McConnell Auto. Corp. v. Jackson

• Decision Date: 01 November 2002
• Citation: 849 So.2d 159
• Parties: McCONNELL AUTOMOTIVE CORPORATION et al. v. Robert JACKSON and Kisha Jackson.
• Court: Alabama Supreme Court

849 So.2d 159

McCONNELL AUTOMOTIVE CORPORATION et al. v. Robert JACKSON and Kisha Jackson.

1010006.

Supreme Court of Alabama.

November 1, 2002.

Michael P. Windom of Windom & Tobias, L.L.C., Mobile, for appellants.

John Ronald Spencer, Mobile, for appellees.

MADDOX, Retired Justice.

The sole question presented by this appeal is whether the trial court erred in refusing to compel arbitration in this case on the basis that the underlying transaction did not have a substantial effect on interstate commerce. The plaintiffs, Robert Jackson and Kisha Jackson, claimed that the defendants, McConnell Automotive Corporation ("McConnell"); Terry Anderson, a sales representative for McConnell ("Anderson"); and Stacy Hill, the used-car manager of McConnell ("Hill"), were guilty of fraud, misrepresentation, suppression, and deceit arising out of the sale of a used automobile.¹

The defendants filed a motion to dismiss the Jacksons' complaint, or alternatively, to compel arbitration. They attached as exhibits to the motion a "Used Vehicle Retail Buyer's Order" and the "Arbitration Agreement." Both of those documents were signed by Kisha Jackson. In support of their motion to compel arbitration, the defendants filed an affidavit of Raymond Zakutney, a vice president of McConnell, and affidavits of Anderson and Hill, in which they showed the history of the motor vehicle that is the subject of this dispute.

Facts

On or about March 8, 2001, Kisha Jackson purchased a 1999 Cadillac DeVille automobile from McConnell.² Anderson was a sales representative for McConnell, and, according to an affidavit filed in the trial court by Kisha Jackson, was the salesperson with whom she dealt. In her affidavit she stated that "[b]efore purchasing [the] vehicle [she] asked Terry Anderson whether the Cadillac DeVille had been wrecked" and "[he] assured [her] that it had not been wrecked." She also stated in her affidavit that she spoke with Hill, who was the used-car manager of McConnell, and that she asked Hill if the vehicle had been wrecked and "[he] assured [her] that it had not been wrecked."

The question crucial to a determination of this particular appeal is whether the defendants can enforce the arbitration agreement executed by Kisha Jackson at the time of the transaction in accordance with its terms. The arbitration agreement was a separate document; it reads:

"ARBITRATION AGREEMENT

"Buyer/lessee acknowledges and agrees that the vehicle purchased or leased herein has traveled in interstate commerce. Buyer/lessee thus acknowledges that the vehicle and other aspects of the sale, lease or financing transaction are involved in, affect, or have a direct impact upon, interstate commerce.

"Buyer/lessee and dealer agree that all claims, demands, disputes, or controversies of every kind or nature that may arise between them concerning any of the negotiations leading to the sale, lease or financing of the vehicle, terms and provisions of the sale, lease or financing agreement, arrangements for financing, purchase of insurance, purchase of extended warranties or service contracts, the performance or condition of the vehicle, or any other aspects of the vehicle and its sale, lease or financing shall be settled by binding arbitration conducted pursuant to the provision of 9 U.S.C. Section 1 et seq. and according to the Commercial Rules of the Mobile Better Business Bureau. Without limiting the generality of the foregoing, it is the intention of the buyer/lessee and the dealer to resolve by binding arbitration all disputes between them concerning the vehicle, its sale, lease or financing, and its condition, including disputes concerning the terms and conditions of the sale, lease or financing, the condition of the vehicle, any damage to the vehicle, the terms and meaning of any of the documents signed or given in connection with the sale, lease or financing, any representations, promises or omissions made in connection with negotiations for the sale, lease, or financing of the vehicle, or any terms[,] conditions, or representations made in connection with the financing, credit life insurance, disability insurance, and vehicle extended warranty or service contract purchased or obtained in connection with the vehicle. "Either party may demand arbitration by filing with the American Arbitration Association a written demand for arbitration along with a statement of the matter in controversy. A copy of the demand for arbitration shall simultaneously be served upon the other party. The buyer/lessee and the dealer agree that the arbitration proceedings to resolve all such disputes shall be conducted in the city where dealer's facility is located."

