Huntley v. Regions Bank

• Decision Date: 29 June 2001
• Parties: Willie J. HUNTLEY, Jr. v. REGIONS BANK. Regions Bank v. Willie J. Huntley, Jr.
• Court: Alabama Supreme Court

807 So.2d 512

Willie J. HUNTLEY, Jr. v. REGIONS BANK.

Regions Bank v. Willie J. Huntley, Jr.

1966.

Supreme Court of Alabama.

June 29, 2001.

Willie J. Huntley, Jr., pro se.

Alan C. Christian of Johnstone, Adams, Bailey, Gordon & Harris, L.L.C., Mobile, for appellee/cross appellant.

HARWOOD, Justice.

Willie J. Huntley, Jr., a defendant in an action filed in the Mobile Circuit Court, appeals the trial court's order denying his motion to compel arbitration and appeals a summary judgment entered for the plaintiff Regions Bank; Regions Bank crossappeals from the trial court's order denying it an award of attorney fees. Both parties rely on the language of a promissory note executed by Huntley as support for their arguments. We affirm as to Huntley's appeal and reverse and remand as to Regions Bank's cross-appeal.

Huntley and Joe Carl Jordan executed a promissory note to Regions Bank. In pertinent part, that promissory note reads:

"PROMISE TO PAY. Willie J. Huntley, Jr. and Joe Carl Jordan (`Borrower') promise to pay to Regions Bank (`Lender'), or order, in lawful money of the United States of America, the principal amount of One Hundred Forty Six Thousand Three Hundred Thirty Eight & 93/100 Dollars ($146,338.93), together with interest on the unpaid principal balance from September 28, 1999, until paid in full.

"PAYMENT. Borrower will pay this loan in one principal payment of $146,338.93 plus interest on November 30, 1999. This payment due November 30, 1999, will be for all principal and accrued interest not yet paid....

". . . .

"DEFAULT. Borrower will be in default if any of the following happens: (a) Borrower fails to make any payment when due....

"LENDER'S RIGHTS.... Upon the occurrence of any other default described in that paragraph [concerning default], Lender may declare the entire unpaid principal balance on this Note and all accrued unpaid interest immediately due, without notice, and then Borrower will pay that amount. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower also will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses whether or not there is a lawsuit.... This Note has been delivered to Lender and accepted by Lender in the State of Alabama. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of Mobile County, the State of Alabama. Lender and Borrower hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by either Lender or Borrower against the other. Subject to the provisions on arbitration, this Note shall be governed by and construed in accordance with the laws of the State of Alabama.

". . . .

"ARBITRATION. Lender and Borrower agree that all disputes, claims and controversies between them, whether individual, joint, or class in nature, arising from this Note or otherwise, including without limitation contract and tort disputes, shall be arbitrated pursuant to the Rules of the American Arbitration Association, upon request of either party.... The Federal Arbitration Act shall apply to the construction, interpretation, and enforcement of this arbitration provision."

On December 21, 1999, Regions Bank sued Huntley and Jordan, alleging that they had defaulted on the note by failing to make payment. The bank alleged that as of December 21, 1999, Huntley and Jordan owed it "a principal balance of $146,338.93, accrued interest of $3,022.31, late fees of $100.00 and reasonable attorneys' fees of $22,404.19, for a total sum of $171,865.43, with interest accruing at the rate of $36.58 per diem thereafter." Jordan answered the complaint on February 18, 2000, denying certain allegations in regard to the note and asserting the defenses of failure of consideration and fraud. The record before this Court gives no indication that Huntley ever filed an answer.

On May 31, 2000, Regions Bank filed a motion for summary judgment, supported by two attached affidavits and an accompanying brief. The first affidavit, from Deborah S. Renfroe, a "special assets officer" for the bank, provided information concerning the promissory note. Attached to Renfroe's affidavit were copies of the promissory note and guaranty agreements that had been separately signed by Jordan and Huntley. The second affidavit was from Alan C. Christian, the attorney representing the bank; it was submitted to support the reasonableness of the attorney fee the bank was requesting. Neither Jordan nor Huntley filed a brief or otherwise made any response in opposition to the bank's summary-judgment motion.

