Oakwood Mobile Homes, Inc. v. Godsey

• Decision Date: 28 December 2001
• Court: Alabama Supreme Court
• Parties: OAKWOOD MOBILE HOMES, INC., et al. v. Charlotte GODSEY.

824 So.2d 713

OAKWOOD MOBILE HOMES, INC., et al. v. Charlotte GODSEY.

1002005.

Supreme Court of Alabama.

December 28, 2001.

Jon B. Terry of Bains & Terry, Bessemer; and Hobson Manasco, Jr., Haleyville, for appellants.

Jonathan B. Lowe and Michael E. Newell of Lowe, Mobley & Lowe, Haleyville, for appellee.

MADDOX, Retired Justice.

This is an appeal by several defendants from an order of the trial court denying the defendants' motion to compel arbitration in a suit involving the sale and financing of a mobile home.

Charlotte Godsey sued Oakwood Mobile Homes, Inc., Oakwood Homes Corporation, Oakwood Acceptance Corporation, and Rhonda Jefferson (hereinafter referred to collectively as "Oakwood"), alleging that a mortgage allegedly executed by her to Oakwood Acceptance Corporation as security for the loan by which she purchased the mobile home was a forgery and that the forgery was a criminal offense and created a cause of action for damages. Godsey also alleged that Oakwood's conduct constituted a slander of title of her interest in the real property described in the mortgage and that Oakwood had committed the tort of outrage.

Oakwood responded to Godsey's complaint by filing a "Motion to Dismiss and to Compel Arbitration." After some discovery was conducted, the trial court set a date for a hearing on the motion, and initially entered an order compelling arbitration.¹

Godsey subsequently filed a motion to vacate, alter, or amend the order of the trial court granting Oakwood's motion to compel arbitration. The trial judge set the motion for a hearing, and on July 20, 2001, the trial judge entered an order denying Oakwood's motion to compel arbitration. Oakwood appealed.²

Facts

On or about July 29, 1997, Scottie Godsey, Goodsey's husband, traveled to Tupelo, Mississippi, and purchased a new mobile home from Oakwood Mobile Homes, Inc. Rhonda Jefferson was employed by Oakwood Mobile Homes as a salesperson and was the employee who personally dealt with Mr. Godsey. The purchase was to be financed by Oakwood Acceptance Corporation. On the date of the purchase, several documents were executed, including a purchase contract, a retail-installment contract, and other documents, including an arbitration agreement that is the subject matter of this appeal. As part of the closing of the loan transaction, Mr. Godsey executed a mortgage on a certain parcel of real property located in Winston County, Alabama, where the mobile home was to be installed. From the record before us, it appears undisputed that Charlotte Godsey did not sign any of the documents relating to the purchase of the mobile home and that, although her signature appears on the mortgage, her signature on that document was forged.

I.

On appeal, Oakwood contends that Godsey, although not a signatory of the arbitration agreement, was a third-party beneficiary of the contracts executed by her husband, including the arbitration agreement, and that she should be equitably estopped from denying that her claims are subject to arbitration. Oakwood says that it is undisputed that the Godseys went from their home in Winston County to Tupelo, Mississippi, to purchase the mobile home and that at the time of the purchase, Godsey and her husband owned, as joint tenants, a parcel of real property located in Winston County.

Although Oakwood admits that Scottie Godsey, the husband, executed the documents relating to the purchase of the mobile home, Oakwood points out that Godsey admitted in deposition testimony that she would have signed the mortgage document if anybody had asked her to sign it.

Oakwood candidly admits that the critical issue presented on this appeal is whether Godsey, as a nonsignatory to the arbitration agreement, can be compelled, as a third-party beneficiary of the contract to purchase and the financing documents for the purchase of the mobile home, to arbitrate her claims.

II.

Oakwood argues that this Court, along with federal courts, has held that the law relating to third-party beneficiaries applies to arbitration agreements, citing Ex parte Dyess, 709 So.2d 447 (Ala.1997); Dunn Constr. Co. v. Sugar Beach Condo. Assoc., Inc., 760 F.Supp. 1479 (S.D.Ala.1991); Ex parte Stamey, 776 So.2d 85 (Ala.2000). In its brief, Oakwood argues that Godsey's claims arise out of, or relate to, the purchase, financing, or occupancy of the mobile home, and that her claims are "so intertwined with the purchase, occupancy and financing of this mobile home that she, as a third party beneficiary, is bound by the terms of [the] Arbitration Agreement." It bases its argument on the fact that Godsey and Mr. Godsey were joint tenants as to the real property given as additional security for the purchase of the mobile home, and that the record shows that the Godseys asked Oakwood to use their land as collateral because they did not have money for a down payment. Oakwood further argues that the record shows that Godsey's name would have been included on the documents her husband executed but for the fact that she had been through a bankruptcy proceeding and had failed to reestablish her credit. Oakwood also argues that the record shows that Godsey was the person who came to Tupelo, picked out the mobile home, and reviewed the paperwork her husband signed, and that he signed the documents because he was relying on her statement that he could sign the closing statements, which included the arbitration agreement.