Although the trial judge did not state his reasons for denying the defendants' motion to compel arbitration, it seems apparent from the record that the trial judge, after considering the oral arguments of counsel and the holdings of cases cited by the parties, determined that the transaction did not have a substantial effect on interstate commerce.

In conducting our de novo review we have studied the evidence that was before the trial court. That evidence shows that McConnell purchased the Cadillac from General Motors Auction Department, located in Warren, Michigan, at an auction conducted by ADESA Birmingham, located in Moody, Alabama. When McConnell purchased the vehicle it had a Georgia certificate of title issued on October 27, 1998. The certificate of title shows the owner of the vehicle as follows:

"GMAC

"Daniel, Dolores R.

"PO Box 55306

"Birmingham, AL 35255"

Under the subheading "1st Lien Or Security Interest," the following appears:

"GMAC

"PO Box 8107

"Cockeysville, MD 21030"

The document evidencing the sale of the Cadillac shows that the seller was General Motors Auction Department, 30007 Van Dyke Avenue, Warren, Michigan, and that the buyer was McConnell.

There is other evidence in the record indicating that the vehicle was transported from Georgia to Alabama; that McConnell, although its principal place of business is located in Mobile, in the course of that business has sold motor vehicles to customers who reside out of state; and that McConnell has financed motor vehicles with companies whose principal places of business are not within Alabama.

I.

We first note that a direct appeal is the proper procedure to obtain appellate review of a trial court's order granting or denying a motion to compel arbitration. See Rule 4(d), Ala. R.App. P.; Tefco Fin. Co. v. Green, 793 So.2d 755, 758 (Ala.2001). The scope of this Court's review on appeal is de novo. Id. The burden of proving that the subject transaction substantially affected interstate commerce is on the party seeking to compel arbitration. Id. See also Transouth Fin. Corp. v. Bell, 739 So.2d 1110, 1114 (Ala.1999), and Jim Burke Auto., Inc. v. Beavers, 674 So.2d 1260, 1265 (Ala.1995) (opinion on rehearing). If a movant meets the burden required by law, the burden then shifts to the nonmovant to present evidence indicating that the arbitration agreement is not valid or does not apply to the disputed question. Id.

II.

We now consider the crucial issue on this appeal: Did the defendants present sufficient evidence to show that the subject transaction had a substantial effect on interstate commerce? The defendants argue that the evidence shows that McConnell is an automobile dealership located in Mobile, Alabama; that it sells new and used vehicles; and that it sells vehicles to customers who reside out of state. McConnell also argues that it has financed vehicles with companies whose principal places of business are outside the State of Alabama.

The defendants, in their brief to this Court, contend that the arbitration agreement Kisha Jackson signed is enforceable under the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1 et seq., as interpreted by the Supreme Court of the United States in Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265, 115 S.Ct. 834, 130 L.Ed.2d 753 (1995).

Although the defendants rely on Allied-Bruce Terminix, they recognize that this Court, in Sisters of the Visitation v. Cochran Plastering Co., 775 So.2d 759 (Ala. 2000), now requires that there be a "substantial" effect on interstate commerce for a transaction to be governed by the provisions of the FAA. They contend that the facts of this case are similar to other motor-vehicle arbitration cases decided by this Court, in which this Court has compelled arbitration in accordance with the terms and conditions of an arbitration agreement. They cite Hurst v. Tony Moore Imports, Inc., 699 So.2d 1249 (Ala. 1997), which involved the sale of a used motor vehicle, and in which this Court analyzed the arbitration agreement and an affidavit executed by the dealership's president and affirmed the trial court's order enforcing the arbitration agreement. The defendants also rely on Jim Burke Automotive, Inc. v. McGrue, 826 So.2d 122 (Ala.2002). McGrue, the plaintiff in that case, purchased a used Nissan Altima automobile from the defendant, Jim Burke Automotive, Inc. ("Jim Burke"). After the purchase, she brought conspiracy and antitrust claims against Jim Burke; 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. (the Court referred to these other automobile dealerships as "the nonsignatory defendants"). She also alleged that her constitutional right to a trial by jury had been violated and requested certification of her case as a class action.

In that case, Jim Burke and the nonsignatory defendants filed ...