Bowen v. Security Pest Control, Inc.

• Court: Supreme Court of Alabama
• Writing for the Court: BROWN, Justice.
• Citation: 879 So.2d 1139
• Parties: Michael BOWEN and Britta Bowen v. SECURITY PEST CONTROL, INC.
• Decision Date: 03 October 2003

879 So.2d 1139

Michael BOWEN and Britta Bowen
v.
SECURITY PEST CONTROL, INC

1010783.

Supreme Court of Alabama.

October 3, 2003.

879 So.2d 1140

Donald R. Harrison, Dadeville, for appellants

M. Andrew Donaldson and Clifton E. Slaten of Crosslin, Slaten & O'Connor, P.C., Montgomery; and Paul M. James, Jr., of Rushton, Stakely, Johnston & Garrett, P.A., Montgomery, for appellee.

On Application for Rehearing

BROWN, Justice.

The opinion of February 28, 2003, is withdrawn, and the following is substituted therefor.

The plaintiffs, Michael Bowen and Britta Bowen, appeal from an order of the Tallapoosa Circuit Court compelling them to arbitrate their claims against the defendant Security Pest Control, Inc. ("SPC"). We affirm.

In April 1999, Michael Bowen entered into a contract with SPC pursuant to which SPC agreed to treat the Bowens' house for termites. The contract indicated that the cost of the treatment was $1,490, and it contained an arbitration provision, which states in its entirety:

"In the event of a dispute between [SPC] and/or its employees and Customer with respect to interpretation of the terms and conditions of this agreement, including the making of this agreement, or breach of any provision of this agreement, the parties hereby expressly agree to submit their dispute to binding arbitration for resolution in accordance with the rules and requirements of the American Arbitration Association. The parties acknowledge and understand that by agreeing to submit their dispute to binding arbitration they are effectively waiving their right to trial by jury as a means of resolving disputes. Furthermore, the parties acknowledge that they desire to arbitrate any dispute arising from this agreement in an effort to resolve such dispute(s) quickly and avoid the costs of litigation. The parties further agree that any arbitration proceedings shall take place in Alexander City, Alabama."

SPC treated the Bowens' house with a termiticide called "Navigator TC." The treatment process included boring holes under the Bowens' house with special drilling equipment.

In June 2000, the Bowens discovered that termites had damaged their house. Specifically, they allege that termites destroyed

879 So.2d 1141

approximately one-third of the entire structure of their house, and that it will cost $50,000 to repair the damage. In May 2001, the Bowens sued SPC, asserting numerous claims, including breach of contract, negligence, and fraud. In August 2001, SPC moved the trial court to compel arbitration. The trial court granted SPC's motion, and the Bowens appeal

Standard of Review

"`[T]he standard of review of a trial court's ruling on a motion to compel arbitration at the instance of either party is a de novo determination of whether the trial judge erred on a factual or legal issue to the substantial prejudice of the party seeking review.' Ex parte Roberson, 749 So.2d 441, 446 (Ala.1999). Furthermore:

"`A motion to compel arbitration is analogous to a motion for 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 that contract evidences a transaction affecting interstate commerce. Id. "After 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."'

"Fleetwood Enters., Inc. v. Bruno, 784 So.2d 277, 280 (Ala.2000) (quoting Jim Burke Auto., Inc. v. Beavers, 674 So.2d 1260, 1265 n. 1 (Ala.1995) (emphasis omitted))."

Vann v. First Cmty. Credit Corp., 834 So.2d 751, 752-53 (Ala.2002).

Discussion

The Federal Arbitration Act, 9 U.S.C. § 1 et seq. ("the FAA"), provides: "A written provision in . . . a contract evidencing a transaction involving interstate commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . shall be valid, irrevocable, and enforceable. . . ." 9 U.S.C. § 2. We have held that the FAA "mandates the arbitration of claims encompassed by an arbitration clause that is contained in a binding contract that involves interstate commerce." Ex parte Conference America, Inc., 713 So.2d 953, 955 (Ala.1998). Moreover, the FAA "provides for `the enforcement of arbitration agreements within the full reach of the Commerce Clause.'" Citizens Bank v. Alafabco, Inc., 539 U.S. 52, 56, 123 S.Ct. 2037, 2040, 156 L.Ed.2d 46 (2003)(quoting Perry v. Thomas, 482 U.S. 483, 490, 107 S.Ct. 2520, 96 L.Ed.2d 426 (1987)). The application of the FAA is not defeated if the individual transaction at issue, taken alone, does not have a substantial effect on interstate commerce. Citizens Bank, 539 U.S. at 56, 123 S.Ct. at 2040. Instead, "Congress' Commerce Clause power `may be exercised in individual cases without showing any specific effect upon interstate commerce' if in the aggregate the economic activity in question would represent `a general practice . . . subject to federal control.'" Id. (quoting Mandeville Island Farms, Inc. v. American Crystal Sugar Co., 334 U.S. 219, 236, 68 S.Ct. 996, 92 L.Ed. 1328 (1948)).

The Bowens argue that SPC failed to prove that the transaction in this case sufficiently affected interstate commerce. In Citizens Bank, an Alabama lending institution, Citizens Bank, agreed to provide operating capital to Alafabco, Inc., a construction company. 539 U.S. at 53, 123 S.Ct. at 2038. Alafabco subsequently began suffering financial difficulties, allegedly because of misconduct on Citizens Bank's...