Ex parte Allen
Decision Date | 20 April 2001 |
Citation | 798 So.2d 668 |
Parties | Ex parte Jim ALLEN and Sea Star, Inc. (Re Frank C. Hardigree and Camco, L.L.C. v. Sentell Engineering, Inc., et al.) Jim Allen and Sea Star, Inc. v. Frank C. Hardigree and Camco, L.L.C. |
Court | Alabama Supreme Court |
James H. Anderson and Micheal S. Jackson of Beers, Anderson, Jackson, Nelson, Hughes & Patty, P.C., Montgomery, for Jim Allen and Sea Star, Inc.
William D. Coleman and James N. Walter, Jr., of Capell & Howard, P.C., Montgomery, for Jim Allen.
Roger C. Foster of Rives & Peterson, P.C., Birmingham, for Sentell Engineering, Inc.
Thomas T. Gallion III and Jamie Austin Johnston of Haskell, Slaughter, Young & Gallion, L.L.C., Montgomery, for Frank C. Hardigree and Cameo, L.L.C.
These proceedings challenge orders of the Montgomery Circuit Court denying the motions of Jim Allen and Sea Star, Inc., (1) to transfer this action to Elmore County (case 1991656), and (2) to compel arbitration of the dispute (case 1991707). We reverse the order in case 1991707. In case 1991656, we deny the petition as moot.
This dispute arose out of the execution on August 11, 1997, of an "Agreement" by (1) Jim Allen, as President of Sea Star, Inc., (2) Frank C. Hardigree, personally, and (3) Frank C. Hardigree, as "managing member" of Cameo, L.L.C. ("Cameo"). The Agreement purported to govern the conduct of the parties in constructing and operating a "Golf and Country Club" of "resort quality" in the Emerald Mountain community of Elmore County ("the Project"). The Project was to include an "eighteen hole golf course, driving range,... putting green, ... a maintenance building and a golf cart storage building... a golf clubhouse, parking lot, and bar and grill." The clubhouse was to "include a pro shop, a minimum seventy-five seat bar and grill, approximately six thousand feet ... of above ground heated and cooled space and a parking lot," at a minimum cost of $500,000. The total cost of the Project was to exceed $3,500,000.
Sea Star agreed to convey to Cameo approximately 200 acres in "fee simple determinable" (the "Property") on which Cameo was to construct the Project. In consideration of this conveyance, Sea Star was to receive from Cameo or its successors (1) $1.00 at the time of closing, and (2) five percent "of all gross revenues ... from all activities conducted on the [p]roperty or originating from the ... Project... including ... all golf course activities, greens fees, pro shop sales and rentals, food and beverage sales and restaurant activities." This five-percent return was to "run with the Property" in perpetuity. In the event the Project ceased to operate and generate the five-percent fee, the Property was to revert to Sea Star in fee simple absolute.
For its part, Cameo agreed to "construct, maintain, operate and manage the Project to meet the standards of the top 5% (from a quality of maintenance, operations, landscaping, general appearance and management standpoint) of other golf and country clubs within a radius of one hundred (100) miles of the Property." Cameo "warrant[ed] ... that the [Project would] remain as a private club which permits the sale of private memberships but also remains open to the public on a priced daily fee basis." Cameo was to employ "Ward W. Northrup or a comparable golf course architect," to develop a "master plan and golf course general layout."
On October 31, 1997, the parties executed and recorded a warranty deed with various exhibits, containing the essential provisions of the Agreement. Thereafter, Cameo employed Sentell Engineering, Inc. ("Sentell"), to develop the Project, and construction began under the direction of Golf Engineering Group, Inc., a Florida company affiliated with Ward Northrup.
On June 17, 1999, the parties executed a "Release Agreement," which recited that Cameo was "approaching completion of the [Project contemplated] by the Agreement," and that questions had arisen as to whether Sea Star "and/or Allen [had] breached [their] obligations under the Agreement." The Release Agreement purported to release Sea Star and Allen from liability for any acts or omissions occurring before the date thereof.
The following day, the parties executed an instrument purporting to amend the Agreement. The amendment contained an arbitration clause that provided in pertinent part:
"Any dispute between the Parties hereto or between any of the Parties and any owner or affiliate of any other Party hereto with respect to the subject matter of this Agreement ... shall be submitted to mandatory, binding arbitration in accordance with the Rules of Procedure for Arbitration of [the] American Arbitration Association...."
Nevertheless, On October 22, 1999, Hardigree and Cameo filed a complaint in Montgomery Circuit Court against Sea Star, Allen, and Sentell. On November 29, 1999, Allen, Sea Star, and Sentell moved to transfer the cause to Elmore County. On January 7, 2000, the trial court denied their motion, stating no reasons for its order.
On January 24, 2000, Allen and Sea Star moved to compel arbitration of the dispute, and, contemporaneously, filed with the American Arbitration Association a demand for arbitration. On April 21, 2000, the trial court denied their motion to compel arbitration.
On June 1, 2000, Allen and Sea Star petitioned this Court for a writ of mandamus directing the trial court to vacate its order denying their motion to transfer the cause to Elmore County (case 1991656). Also, on June 1, 2000, Allen and Sea Star appealed from the order of the trial court denying their motion to compel arbitration (case 1991707). Because disposition of the appeal resolves the arguments raised in the mandamus petition, we shall first address the appeal.
"This Court reviews de novo the denial of a motion to compel arbitration." Fleetwood Enters., Inc. v. Bruno, 784 So.2d 277 (Ala.2000). Allen and Sea Star contend that the Federal Arbitration Act, 9 U.S.C. § 1 et seq., controls this case and requires the arbitration of this dispute. They are correct "if (1) there is a written agreement calling for arbitration, ... and (2) the contract containing the arbitration agreement `substantially affects interstate commerce.'" Marshall Durbin Farms, Inc. v. Fuller, 794 So.2d 320, 323 (Ala. 2000). "A motion to compel arbitration is analogous to a motion for a summary judgment." Ex parte Caver, 742 So.2d 168, 172 n. 4 (Ala.1999). Therefore, "[t]he party seeking to compel arbitration has the burden of proving the existence" of these two elements. Id.
"`[A]fter a motion to compel arbitration has been made and supported, the burden [shifts to] 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., 784 So.2d at 280, quoting Jim Burke Automotive, Inc. v. Beavers, 674 So.2d 1260, 1265 n. 1 (Ala.1995) (emphasis omitted).
It is undisputed that the claims of Hardigree and Cameo against Allen and Sea Star are within the scope of the arbitration provision. Hardigree and Cameo, however, contend that the transaction does not substantially affect interstate commerce. The record contains the affidavit of Jim Allen, which states in pertinent part:
Hardigree and Cameo do not refute the factual assertions in Allen's affidavit. The affidavit, coupled with the unavoidable inferences suggested by the Agreement itself, compels the conclusion that this transaction substantially affects interstate commerce.
This arbitration clause was contained in an amendment to an overarching...
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