Jim Burke Automotive, Inc. v. McGrue

• Decision Date: 18 January 2002
• Citation: 826 So.2d 122
• Parties: JIM BURKE AUTOMOTIVE, INC., et al. v. Lori McGRUE. Roebuck Honda et al. v. Lori McGrue. Century Chevrolet-Geo, Inc., et al. v. Lori McGrue. Hoover Toyota, L.L.C. v. Lori McGrue. Serra Toyota, Inc., et al. v. Lori McGrue. Courtesy Pontiac GMC, Inc. v. Lori McGrue.
• Court: Alabama Supreme Court

826 So.2d 122

JIM BURKE AUTOMOTIVE, INC., et al. v. Lori McGRUE.

Roebuck Honda et al. v. Lori McGrue.

Century Chevrolet-Geo, Inc., et al. v. Lori McGrue.

Hoover Toyota, L.L.C. v. Lori McGrue.

Serra Toyota, Inc., et al. v. Lori McGrue.

Courtesy Pontiac GMC, Inc. v. Lori McGrue.

1000831, 1000877, 1000972, 1000973, 1081.

Supreme Court of Alabama.

January 18, 2002.

John Martin Galese, Jeffrey L. Ingram, and David A. Norris of Galese & Ingram, P.C., Birmingham, for appellants Jim Burke Automotive, Inc.; Roebuck Mazda; Med-Center Mazda; Crown Pontiac-Nissan; Crown Automobile Company; King Acura; Limbaugh Toyota; Susan Schein Chevrolet; Premiere Chevrolet; Neil Bonnett Honda; Lynn Layton Chevrolet; Jim Skinner Ford; and Edwards Chevrolet.

Jeffrey E. Friedman, P. Thomas Dazzio, Jr., and Jess S. Boone of Friedman, Leak & Bloom, P.C., Birmingham, for appellants Roebuck Chrysler-Plymouth-Jeep-Eagle, Inc.; Roebuck Honda; and Tameron Automotive Group.

Thomas S. Spires and Matthew C. Williams of Smith, Spires & Peddy, P.C., Birmingham, for appellants Century Chevrolet-Geo, Inc.; Royal Oldsmobile Company, Inc.; and Steel City Pontiac-GMC.

Cecil H. Macoy and Larry S. Logsdon of Wallace, Jordan, Ratliff & Brandt, L.L.C., Birmingham, for appellant Hoover Toyota, L.L.C.

Paul C. Garrison of Hall, Conerly, Mudd & Bolvig, P.C., Birmingham, for appellant Serra Toyota, Inc.

Jack J. Hall, Jr., of Hall, Conerly, Mudd & Bolvig, P.C., Birmingham, for appellant Courtesy Pontiac GMC, Inc.

Robert H. Ford of The Ford Law Firm, Birmingham; and William M. Dawson, Birmingham, for appellee.

Robert A. Huffaker of Rushton, Stakely, Johnston & Garrett, P.A., Montgomery, for amicus curiae Automobile Dealers Association of Alabama, in support of the application for rehearing.

Kallie C. Lunsford and Michael L. Jones of Galese & Ingram, P.C., Birmingham, for amicus curiae Alabama Independent Automobile Dealers Association, in support of the application for rehearing

On Applications for Rehearing

HOUSTON, Justice.

The opinion of October 5, 2001, is withdrawn and the following is substituted therefor.

Lori McGrue sued Jim Burke Automotive, Inc. (an automobile dealership hereinafter referred to as "Jim Burke"), and Roebuck Mazda; Med-Center Mazda; Crown Pontiac-Nissan, Inc.; Crown Automobile Company, Inc.; King Acura; Limbaugh Toyota; Susan Schein Chevrolet, Inc.; Premier Chevrolet, Inc.; Neil Bonnett Honda; Lynn Layton Chevrolet Company; Jim Skinner Ford; Edwards Chevrolet Company, Inc.; Roebuck Chrysler-Plymouth-Jeep-Eagle, Inc.; Roebuck Honda; Tameron Automotive Group; Hoover Toyota, L.L.C.; Courtesy Pontiac GMC, Inc.; Century Chevrolet-Geo, Inc.; Royal Oldsmobile Company, Inc.; Steel City Pontiac-GMC; and Serra Toyota, Inc. (automobile dealerships hereinafter referred to as "the nonsignatory defendants"). The plaintiff sought damages based on allegations of conspiracy, violations of her constitutional right to a trial by jury, and antitrust violations. She also requested certification of her case as a class action.¹ Jim Burke and the nonsignatory defendants filed motions to compel McGrue to arbitrate her claims citing three arbitration agreements executed by her and Jim Burke. The trial court denied the motions. Jim Burke and the nonsignatory defendants appeal, in six separate appeals. We reverse the trial court's order denying Jim Burke's motion to compel arbitration, but we affirm the orders denying the nonsignatory defendants' motions to compel arbitration, and we remand.

I.