On July 12, 2000, Huntley filed a document entitled "Motion to Dismiss and Motion to Compel Arbitration." Regions Bank correctly responded to this motion by pointing out that it should be treated as a motion to stay proceedings pending arbitration, rather than as a motion to dismiss. The trial court considered the substance of Huntley's motion. Huntley's motion relied upon the language of the arbitration clause in the note, and Huntley attached to the motion copies of two letters dated March 8, 2000—one, a letter he had sent to counsel for Regions Bank, and the other, a letter he had sent to the bank's assistant vice president. Both letters stated that Huntley desired to invoke the arbitration clause. Huntley also attached a copy of a March 9, 2000, letter sent by Regions Bank's counsel to Joe Carl Jordan, which referred to the Bank's receipt of Huntley's letter and inquired about Jordan's position on arbitrating this dispute.

On July 13, 2000, Regions Bank filed a motion in response to Huntley's motion to compel arbitration. It argued that the term "Borrower" contained within the promissory note referred to Huntley and Jordan jointly, and that Jordan had not sought to invoke the arbitration clause in the note.¹ Although the bank's filings state that Jordan did not seek, and specifically objected to, invocation of the arbitration clause, the record contains no direct indication of this. However, one could reasonably infer that Jordan did not seek to enforce the arbitration clause, because in his answer he did not deny Regions Bank's statement of the trial court's jurisdiction and he did not file any response to the bank's filings wherein the bank had asserted that Jordan had not invoked the arbitration clause. The bank also argued that Huntley had not properly invoked the arbitration clause because he had not paid the filing fee required under the Commercial Arbitration Rules of the American Arbitration Association ("AAA"). The bank's motion further argued that Huntley had not made the showing required of one seeking to compel arbitration of a dispute, i.e., a showing of "a contract calling for arbitration and [evidencing] a transaction affecting interstate commerce," quoting Tran-South Fin. Corp. v. Bell, 739 So.2d 1110, 1114 (Ala.1999).

The case action summary indicates that the trial court denied Huntley's motion to compel arbitration on July 19, 2000. Regions Bank asserts in its appellate brief that the trial court orally communicated its denial to the parties. The scant record before the Court does not show when the trial court made this communication; however, we infer that it was made either on July 19, 2000, at the hearing on the motion to compel arbitration, or on July 21, 2000, at the hearing on Regions Bank's motion for summary judgment. In either event, the record shows no objection by Huntley to the trial court's denial of his motion to compel arbitration. The trial court entered its summary judgment for Regions Bank on July 21, 2000, awarding it $157,618.70, with court costs, against Huntley and Jordan jointly.

I. Huntley's Appeal

We first address a specific argument made by Regions Bank in regard to the arbitration issue. The bank argues that Huntley did not properly invoke the arbitration agreement because, among other things, he failed to pay the proper filing fee under the AAA's Commercial Arbitration Rules. This Court has previously addressed this specific argument, in Ex parte Dan Tucker Auto Sales, Inc., 718 So.2d 33, 36 (Ala.1998):

"Rule 6 of the Commercial Arbitration Rules states that `the initiating party (hereinafter claimant)' shall file the `appropriate filing fee' as mandated in the schedule accompanying the rules. That same rule later explains that after the `claimant' has stated the nature of the dispute, the respondent shall file an answering statement and send that statement to the claimant. The word `claimant' is defined in Black's Law Dictionary (6th ed.1990) as `[o]ne who claims or asserts a right, demand, or claim.' The word `respondent' is defined in Black's as `one who makes an answer to a bill or other proceeding in equity' or one `who contends against an appeal.' Considering these words in light of their plain meaning, we conclude that the `claimant' is the party who makes a demand upon another party and that the `respondent' is the party who must answer the allegations.

"If we apply these general definitions to the facts of this case, it would be awkward to interpret the Commercial Arbitration Rules to mean that [the defendant] is the claimant. Such an interpretation would force [the defendant] to state the nature of the claims against itself. Equally as awkward, this interpretation would then force [the plaintiff] to answer the very complaint that he filed against [the defendant]. It is unreasonable to believe that the parties in this case intended to apply the terms `initiating party' and `claimant' to [the defendant], the party defending itself against a claim by [the plaintiff]. Judging from the plain meaning of these labels as they are used in the Rules and from what the parties intended by the terms `claimant' and `initiating party,' it is clear that [the plaintiff] is the claimant and [the defendant] is the respondent."

See also Universal Underwriters Life...