Morris v. Terminix Services

• Decision Date: 01 October 2000
• Citation: Morris v. Terminix Services, 782 So.2d 249 (Ala. 2000)
• Parties: (Ala. 2000) (Re: Benjamin E. Morris and Cynthia Gayle Morris v. Terminix Services, Inc., et al.) 1990485
• Court: Alabama Supreme Court

782 So.2d 249 (Ala. 2000)

(Re: Benjamin E. Morris and Cynthia Gayle Morris v. Terminix Services, Inc., et al.)

1990485

SUPREME COURT OF ALABAMA

OCTOBER TERM, 2000-2001

Ex parte Ben Morris and Gayle Morris

PETITION FOR WRIT OF MANDAMUS

10/27/2000

(Baldwin Circuit Court, CV-99-394)

BROWN, Justice.

Ben and Gayle Morris are the plaintiffs in a civil action pending in the Baldwin Circuit Court. They petition for a writ of mandamus directing Judge James Reid to vacate his November 29, 1999, order granting a motion of the defendants Terminix Services, Inc., and Allied Bruce-Terminix Company (hereinafter, collectively referred to as "Terminix") to compel arbitration. We deny the writ.

In May 1997, the Morrises purchased a house located at 9671 Pleasant Road in Daphne, from Beulah Berga. Before the Morrises purchased the house, Terminix issued an "Official Alabama Wood Infestation Inspection Report," dated May 1, 1997. That report stated that the house had no visible signs of termite damage or infestation. However, the Morrises discovered substantial termite damage soon after they had purchased the house; Terminix agreed to pay for the work needed to repair that termite damage.

On August 13, 1997, after the damage had been repaired, Terminix issued the Morrises a "Termite Protection Plan." This contract, which contained an arbitration clause, was signed by each of the Morrises, but it was furnished unilaterally by Terminix and it required no initial payment from the Morrises.¹ The arbitration clause stated:

"The Purchaser and Terminix agree that all matters in dispute between them, including but not limited to any controversy or claim between them arising out of or relating to this Agreement or to the identified property [i.e., the Morrises' home] in any way, whether by virtue of contract, tort or otherwise, shall be settled exclusively by arbitration. Such arbitration shall be conducted in accordance with the Commercial Arbitration Rules then in force of the American Arbitration Association."

On September 24, 1997, the Morrises' attorney wrote to Terminix and advised it that the Morrises had found active termites in their house. Terminix retreated the Morrises' house, and it paid for additional repairs to the house in an attempt to put the house in a condition satisfactory to the Morrises. Additionally, Terminix paid a number of incidental expenses associated with the repairs, including cleaning costs and the costs of alternative housing for the Morrises. The total amount Terminix paid for the repairs and incidental expenses was over $30,000.

Despite numerous attempts by Terminix, the Morrises were not satisfied with Terminix's efforts to repair their house, and on April 27, 1999, they sued Terminix in the Baldwin Circuit Court, alleging misrepresentation and negligence or wantonness. The Morrises also asserted in the same action a fraud claim against Berga. On June 3, 1999, Terminix moved to compel arbitration, relying on the arbitration clause in the Termite Protection Plan. On October 6, 1999, the circuit court granted Terminix's motion to compel arbitration. The Morrises filed this petition for the writ of mandamus on December 15, 1999.²

The writ of mandamus is a drastic and extraordinary remedy, to be issued only when there is (1) a clear legal right in the petitioner to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) properly invoked jurisdiction of the court. Ex parte Horton, 711 So. 2d 979, 983 (Ala. 1998) (citing Ex parte United Serv. Stations, Inc., 628 So. 2d 501 (Ala. 1993)); Ex parte Alfab, Inc., 586 So. 2d 889, 891 (Ala. 1991) (citing Martin v. Loeb & Co., 349 So. 2d 9 (Ala. 1977)). Moreover, "`[t]he right sought to be enforced by mandamus must be clear and certain with no reasonable basis for controversy about the right to relief,' and `[t]he writ will not issue where the right in question is doubtful.'" Ex parte Bozeman, 420 So. 2d 89, 91 (Ala. 1982) (quoting Ex parte Dorsey Trailers, Inc., 397 So. 2d 98, 102 (Ala. 1981)). "A petition for a writ of mandamus is the proper means by which to challenge a trial court's order granting a motion to compel arbitration." Ex parte Napier, 723 So. 2d 49, 52 (Ala. 1998) (citing Ex parte Phelps, 672 So. 2d 790 (Ala. 1995)). An order granting a motion to compel arbitration is reviewed under an abuse-of-discretion standard. Capital Inv. Group, Inc. v. Woodson, 694 So. 2d 1268, 1270 (Ala. 1997).

