Ryan's Family Steak Houses, Inc. v. Regelin

• Decision Date: 30 April 1999
• Citation: 735 So.2d 454
• Parties: RYAN'S FAMILY STEAK HOUSES, INC., et al. v. Tammy REGELIN et al.
• Court: Alabama Supreme Court

735 So.2d 454

RYAN'S FAMILY STEAK HOUSES, INC., et al. v. Tammy REGELIN et al.

1980186.

Supreme Court of Alabama.

April 30, 1999.

Stephen F. Fisher of Jackson, Lewis, Schnitzler & Krupman, Greenville, SC; and Finis St.John of St.John & St.John, Cullman, for appellants.

Gregory A. Nicholas and William D. Sulzby, Jr., Cullman, for appellees.

HOUSTON, Justice.

Ryan's Family Steak Houses, Inc., and two of its managers, Randy Mullins and Scott Moats, are defendants in an action pending in the Cullman Circuit Court. (Hereinafter the defendants are referred to collectively as "Ryan's.") They appeal from an order denying their motion to compel arbitration. An appeal is the generally accepted method of review when a trial court denies a motion to compel arbitration. Nissan Motor Acceptance Corp. v. Ross, 703 So.2d 324 (Ala.1997). We reverse and remand.

Tammy Regelin, Lisa Vandergrift, Paula Price, Tina Jones, Windi Self, and Brandi Hunt, all of them employees of Ryan's, brought this action against Ryan's, seeking money damages for invasion of privacy, the tort of outrage, assault and battery, and negligent training and supervision; all the claims arose from sexually inappropriate conduct they say occurred in the workplace. Ryan's moved to dismiss or, in the alternative, to compel arbitration, based upon arbitration agreements that were executed by each of the plaintiffs when they were hired by Ryan's. The plaintiffs filed an amended complaint naming Employment Dispute Services, Inc. ("EDSI"), as a defendant; seeking damages for fraud in the inducement; and seeking to reform their contracts of employment. After a hearing on the motion to dismiss or to compel arbitration, the trial court denied the motion.

Each of the plaintiffs signed an application for employment that contained the following statement at the top:

"THE ENTIRE APPLICATION FORM MUST BE COMPLETED AS WELL AS THE ATTACHED ARBITRATION AGREEMENT PRIOR TO BEING CONSIDERED FOR HIRE!"

Each of the plaintiffs, by signing the application, agreed to arbitrate employment-related disputes; the application they signed had attached to it a separate document (which they also signed) that contained the following provision:

"Your potential Employer (`signatory company' or `Company') has entered into an agreement with Employment Dispute Services, Inc. (EDSI) to arbitrate and resolve any and all employment-related disputes between the Company's employees (and job applicants) and the Company. The following Agreement between You and EDS is a `selection of forum' agreement by which you agree that employment-related disputes between You and the Company shall be resolved through arbitration. Any arbitration matter shall be heard and decided under the provisions and the authority of the Federal Arbitration Act, 9 USC sec. 1, as applicable.

"The purpose of this agreement is to provide You and the Company a forum in which claims or disputes with the Company and any other signatories may be resolved by arbitration rather than litigation. This Agreement does not restrict you from filing a claim or charge with any state or federal agency, for example, Equal Employment Opportunity Commission, state unemployment agency, state workers' compensation commission, where applicable. Rather, the Agreement applies only to State or Federal court proceedings.

". . . .

"1. Any employment-related dispute between the Company, Me, and/or other signatories which would otherwise be brought in State or Federal court shall be brought ONLY in the EDS arbitration forum and under EDS Rules and Procedures, as modified or amended from time to time. Other signatories to the same Agreement with EDS may be, for example, supervisors, managers, and agents of the Company.

"2. In consideration of the agreement by EDS to provide an arbitration forum, Rules and Procedures, and a hearing and decision based upon any claim or dispute I (employee/job applicant) may file or defend, I understand and agree to the following:

"A. Except as to claims or charges actually handled within a State or Federal agency, any and all disputes I may have with the Company, or that Company, its supervisors, managers or other agents may have with Me which would otherwise be decided in court, shall be resolved only through arbitration in the EDS forum and NOT THROUGH LITIGATION IN STATE OR FEDERAL COURT.

"B. The decision of EDS arbitration panel is final and binding on all parties. There is no appeal by any party on the merits of the dispute either to State or Federal court.

