SouthTrust Bank v. Ford
| Decision Date | 17 May 2002 |
| Parties | SouthTRUST BANK v. Melody FORD and Eddie Ford. |
| Court | Alabama Supreme Court |
A. Joe Peddy and Clair Maloney Gammill of Smith, Spires & Peddy, P.C., Birmingham, for appellant.
Chuck Hunter, Birmingham, for appellees.
SouthTrust Bank ("SouthTrust") is a defendant in an action pending in the Jefferson Circuit Court. It appeals from the trial court's denial of its motion to compel arbitration. We affirm in part, reverse in part, and remand with instructions.
Melody Ford and Eddie Ford are husband and wife. Upon the death of Melody's father, Edwin Edwards, Melody was appointed the administratrix of his estate. At the time of Edwards's death, he maintained at least one checking account with SouthTrust. Before his death, Edwards and SouthTrust were involved in a dispute regarding SouthTrust's payment of an allegedly forged check drawn on Edwards's account.1
Edwards's checking account with South-Trust was governed by a "deposit agreement." That deposit agreement incorporated by reference SouthTrust's "Rules and Regulations Governing Deposit Accounts" and all amendments thereto. Those rules and regulations contained the following arbitration provision:
The Fords instituted this action against SouthTrust, alleging that SouthTrust: (1) negligently cashed a forged item drawn on Edwards's account; (2) intentionally inflicted emotional distress by causing Edwards's estate to be depleted and "having to vainly attempt to have [SouthTrust] reimburse the Monies and having to deal with Uncaring and Rude personnel of [SouthTrust]"; and (3) intentionally misrepresented and suppressed material facts concerning the passing and forgery of the check.
SouthTrust filed a motion to dismiss or, in the alternative, to stay the proceedings and compel arbitration. In support of that motion, SouthTrust submitted the affidavit of Heather Thornburgh, who is employed by SouthTrust as a vice president.
The Fords opposed SouthTrust's motion to compel arbitration. They asserted that the language of the deposit agreement and the language of the arbitration agreement itself pertained only to a dispute between Edwards and SouthTrust and that neither the deposit agreement nor the arbitration agreement addressed claims asserted by the administratrix of Edwards's estate.
The trial court denied SouthTrust's motion to compel arbitration, finding that the "substantial-effect-on-interstate-commerce" requirement had been satisfied but that the arbitration agreement did not apply to claims asserted by the depositor's agents, assigns, or representatives. SouthTrust appeals from the trial court's denial of its motion to compel arbitration.
In American General Finance, Inc. v. Morton, 812 So.2d 282, 284 (Ala. 2001), Justice Harwood, writing the main opinion, set forth the standard of review on an appeal from the trial court's denial of a motion to compel arbitration:
Here, SouthTrust bears the initial burden of proving the existence of a contract calling for arbitration and proving that the contract evidences a transaction substantially affecting interstate commerce.
If SouthTrust met this burden of proof, then the burden of persuasion shifted to the Fords as the parties opposing the motion to compel arbitration. Once that burden has shifted, we consider whether the Fords have established that the arbitration agreement is inapplicable or whether they have a valid defense to the enforcement of that agreement.
The parties do not dispute that Edwards's checking account was governed by SouthTrust's deposit agreement, or that the deposit agreement included the arbitration agreement. Thus, SouthTrust established the existence of a contract calling for arbitration.
SouthTrust also presented evidence concerning the effect of its banking activities on interstate commerce; the trial court held that SouthTrust had proved that the transaction had a substantial effect on interstate commerce. On appeal, the Fords do not challenge SouthTrust's assertion or the trial court's finding that the transaction at issue in this case had a substantial effect on interstate commerce. Thus, the burden of persuasion shifted to the Fords to oppose SouthTrust's properly supported motion to compel arbitration.