The Morrises contend that their claims are not subject to the arbitration clause contained in the termite-protection plan because, they contend, their complaint alleges conduct based upon Terminix's representations contained in the Official Alabama Wood Infestation Inspection Report issued on May 1, 1997, which did not contain an arbitration clause. They argue that because the termite damage was discovered before August 13, 1997, the actions complained of in this lawsuit occurred before Terminix issued the protection plan that contained the arbitration clause.

Alternatively, the Morrises contend that their claims are outside the scope of the arbitration clause because, they claim, the plan states that "Terminix is not responsible for the repair of either visible damage or hidden damage existing as of the date of this Agreement." The Morrises claim that this damage was discovered before the date of the agreement and, thus, that it is not covered. Finally, the Morrises cite this Court's opinion in Ex parte Discount Foods, Inc., 711 So. 2d 992 (Ala.), cert. denied sub nom Supervalu Inc. v. Discount Foods, Inc., 525 U.S. 825 (1998), for the proposition that arbitration provisions in a contract do not extend to disputes that the parties did not agree to arbitrate.

Initially, it would appear that the decision in Terminix International Co. v. Jackson, 723 So. 2d 555 (Ala. 1998), a case with essentially the same facts³ as those presented in the Morrises' action, controls the determination of this question. The Jacksons sued Terminix, alleging fraud and negligence arising out of Terminix's issuance of a "termite letter." They also alleged a breach of contract arising out of Terminix's termite-protection plan. The termite-protection plan contained an arbitration clause apparently stating that "The Purchaser and Terminix agree that any controversy or claim between them arising out of or relating to the interpretation, performance or breach of any provision of this agreement shall be settled exclusively by arbitration." See Allied-Bruce Terminix Cos. v. Dobson, 684 So. 2d 102, 110 (Ala. 1995). This Court held that the Jacksons were required to arbitrate their breach-of-contract claim, but that the claims alleging fraud and negligence were outside the scope of the arbitration clause found in Terminix's termite-protection plan. The Court stated:

"We do note that the termite protection bond provides certain remedies to the Jacksons if new termite infestations occur, whereas the allegations of Counts I and II pertain to an inspection of the house for the sake of issuing a `termite letter' to facilitate the Jacksons' purchase of the house. This is virtually the same situation that was presented in Allied-Bruce Terminix [Cos.] v. Dobson[, 684 So. 2d 102 (Ala. 1995)]. ... As in Dobson, we do not see that the activities in regard to the termite letter give rise to claims `arising out of or relating to the interpretation, performance or breach of any provision of' the termite protection plan."

723 So. 2d at 558.

An examination of the arbitration clause contained in the Morrises' Termite Protection Plan reveals an agreement broader than the one contained in the plaintiffs' plan in Dobson. Whereas the arbitration agreement in Dobson related only to matters arising out of any provision of the termite-protection plan, the arbitration clause in the Morrises' plan covers "any controversy or claim between [the Morrises and Terminix] arising out of or relating to this Agreement or to the identified property in any way, whether by virtue of contract, tort or otherwise."

"[A]n arbitration provision will be enforced in Alabama to the extent that enforcement is required by federal law." Green Tree Fin. Corp. v. Shoemaker, [Ms. 1980978, July 14, 2000] ___ So. 2d ___, ___ (Ala. 2000). Moreover, cases interpreting the Federal Arbitration Act mandate that a court give the broadest possible interpretation to an arbitration agreement and resolve all doubts in favor of arbitration. A.G. Edwards & Sons, Inc. v. Syvrud, 597 So. 2d 197, 200-01 (Ala. 1992). The plain language of the arbitration clause contained in the Termite Protection Plan executed by the Morrises on August 13, 1997, requires them to submit to arbitration "any controversy or claim between [the Morrises and Terminix] arising out of or relating to this Agreement or to the identified property in any way, whether by virtue of contract, tort or otherwise." The claims presented by the Morrises' action are clearly "matters in dispute" between the Morrises and Terminix and are matters that arise out of or relate to the "identified property," namely the Morrises' house at 9671 Pleasant Road in Daphne; thus, the arbitration agreement encompasses the Morrises' claims alleging fraud and negligence or wantonness on the part of Terminix in regard to its issuance of the May 1997 "termite letter."

The Morrises also argue that the arbitration agreement contained in the Termite Protection Plan is unenforceable for want of consideration. However, a similar claim was rejected in Green Tree Financial Corp. v. Vintson, 753 So. 2d 497, 502 (Ala. 1999), wherein we held that an arbitration agreement is not unenforceable for want of consideration, where there is consideration for the contract as a whole. Moreover, the Morrises subsequently ratified the Termite Protection Plan by paying renewal fees in 1998 and 1999. See Ex parte Rush, 730...