Edwards v. Costner, 1060099.

CourtSupreme Court of Alabama
Writing for the CourtCobb
Citation979 So.2d 757
PartiesHoyt Randall EDWARDS, Jr., and Edwards Motors, Inc. v. Mark Wayne COSTNER and Matthew W. Kimbril.
Docket Number1060099.
Decision Date17 August 2007
979 So.2d 757
Hoyt Randall EDWARDS, Jr., and Edwards Motors, Inc.
Mark Wayne COSTNER and Matthew W. Kimbril.
Supreme Court of Alabama.
August 17, 2007.

[979 So.2d 758]

M. Andrew Donaldson and Mindi C. Robinson of Slaten & O'Connor, P.C., Montgomery, for appellants.

Joshua L. Firth and Steven W. Couch of Hollis & Wright, Birmingham, for appellees.

COBB, Chief Justice.

Hoyt Randall Edwards, Jr., and Edwards Motors, Inc., appeal the Etowah Circuit Court's denial of their motion to compel arbitration of claims brought against them by Mark Wayne Costner and Matthew W. Kimbril. We affirm in part, reverse in part, and remand.

I. Background

On November 23, 2004, Kimbril purchased a 1993 Ford Probe GT automobile from Edwards Motors.1 In conjunction with Kimbril's purchase of the Ford Probe, Edwards Motors and Kimbril entered into a predispute arbitration agreement, which provided:

"In connection with the undersigned's acquisition or attempted acquisition of the below described vehicle, by lease, purchase or otherwise, the undersigned and [Edwards Motors] stipulate and agree, in connection with the resolution of any dispute arising out of, relating to, resulting from or concerning all alleged representations, promises and covenants, and arising out of, relating to, resulting from or concerning the contract(s) and agreements entered into by the parties and relationships resulting therefrom as follows: That the manufacture, transportation, sale and use of the

979 So.2d 759

below described vehicle is regulated by laws of the United States of America: and, that the contract(s) and agreements entered into by the parties concerning said vehicle evidence transactions substantially involving and affecting interstate commerce sufficiently to invoke the application of the Federal Arbitration Act, 9 U.S.C. § 1, et seq. The undersigned agree that all disputes not barred by applicable statutes of limitations, resulting from or arising out of or relating to or concerning the transaction entered into or sought to be entered into (including but not limited to: any matters taking place either before or after the parties entered into this agreement, including any prior agreements or negotiations between the parties; the terms of this agreement and all clauses herein contained, their breadth and scope, and any term of any agreement contemporaneously entered into by the parties; the past, present and future condition of the vehicle at issue; the conformity of the vehicle to any contract description; the representations, promises, undertakings, warranties or covenants made by [Edwards Motors], or otherwise dealing with the vehicle; any lease terms or the terms of credit and/or financing in connection therewith; any terms or provisions of any insurance sought to be purchased or purchased simultaneously herewith; any terms or provisions of any extended service contract sought to be purchased or purchased simultaneously herewith; and all claims or disputes as to any body and/or mechanical repair heretofore made, now or hereafter made to the vehicle) shall be submitted to BINDING ARBITRATION, pursuant to the provisions of 9 U.S.C. § 1, et seq., and according to the Commercial Dispute Resolution Procedures and/or Consumer Protocol (depending on the amount in controversy) of the American Arbitration Association (the AAA) then existing in the County where [Edwards Motors] maintains its principal place of business, except as follows: (a) In all disputes in which the matter in controversy (including compensatory and punitive damages and fees and costs) is more than $10,000 but less than $75.000.00, the parties shall arbitrate in accordance with the AAA's Consumer Protocol. In all disputes in which the matter in controversy (including compensatory and punitive damages and fees and costs) is $75,000.00 or more, [Edwards Motors] and the customers shall select one arbitrator from a list of at least 5 suitable arbitrators supplied by the AAA in accordance with and utilizing the AAA strike method. (b) An arbitrator so selected shall be empowered to enter an award of such damages, fees and costs, and grant such other relief, as said arbitrator or arbitrators deem[ ] just and proper. Any party to this agreement who fails or refuses to arbitrate in accordance with the terms of this agreement shall, in addition to any other relief awarded, be taxed by the arbitrator or arbitrators with the costs, including reasonable attorney's fees, of any other party who had to resort to judicial or other relief in compelling arbitration. In the event [Edwards Motors] and the undersigned have entered into more than one arbitration agreement concerning any of the matters identified herein, the undersigned and [Edwards Motors] agree that the terms of this arbitration agreement shall control disputes between them. Any provision in this Agreement found to be in conflict with any procedure promulgated by the AAA which shall affect its administration of disputes hereunder shall be considered severed herefrom. With respect to the process of arbitration under the AAA Commercial Rules or Consumer Protocol,

