 U.S.C. Section 1, et seq. Such arbitration shall be governed by the rules and provisions of the dispute resolution program for insurance claims of the American Arbitration Association (‘AAA’). The arbitration panel shall consist of three (3) arbitrators: one (1) selected by the company, one (1) selected by the claimant and one (1) selected by the arbitrators previously selected.

"It is understood and agreed:

"(1) that the arbitration shall be binding upon the parties;

"(2) that the parties are waiving their right to seek remedies in court, including the right to jury trial; and

"(3) that an arbitration award may not be set aside in later litigation, except upon the limited circumstances set forth in the Federal Arbitration Act.

"The cost of all arbitration proceedings shall be borne by the company, with the exception of the cost of representation of the claimant. Should the arbitrator find that the dispute is without substantial justification, the arbitrator shall have the authority to order that the cost of the arbitration proceedings be borne by the claimant. All arbitration proceedings shall be conducted in the county of residence of the claimant, unless another location is mutually agreed upon by both parties. Arbitration proceedings shall commence within 90 days after the first notification of one party by the other as to their election to arbitrate a dispute regarding this policy.

"Judgment upon the award rendered by arbitrator(s) may be entered in any court having jurisdiction thereof.

"Arbitration under this provision is confidential. Neither a party nor an arbitrator may disclose the existence, content or results of any arbitration hereunder without the prior written consent of both parties."

This arbitration provision was labeled as an amendment to the group policy and was printed on a form labeled "GL–AMEND.ARBITR" that was attached to the policy, numbered sequentially, and stated on its face that it took effect on "the date this policy takes effect." The defendants further assert that the certificate of group life insurance prepared for each insured contained a separate notice explaining that the group policy obtained by the AME church included a binding arbitration agreement; this notice was printed on a form titled "AL ARB NOTICE–CERT."

Smith and Levins opposed the motions to compel arbitration filed in each of their cases, and the parties thereafter conducted extensive briefing on the issue. On June 5, 2015, the Montgomery Circuit Court denied the motion to compel arbitration in the Smith action, and, on July 14, 2015, the Jefferson Circuit Court did the same in the Levins action. The Ninth District and Lincoln National thereafter separately filed timely appeals to this Court challenging the denial of their motions to compel arbitration in both the Smith action and the Levins action. Because the facts underlying the actions are similar and because the issues raised and arguments presented in the appeals largely overlap, we have consolidated the four appeals for the purpose of writing one opinion.

II.

The standard of review we apply to a ruling denying a motion to compel arbitration is well settled:

217 So.3d 821
" ‘This Court reviews de novo the denial of a motion to compel arbitration. Parkway Dodge, Inc. v. Yarbrough, 779 So.2d 1205 (Ala.2000). A motion to compel arbitration is analogous to a motion for a summary judgment. TranSouth Fin. Corp. v. Bell, 739 So.2d 1110, 1114 (Ala.1999). The party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration and proving that the contract evidences a transaction affecting interstate commerce. Id. "[A]fter a motion to compel arbitration has been made and supported, the burden is on the non-movant to present evidence that the supposed arbitration agreement is not valid or does not apply to the dispute in question." Jim Burke Automotive, Inc. v. Beavers, 674 So.2d 1260, 1265 n. 1 (Ala.1995) (opinion on application for rehearing).’ "

Elizabeth Homes, L.L.C. v. Gantt, 882 So.2d 313, 315 (Ala.2003) (quoting Fleetwood Enters., Inc. v. Bruno, 784 So.2d 277, 280 (Ala.2000) ). The defendants met their initial burden in this case by submitting to the respective trial courts a copy of the group policy, including the amendment containing the arbitration provision quoted above, and an affidavit from a Lincoln National representative describing the interstate elements of its transaction with the Ninth Episcopal District. Smith and Levins do not dispute that the...

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    ...not the court, who should determine whether a condition precedent to arbitration has been met. African Methodist Episcopal Church, Inc. v. Smith, 217 So.3d 816, 829 (Ala. 2016) (citing Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 85 (2002) and Brasfield & Gorrie, L.L.C. v. Soho Partne......

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