Lori McGrue purchased a used Nissan Altima automobile from Jim Burke. McGrue and a representative of Jim Burke executed three documents in connection with this purchase: a single-page arbitration agreement, a retail installment contract that contained an arbitration agreement; and an extended-service contract that also contained an arbitration agreement. Shortly after McGrue purchased the vehicle, she learned that it had been wrecked before she purchased it. McGrue complained to Jim Burke about the condition of her vehicle. Jim Burke offered to replace it with another vehicle if McGrue would execute another arbitration agreement. McGrue refused to sign the additional agreement and ultimately did not trade in her vehicle with Jim Burke. McGrue subsequently approached each of the nonsignatory defendants, inquiring about making a trade as to the vehicle. Similarly, the nonsignatory defendants informed her that to deal with her they would require that she execute an arbitration agreement as a condition of the trade. She would not sign an arbitration agreement and did not enter, with any nonsignatory defendant, a transaction involving the vehicle.

Approximately four months after she had purchased the car, McGrue filed this action against Jim Burke and the nonsignatory defendants. In her complaint, McGrue alleged that by their conduct the defendants had violated "her constitutional rights under ... the Alabama Constitution," that the defendants had "engaged in and continue to engage in an illegal civil conspiracy by contriving, combining, federating and conspiring amongst themselves" to violate her rights, and that the defendants had engaged in an "unlawful trust, combine or monopoly." McGrue's complaint included the following paragraph:

"WHEREFORE, Plaintiff demands judgment for compensatory and punitive damages and statutory penalties of Five Hundred Dollars ($500.00) for herself and each plaintiff similarly situated; to-wit: Fifty Thousand Dollars ($50,000.00) for herself and approximately Five Hundred Million Dollars ($500,000,000.00) for the members of the class which is estimated at 10,000 members."

(R. 3.)

In response to McGrue's complaint, Jim Burke and the nonsignatory defendants filed motions to enforce the arbitration agreements signed by McGrue and representatives of Jim Burke. In support of its motion, Jim Burke offered the affidavit of Dave Bolden, the comptroller of Jim Burke, in which he states:

"[Jim Burke] sought to obtain financing for Ms. McGrue's purchase through multiple out of state finance companies. Eventually, she financed her purchase through Chrysler Financial Company, L.L.C., a Michigan corporation.

". . . .

"The automobile purchased by Ms. McGrue, as described [on the financing documents,] was manufactured outside of Alabama and received by [Jim Burke] in Alabama. After manufacture, the car was sold to Southwest Tex Leasing Company, a San Antonio, Texas company. At the time of Southwest Tex Leasing Company's purchase, the car was financed by Ford Motor Credit Company, a Delaware corporation. The car was then purchased by American Sales & Leasing, of Orlando, Florida. [Jim Burke] purchase[d] the car from American Sales & Leasing, prior to its sale to Ms. McGrue. From the time of manufacture to its sale to Southwest Tex Leasing Company, its resale to American Sales & Leasing, its subsequent resale to [Jim Burke] in Orlando, Florida, and final sale to Ms. McGrue in Alabama, the car had traveled extensively in interstate commerce, with sales and resales occurring in multiple states."

(R. 42-45.)

Jim Burke later submitted, as evidence in support of its motion to compel arbitration, a transcription of McGrue's execution of the arbitration agreements; during her execution of the agreements, McGrue asked no questions about them, and they were fully disclosed to her, without misrepresentation.

McGrue submitted the following affidavit with her response to the motions to enforce the arbitration agreements:

"My name is Lori McGrue. I am the plaintiff in the above case. I purchased a Nissan Altima from [Jim Burke] on April 19, 2000. Soon thereafter, I discovered that the car had been wrecked before I bought it and I took it back to [Jim Burke]. They offered me a deal that included replacing the automobile with another[,] but they insisted that I sign an arbitration agreement as a condition of the sale. I refused to sign it. Later, I tried to trade with all of the [nonsignatory defendants] and all of them refused to trade unless I signed an arbitration agreement.

"My lawsuit makes no claim respecting the original purchase of the once wrecked Nissan Altima on April 19, 2000. I may decide to bring an arbitration proceeding to recover damages related to the original purchase from [Jim Burke], however, because the filing fees and other expenses are very high, I will need to save some money to do this. My lawsuit claims damages, injunctive relief and class action status because all of the defendants have conspired to deny my constitutional right to a trial by jury in civil actions at law. This is an illegal conspiracy and it constitutes an illegal boycott and restraint of trade.

"Although I did sign an arbitration agreement respecting my purchase of the Nissan Altima from [Jim Burke], this agreement should not extend to my claims regarding my attempt to purchase a replacement vehicle without having to submit to a binding arbitration agreement. Certainly, I have never signed any agreements with the [nonsignatory defendants], who likewise, uniformly refused to trade with me unless I agreed to arbitration.

"I believe I have a constitutional right to a jury trial in this case. I am over the age of nineteen, of sound mind, and competent to give evidence in this case. I have personal knowledge of the matters stated herein."

(R. 233-34.)

After conducting a hearing on the motions by Jim Burke and the nonsignatory defendants to enforce the arbitration agreements, the trial court entered the following order:

"Plaintiff brings this action for damages and injunctive relief against twenty-two Birmingham automobile dealers. She makes the claim on her own behalf and seeks class certification to represent all other customers who have bought motor vehicles from the defendants within the two years prior to the filing of the complaint. Plaintiff asserts two causes of action. She alleges that the defendants engaged in an illegal civil conspiracy to deprive the

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