979 So.2d 760

the undersigned and [Edwards Motors] expressly recognize that the rules and protocol and the terms of this agreement adequately protect their abilities to fully and reasonably pursue their respective statutory and other legal rights. NOTE: This agreement is not intended to require arbitration of disputes brought by any party to this agreement in the state district courts of Alabama, provided that the relief sought therein or as a result thereof, including compensation and punitive damages and fees and costs, does not exceed $10.000.00. The parties stipulate that either party's participation in proceedings in Alabama state district courts shall not operate as a waiver of any right to compel binding arbitration upon appeal from said district courts. This agreement shall survive any termination, cancellation, fulfillment or non-fulfillment of any other contract, covenant or agreement related to the vehicle described below, including, but not limited to cancellation due to lack of acceptable financing or funding of any retail installment contract or lease. Any provision herein found to adversely affect the enforcement of this agreement shall be considered severed from the remaining provisions herein, provided that such severance does not prevent the arbitration of the disputes described herein. Further information about arbitration can he obtained directly from the AAA, Atlanta, Georgia, by calling the AAA at 404/___-___ or from a review of AAA's Commercial Dispute Resolution Procedures and Consumer Protocol, a copy of which is available without charge for review from the AAA. THE UNDERSIGNED HAVE AGREED TO WAIVE THE UNDERSIGNED['S] RIGHT TO A TRIAL BY JUDGE OR JURY IN ALL DISPUTES OVER $10,000.00 AND THAT ARBITRATION SHALL BE IN LIEU OF ANY CIVIL LITIGATION IN ANY COURT AND IN LIEU OF ANY TRIAL BY JUDGE OR JURY FOR ALL CLAIMS OVER $10,000.00. THE TERMS OF THIS AGREEMENT AFFECT YOUR LEGAL RIGHTS. IF YOU DO NOT UNDERSTAND ANY PROVISION OF THIS AGREEMENT OR THE COSTS, ADVANTAGES OR DISADVANTAGES OF ARBITRATION, SEEK INDEPENDENT ADVICE AND/OR REVIEW THE WRITTEN CONSUMER AND/OR COMMERCIAL DISPUTE RESOLUTION PROCEDURES AND PROTOCOLS AND/OR CONTACT THE AAA AT THE TELEPHONE NUMBER SHOWN ABOVE BEFORE SIGNING. BY SIGNING YOU ACKNOWLEDGE THAT YOU HAVE READ, UNDERSTAND AND AGREE TO BE BOUND BY EACH OF THE PROVISIONS, COVENANTS, STIPULATIONS AND AGREEMENTS SET FORTH AND REFERENCED HEREINABOVE."

(Capitalization in original.) The agreement was signed by Kimbril and a representative of Edwards Motors.

On November 26, 2004, the brakes on the Ford Probe purportedly failed while Costner was driving, causing the Probe to run into a brick wall. Kimbril was a passenger in the vehicle. Both Costner and Kimbril were injured as a result of the accident. Costner and Kimbril sued Edwards and Edwards Motors, alleging that the brakes had not been repaired before Kimbril purchased the vehicle, that Edwards and Edwards Motors had fraudulently misrepresented to Kimbril that the brakes had been repaired or replaced, that Edwards Motors had breached the terms of the sales contract by not replacing the brakes, and that Edwards and Edwards Motors had failed to warn Kimbril that the

979 So.2d 761

brakes were not working properly and that the brakes had not been replaced or repaired. Costner and Edwards sought a judgment in a sum in excess of the exclusive jurisdictional limits of the circuit court, i.e., $10,000. See § 12-11-30(1), Ala.Code 1975. Edwards and Edwards Motors moved the trial court to compel arbitration and to stay the proceedings pending arbitration; the trial court denied the motion. Edwards and Edwards Motors appealed.

II. Standard of Review

We review de novo the trial court's grant or denial of a motion to compel arbitration. Bowen v. Security Pest Control, Inc., 879 So.2d 1139, 1141 (Ala. 2003). Initially, 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 involving interstate commerce. Polaris Sales, Inc. v. Heritage Imports, Inc., 879 So.2d 1129, 1132 (Ala. 2003). The moving party "must `"produce some evidence which tends to establish its claim."'" Wolff...

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