Ex parte McKinney
| Decision Date | 21 August 1987 |
| Parties | Ex parte Wallace R. McKINNEY IV. (In Re Robert and Karen LANE v. E.F. HUTTON & COMPANY, INC., and Wallace R. McKinney IV). 86-324. |
| Court | Alabama Supreme Court |
James F. Duffy, Jr., of Inge, Twitty, Duffy & Prince, Mobile, for petitioner.
Paul W. Brock and Orrin K. Ames III of Hand, Arendall, Bedsole, Greaves & Johnston, Mobile, and Charles A. Gilman and Robert A. Alessi of Cahill, Gordon & Reindell, New York City, for respondents.
ON APPLICATION FOR REHEARING
On January 20, 1987, the petition for mandamus was denied, without opinion. See 514 So.2d 350 (Ala.1987). The petitioner has filed an application for rehearing.
This petition for writ of mandamus involves a question of whether a dispute was subject to arbitration under the provisions of the Federal Arbitration Act. In order to answer that question, we must determine whether there was a valid enforceable arbitration agreement that applied to the dispute, and whether the party moving for arbitration had waived its right to have the controversy arbitrated because it had substantially invoked the judicial process.
On January 4, 1984, Robert and Karen Lane commenced a lawsuit in the Circuit Court of Mobile County captioned Robert Lane and Karen Lane v. E.F. Hutton & Company, Inc. and Wallace R. McKinney IV, No. CV-84-000018. The Lanes alleged that, in reliance upon misrepresentations made to them by Hutton and McKinney, who acted as the Lanes' account executive, they purchased a single premium deferred annuity (SPDA) policy issued by an insurance company that subsequently experienced financial difficulties, and that because of the fraud practiced upon them by the defendants they were damaged substantially.
On May 2, 1984, McKinney, the petitioner here, answered the Lane complaint and cross-claimed against Hutton, alleging that (1) if he made any misrepresentations to the Lanes, such misrepresentations were based upon information provided to him by Hutton, and (2) the Lane lawsuit had caused him mental anguish and had caused damage to his reputation. Hutton answered the Lane complaint and McKinney's cross-claim on September 24, 1984, and filed a cross-claim against McKinney in which it alleged that, if McKinney made any misrepresentations to the Lanes concerning their SPDA policy, he acted beyond the scope of his employment with Hutton and should be held liable to Hutton for indemnity if Hutton were found liable to the Lanes.
The Lanes' suit is one of several cases filed against Hutton and Hutton employees in the Circuit Court of Mobile County, arising out of Hutton's marketing of the SPDA involved in the Lane suit. It is one of several in which this petitioner, McKinney, is, and was, named as a defendant along with his employer, Hutton. The lawsuit filed by the Lanes against Hutton and McKinney was the first lawsuit to be filed, however.
Because there were approximately 50 of these lawsuits filed against Hutton and employees of Hutton, such as McKinney, the then-presiding judge of the Circuit Court of Mobile County, the Honorable After the filing of the lawsuit by the Lanes, and the entry of the consolidation order, there were approximately 115 depositions taken by the parties.
Robert E. Hodnette, Jr., entered an order consolidating all of the cases for the purpose of discovery, and designated Robert T. Cunningham, Jr., counsel for the Lanes, as chief counsel in charge of all "general" discovery for all plaintiffs in all of the cases and, until his retirement, Judge Hodnette handled all discovery motions, pleadings, other motions, etc., in all of the cases.
Hutton took McKinney's pre-trial deposition on five occasions (September 27, 1984; May 14, 1985; May 15, 1985; April 28, 1986, and May 8, 1986). Hutton also propounded two sets of interrogatories, and Hutton filed several motions in the court in connection with the pending claims.
Just prior to May 19, 1986, the day on which the case was to be tried in the Circuit Court of Mobile County, Hutton entered into a settlement agreement with the Lanes, which resulted in the dismissal of the Lanes' case against Hutton and McKinney.
There remained, however, the cross-claims of McKinney against Hutton, and Hutton against McKinney, and a conference was then held in the chambers of Judge Douglas I. Johnstone, to whom the case had been reassigned, with regard to the rescheduling of the trial of the issues embraced in those cross-claims.
The cross-claim of McKinney against Hutton in the Lane lawsuit was then scheduled for trial on September 22, 1986. Hutton dismissed its cross-claim against McKinney on September 8, 1986, and on the next day, September 9, 1986, which was over two years after the date McKinney had filed his cross-claim against it, Hutton moved for an order compelling arbitration and a stay of the proceedings pending arbitration, contending that the case between it and McKinney became arbitrable for the first time when the settlement was reached by and between Hutton and the Lanes. The motion was supported by documents containing what Hutton contended, and contends in its response to this petition, is a valid arbitration agreement by and between McKinney and it.
On September 12, 1986, after receiving extensive briefing on Hutton's motion to compel arbitration and after entertaining oral argument on the motion on September 5 and 11, 1986, Judge Johnstone held that McKinney's claims against Hutton must be stayed pending arbitration. He entered the following order:
"The motion of E.F. Hutton & Company, Inc. ('Hutton') to compel arbitration and to stay the case pending arbitration having come on for hearing before the court on September 11, 1986, and the parties having appeared by their counsel of record, and the court having fully considered the legal briefs, the evidence and the arguments of counsel and finding that said motion is well founded, that the parties have agreed to arbitrate and that there has been no waiver by Hutton, grants said motion, orders arbitration to be held and further orders that this action and all issues raised therein be stayed pending said arbitration."
