Ex parte Martin
| Citation | 703 So.2d 883 |
| Parties | Ex parte Barbara MARTIN and George Martin. (In re Barbara MARTIN and George Martin v. SOUTHERN ENERGY HOMES, INC., et al.). 1951420. |
| Decision Date | 08 November 1996 |
| Court | Supreme Court of Alabama |
Richard Horsley of Dillard, Goozee & King, Birmingham, for petitioners.
John Martin Galese and Jeffrey L. Ingram of John Martin Galese, P.A., Birmingham, for Southern Energy Homes, Inc.
The plaintiffs, George and Barbara Martin, petition for a writ of mandamus directing the Circuit Court of Shelby County to vacate its order granting the motion of Southern Energy Homes, Inc., to compel arbitration and to stay proceedings pending arbitration of the plaintiffs' claims against that defendant.
The Martins sued Blue Ribbon Homes, Inc., doing business as Oak Tree Mobile Homes, and its agent David Walters, alleging fraud, negligence, wantonness, breach of contract, and breach of warranty, all arising from their purchase of a mobile home from Blue Ribbon Homes. The Martins also sued Southern Energy Homes, Inc., the manufacturer of the mobile home, alleging that it had breached the limited warranty it issued on the mobile home. In its answer to the complaint, Southern Energy Homes stated that it was not "in privity with" the contract under which the Martins purchased the mobile home from Blue Ribbon Homes, and it initiated discovery.
Shortly thereafter, however, Blue Ribbon Homes and Walters moved to compel arbitration of the Martins' claims, pursuant to an arbitration agreement contained within the contract for the purchase of the mobile home. Although it was admittedly not a party to this contract, Southern Energy Homes also moved to compel arbitration pursuant to the arbitration clause. The trial court subsequently granted all of the defendants' motions for arbitration. The plaintiffs' petition here relates only to the granting of Southern Energy Homes' motion to compel arbitration.
A writ of mandamus is an extraordinary remedy and requires a showing that there is (1) a clear legal right in the petitioner to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) properly invoked jurisdiction of the court. Ex parte Edgar, 543 So.2d 682 (Ala.1989). We note that the last two requirements have been met from the outset; a petition for a writ of mandamus is the proper means to challenge a trial court's order granting a motion to compel arbitration. Ex parte Phelps, 672 So.2d 790 (Ala.1995).
The Martins negotiated with Blue Ribbon Homes' agent, David Walters, for the purchase of a mobile home. They signed a contract that included a document entitled "Arbitration Agreement between Blue Ribbon Homes, Inc. and (Purchaser)." The document was dated "6-23-95" and the names "George and Barbara P. Martin" were written in, to indicate that they were the purchasers. The agreement then stated, in pertinent part:
(Emphasis added.) With their mobile home, the Martins received from Southern Energy Homes a written limited warranty, which expressly stated in boldface:
(Emphasis added.) This warranty did not refer to the agreement between the Martins and Blue Ribbon Homes.
The Martins argue that the trial court erred in compelling arbitration of their claims against Southern Energy Homes, which was not a signatory to the arbitration agreement between them and Blue Ribbon Homes. As the Martins point out, the arbitration agreement names only two parties and is signed only by the Martins, an agent for Blue Ribbon Homes, and two witnesses. Further, in setting out the methods by which arbitration will be carried out, the agreement repeatedly refers to the "two parties" and "both parties," further evidencing the fact that the agreement was only between Blue Ribbon and the Martins, without reference or application to another party.
Southern Energy Homes argues, however, that this Court's recent decision in Gates v. Palm Harbor Homes, Inc., 675 So.2d 371 (Ala.1996), has made it unnecessary for a party to sign an arbitration agreement in order to come within its protection. In Gates, the plaintiffs purchased from Bilo Homes, Inc., a mobile home represented to be a "new" mobile home, after negotiations with Bilo Homes' general manager. They signed a retail installment contract that provided, in pertinent part:
"All disputes, claims, or controversies arising from or relating to this Contract or the relationships which result from this Contract, or the validity of this arbitration clause or the entire Contract, shall be resolved by binding arbitration...."
(Emphasis added.)
After purchasing the mobile home, the plaintiffs learned that it was not new, but had been sold previously to another buyer. They then sued Bilo Homes, as the seller of the mobile home, and also Palm Harbor Homes, Inc., as its manufacturer, alleging, among other things, breach of express and implied warranties, fraud, and negligent or wanton installation of the home.
Both Bilo Homes and Palm Harbor Homes moved to compel arbitration, based upon the arbitration agreement contained within the purchase contract. The trial court granted their motions, and the Gateses petitioned this Court for a writ of mandamus directing the trial court to vacate its order granting the arbitration motions, arguing that Palm Harbor Homes was not a signatory to the purchase agreement and therefore could not invoke the arbitration clause contained therein.
To determine the scope of that arbitration clause, the Gates Court first noted that the issue was a matter of contractual interpretation, to be resolved by considering the intent of the parties to the agreement. Gates at 374. The Court recognized that the language of the arbitration clause was particularly broad, encompassing not only the "disputes, claims, or controversies arising from" the contract, but also "the relationships" that resulted from it. The Court concluded, based upon the agreement's expansive language as it applied to the plaintiffs' claims, that the trial court had properly determined that the claims against Palm Harbor were arbitrable, despite the fact that Palm Harbor had not signed the agreement containing the arbitration clause.
The arbitration clause in Gates clearly contemplated arbitration of claims brought by the signatories to the agreements and also arbitration of claims brought by other, unnamed parties, if those claims arose from or related to the contract or the "relationships" that resulted from the contract. 2 Nothing in the arbitration agreement the Martins signed indicates that its scope was intended to be so broad; the agreement specifically names only the Martins and Blue Ribbon Homes as parties to the agreement, and it applies the arbitration procedures to "both" parties or to "either" party.
This Court has recently held that a nonsignatory to a limited arbitration clause specifically referencing only the signing parties is not sufficiently broad to encompass a nonsignatory defendant. In Ex parte Jones, 686 So.2d 1166 (Ala.1996), the plaintiff Jones entered into a security agreement with The Money Tree, Inc., to finance the purchase of an automobile. One provision of this agreement required the plaintiff to maintain insurance on the car; however, it was Money Tree's duty to procure this insurance and to include its premium price in the amount it financed for the plaintiff. The security agreement named Money Tree as the "creditor" and the plaintiff as the "debtor," and included a clause whereby "all disputes, controversies or claims of any kind and nature between creditor and debtor arising out of or in connection with" the agreement would be submitted to arbitration.
Money Tree thereafter contracted with First Colonial Bank to obtain the insurance for the plaintiff's car, as it was required to do under the security agreement with the plaintiff; however, the contract between Money Tree and First Colonial did not contain an arbitration clause, nor did it refer to the arbitration clause contained within Jones's security agreement with Money Tree. The plaintiff's car was subsequently destroyed by fire and he then learned that the insurance Money Tree had procured for him from Colonial Bank was inadequate.
In the ensuing lawsuit, both Money Tree and First Colonial sought to compel arbitration of the plaintiff's claims, pursuant to the arbitration clause in the...
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