"C. This agreement is with EDS, not the Company, and is not, nor is it intended to be, an employment contract or any part of an employment contract. This agreement does not affect or alter My `at will' employment relationship with the Company.

"D. The Company and any other successor or assign, its signatory supervisors, managers, and other agents, are `third party beneficiary' of My agreement with EDS, and I am a `third party beneficiary' of others' agreements with EDS. A `third party beneficiary' is someone who benefits legally from a contract between two other parties.

"E. I absolutely must use the EDS forum for any and all employment-related disputes and/or claims and/or related tort claims I may have against the Company and all other signatories of this agreement which would otherwise be brought in court, even if the Agreement has been terminated since the date of the claim...."

Ryan's is a South Carolina-based multistate restaurant chain; it purchases food products, advertising, and many other products and services from vendors throughout the United States. (Affidavit, James Randolph Hart, vice president for human resources for Ryan's, filed in support of the motion to compel arbitration.) The plaintiffs were at-will employees of Ryan's at one of its restaurants in Alabama, where Ryan's does business pursuant to Ala.Code 1975, § 10-3A-170. Clearly, the operation of Ryan's was commerce in fact, because it involved a multistate company that obtained, from outside Alabama, supplies to achieve its business purposes. Allied-Bruce Terminix Cos., Inc. v. Dobson, 513 U.S. 265, 115 S.Ct. 834, 130 L.Ed.2d 753 (1995).

"A written provision in any ... contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract."

9 U.S.C. § 2.

On July 1, 1998, the trial court set the motion to dismiss or to compel arbitration for a hearing on August 21, 1998. There is no record of the hearing before this Court. The case action summary, which is before us, does show that on August 24, 1998, "after hearing," the trial judge denied the motion to dismiss or to compel arbitration.

The plaintiffs' brief contains the following in its "statement of the case":

"On August 21, 1998, a hearing was held on Ryan's Motion to Dismiss and Petition to Compel Arbitration. No evidence was presented at the hearing."

The following statement appears in the reply brief filed by Ryan's:

"Plaintiffs have at no time offered affidavits, testimony or any type of evidence to support their alleged contract defenses. All parties agree that no evidence was presented at the brief hearing conducted by the circuit court at which the court heard oral argument on Ryan's... motion to dismiss and petition to compel arbitration."

Therefore, when the trial court denied arbitration, the only evidence before the court was evidence that would have supported an order compelling arbitration: 1) Hart's affidavit; 2) the signed applications for employment; and 3) the arbitration forms signed by each employee.

This Court has written:

"`The party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration and the existence of an arbitrable dispute. In order to prevail on an assertion of arbitrability, the moving party is required to produce some evidence which tends to establish its claim.'"

Jim Burke Automotive, Inc. v. Beavers, 674 So.2d 1260, 1265 (Ala.1995). (Citation omitted.) "[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." Jim Burke, 674 So.2d at 1265 n. 1. The plaintiffs did not do this.

The trial court should have compelled arbitration. Therefore, the order denying arbitration is reversed, and the cause is remanded for the trial court to grant the motion to compel arbitration.¹

REVERSED AND REMANDED.

HOOPER, C.J., and MADDOX, SEE, LYONS, and BROWN, JJ., concur.

KENNEDY, COOK, and JOHNSTONE, JJ., dissent.

COOK, Justice (dissenting).

I join in Justice Johnstone's dissent inasmuch as it concludes that EDSI is a foreign corporation that was not licensed in Alabama at the time the contracts in question were entered into, and, therefore, that the contracts, purporting to provide for arbitration of these disputes, are void and unenforceable. Present in this case is the principle, ably addressed by Justice Johnstone, that the order of the trial court is due to be affirmed if it is right for any reason, including a reason not expressed by the trial court in the record. Nonetheless, barring an affirmance, no greater consequence should befall this case than for it to be remanded for the trial court to determine whether the present state of the record, regarding EDSI's status, is factual.

I write further to discuss National American Insurance Co. v. Boh Brothers Construction Co., 700 So.2d 1363 (Ala. 1997), and Boh Brothers Construction Co. v. Nelson, 730 So.2d 132 (Ala.1999); specifically, to point out that my proposed resolution of this case is not inconsistent with those two opinions. More specifically, those cases do not stand for the proposition that Ala.Code 1975, § 10-2B-15.02(a)...