Premiere Automotive Group, Inc. v. Welch

• Decision Date: 06 April 2001
• Citation: 794 So.2d 1078
• Parties: PREMIERE AUTOMOTIVE GROUP, INC., d/b/a Premiere Pontiac, Buick, GMC, Toyota; Charles Mitchell; and Joe Plexico v. Carl A. WELCH. AmSouth Bank, N.A. v. Carl A. Welch.
• Court: Alabama Supreme Court

794 So.2d 1078

PREMIERE AUTOMOTIVE GROUP, INC., d/b/a Premiere Pontiac, Buick, GMC, Toyota; Charles Mitchell; and Joe Plexico v. Carl A. WELCH.

AmSouth Bank, N.A. v. Carl A. Welch.

1031.

Supreme Court of Alabama.

April 6, 2001.

John Martin Galese and David A. Norris of Galese & Ingram, P.C., Birmingham, for appellants Premiere Automotive Group, Inc., Charles Mitchell, and Joe Plexico.

C. William Gladden and James S. Witcher III of Gladden & Sinor, P.C., Birmingham, for appellant AmSouth Bank, N.A.

W. Scears Barnes, Jr., of Barnes & Radney, P.C., Alexander City; and John K. Johnson, Rockford, for appellee.

LYONS, Justice.

Carl A. Welch sued Premiere Automotive Group, Inc., doing business as Premiere Pontiac Buick GMC Toyota ("Premiere"); AmSouth Bank, N.A. ("AmSouth"); Charles Mitchell; and Joe Plexico, alleging suppression, misrepresentation, conspiracy, and a violation of Alabama's Deceptive Trade Practices Act, § 8-19-1 et seq., Ala. Code 1975. All claims related to the sale and financing of an automobile. At all pertinent times herein, Mitchell and Plexico were employees of Premiere. The defendants moved to compel arbitration of Welch's claims; the trial court denied their motions. The defendants appeal from the orders denying their motions to compel arbitration.¹ We reverse and remand with instructions.

I. Factual Background

Welch's complaint alleges that his daughter, Amy Welch Andrews, had financed with AmSouth the purchase of a 1999 Toyota Camry automobile from Premiere. Welch alleges that his daughter signed his name to the sale documents without his permission, after he had expressly informed Mitchell and Plexico, as agents of Premiere, that he would not sign the documents if he was listed as the buyer. Welch further alleges that Mitchell later advised Andrews that he had talked to Welch and that her father had approved her signing his name to the sale documents.

Several weeks after the sale, according to the complaint, AmSouth mailed Welch a payment book. Welch says he then advised AmSouth that he did not know what he had supposedly purchased, and he says that AmSouth advised him that he had purchased a 1999 Toyota Camry. Welch says that he told AmSouth that he had not purchased the automobile. According to the complaint, AmSouth assured Welch that it would contact Premiere and AmSouth would call Welch back.

The complaint states that at a later date Plexico telephoned Welch and instructed him to return the automobile to the dealership by 1:00 p.m. that same day. Welch says that Plexico told him that if he failed to do so, Premiere would prosecute his daughter for "grand theft." At some time thereafter, according to the complaint, Welch applied for a loan for himself but was refused credit because of "excessive obligations in relation to income." Welch says that a few months later, AmSouth notified him that the account on the Camry was in arrears, and he says he again told AmSouth that he had not purchased the automobile. Welch's complaint demands an unspecified amount of compensatory and punitive damages.

II. The Proceedings Below

Premiere, Mitchell, and Plexico (hereafter referred to collectively as "the Premiere defendants") filed a motion to stay the action and to require Welch to submit his claim to binding arbitration pursuant to the provisions of the Federal Arbitration Act, 9 U.S.C. § 1 et seq. ("FAA"). The motion was based upon a written agreement to arbitrate included in the documents allegedly executed by Welch. The Premiere defendants attached an affidavit given by Mitchell, who testified that Andrews presented the arbitration agreement to him bearing what was purported to be Welch's signature, and who further testified that Andrews represented to him at that time that she had obtained her father's signature on the arbitration agreement and on other documents in connection with the purchase of the Toyota. AmSouth filed a motion requesting enforcement of the arbitration agreement set forth in a retail installment contract that also bears the purported signature of "Carl A. Welch."

The terms of the applicable agreements are not material, because Welch has not challenged in this appeal the scope of the agreements to arbitrate. Welch unequivocally denies signing any of the documents that would have been necessary to purchase a vehicle from Premiere or to finance it with AmSouth.

