Anderson Bros. Chrysler Plymouth Dodge, Inc. v. Hadley

• Decision Date: 31 July 1998
• Citation: 720 So.2d 895
• Parties: ANDERSON BROTHERS CHRYSLER PLYMOUTH DODGE, INC. v. Glarin HADLEY. 1961143.
• Court: Alabama Supreme Court

Page 895

720 So.2d 895

ANDERSON BROTHERS CHRYSLER PLYMOUTH DODGE, INC. v. Glarin HADLEY.

1961143.

Supreme Court of Alabama.

July 31, 1998.

Paul M. James, Jr., of Rushton, Stakely, Johnston & Garrett, Montgomery, for appellant.

Joseph C. McCorquodale III and Jaqualyn S. Bradley of McCorquodale & McCorquodale, Jackson; and Wyman O. Gilmore, Jr., Grove Hill, for appellee.

COOK, Justice.

Anderson Brothers Chrysler Plymouth Dodge, Inc. ("Anderson Brothers"), appeals from the trial court's order denying arbitration of claims filed against it by Glarin Hadley. We reverse.

On January 3, 1996, Glarin Hadley purchased from Anderson Brothers, an automobile dealership, a used 1993 Chevrolet Cavalier automobile. As part of the negotiations for the sale of the automobile, Hadley signed an arbitration agreement. On November 6, 1996, Hadley filed a four-count complaint against Anderson Brothers: two counts alleged fraud; one count alleged negligence; and one count sought a declaratory judgment regarding the arbitration agreement. On December 5, 1996, Anderson Brothers filed a motion to stay proceedings and to compel arbitration of all claims stated in Hadley's complaint. On December 17, 1996, Hadley filed her response opposing Anderson Brothers' motion. Subsequently, Hadley filed a motion to stay arbitration.

On March 5, 1997, the trial court denied Anderson Brothers' motion to stay proceedings and to compel arbitration. In the same order, the trial court granted Hadley's motion to stay arbitration, for the reasons enumerated in Count IV, Paragraph 6(c), of the complaint. On April 3, 1997, Anderson Brothers sought permission to appeal, pursuant to Ala.R.App.P. 5, and we granted that permission.

The arbitration agreement provides:

"Buyer/lessee acknowledges and agrees that the vehicle purchased or leased herein has traveled in interstate commerce. Buyer/lessee thus acknowledges that the vehicle and other aspects of the sale, lease or financing transaction are involved in, affect, or have a direct impact upon, interstate commerce.

"Buyer/lessee and dealer agree that all claims, demands, disputes, or controversies of every kind or nature that may arise between them concerning any of the negotiations leading to the sale, lease or financing of the vehicle, terms and provisions of the sale, lease or financing agreement, arrangements for financing, purchase of insurance, purchase of extended warranties or service contracts, the performance or condition of the vehicle, or any other aspects of the vehicle, its sale, lease or financing, shall be settled by binding arbitration conducted pursuant to the provision of 9 U.S.C. Section 1 et seq. and according to the Commercial Rules of the American Arbitration Association. Without limiting the generality of the foregoing, it is the intention of the buyer/lessee and the dealer to resolve by binding arbitration all disputes between them concerning the vehicle, its sale, lease or financing, and its condition, including disputes concerning the terms and conditions of the sale, lease or financing, the condition of the vehicle, any damage to the vehicle, the terms and meaning of any of the documents signed or given in connection with the sale, lease or financing, any representations, promises or omissions made in connection with negotiations for the sale, lease or financing of the vehicle, or any terms, conditions, or representations made in connection with the financing, credit life insurance, disability insurance, and vehicle extended warranty or service contract purchased or obtained in connection with the vehicle.

"Either party may demand arbitration by filing with the American Arbitration Association a written demand for arbitration along with a statement of the matter in controversy. A copy of the demand for arbitration shall simultaneously be served upon the other party. The buyer/lessee and the dealer agree that the arbitration proceedings to resolve all such disputes shall be conducted in the city where dealer's facility is located.

"1993 Chevrolet Cavalier

"Vehicle Description

"IGIJC144XP7341690

"Vehicle Identification Number

"Anderson Bros CPD

"Seller(s)/Lessor(s)

"Glarin Hadley

"Buyer(s)/Lessee(s)

"1"3"96

"Date"

(Emphasis added.)

The primary issue before this Court is whether the fact that the name "Anderson Bros CPD" appears on the signature line on the arbitration agreement, but appears there without the signature of a designated agent of Anderson Brothers, renders the arbitration agreement unenforceable. Specifically, Hadley argued that the arbitration agreement is void and unenforceable; the trial court agreed, stating the following in its order of March 5, 1997 "[T]he agreement appears to be unilateral in nature, in that only the Plaintiff executed it, whereas the corporate Defendant did not execute the agreement and therefore, if the Plaintiff were to attempt to enforce the alleged contract against the Defendant, the Defendant would have a legal basis for not complying with the arbitration agreement because it did not execute it agreeing to be legally bound by it."

Hadley asserts that the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1-16 provides that arbitration agreements are judicially enforceable, except upon such grounds as exist at law or equity for the revocation of any contract 9 U.S.C. § 2 (1994); Ex parte Williams, 686 So.2d 1110 (Ala.1996). However, Anderson Brothers asserts that Hadley's claim that the arbitration agreement is void and unenforceable is without merit; it contends that the agreement is within the scope of agreements encompassed by the FAA. Therefore, Anderson Brothers argues, Hadley should be compelled to arbitrate any and all claims, demands, disputes, and controversies between Hadley and Anderson Brothers, including the issue Hadley has raised in this Court.

I.

We first determine whether the trial court properly found the arbitration agreement to be unilateral in nature and unenforceable. The question is whether Anderson Brothers would be bound by the arbitration agreement, given that it was not signed by a designated agent of Anderson Brothers and that the language contained in the body of the agreement refers to it as the "dealer," whereas, the signature line identifies it as...