Ex parte Conference America, Inc.

Citation713 So.2d 953
PartiesEx parte CONFERENCE AMERICA, INC., an Alabama corporation. (Re CONFERENCE AMERICA, INC., an Alabama corporation v. NCI INFORMATION SYSTEMS, INC., a foreign corporation; and James U. Tindell). 1961750.
Decision Date24 April 1998
CourtSupreme Court of Alabama

James M. Sizemore, Jr., Montgomery, for petitioner.

Julian L. McPhillips, Jr., and Kenneth Shinbaum of McPhillips, Shinbaum, Gill & Stoner, Montgomery, for respondents.

SEE, Justice.

Conference America, Inc., petitions for a writ of mandamus directing the trial court to vacate its order compelling arbitration of its claims against NCI Information Systems, Inc., and its employee, James Tindell (collectively, "NCI"). Conference America maintains that arbitration is inappropriate because its claims, though related to a prior contract that did contain an arbitration clause, directly arise from a subsequent contract that did not contain an arbitration clause. The subsequent contract clearly stated that it constituted the "entire agreement" between the parties. We grant the petition.

I.

In February 1996, Conference America entered into its first contract with NCI (the "February Contract"). The February Contract provided that NCI was to perform a detailed analysis of Conference America's business and to develop and present to Conference America a "System Engineering Design" plan and a "Software Developmental Plan" (collectively, the "Plans"), for $8,190. The February Contract included an arbitration clause, which stated:

"[A]ll claims, disputes, controversies and other matters in question between the parties arising from or relating to this Agreement, which cannot be resolved through consultation and negotiation, shall be settled by binding arbitration in accordance with the Rules of the American Arbitration Association in effect at the time arbitration is demanded."

(Emphasis added.) NCI completed the February Contract to Conference America's satisfaction, and Conference America paid NCI in full.

In April 1996, after NCI had completed its analysis of Conference America's business and had developed the Plans, Conference America entered into a second contract with NCI (the "April Contract"), in the form of a purchase order. 1 The April Contract was separate and distinct from the February Contract; it provided that NCI would perform the extensive work necessary to implement the Plans, in exchange for $223,210. Each of the Plans was expressly incorporated into the April Contract. The April Contract did not include an arbitration clause. It did, however, include an "entire agreement" clause, which provided in pertinent part:

"Acceptance of this purchase order shall be unqualified, unconditional and subject to and expressly limited to the terms and conditions hereon. We shall not be bound by additional provisions at variance herewith that may appear in your quotation, acknowledgement, invoice or any other communication from you to us unless such a provision is expressly agreed to in a writing signed by us. Our acceptance or payment for material shipped shall constitute acceptance of such material subject to the provisions herein, only, and shall not constitute acceptance of any counterproposal submitted by you not otherwise accepted in a writing signed by us. Upon acceptance this purchase order shall constitute the entire agreement between us and may not be modified or rescinded except by a writing signed by both of us."

(Emphasis added.) NCI did not complete the April Contract to the satisfaction of Conference America, and Conference America did not pay NCI in full for the implementation of the Plans.

In December 1996, Conference America sued NCI, alleging breach of contract and fraud. Specifically, Conference America alleged that NCI had failed to properly implement the Plans and that NCI had misrepresented to Conference America that NCI had the staff expertise to perform the April Contract. The trial court granted NCI's motion to stay the proceeding and compel arbitration. Conference America filed this mandamus petition.

II.

A writ of mandamus is an extraordinary remedy, requiring the showing of: (1) a clear legal right in the petitioner to the order sought; (2) an imperative duty on the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) the properly invoked jurisdiction of the court. Ex parte Edgar, 543 So.2d 682, 684 (Ala.1989). Mandamus relief is appropriate when a party has been compelled to arbitrate a claim it did not agree to arbitrate. 2

Section 2 of the Federal Arbitration Act provides in pertinent part:

"A written provision in any ... 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 (emphasis added). Accordingly, federal law mandates the arbitration of claims encompassed by an arbitration clause that is contained in a binding contract that involves interstate commerce. AT & T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643, 649, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986). Although federal policy favors arbitration, that policy cannot operate without regard to the wishes of the parties as expressed in the terms of the contract. Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 56, 115 S.Ct. 1212, 131 L.Ed.2d 76 (1995).

The terms of the February Contract prove that the parties intended to arbitrate "all claims ... arising from or relating to this Agreement." (Emphasis added.) Were this the only language before us, we would have little difficulty concluding that Conference America's claims would be subject to arbitration. Conference America's claims concern the proper implementation of the Plans that NCI produced pursuant to the February Contract. Thus, the subject matter of Conference America's claims concerning the implementation of the Plans clearly "relates to" the February Contract under which NCI produced those Plans. See Reynolds & Reynolds Co. v. King Automobiles, Inc., 689 So.2d 1, 3-4 (Ala.1996) (stating that an "arbitration clause that applies to claims 'arising out of or relating to ' the contract ... has a broader application than an arbitration clause that refers only to claims 'arising from' the agreement"); see generally Ex parte Gates, 675 So.2d 371, 374 (Ala.1996) (stating that an arbitration clause including the phrase "all disputes ... arising from or relating to this contract" is very broad).

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