Redman Home Builders Co. v. Lewis

• Decision Date: 29 May 2007
• Docket Number: No. CV-2:07-107.,CV-2:07-107.
• Citation: 513 F.Supp.2d 1299
• Court: U.S. District Court — Southern District of Alabama
• Parties: REDMAN HOME BUILDERS CO., Plaintiff, v. Andrew LEWIS and Mary Lewis, Defendants.

Page 1299

513 F.Supp.2d 1299

REDMAN HOME BUILDERS CO., Plaintiff, v. Andrew LEWIS and Mary Lewis, Defendants.

No. CV-2:07-107.

United States District Court, S.D. Alabama, Northern Division.

May 29, 2007.

Order Amending Judgment In Part July 25, 2007.

Lee E. Bains, Jr., Matthew Lee Huffaker, Thomas W. Thagard, III, Maynard, Cooper, and Gale P.C., Birmingham, AL, Wayne Scott Simpson, Ritchey & Simpson, PLLC, Birmingham, AL, for Plaintiff.

David G. Wirtes, Jr., John T. Crowder, Jr., Edwin Lamberth, Richard Edwin Lamberth, Steven L. Nicholas, Cunningham, Bounds, Crowder, Brown, & Breedlove, LLC, Mobile, AL, for Defendants.

ORDER

KRISTI K. DUBOSE, District Judge.

This matter is before the Court on defendants' "Motion to Dismiss" (Doc. 11) brief in support (Doc. 12) filed March 9, 2007 and supplemental brief in support (Doc. 16) filed March 30, 2007; plaintiff's response in opposition thereto (Doc. 17) filed April 6, 2007, and defendants' reply brief, (Doc. 22) filed April 25, 2007. Upon consideration, and for the reasons set out more fully below, defendants' motion to dismiss is GRANTED,

I. PROCEDURAL HISTORY

On February 13, 2007, plaintiff, Redman Homes, Inc., ("Redman" or "plaintiff") pursuant to the Federal Arbitration Act 9 U.S.C. § 4¹, filed a complaint and petition to compel arbitration against defendants Andrew Lewis and Mary Lewis ("Lewises" or "defendants"). (Doc. 1) Redman alleges that the filing of its' petition was instigated by the Lewises' "improper filing of a demand for a purported class action arbitration. ..." (Id. at 1) Redman seeks a declaration that the Lewises's class arbitration demand is "contrary to Alabama law, is in direct contradiction of Defendant's Arbitration Agreement and is impermissible." (Id. at 15) In addition, Redman seeks injunctive relief in that it requests that this Court "compel" the Lewises to "arbitrate their dispute as expressly provided in the Arbitration Agreement." (Id. at 4)

On March 9, 2007 the Lewises filed the instant motion to dismiss on the grounds, in sum, that this Court lacks subject matter jurisdiction over this action. (Docs.11, 12) The Lewises filed a supplemental brief on March 30, 2007. (Doc. 16) In opposition to the motion to dismiss Redman maintains that the Court has jurisdiction under the Federal Arbitration Act 9 U.S.C. § 4 and 28 U.S.C. § 1332. (Doc. 17) The defendants' motion to dismiss has been fully briefed and is now ripe for this Court's consideration.

II. FACTUAL BACKGROUND

1. On or about September 9, 2002, the Lewises purchased a Redman manufactured mobile home from Future Housing, which is located in Tuscaloosa County, Alabama. (Doc. 1, ¶ 8.) At the time of the purchase of the home, Redman provided the Lewises with a one-year limited warranty that contained the following arbitration agreement:

ARBITRATION AND LIMITATION OF REMEDIES:

It is agreed that any controversy, claim or dispute between or among the Manufacturer homeowner, independent dealer, finance company or any other person or entity arising from or relating to the Manufactured Home, its sale, transportation, setup, repair, installation, use, design, manufacture, financing, insurance, any other condition, the manufacturers limited warranty, any contract or any alleged promise, representation, agreement or instrument relating to or delivered in connection with the Manufactured Home, or any alleged breach thereof, and any claim based on or arising from an alleged tort or claim of any kind whatsoever, including any claim relating to the validity of this arbitration provision [collectively "Claim(s)"], and if the Claim(s) cannot be resolved through direct discussions or negotiations, the Claim(s) first shall be mediated as administered by the American Arbitration Association under its Commercial Mediation Rules before resorting to binding arbitration. Thereafter, any unresolved Claim(s) shall be settled by binding arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules, and any judgment on the award rendered by the arbitrator(s) may be entered in any Court having jurisdiction thereof. All fees and expenses of the mediation or arbitration shall be borne by the parties equally, unless otherwise agreed in writing. Moreover, each party shall bear the expense of its own counsel, experts, witnesses and other costs, including preparation and presentation of proofs. All mediation or arbitration proceedings shall be conducted in the jurisdiction of the original retail sale or at any other place selected by agreement of all parties.

