Garikes, Wilson, and Atkinson, Inc. v. Episcopal Foundation of Jefferson County, Inc.

• Decision Date: 05 March 1993
• Citation: 614 So.2d 447
• Parties: GARIKES, WILSON, AND ATKINSON, INC. v. The EPISCOPAL FOUNDATION OF JEFFERSON COUNTY, INC. 1911557.
• Court: Alabama Supreme Court

Page 447

614 So.2d 447

GARIKES, WILSON, AND ATKINSON, INC. v. The EPISCOPAL FOUNDATION OF JEFFERSON COUNTY, INC.

1911557.

Supreme Court of Alabama.

March 5, 1993.

James H. Starnes, Carol Ann Smith and Rhon E. Jones of Starnes & Atchison, Birmingham, for appellant.

William S. Dodson, Jr. and Warren B. Lightfoot, Jr. of Maynard, Cooper, Frierson & Gale, P.C., Birmingham, for appellee.

PER CURIAM.

The plaintiff, Garikes, Wilson, and Atkinson, Inc. ("Garikes"), appeals from a summary judgment in favor of the defendant, the Episcopal Foundation of Jefferson County (the "Foundation").

At issue is whether a contract between Garikes (an architectural firm) and the Foundation involves interstate commerce and thus, invokes federal law that would render an arbitration provision in the contract enforceable.

The following facts are undisputed:

The Foundation, located in Jefferson county, is a non-profit Alabama corporation. It owns St. Martin's-in-the-Pines, a retirement community located in Birmingham. Garikes is an Alabama corporation with its place of business in Birmingham.

On July 8, 1985, the Foundation contracted with Garikes for "design and construction administration services" related to an addition to St. Martin's-in-the-Pines. This contract was negotiated and executed in Alabama.

Also, this contract contained a predispute arbitration agreement. Such agreements are unenforceable under Alabama law. Ala.Code 1975, § 8-1-41. However, if a contract containing a predispute arbitration provision involves interstate commerce and the provision is voluntarily agreed to, then the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (the "FAA"), applies. Where the FAA applies, it preempts Alabama law. See Ex parte Alabama Oxygen Co., 433 So.2d 1158 (Ala.1983) (Maddox, J., dissenting), review after remand from United States Supreme Court, 452 So.2d 860 (Ala.1984) (adopting views expressed in Justice Maddox's original dissent); A.G. Edwards & Sons, Inc. v. Syvrud, 597 So.2d 197 (Ala.1992). Under the FAA, a predispute arbitration agreement is enforceable. Id.

After the addition was constructed, a dispute arose over a heating and cooling system. The Foundation sought arbitration of the dispute. Garikes sued, seeking to enjoin arbitration. Garikes argued that Alabama law, rather than the FAA, applies, because, it says, the contract did not involve interstate commerce. Under Alabama law, the arbitration provision would be unenforceable.

The Foundation correctly argues that even the "slightest nexus" of an agreement with interstate commerce will bring the agreement within the scope of the FAA. Ex parte Costa & Head (Atrium), Ltd., 486 So.2d 1272, 1275 (Ala.1986); Ex parte Brice Building Co., 607 So.2d 132 (Ala.1992). As proof of the interstate nature of the contract, the Foundation cites the following provisions; these provisions relate to another contract, one between the Foundation ("owner") and the project contractor:

"1.5.8 The issuance of a certificate for payment shall constitute a representation by the architect to the owner, based on the architect's observations at the site ... and on the data comprising the contractor's application for payment, that the work has progressed to the point indicated; that, to the best of the architect's knowledge, information, and belief, the quality of the work has progressed to the point indicated; that to the best of the architect's knowledge, information, and belief, the quality of the work is in accordance with the contract documents ... and the contractor is...