On September 25, 1986, McKinney moved for reconsideration of Judge Johnstone's September 12, 1986, order compelling arbitration. After receiving additional briefing and hearing further oral argument on October 24, 1986, Judge Johnstone denied McKinney's motion for reconsideration in a written order dated November 10, 1986. In that order, Judge Johnstone, being advised by McKinney's counsel that he would seek a writ of mandamus from this Court, did stay his order to compel arbitration until this Court acted on the mandamus petition.
On December 8, 1986, McKinney petitioned this Court for a writ of mandamus to Judge Johnstone. Upon receipt of McKinney's petition and Hutton's letter response dated December 17, 1986, this Court denied McKinney's petition on January 20, 1987.
Dissatisfied with this Court's decision, McKinney petitioned the Court on February 3, 1987, for a rehearing on his petition for a writ of mandamus. A majority of this Court set aside its January 20, 1987 The matter was presented orally before the Court, and is now ripe for resolution.
order denying McKinney's petition for a writ of mandamus, and directed Hutton to respond to McKinney's petition.
First, we address our scope of review. This is a mandamus petition, and this Court has said many times that "[m]andamus is an extraordinary remedy, which should be granted only when there is a clear showing that the trial court abused its discretion." Ex parte Lang, 500 So.2d 3, 5 (Ala.1986). See, also, Ex parte Hartford Ins. Co., 394 So.2d 933, 936 (Ala.1981), wherein this Court stated that "[m]andamus itself is an extraordinary remedy which should only be granted when there is a clear showing that the trial court abused its discretion and exercised it in an arbitrary or capricious manner."
We have examined the record and related material forwarded to this Court by McKinney and Hutton and we are of the opinion that Judge Johnstone very carefully considered and analyzed the issues presented on Hutton's motion to compel arbitration, and that he held three separate hearings at which oral arguments were presented by McKinney and Hutton concerning each of the matters raised in the petition for mandamus. The record shows that Judge Johnstone reviewed the briefs and affidavits submitted by the parties and questioned counsel on all relevant issues, and that only then did he issue a written order holding that McKinney is obligated under the controlling arbitration agreements to submit his claims to arbitration.
Judge Johnstone allowed McKinney a final opportunity to present arguments in opposition to Hutton's motion to compel arbitration on October 24, 1986, in connection with McKinney's motion for reconsideration. Upon further consideration of the issues, and despite having been made aware of McKinney's intention to seek a writ of mandamus if the circuit court ruled against him, Judge Johnstone again concluded, in a written order dated November 10, 1986, that arbitration was mandated.
Based on this record, we cannot conclude that Judge Johnstone abused his discretion or exercised it in an arbitrary or capricious manner. Quite to the contrary, the record reflects that Judge Johnstone gave due consideration to the arguments of both sides; therefore, the writ is not due to be granted on the proposition that the trial judge did not adequately consider the matter.
Hutton contends that in view of the fact that Judge Johnstone did give due consideration to the matter before him, this Court should deny McKinney's petition without reaching the merits of the arbitration issue. This we decline to do.
The question of whether McKinney agreed to arbitrate this particular dispute between him and Hutton is a substantial one, and if we hold that the parties did agree to arbitrate, there is...
To continue reading
Request your trial
-
TERMINIX INTERN. CO. v. Jackson
... ... that the circuit court's denial of the motion to compel arbitration should be reversed in spite of that court's finding of waiver, citing Ex parte McKinney, 515 So.2d 693 (Ala.1987), for the proposition that "a party does not waive its right to arbitrate by engaging in discovery that would ... ...
-
Hales v. ProEquities, Inc.
... ... novo determination of whether the trial judge erred on a factual or legal issue to the substantial prejudice of the party seeking review." Ex parte Roberson, 749 So.2d 441, 446 (Ala.1999) ... Accord Lewis v. Conseco Fin. Corp., 848 So.2d 920, 922 (Ala.2002) ("[t]his Court reviews de novo the ... acceptance or rejection of the ground of waiver in a ruling by the trial court on a motion to compel arbitration can be traced to Ex parte McKinney, 515 So.2d 693 (Ala.1987), which denied a petition for a writ of mandamus. In McKinney, we stated "`[m]andamus itself is an extraordinary remedy, ... ...
-
Karl Storz Endoscopy-America, Inc. v. Integrated Medical Systems, Inc.
... ... Ordinarily, we review issues regarding waiver of arbitrability under an abuse-of-discretion standard. See Ex parte Handley, 775 So.2d 141, 143 (Ala. 2000) ; Thompson v. Skipper Real Estate Co., 729 So.2d 287 (Ala.1999) ; Companion Life Ins. Co. v. Whitesell g., Inc., 670 So.2d 897 (Ala.1995) ; Ex parte McKinney, 515 So.2d 693 (Ala.1987) ... It appears undisputed, however, that evidence of the alleged waiver consists entirely of the written correspondence ... ...
-
Rogers v. State Farm Fire and Cas. Co.
... ... `[O]n appeal, the ruling on a question of law carries no presumption of correctness, and this Court's review is de novo. ' Ex parte Graham, 702 So.2d 1215, 1221 (Ala.1997)." ... The trial court did not base its ruling allowing State Farm to invoke the appraisal ... See Huntsville Golf Development, Inc. v. Aetna Casualty & Surety Co., 632 So.2d 459 (Ala.1994); Ex parte McKinney, 515 So.2d 693 n. 2 (Ala. 1987); Ex parte Merrill Lynch, Pierce, Fenner & Smith, Inc., 494 So.2d 1 (Ala. 1986); Ex parte Costa & Head (Atrium), ... ...