Ex parte Palm Harbor Homes, Inc.

Decision Date20 April 2001
Citation798 So.2d 656
PartiesEx 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.)
CourtAlabama 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.

WOODALL, Justice.

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:

"ARBITRATION: ALL DISPUTES, CLAIMS OR CONTROVERSIES ARISING FROM OR RELATING TO
THIS CONTRACT OR THE PARTIES THERETO SHALL BE RESOLVED BY BINDING ARBITRATION BY ONE ARBITRATOR SELECTED BY YOU WITH MY CONSENT. THIS AGREEMENT IS MADE PURSUANT TO A TRANSACTION IN INTERSTATE COMMERCE AND SHALL BE GOVERNED BY THE FEDERAL ARBITRATION ACT AT 9 U.S.C. SECTION 1." (Capital letters in original.)

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:

"The parties to the Retail Installment Contract agree that any and all controversies or claims arising out of, or in any way relating to, the Retail Installment Contract ... will be settled solely by means of final and binding arbitration before the American Arbitration Association (AAA) in accordance with the rules and procedures of the AAA.
". . . .
"... The parties further agree that this Arbitration Provision inures to the benefit of and is intended for the benefit of the manufacturer of the mobile home as fully as if the manufacturer were a signatory to the Retail Installment Contract."

(Emphasis added.) The Agreement for Binding Arbitration provides in pertinent part:

"Buyer and Seller agree, covenant and consent, that any and all controversies or claims arising out of or in any way relating to the sale of the said mobile home and the negotiations leading up to the sale ... shall be settled solely by arbitration in accordance with the applicable Rules of the American Arbitration Association then in effect.... Buyer and Seller further agree that they shall submit any and all disputes, controversies and cases arising out [of] the negotiations for and the sale and service of the mobile home ... to the decision of a three-person arbitration panel. The arbitration panel shall be appointed by the applicable national panel of arbitrators in accordance with the American Arbitration Association's rules of appointment of such panel.
". . . .
"It is further agreed by the parties that all rights, privileges and responsibilities under this agreement shall expressly inure to the benefit of the manufacturer of the said mobile home insofar as any claims may exist or hereafter arise against the manufacturer, including but not limited to, enforcement of warranties, whether express or implied."

(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:

"1. The court ordered arbitration as to all defendants on July [27,] 2000.
". . . .
"3. There are two different arbitration clauses at issue in the above case.
"4. One clause calls for the use of the American Arbitration Association.
"5. One clause calls for Defendant Green Tree or Defendant Southern Lifestyles ... to select with the consent of Plaintiff.
"6. Plaintiff has the burden of beginning the arbitration process.
"7. Plaintiff does not know which clause to use.
"8. The American Arbitration Association requires up front fees to begin the process of arbitration.'
"9. The retail installment contract contains an integration clause which integrates all agreements into [it].
"10. Plaintiff does not have the up front fees to begin the process under the AAA.
"11. Under the [retail installment contract] plaintiff as well as defendant get[s] to participate in the selection process. If they cannot agree then the court an elected official would pick the arbitrator.
"12. Under the [retail installment contract] no up front fees are required.
". . . .
"Wherefore plaintiff would request the court to order the following:
"That said arbitration be held with[in] sixty days of the court's signed order directing plaintiff to use the arbitration clause in the retail installment contract. That the court consolidate these proceedings into one arbitration proceeding under the retail installment contract."

(Emphasis added.) On September 19, 2000, the trial court entered the following order:

"The Court Finds as Follows:
"1. The arbitration is to be held in accordance with the Retail Installment contract and security agreement in this matter.
"2. The Alabama Arbitration Act will apply.
"3. The arbitration is to be held within 60 days of this order.
"4. This proceeding is stayed and placed on the administrative docket until the court hears the final disposition of the arbitrator."

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.

I. The Parties' Agreement

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...

To continue reading

Request your trial
59 cases
  • TD Auto Fin. LLC v. Reynolds
    • United States
    • West Virginia Supreme Court
    • April 10, 2020
    ...parties" and rejecting arbitration agreement which contained no purchase terms nor merger clause of its own); Ex parte Palm Harbor Homes, Inc ., 798 So.2d 656, 661 (Ala. 2001) (finding that drafters of installment contract "could easily have included in the merger clause a specific referenc......
  • Waddell & Reed, Inc. v. UNITED INVEST. LIFE INS. CO.
    • United States
    • Alabama Supreme Court
    • July 3, 2003
    ...The letter contains all of the terms necessary for a contract, W & R argues, and is therefore enforceable. Ex parte Palm Harbor Homes, Inc., 798 So.2d 656, 661 (Ala.2001). UILIC maintains that W & R had no contractual right to direct Target Funds to change the manner in which it paid the M ......
  • Willis v. Tower Loan of Miss., LLC (In re Willis)
    • United States
    • U.S. Bankruptcy Court — Southern District of Mississippi
    • December 12, 2017
    ...arbitration provisions when the contracts themselves provide the solution." Ragab , 841 F.3d at 1138 ; see Ex parte Palm Harbor Homes, Inc. , 798 So.2d 656, 660 (Ala. 2001) (compelling arbitration when a contract includes an arbitration provision and a merger clause because the merger claus......
  • African Methodist Episcopal Church, Inc. v. Smith, 1141100, 1141101, 1150055, 1150156.
    • United States
    • Alabama Supreme Court
    • August 19, 2016
    ...provision is found in an amendment to the group policy, she argues, it is not a valid part of the contract. See Ex parte Palm Harbor Homes, Inc., 798 So.2d 656, 660 (Ala.2001) ("Merger clauses ... create a presumption that the writing represents an integrated, that is, the final and complet......
  • Request a trial to view additional results
2 books & journal articles
  • Alabama's Appellate Standards of Review in Civil Cases
    • United States
    • Alabama State Bar Alabama Lawyer No. 81-1, January 2020
    • Invalid date
    ...the petitioner to demonstrate a clear, legal right to the relief sought, or an abuse of discretion. 'Ex parte Palm Harbor Homes, Inc., 798 So. 2d 656, 660 (Ala. 2001).' [T]he review of a trial court's ruling on the question of enforcing a forum-selection clause is for an abuse of discretion......
  • Class arbitration: someone please forward a copy of the Bazzle decision to the Alabama Supreme Court.
    • United States
    • Jones Law Review Vol. 13 No. 2, March 2009
    • March 22, 2009
    ...So. 2d at 888. (94) SouthTrust Bank v. Copeland One, L.L.C., 886 So. 2d 38, 43 (Ala. 2003); see also Ex parte Palm Harbor Homes, Inc., 798 So. 2d 656, 661 (Ala. 2001); Birmingham News Co. v. Lynch, 797 So. 2d 440, 443 (Ala. 200l); Brewbaker Motors, Inc. v. Belser, 776 So. 2d 110, 112 (Ala. ......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT