Reynolds and Reynolds Co., Inc. v. King Automobiles, Inc.
| Decision Date | 13 December 1996 |
| Citation | 689 So.2d 1 |
| Parties | REYNOLDS AND REYNOLDS COMPANY, INC. v. KING AUTOMOBILES, INC. 1950854. |
| Court | Alabama Supreme Court |
Michael S. Speakman of Haygood, Cleveland, Pierce & Speakman, Auburn; and Laureen E. McGurk and Bryan G. Harrison of Morris, Manning & Martin, Atlanta, GA, for Appellant.
W.F. Horsley and Amy J. Himmelwright of Samford, Denson, Horsley, Pettey & Martin, Opelika, for Appellee.
King Automobiles, Inc., sued Reynolds and Reynolds Company, Inc., and fictitiously named defendants, alleging breach of contract, negligence, and various fraud claims arising from an agreement under which Reynolds had sold a computer system and system maintenance program to King Automobiles. The transaction involved a printed "master agreement," which contained an arbitration clause and which had certain attachments; the transaction also involved a handwritten agreement. Reynolds moved to compel arbitration and to stay further court proceedings pending arbitration, based upon the arbitration clause in the master agreement. King Automobiles opposed the motion, arguing that its claims were based solely upon the handwritten agreement and were not related to the master agreement. The trial court denied Reynolds's motions to compel arbitration and to stay proceedings.
During the spring of 1993, Dave King, as president of King Automobiles, met with Bob Fowler, a salesman for Reynolds, to discuss purchasing a computer system known as the ERA 24000. In the course of his discussion with King, Fowler demonstrated a computer system that utilized a new computer processor.
On August 23, 1993, Fowler and Dave King negotiated the purchase of the computer system. King Automobiles alleged that Fowler represented to Dave King that the system utilized a new computer processor and that Dave King then, to buy the system, executed on behalf of King Automobiles a "Reynolds & Reynolds Master Equipment Sales, License, and Services Agreement" (the master agreement). The master agreement called for the delivery of a "reconditioned" processor with 28 "user ports," i.e., 28 physical connections on the processing unit where peripheral devices such as printers, modems, and video monitors could be connected. Fowler and Dave King crossed out the number "28" and wrote in the number "24"; then both of them initialed the change. The arbitration clause in the master agreement stated, in pertinent part:
"All disputes between [King Automobiles] and Reynolds, except those involving: A) Reynolds' ownership of and title to the Licensed Software and materials and B) [King Automobile's] failure to pay any amount due to Reynolds, arising from or related to this Agreement or the Exhibits, shall be settled by Arbitration."
The master agreement also stated that all equipment, licensed software, material, and services obtained from Reynolds, directly or indirectly, were to be provided only under the terms and conditions of the master agreement. The master agreement stated that it contained the entire understanding of the parties and that it superseded all prior oral or written agreements, communications, and understandings between the parties with respect to the subject matter of the master agreement.
In addition to the master agreement, King Automobiles executed an "Exhibit OS-1," which listed the installation charges associated with the software King Automobiles was purchasing, and an "ERA 24000-RS Addendum," which stated that King Automobiles was acquiring a reconditioned computer processor and would pay a monthly maintenance fee of $1,146 on the processor.
On that same day, King Automobiles compiled a handwritten document stating that "today, 8-23-1993 Bob Fowler and Dave King agreed to the following sale of equipment from Reynolds & Reynolds to King Automobile." The document went on to list the items purchased. These items were the same as those referred to in the master agreement, but the handwritten document did not list the prices for these items, nor did it list the price for certain in-dealership training and cable installation necessary for the system. 1
A Reynolds representative approved the master agreement and related exhibits in December 1993 and delivered the fully executed documents to King Automobiles on March 7, 1994. The documents stated that the computer processor King Automobiles bought was "reconditioned" and that it had 24 ports. King Automobiles did not contact Reynolds to discuss, or to object to, the master...
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