Shortly after the motions to compel arbitration had been filed, Welch filed materials in opposition, attaching his and his daughter's affidavits. Four days later, the trial court summarily denied the motions to compel arbitration filed by the Premiere defendants and AmSouth. On the next day, the Premiere defendants moved the court for leave to conduct limited discovery as to matters relating to the enforceability of the arbitration agreements at issue. A hearing on this motion was at that time set for approximately one month later, but, on the next day, a representative of the trial court contacted the Premiere defendants' counsel and advised that the hearing on their motion for leave to conduct discovery would have to be rescheduled. Welch thereafter responded to the motion by contending that the trial court's order denying arbitration rendered the motion moot. Premiere and AmSouth thereafter filed timely notices of appeal.²

III. Issues

All parties agree that there must be a trial on the issue of the making of the agreements to arbitrate. The only issues before us are the timing of the trial and, if the trial is to take place before any trial of the underlying issues in the action, whether discovery limited to the issue of execution of the agreements is appropriate.

A. Timing of the Trial

Under the provisions of § 4 of the FAA, "[i]f the making of the arbitration agreement ... be in issue, the court shall proceed summarily to the trial thereof." If a jury has been demanded, the trial court "shall" refer the issues to a jury. "If the jury find that an agreement for arbitration was made ..., the court shall make an order summarily directing the parties to proceed with the arbitration...." Id.

Our caselaw has analogized the practice on motions to compel arbitration to motions for summary judgment. In Southern Energy Homes, Inc. v. Harcus, 754 So.2d 622, 625-26 (Ala.1999), Justice See wrote:

"This Court reviews de novo a trial court's denial of a motion to compel arbitration. See Crimson Industries, Inc. [v. Kirkland], 736 So.2d [597,] 600 [(Ala.1999)]; Patrick Home Center, Inc. v. Karr, 730 So.2d 1171, 1171 (Ala.1999). This Court has stated that a trial court's duty in ruling on a motion to compel arbitration is analogous to its duty in ruling on a motion for summary judgment and that the trial court is to hold a hearing and determine whether there are genuine issues of material fact concerning the making of, or performance of, an arbitration agreement. See Allied-Bruce Terminix Companies, Inc. v. Dobson, 684 So.2d 102, 108 (Ala.1995).

`"[A]fter a motion to compel arbitration has been made and supported, the burden is on the non-movant to present evidence that the supposed arbitration agreement is not valid or does not apply to the dispute in question."` Ryan's Family Steak Houses, Inc. v. Regelin, 735 So.2d 454, 457 (Ala.1999) (quoting Jim Burke Automotive, Inc. v. Beavers, 674 So.2d 1260, 1265 n. 1 (Ala.1995)) (alteration in Regelin)."

Because the facts before us in Harcus were similar to the facts presented in these appeals, the result we reached in Harcus is instructive for our resolution of the questions raised in these appeals. In Harcus, we stated:

"One of the major issues on appeal is whether the Harcuses agreed to arbitrate their claims against Southern Energy. The Harcuses argue that Southern Energy cannot compel arbitration of their claims because, they say, they did not agree to arbitrate any disputes with Southern Energy. Specifically, the Harcuses argue that they did not sign the Arbitration Agreement contained in the written warranty. ...

"`This Court has clearly and consistently held that a party cannot be required to submit to arbitration any dispute he has not agreed to submit.' Ex parte Stallings & Sons, Inc., 670 So.2d 861, 862 (Ala.1995) (internal quotation marks omitted). In determining whether the parties agreed to arbitrate a dispute, this Court applies general Alabama contract-law principles. See Quality Truck & Auto Sales, Inc. v. Yassine, 730 So.2d 1164, 1167-68 (Ala. 1999) (`This Court is required to compel arbitration if, under "ordinary state-law principles that govern the formation of contracts," the contract containing the arbitration clause is enforceable.') (quoting Crown Pontiac, Inc. [v. McCarrell], 695 So.2d [615,] 617 [(Ala.1997)]). The FAA requires this Court, in applying Alabama contract law to questions of arbitrability, to resolve `any doubts concerning the scope of arbitrable issues... in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.' Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983).

"We cannot determine, from the scant record before us, whether the Harcuses agreed, either by ratification or otherwise, to submit their claims against Southern Energy to arbitration. Although the record on appeal contains some evidence, we do not have a sufficient basis to resolve conflicts in that evidence. Therefore, we must remand this case for the trial court to make specific factual findings. On remand, the trial court is to conduct further proceedings and to take evidence as may be necessary, including testimony from such witnesses, by deposition or otherwise, as the parties choose to present. The trial court shall file a return to this remand within 42 days of the date of this opinion. The return to remand shall include a transcript of any proceedings conducted by the trial

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