Service Corporation International v. Fulmer, No. 1021503 (Ala. 12/5/2003)
| Decision Date | 05 December 2003 |
| Docket Number | No. 1021503.,1021503. |
| Parties | Service Corporation International and SCI Alabama Funeral Services, Inc. v. Blair Fulmer |
| Court | Alabama Supreme Court |
Appeal from Jefferson Circuit Court (CV-03-297)
In this arbitration case we must address the ramifications of the United States Supreme Court's recent decision in Citizens Bank v. Alafabco, Inc., ___ U.S. ___, 123 S. Ct. 2037 (2003). Service Corporation International ("SCI") and SCI Alabama Funeral Services, Inc. ("SCI-Alabama") (hereinafter referred to collectively as "the appellants"), appeal from the denial of the appellants' motion to compel arbitration by the Jefferson Circuit Court. The trial court denied that motion based on our decision in Sisters of the Visitation v. Cochran Plastering Co., 775 So. 2d 759 (Ala. 2000), which the United States Supreme Court recently abrogated in Citizens Bank. We affirm in part, reverse in part, and remand.
Following the death of his mother, Blair Fulmer entered into a contract with SCI-Alabama d/b/a Johns-Ridout's Southside Chapel pursuant to which Johns-Ridout's Chapel would, among other things, perform a funeral service and cremate his mother's body. The contract, entitled "Statement of Funeral Goods and Services Selected/Purchase Agreement," included an arbitration provision.
After a funeral service at Johns-Ridout's, Fulmer was presented with a vase; he was told that the vase contained his mother's remains. Fulmer claims that he later discovered that the remains in the vase were not those of his mother. Following this alleged discovery, Fulmer sued SCI-Alabama and SCI (SCI-Alabama's parent company), asserting various claims. The appellants filed a motion to compel arbitration, which the trial court, relying upon Sisters of the Visitation, supra, denied, stating that "[t]here is insufficient evidence that this specific contract led to any substantial movement of services or materials across state lines." (Emphasis omitted.) This appeal followed.
"We review de novo a trial court's ruling on a motion to compel arbitration. Green Tree Fin. Corp. v. Vintson, 753 So. 2d 497, 502 (Ala. 1999). Initially, the party seeking to compel arbitration must prove 1) the existence of a contract calling for arbitration, and 2) that the contract 'is "a contract evidencing a transaction involving commerce" within the meaning of the Federal Arbitration Act (FAA).' Citizens Bank v. Alafabco, Inc., ___ U.S. ___, ___, 123 S. Ct. 2037, 2038, 156 L. Ed. 2d 46 (2003) (quoting 9 U.S.C. § 2). '[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 Auto., Inc. v. Beavers, 674 So. 2d 1260, 1265 n.1 (Ala. 1995)."
The appellants argue that the trial court erred in denying their motion to compel arbitration because, they argue, the appellants met their burden of proving "1) the existence of a contract calling for arbitration, and 2) that the contract ' is "a contract evidencing a transaction involving commerce" within the meaning of the Federal Arbitration Act (FAA).'" Hudson, So. 2d at . While the appellants did produce a contract calling for the arbitration of Fulmer's claims, the trial court held that the contract did not "evidence a transaction involving [interstate] commerce." Additionally, Fulmer argues that even if the interstate-commerce requirement had been met, the trial court did not err in denying the appellants' motion because 1) Fulmer's mental capacity at the time he signed the contract was such that he could not have assented to the arbitration provision, and 2) the arbitration provision is unenforceable because it is unconscionable and the contract containing the provision is a contract of adhesion. Fulmer also contends that even if arbitration is required as to his claims against SCI-Alabama, it is not required as to his claims against SCI, a nonsignatory to the contract.
As stated above, the trial court's ruling was based upon this Court's decision in Sisters of the Visitation. However, as we have previously noted, see, e.g., Wolff Motor Co. v. White, [Ms. 1011845, June 27, 2003] ___ So. 2d ___, ___ (Ala. 2003); Gayfer Montgomery Fair Co. v. Austin, [Ms. 1012159, June 27, 2003] ___ So. 2d ___, ___ (Ala. 2003), the interstate-commerce analysis in Sisters of the Visitation was expressly rejected in Citizens Bank. Fulmer acknowledges that Sisters of the Visitation was abrogated in Citizens Bank; however, Fulmer contends that the United States Supreme Court in Citizens Bank "merely called into question the five-step analysis utilized in the Sisters [of the Visitation] case." Fulmer's brief at 6. Fulmer's characterization of the impact of Citizens Bank is drastically understated. Citizens Bank was a very strong, although not a novel, statement that Congress has the power to bring transactions that are even purely intrastate commercial transactions (i.e., economic transactions) within the reach of its enactments, including the Federal Arbitration Act, 9 U.S.C. § 1 et seq. ("the FAA"). To the extent that this point is still unclear, we provide the following clarification.
As noted in Citizens Bank, our decision in Sisters of the Visitation erred primarily in that it applied the "substantial effect on interstate commerce" test from United States v. Lopez, 514 U.S. 549 (1995), to individual transactions to require that each transaction, regardless of its nature, would have to be shown to "substantially affect" interstate commerce before the FAA would be triggered. See Citizens Bank, ___ U.S. at ___, 123 S. Ct. at 2039-41. In Lopez, the Supreme Court declared that Congress's enactment of the Gun-Free School Zones Act of 1990, 18 U.S.C. § 922(q), exceeded Congress's power under the Commerce Clause of the United States Constitution.[1] The Gun-Free School Zones Act made it a federal offense "for any individual knowingly to possess a firearm ... at a place that the individual knows, or has reasonable cause to believe, is a school zone." 18 U.S.C. § 922(q)(2)(A).
In reaching its holding, the Court described the "three broad categories of activity that Congress may regulate" under the Commerce Clause:
Brzonkala v. Virginia Polytechnic Inst. & State Univ., 169 F.3d 820, 831 (4th Cir. 1999), aff'd, United States v. Morrison, 529 U.S. 598 (2000). The Lopez Court held that the Gun-Free School Zones Act was unconstitutional because (1) the Act was a criminal statute that had "nothing to do with 'commerce' or any sort of economic enterprise," and (2) the Act "contain[ed] no jurisdictional element which would ensure, through case-by-case inquiry, that the firearm possession in question affects interstate commerce."[2] Lopez, 514 U.S. at 561 (emphasis added).[3]
Furthermore, the Lopez Court held that the "aggregation principle" first announced in Wickard v. Filburn, 317 U.S. 111 (1942), could not be used to uphold the Gun-Free School Zones Act. The Court noted that the aggregation principle had not been applied to uphold statutes that did not regulate a commercial or economic transactions:
To continue reading
Request your trial