Dan Wachtel Ford, Lincoln, Mercury, Inc. v. Modas

• Decision Date: 09 April 2004
• Citation: 891 So.2d 287
• Parties: DAN WACHTEL FORD, LINCOLN, MERCURY, INC. v. Tania MODAS.
• Court: Alabama Supreme Court

891 So.2d 287

DAN WACHTEL FORD, LINCOLN, MERCURY, INC. v. Tania MODAS.

1022087.

Supreme Court of Alabama.

April 9, 2004.

John Martin Galese, Jeffrey L. Ingram, and J. Todd Miner of Galese & Ingram, P.C., Birmingham, for appellant.

Terry B. Rochester of Harold G. Peck & Associates, Florence, for appellee.

STUART, Justice.

Dan Wachtel Ford, Lincoln, Mercury, Inc., the defendant in an action pending in the Limestone Circuit Court, appeals from the denial of its motion to compel Tania Modas to arbitrate her claims against it. We reverse and remand.

Facts

On October 4, 2001, Tania Modas entered into a contract to purchase a 1999 Ford Explorer sport-utility vehicle from Dan Wachtel Ford. She traded in her 1999 Mercury Cougar automobile and signed a retail installment contract that named Fairlane Credit, L.L.C., as the lienholder of the Explorer. She also signed a separate document entitled "Arbitration Agreement," a document entitled "Sold Vehicle" (referred to by the parties as a "delivery receipt"), and other documents necessary to complete the transaction (title applications, warranty disclosures, credit application, etc.). Modas left her Cougar with Dan Wachtel Ford and drove away from the dealership in the Ford Explorer.

According to Modas, Dan Wachtel Ford later contacted her to inform her that she needed to return to the dealership to complete more paperwork. On October 5, 2001, Modas returned to the dealership and signed another retail installment contract. This second retail installment contract included a $1,500 charge for an extended service plan and listed Ford Motor Credit Co. as the lienholder. Modas again left the dealership in the Ford Explorer.

Modas alleges that a month later she had not received a payment book from Ford Motor Credit and that she telephoned Ford Motor Credit inquiring where she should send her payments. She learned that Ford Motor Credit had declined her credit application and that her credit application had been returned to Dan Wachtel Ford.

Modas notified Dan Wachtel Ford that she had learned from Ford Motor Credit that her credit application had been denied; the dealership then attempted to sell Modas another vehicle, older than the Explorer, on which it believed she could obtain financing. Modas refused to accept the older vehicle and requested that Dan Wachtel Ford return the 1999 Cougar to her. According to Dan Wachtel Ford, Modas's Cougar had been sold. Modas then offered to make payments on the Explorer to Dan Wachtel Ford but Dan Wachtel Ford refused to accept those payments, claiming that the denial of her credit application had rendered the retail installment contract void. Modas insisted she would not return the Explorer until Dan Wachtel Ford returned her Cougar. Despite the intervention of Modas's attorney, Dan Wachtel Ford and Modas could not resolve this dispute.

Dan Wachtel Ford had the Explorer repossessed and initiated criminal charges against Modas for theft by deception. Modas was arrested in Lauderdale County and was transported to the Limestone County jail, where she was held until she could post bond. The Limestone Circuit Court eventually nol-prossed the criminal charges against Modas.

On May 21, 2003, Modas sued Dan Wachtel Ford in the Lauderdale Circuit Court. In her complaint, she alleged conversion of her 1999 Cougar, trespass to her personal property, malicious prosecution, and abuse of process. On June 6, 2003, Dan Wachtel Ford filed a motion to transfer the action to the Limestone Circuit Court and a motion to compel arbitration of Modas's claims. The motion to transfer was granted.

In support of its motion to compel arbitration, Dan Wachtel Ford asserted that the transaction underlying the dispute involves interstate commerce. The president of the dealership filed an affidavit in which he attested to the effects an automobile business like Dan Wachtel Ford has on interstate commerce. In its motion to compel, Dan Wachtel Ford also asserted that as part of the transaction underlying the dispute the parties signed a stand-alone arbitration agreement and that the claims asserted by Modas fall within the scope of that arbitration agreement.

