Ex parte Majors
| Decision Date | 15 February 2002 |
| Citation | 827 So.2d 85 |
| Parties | Ex parte Ricky Earl MAJORS. (In re Ricky Earl Majors v. Jon Ellen Nix et al.) |
| Court | Alabama Supreme Court |
Donna J. Beaulieu, Saginaw, for petitioner.
A. Joe Peddy and Clair M. Gammill of Smith, Spires & Peddy, P.C., Birmingham, for respondents.
Ricky Earl Majors, the plaintiff in an action pending in the Circuit Court of Shelby County, petitions this Court for a writ of mandamus directing the trial judge to whom Majors's case is assigned to vacate his order granting a motion to compel arbitration filed by Jon Ellen Nix, Jean Webb, and SouthTrust Bank (hereinafter collectively referred to as "the defendants").1 We grant the petition for the writ of mandamus.
On October 2, 2000, Majors sued the defendants. Majors's complaint alleged (1) that Nix and Webb, as employees of SouthTrust Bank, engaged in, assisted with, or supervised loan transactions made by his wife, Donna Patricia Majors,2 also a bank employee, that created a debt in his name without his knowledge, consent, or authorization; (2) that Nix and Webb knew or should have known that his wife had wrongfully signed his name to the loan documents and that they wrongfully witnessed and notarized those documents, stating that they had witnessed his signing those documents when they had not; (3) that Nix and Webb had conspired with his wife, intentionally defrauded him of credit, assisted in the wrongful creation of debt in his name, wrongfully assisted his wife in obtaining money in his name, and hid or assisted in hiding bank transactions from him or in misrepresenting bank transactions to him; and (4) that SouthTrust Bank should have known about Nix's and Webb's actions, which were against bank policy and procedure, that the bank had failed to protect him from these actions, and was liable for the negligent and fraudulent actions of Nix and Webb.3 The transactions from which Majors's complaint arose involved a home-equity line of credit and a promissory note secured by a certificate of deposit.
On December 20, 2000, the defendants filed a motion to dismiss or, in the alternative, to stay the action and compel arbitration. In their motion they argued, among other things, that the documents evidencing the loans contained arbitration clauses that required that this dispute be arbitrated pursuant to the rules of the American Arbitration Association. The motion attached as exhibits copies of documents evidencing a "Home Equity Loan Line Agreement, Note & Disclosure" secured by a home mortgage, all relating to an April 13, 1998, home-equity loan by SouthTrust Bank, and a promissory note, secured by an assignment of a certificate of deposit, relating to a December 10, 1999, loan by SouthTrust Bank. These exhibits constituted the loan documents that were the basis of Majors's complaint. The motion also attached an affidavit of Donna Majors and portions of transcribed testimony taken at Majors's deposition.
On February 1, 2001, Majors filed a motion in opposition to the defendants' motion. He argued that he had not knowingly entered into the contracts in question, evidenced by the loan documents, because he had not signed any of the documents relating to the December 10, 1999, promissory-note transaction, claiming that his wife or some other person had signed for him, and because, if his signature did appear on certain documents relating to the April 13, 1998, home-equity-line-of-credit transaction, he had signed them only as a result of his wife's representations that the documents were credit applications. He further contended that Nix and Webb had wrongfully acknowledged his signing the home-equity-line-of-credit documents in their presence, when he had not. He argued that a party cannot be required to submit to arbitration any dispute he has not agreed to submit, citing Allstar Homes, Inc. v. Waters, 711 So.2d 924 (Ala.1997), and American Bankers Life Assurance Co. v. Rice Acceptance Co., 739 So.2d 1082 (Ala.1999), and that a signatory to a contract containing an arbitration clause cannot compel a nonsignatory spouse to arbitrate, citing Ex parte Dickinson, 711 So.2d 984 (Ala. 1998)(four Justices concurring in the lead opinion, one Justice concurring in the result, and four Justices dissenting on this point)(rule stated by lead opinion later adopted by this Court in Tom Williams Motors v. Thompson, 726 So.2d 607 (Ala. 1998)). Majors attached his own affidavit and portions of transcribed testimony taken at Nix's deposition as exhibits to his motion in opposition.
The trial court heard arguments on the parties' motions on February 7, 2001, and March 7, 2001. On June 28, 2001, the trial court entered an order that, in pertinent part, stated:
"The Motion to Stay and Compel Arbitration which has been filed by the defendants Jon Ellen Nix, Jean Webb, and SouthTrust Bank is GRANTED, and the parties shall arbitrate the plaintiff's pending claims against said defendants pursuant to the applicable arbitration agreements; all proceedings against said defendants in this pending case in the Circuit Court of Shelby County, Alabama, are STAYED, pending the conclusion of the arbitration."
This Court's standard of review applicable to a petition for the writ of mandamus is well settled:
Ex parte Empire Fire & Marine Ins. Co., 720 So.2d 893, 894 (Ala.1998). Furthermore, "[t]his Court has held that when the issue raised in a petition for the writ of mandamus is the correctness of a ruling on the question of arbitrability, that ruling is reviewed de novo." Ex parte Stamey, 776 So.2d 85, 88 (Ala.2000)(citing Ex parte Roberson, 749 So.2d 441, 446 (Ala.1999)).
Majors argues that the arbitration clauses contained in the loan documents should not operate to compel him to arbitrate his claims because, he says, the underlying contracts are void. He asserts that he did not sign the documents relating to the 1999 promissory note, including the note itself; he further asserts that if he did sign certain documents relating to the 1998 home-equity line of credit, he did so only through his wife's misrepresenting them as being mere credit applications. Thus, the gist of Majors's argument is that if he signed certain home-equity-line-of-credit documents, he did so only as a result of his wife's fraudulent inducement, and that any signatures purporting to be his on the promissory-note documents are forgeries. In its response to Majors's petition, filed with this Court, the defendants acknowledge that the December 10, 1999, "promissory note admittedly was signed by Mrs. Majors on behalf of her husband."
We cannot determine from the order entered by the trial court if it made any initial findings as to whether the underlying contracts were valid or whether Majors's claims were arbitrable. The arbitration clause contained in one of the homeequity-line-of-credit documents stated, in pertinent part:
The arbitration clause contained in the promissory note stated similarly, in pertinent part:
While this Court has held similar language to be sufficiently broad to allow an arbitrator to decide the issue of arbitrability, see, e.g., Green Tree Financial Corp. v. Wampler, 749 So.2d 409 (Ala.1999), nothing in the trial court's order suggests that it made this initial finding or that it determined whether the contracts at issue were valid. See Alabama Catalog Sales v. Harris, 794 So.2d 312, 317 (Ala.2000)("if the contracts are void and unenforceable, no claims arising out of or relating to the contracts are subject to arbitration")(citing Shearson Lehman Bros., Inc. v. Crisp, 646 So.2d 613 (Ala.1994); Interocean Shipping Co. v. National Shipping & Trading Corp., 462 F.2d 673 (2d Cir.1972); and Camaro Trading Co. v. Nissei Sangyo America, Ltd., 577 So.2d 1274 (Ala.1991)).
In Ex parte Meadows, 782 So.2d 277 (Ala.2000), the plaintiff in an action against the manufacturer, dealer, and lender involved in his purchase of a mobile home for breach of warranty, breach of contract, and fraud, sought a writ of mandamus directing the trial court to vacate its order granting the defendants' motion, to compel arbitration. The plaintiff claimed that his signature on the documents containing the arbitration clause was a forgery. This Court granted the writ, explaining its rationale by setting forth the following statements of applicable legal principles:
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