Godsey claims that because she did not sign the retail-installment agreement or the separate arbitration agreement she cannot be compelled to arbitrate her claims. She cites this Court's recent case of Equifirst Corp. v. Ware, 808 So.2d 1 (Ala.2001).

The facts in Equifirst are similar to the facts in this case. In Equifirst, Cynthia Ware sued Equifirst Corporation and others, seeking damages on claims that they had obtained title to her real property by fraud, had slandered her title, had conspired to obtain title to her real property by fraud, had conspired to slander her title, and had conspired to invade her privacy. Ware also sought equitable relief. She specifically sought a cancellation of a deed and a mortgage. Equifirst moved to compel arbitration of Ware's claims and the claims of Ware's mother, Eloise Harrington, who had not sued and who had made no claims, but who was later joined as an indispensable party.

The trial court in Equifirst, without making any findings of fact, denied Equifirst's motion to compel arbitration, and Equifirst appealed.

Because the facts in the Equifirst case are so similar to the facts in this case, we set them out as they are stated in the opinion in that case:

"The record indicates the following: Ware and Harrington were tenants in common as to real property located in Chambers County. During November 1998, Diann Lewis, a representative of Horton Homes, approached them about purchasing a new mobile home. When Lewis learned that Ware had previously filed a bankruptcy petition, she referred Ware and Harrington to a company known as LaGrange Mobile Homes, Inc. Lewis also referred Harrington and Ware to Tim Robinson, a mortgage broker at LaGrange, Magnolia Mortgage Company (`LaGrange Magnolia'), for special assistance with financing.

"After selecting a mobile home and having discussions with Robinson, Harrington learned that she, but not Ware, qualified for financing through LaGrange Magnolia and Equifirst. Equifirst agreed to provide Harrington the funds to purchase the mobile home in exchange for a promissory note and a real-estate mortgage securing repayment of the loan used to pay for the mobile home.

"In March 1999, although the financing arrangement had not been completed, LaGrange Mobile Homes delivered a mobile home and set it up on the real estate owned by Ware and Harrington. Several weeks later, on March 24, 1999, Robinson telephoned Harrington and told her the closing was scheduled for the following day at 1:30 p.m. Ware asserts that she was unaware of the scheduled closing.

"On March 25, 1999, Robinson picked up Harrington at the mobile home. Harrington, her aunt, the closing attorney, and Robinson attended the closing. Ware was not present at the closing. Harrington testified that, during the closing, the closing attorney presented, for Harrington's signature, a deed bearing the printed name of `Cynthia Ware.' According to Harrington, the closing attorney instructed Harrington to sign Ware's name to this document, and Harrington says she did so, knowing that the document was a deed, but she says she was unaware of the full impact of her actions. Harrington testified that she did not have Ware's permission to sign Ware's name on the deed and that Ware knew nothing of her actions.

"Equifirst denies that Harrington signed Ware's name at the closing. Equifirst alleges that the deed was delivered to Harrington before the closing and with the understanding that she was to obtain Ware's signature on that deed and return it to Robinson before the closing. Equifirst and Robinson assert that Harrington and Ware understood that, in order to obtain financing for the mobile home, Harrington had to hold, in her name alone, title to the real estate on which the mobile home was to be set up, and that Ware agreed to convey her interest in the real estate to Harrington. Equifirst further alleges that, before the closing, the deed was returned to Robinson's office, bearing the purported signature of Ware. Equifirst alleges that Robinson then presented the deed to a notary public, who notarized the deed, although he had not witnessed Cynthia Ware's signature on it. The deed purporting to convey Ware's interest to Harrington bears the date March 25, 1999; Ware's purported signature was notarized on that same date.

"During the closing, Harrington also signed the following rider, attached to the mortgage:

"`Any claim, dispute, or controversy (whether in contract, tort, or otherwise) arising from or related to the loan evidenced

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