IT IS AGREED AND UNDERSTOOD THAT THE PARTIES ARE KNOWINGLY GIVING UP AND WAIVING CERTAIN RIGHTS TO TRIAL BY JURY. This arbitration and limitation of remedies provision is part of the manufacturers limited warranty for the Manufactured Home and shall be binding on and inure to the benefit of the parties respective heirs and assigns.

(Doc. 1, Ex. 1, p. 10.)²

2. A dispute arose between the parties regarding the condition of the Lewises' manufactured home. On July 31, 2006 counsel for the Lewises submitted a demand to arbitrate their claims against Redman³ with the American Arbitration Association ("AAA"). At that time counsel for the Lewises forwarded a check in the amount of $375.00 to the AAA along with the arbitration demand. (Doc. 12 at Exhibit A)

3. Over the next several months correspondence was exchanged between counsel for the parties regarding the arbitration and the possibility of pre-arbitration mediation as set out in the arbitration agreement. (Doc. 12, Exhibits B, C, D, E.)

4. On September 28, 2006, Redman submitted a proposed "Agreement to Mediate and Arbitrate", wherein the parties would first mediate their dispute and then, if unsuccessful, arbitrate the claims. (Doc. 12, Exhibit B.)⁴ 5. In an October 2, 2006 letter, counsel for the Lewises rejected the mediation/arbitration proposal, stating:

"In response to your recent letter dated September 28, 2006, the proposed mediation and arbitration agreement you attached is unacceptable. Please let us know the names of potential arbitrators before whom your client will agree to arbitrate before the parties spend additional time and money to arbitrate through the AAA so that we can see after our review if the parties can agree upon an arbitrator to resolve the claims in this dispute."

(Doc. 12, Exhibit C) (emphasis added)

6. By letter dated October 3, 2006 counsel for Redman acknowledged the Lewises' rejection of the agreement and invited the Lewises to "make any changes you feel are necessary so that we can consider a proposed agreement from you. Your letter gave us no indication as to why the agreement is unacceptable, but we are glad to work with you in coming to some type of agreement to proceed through arbitration." (Doc. 12, Exhibit D)

7. On October 6, 2006, the Lewises further explained their objection to the proposed Agreement to Mediate and Arbitrate as follows:

As you know, the parties already agreed to resolve this dispute through arbitration. The proposal that you suggested for arbitration is unacceptable. We intend to resolve these claims through the American Arbitration Association based upon the agreement between the parties to arbitrate. In the alternative, please provide us with the names of any potential arbitrators before whom your clients will agree to arbitrate. We will consider any potential arbitrators you suggest to determine whether the parties can agree upon any arbitrator outside the AAA forum.

(Doc. 12, Exhibit E.) (emphasis added).

8. An October 18, 2006 e-mail exchange reflects a disagreement between counsel regarding whether the dispute is to be arbitrated via AAA procedures or through "some alternative forum." (Doc. 17, Exhibit 1)

9. On October 31, 2006, the AAA sent a letter to counsel for the Lewises confirming that the Lewises' claims would not proceed before the AAA:

As of this date, we have not received the required submissions and fees from the business in this matter. Accordingly, we must decline to administer this case. Any payment submitted by a party will be sent to that party via U.S. Mail.

(Doc. 17, Exhibit B)

10. A November 15, 2006 e-mail exchange between counsel for the parties and Charles Fleming, Esq., confirms the parties' agreement to appoint Fleming to arbitrate the Lewises' claims against Redman. (Doc. 12, Exhibit F)

11. On or about December 18, 2006 the Lewises submitted a demand for class arbitration. (Doc. 1, ¶ 18 and Exhibit B) The Class Arbitration Demand states, in part, that the Lewises wish to consolidate their individual arbitration claims with those of "all others similarly situated in Alabama, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, and Texas who have purchased mobile homes from Respondents Redman Homes, Inc .... on or after September 9, 2002" and demand that the class arbitration be held in Wilcox County, Alabama. (Doc. 1, Exhibit B at ¶ 1)

12. Thereafter, on December 28, 2006 Charles Fleming, Esq., issued a request to counsel for Redman to provide him with a response to the class arbitration demand. (Doc. 12, Exhibit H)⁵ 13. On February 13, 2007 Redman Homes filed the instant complaint seeking an order from the court "compel[ling] Defendants to arbitrate their dispute as expressly provided in the Arbitration Agreement in an individual arbitration in the jurisdiction where their manufactured home was sold...." (Doc. 1 at 15)

14. On February 14, 2007 counsel for Redman wrote Charles Fleming. Esq. advising that they were withdrawing any "alleged consent ... to arbitrate any purported class claims whatsoever in any forum." (Doc. 17, Exhibit C)

III. STANDARD ON MOTION TO DISMISS

Defendants move to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)(1). In opposition, plaintiff first argues that the motion is procedurally defective. Specifically, plaintiff contends that the Lewises are asking the Court to rule as a...