Ex parte Palm Harbor Homes, Inc.
Decision Date | 20 April 2001 |
Citation | 798 So.2d 656 |
Parties | Ex parte PALM HARBOR HOMES, INC., and Southern Lifestyle Manufactured Housing, Inc. (Re Jon W. Knapp and Brooke L. Knapp v. Palm Harbor Homes, Inc., et al.) |
Court | Alabama Supreme Court |
Lee M. Hollis, Ivan B. Cooper, Anne Sikes Hornsby, and J. Chandler Bailey of Lightfoot, Franklin & White, L.L.C., Birmingham, for petitioner Palm Harbor Homes, Inc.
Richard M. Crump of Crump & Davis, Mobile, for petitioner Southern Lifestyle Manufactured Housing, Inc.
Edward P. Turner, Jr., and E. Tatum Turner of Turner, Onderdonk, Kimbrough & Howell, P.A., Chatom; and J. Jefferson Utsey, Butler, for respondents.
Palm Harbor Homes, Inc. ("Palm Harbor"), and Southern Lifestyle Manufactured Housing, Inc. ("Southern Lifestyle"), petition this Court for a writ of mandamus directing the Honorable Washington Circuit Judge Harold L. Crow to vacate his order compelling arbitration of this dispute. We grant the petition in part.
This dispute arose out of an action commenced by Jon W. Knapp and Brooke L. Knapp, who purchased from Southern Lifestyle a mobile home manufactured by Palm Harbor. The facts are essentially undisputed. In connection with the purchase, the Knapps and Southern Lifestyle executed a document styled "Manufactured Home Retail Installment Contract and Security Agreement" (the "Installment Contract"). Three parties are prominently listed on the Installment Contract, namely, the Knapps, Southern Lifestyle, and the assignee, Green Tree Financial Corporation ("Green Tree").
The Installment Contract is dated September 19, 1998, and contains an arbitration clause, which states in pertinent part:
The Installment Contract also contained a merger clause, which provided: "This written Contract is the only agreement that covers my purchase of the property." Under "DEFINITIONS," the instrument stated: "`Contract' or `Agreement' means this Retail Installment Contract and Security Agreement." (Emphasis added.)
Dated that same day, however, was a separate instrument, styled "Alabama Arbitration Provision." Also dated September 19, 1998, was a third, separate instrument, styled "Agreement for Binding Arbitration" (collectively, the "free-standing instruments"). Both free-standing instruments were executed by the Knapps and Southern Lifestyle.
The Alabama Arbitration Provision provides in pertinent part:
(Emphasis added.) The Agreement for Binding Arbitration provides in pertinent part:
(Emphasis added.)
After allegedly experiencing difficulties with their mobile home, the Knapps sued Palm Harbor, Southern Lifestyle, and Green Tree. All three defendants moved to compel arbitration of the action.1 On July 27, 2000, the trial court granted the motions.
On August 4, 2000, the Knapps filed a motion styled: "Plaintiff's Motion for the Court to Order Arbitration to be Conducted." The motion stated in pertinent part:
(Emphasis added.) On September 19, 2000, the trial court entered the following order:
Palm Harbor and Southern Lifestyles seek a writ of mandamus directing the trial court to vacate this order.
It is well settled that a petition for a "writ of mandamus is the proper means by which to test a trial court's order compelling arbitration or an order staying proceedings pending arbitration." Ex parte Smith, 706 So.2d 704, 705 (Ala.1997); see also Long v. Industrial Dev. Bd. of the Town of Vincent, 619 So.2d 1387 (Ala. 1993); Ex parte Alexander, 558 So.2d 364, 365 (Ala.1990). However, a writ of mandamus is an extraordinary remedy, which requires the petitioner to demonstrate a clear, legal right to the relief sought, or an abuse of discretion. Ex parte Edgar, 543 So.2d 682, 684 (Ala.1989).
It is undisputed that there is a valid agreement to arbitrate. Palm Harbor and Southern Lifestyle contend, however, that "the trial court erred in ignoring the terms of the [free-standing arbitration instruments,] which specified that arbitration was to be administered by the American Arbitration Association." Petition for Writ of Mandamus, at 6. They also contend that the trial court erred in holding that the Alabama Arbitration Act applies. We first consider whether the trial court erred as to the agreement of the parties.
Palm Harbor and Southern Lifestyle contend that the trial court improperly denied them the right to arbitrate under the administration of the American Arbitration Association, which, they insist, was part of the final agreement as evidenced by the free-standing arbitration instruments. The Knapps, on the other hand, argue that, because the Installment Contract contained a merger clause, "the terms of the arbitration provision in [that instrument]" supersede the two free-standing arbitration provisions. Respondents' Brief, at 6. Thus, the only question is whether the agreement of the parties is embodied and memorialized in the Installment Contract, as the Knapps contend, or in one, or both, of the two free-standing instruments, as Palm Harbor and Southern Lifestyle insist. Stated another way: does the parol-evidence rule bar consideration of the free-standing arbitration instruments? We conclude that it does.2
As a general rule, "when parties reduce a contract to writing and intend that writing to be the complete contract, no extrinsic evidence of prior or contemporaneous agreements will be admissible to change, alter, or contradict the contractual writing." Sherman v. Woerner Magnolia Farms, Inc., 565 So.2d 601, 605 (Ala.1990). This is so, because, "all prior and contemporaneous negotiations are [deemed to be] merged" into that writing. Crimson Indus., Inc. v. Kirkland, 736 So.2d 597, 601 (Ala.1999) (emphasis in original).
"When a contract contains ... a merger clause, the agreement is deemed to be `integrated,' such that evidence of prior or contemporaneous agreements shall not be admitted to contradict the terms of the agreement." Johnson Enters. of Jacksonville, Inc. v. FPL Group, Inc., 162 F.3d 1290, 1309 (11th Cir.1998). Merger clauses thus create a presumption that...
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