The Fords oppose arbitration because, they allege, SouthTrust's deposit agreement governs only a transaction between SouthTrust and Edwards and does not include Edwards's estate. They further assert that the language of the arbitration agreement itself does not encompass the claims asserted by a depositor's agents, assigns, or representatives but limits the application of the agreement solely to disputes between Edwards and SouthTrust.
We recognize that an administratrix of a decedent's estate stands in the shoes of the decedent. See Conseco Fin. Corp. v. Sharman, 828 So.2d 890 (Ala. 2001). We also recognize that the "[p]owers [of an executor], in collecting the debts constituting the assets of the estate, are just as broad as those of the deceased." Webb v. Sprott, 144 So. 569, 571, 225 Ala. 600, 603 (1932). For the same reason the powers of an executor or an administrator encompass all of those formerly held by the decedent, those powers must likewise be restricted in the same manner and to the same extent as the powers of the decedent would have been. Thus, where an executor or administrator asserts a claim on behalf of the estate, he or she must also abide by the terms of any valid agreement, including an arbitration agreement, entered into by the decedent.
We agree that the arbitration agreement at issue in this case is limited to disputes arising between Edwards and SouthTrust. If Edwards were alive and asserting against SouthTrust a claim to recover the value of the purportedly forged check, he would be bound to arbitrate. Because Melody serves as the administratrix of Edwards's estate, she stands in his shoes. We conclude that Melody's claim to recover the value of the improperly paid check is subject to arbitration because she is asserting that claim in her role as the administratrix of Edwards's estate.
Additionally, Edwards agreed to arbitrate any dispute with SouthTrust "that arises out of or is related to [his] account, or any agreement related to [his] account, ... whether based on contract or in tort." Thus, to the extent that Melody's tort claims of intentional infliction of emotional distress and fraud are based upon an injury sustained by Edwards before his death, those claims would be subject to the agreement to arbitrate. This Court, however, expresses no opinion as to whether any such claims survived Edwards's death. See § 6-5-462, Ala.Code 1975 (...
To continue reading
Request your trial
-
Satomi Owners Ass'n v. Satomi, LLC
...including arbitration provisions, entered by decedent, where plaintiffs brought claims on behalf of decedent's estate); S. Bank v. Ford, 835 So.2d 990, 993-94 (Ala.2002) (holding estate administrator asserting claim on behalf of estate "stands in the [decedent's] shoes" and is bound to arbi......
-
Woodall v. Avalon Care Ctr.-fed. Way LLC
...association asserted claims of its members.19 ¶ 15 Avalon does not rely on either the Quackenbush v. Allstate Insurance Co. 20 or SouthTrust Bank v. Ford 21 line of cases that Satomi cites as examples of the “certain limited exceptions” to the general Quackenbush was a case where the rights......
-
Briarcliff Nursing Home, Inc. v. Turcotte
...evidence that the supposed arbitration agreement is not valid or does not apply to the dispute in question."'" SouthTrust Bank v. Ford, 835 So.2d 990, 993 (Ala.2002) (citations omitted) (quoting American Gen. Fin., Inc. v. Morton, 812 So.2d 282, 284 III. Turcotte and Woodman brought these w......
-
Thomas v. Westlake
...also abide by the terms of any valid agreement, including an arbitration agreement, entered into by the decedent.” ( SouthTrust Bank v. Ford (Ala.2002) 835 So.2d 990, 994.) Similarly, “a new trustee ‘succeed[s] to all the rights, duties, and responsibilities of his predecessors.’ ” ( Moelle......
-
No Arbitration Agreement With the Plaintiff? No Problem: Making a Dispute Arbitrable by Use of Equitable Estoppel Doctrine (the Doctrine of "intertwining")
...the defendant is otherwise unable to make the non-signatory plaintiff resolve the dispute in arbitration. See SouthTrust Bank v. Ford, 835 So. 2d 990 (Ala. 2002); ECS, Inc. v. Goff, 880 So. 2d 1140 (Ala. 2003); Green Tree-AL, LLC v. Reynolds, 977 So. 2d 470 (Ala. 2007); Edwards v. Costner, ......