Montgomery Ford Lincoln Mercury v. Hall
| Citation | 999 So.2d 964 |
| Decision Date | 27 June 2008 |
| Docket Number | 2070106. |
| Parties | MONTGOMERY FORD LINCOLN MERCURY, INC., et al. v. Hiawatha HALL and Shawn M. Jones. |
| Court | Alabama Court of Civil Appeals |
Roger S. Morrow and Jason E. Burgett of Morrow, Romine & Pearson, P.C., Montgomery; and Richard F. Matthews, Jr., of the Anderson Law Firm, L.L.C., Montgomery, for appellants.
Milton C. Davis, Tuskegee, for appellees.
Montgomery Ford Lincoln Mercury, Inc. ("MFLM"), Steve Hecht, and Mike Dean appeal from an order of the Montgomery Circuit Court denying their motion to compel arbitration. We reverse and remand.
On November 21, 2006, Hiawatha Hall and Shawn M. Jones negotiated with MFLM regarding the purchase of a new 2006 Ford Explorer sport-utility vehicle. Steve Hecht acted as the sales manager for the dealership in connection with this transaction; Mike Dean acted as the finance manager for the dealership. On that same date, Hall and Jones agreed to purchase and MFLM agreed to sell the 2006 Ford Explorer for a total price of $28,627.23 with a $2,500 rebate to be assigned to MFLM; the rebate was to serve as the down payment by Hall and Jones.
In connection with that transaction, Hall and Jones executed an "Alabama Simple Interest Vehicle Retail Installment Contract," a "Bill of Sale," and a stand-alone "Arbitration Agreement." After executing the paperwork, Hall and Jones left the dealership with the Ford Explorer.
Twenty-one days later, an agent of MFLM contacted Jones and informed him that he needed to come to the dealership to execute additional paperwork. The following day, Jones drove to the dealership. Upon arriving there, agents of MFLM immediately took possession of the Ford Explorer and informed Jones that proper financing could not be obtained for him.
On May 2, 2007, Hall and Jones sued MFLM, Hecht, and Dean. In their complaint Hall and Jones alleged claims of fraudulent misrepresentation in connection with the negotiation and sale of the Ford Explorer; they also alleged conversion and theft arising out of MFLM's repossession of the Ford Explorer. MFLM, Hecht, and Dean moved to compel arbitration, pursuant to the Federal Arbitration Act ("the FAA"), 9 U.S.C. § 1 et seq., of the claims asserted against them.1 They asserted that the parties had agreed to submit their disputes to arbitration and that their transaction involved interstate commerce. In support of their motion to compel arbitration, MFLM, Hecht, and Dean submitted, among other things, a copy of the bill of sale; a copy of the stand-alone arbitration agreement; the affidavit of Michael J. Frakes II, the secretary/treasurer and comptroller for MFLM; and documentation from the office of the Secretary of State of Alabama pertaining to Ford Motor Credit Company, LLC, the company to which Hall and Jones's credit application had been submitted. They also submitted a brief in support of their motion. Additional exhibits were attached to the brief, including a second affidavit of Michael J. Frakes II.
After a hearing on the motion to compel arbitration, the trial court entered an order, dated September 4, 2007. In that order, the trial court concluded that the arbitration agreement was void and unenforceable because MFLM had declared the purchase contract void.
Fleetwood Enters., Inc. v. Bruno, 784 So.2d 277, 280 (Ala.2000) (emphasis omitted).
We note that Hall and Jones signed several documents as part of the November 21, 2006, transaction with MFLM. We construe all of those documents as a single contract. See Dan Wachtel Ford, Lincoln, Mercury, Inc. v. Modas, 891 So.2d 287, 290 (Ala.2004) ().
In support of their motion to compel arbitration, MFLM, Hecht, and Dean pointed out that Hall and Jones had executed a stand-alone arbitration agreement in which they agreed to arbitrate "[a]ny and all disputes, claims, or controversies between the Parties relating to the Vehicle or arising out of or relating to: (a) the application for and the terms of and enforceability of the sale, lease, or financing of the Vehicle, (b) the purchase of terms of any warranty, service agreement, maintenance plan, paint/undercarriage/interior protection product, anti-theft etching product and warranty, GAP protection, deficiency waiver addendum, or any other product or insurance, (c) any claims of breach of contract, negligence, misrepresentation, conversion, fraud, or unfair and deceptive trade practices, (d) any claim of a violation of any state or federal statute or regulation, or (e) the Vehicle's condition, warranty, workmanship, servicing, maintenance or repair."
We also note that the "Alabama Simple Interest Vehicle Retail Installment Contract" also contained an arbitration provision. That agreement provided:
Based on the existence of these arbitration agreements in the documents executed by Hall and Jones, it cannot be disputed that Hall and Jones agreed to arbitrate any dispute arising out of their transaction with MFLM.
We acknowledge that Hall and Jones assert that the contract at issue in this case is void and, therefore, that the contract, including the arbitration provisions contained therein, is unenforceable. However, the United States Supreme Court has held otherwise.
In Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 126 S.Ct. 1204, 163 L.Ed.2d 1038 (2006), the United States Supreme Court recognized that when a party to a contract containing an arbitration provision challenged the contract as void, the arbitration provision remained enforceable and the issue of arbitrability was for the arbitrator to resolve rather than for the trial court.2 This principle was again recognized by the Alabama Supreme Court in Paragon Ltd. v. Boles, 987 So.2d 561, 567 (Ala.2007). Therefore, the fact that Hall and Jones purport to challenge the enforceability of the underlying contract does not negate the enforceability of their agreement to arbitrate.
We also point out that the claims alleged by Hall and Jones in their complaint rely on a completed and executed contract. In their complaint, Hall and Jones allege that MFLM fraudulently induced them into entering into the purchase transaction and that MFLM converted property (the Ford Explorer) that belonged to Hall and Jones and committed theft of property (the Ford Explorer) against Hall and Jones. For each of those claims to have any validity, we must presume that the purchase transaction was consummated and either that Hall and Jones were induced to act or that the Ford Explorer became the property of Hall and Jones.
Thus, under Hall and Jones's complaint, they seek to benefit from an executed contract, but, at the same time, they seek to repudiate the validity of the arbitration provisions contained therein. Hall and Jones cannot claim the benefits of a contract while simultaneously repudiating its burdens and conditions. See, e.g., Noland Health Servs., Inc. v. Wright, 971 So.2d 681 (Ala.2007) (quoting Southern Energy Homes, Inc. v. Ard, 772 So.2d 1131 (Ala. 2000)). For these reasons, we conclude that MFLM has established the existence of a valid contract calling for arbitration.
MFLM, Hecht, and Dean also argue that the sale of the Ford Explorer was a transaction involving interstate commerce. In support of this argument, MFLM, Hecht, and Dean submitted the affidavits of Michael J. Frakes II, the secretary/treasurer and comptroller of MFLM, to attest to the interstate nature of MFLM's business. Frakes attested that MFLM is a Delaware corporation; that the Ford Explorer at issue in this case was assembled in Louisville, Kentucky, and was transferred to Montgomery, Alabama, for sale; and that there are no Ford manufacturing or assembly plants located in Alabama. He also attested that the loan application was submitted to Ford Motor Credit Company, which has its principal place of business in Dearborn, Michigan. Frakes also attested that MFLM routinely accesses credit reports on individuals through "First Advantage Credco," located in Poway, California.
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... ... to a contract containing an arbitration clause." See Montgomery Ford Lincoln Mercury, Inc. v. Hall , 999 So. 2d 964, 968, 971 (Ala. Civ ... ...