Modas opposed the motion to compel arbitration. She argued that Dan Wachtel Ford had not established the existence of a contract between the parties because, she argues, the documents she signed as part of the purchase provided that the contract would be void if Dan Wachtel Ford could not obtain financing for her purchase. In support of her argument, Modas relied upon the express language of the retail buyer's order, the retail installment contract, and the delivery receipt. She also argued that even if the stand-alone arbitration agreement were binding, her claims fell outside the scope of that agreement. Finally, Modas argued that Dan Wachtel Ford had not met its burden of proving that the transaction affected interstate commerce.

On August 11, 2003, the trial court denied Dan Wachtel Ford's motion to compel arbitration by a notation on the case action summary. The trial court stated no reasons for its order.

Dan Wachtel Ford appeals from the trial court's August 11, 2003, order, asserting the following:

"I. The transaction at issue does substantially affect interstate commerce.

II. Valid contracts exist between [Modas] and Dan Wachtel [Ford].

"III. The language of the Arbitration Agreement at issue is sufficiently broad in scope to cover [Modas's] claims.

"IV. An arbitrator should interpret the application of the language `null and void' as provided in one of the contracts at issue."

(Appellant's Brief at p. viii.)

Standard of Review

"This Court reviews de novo the denial [or the grant] 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. `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.' Jim Burke Automotive, Inc. v. Beavers, 674 So.2d 1260, 1265 n. 1 (Ala.1995) (opinion on application for rehearing)."

Fleetwood Enters., Inc. v. Bruno, 784 So.2d 277, 280 (Ala.2000) (emphasis omitted).

Discussion

We must address whether Dan Wachtel Ford met its burden in establishing the existence of a contract calling for arbitration and proving that the contract evidences a transaction affecting interstate commerce.

I. The Existence of a Contract Calling for Arbitration

We note that Modas signed several documents as part of her purchase of the Explorer from Dan Wachtel Ford. We construe all of those documents as a single contract. See ANCO TV Cable Co. v. Vista Communications Ltd. P'ship I, 631 So.2d 860 (Ala.1993) (where more than one writing is involved in a single transaction, the court interprets the writings together); Pacific Enters. Oil Co. (USA) v. Howell Petroleum Corp., 614 So.2d 409 (Ala.1993) (two or more instruments executed contemporaneously by the same parties in reference to the same subject matter constitute one contract and should be read together in construing the contract).

Here, the retail buyer's order, the retail installment contract, the delivery receipt, and the arbitration agreement all constitute one contract. The retail buyer's order states:

"This order shall not become binding until accepted by dealer or its authorized representative and in the event of a time sale dealer shall not be obligated to sell until approval of the terms hereof is given by a bank or finance company willing to purchase a retail installment contract between the parties. . . ."

That document also provided that "any dispute arising of [sic] the contracts entered into by the parties of and concerning the within described motor vehicle" shall be submitted to arbitration.

The retail installment contract signed by Modas as a part of the transaction stated:

"You the Buyer ... may buy the vehicle described below for cash or on credit.... By signing this contract, you choose to buy the vehicle on credit under the agreements on the front and back of this contract."

Additionally, the delivery receipt executed as a part of the transaction provides:

"If a retail installment contract is executed as a part of this sales transaction, then buyer and seller intend that this contract be assigned by seller. In the event seller is unable to assign this contract within 3 days of the date hereof, this contract shall be null and void and Buyer, immediately upon notice by Seller, shall do one of the following: 1. Purchase the vehicle from Seller for the cash price thereof set forth therein; or 2. Return the vehicle described herein to seller and pay to Seller the cost of repair or any damage occurring to the vehicle while in the Buyer's possession."

Finally, the parties executed a stand-alone arbitration agreement, which provided:

"In connection with the undersigned's acquisition of the below described motor vehicle by lease, purchase or otherwise, on or about the date shown below, the undersigned and the Dealer mutually covenant, stipulate and agree, in connection with the resolution of any dispute arising out of or relating to or concerning all of the contracts and agreements entered into by the parties of and concerning the below described motor vehicle, and business relationships resulting therefrom, as follows:.... The undersigned agree that all disputes not barred by the applicable statute of limitations, whether denominated as a claim, counter-claim, cross-claim or third-party claim, resulting from or arising out of or relating to or concerning the

...