Justia Alabama Supreme Court Opinion Summaries

In 2010, Yan Chen, who had a business interest in a restaurant, entered into a 10-year lease agreement with Russell Realty, LLC, and MRT, LLC. The property to be leased was located in Greenville. The lease agreement was drafted by Russell Realty and contained an arbitration clause. In 2012, Russell Realty and MRT sued Chen along with Qiaoyun He, Joe Zou, and Yami Buffet, Inc., alleging breach of contract. Chen filed a response to the motion, alleging that she had been in China for a few months, and that she had not been personally served with notice of the lawsuit. She subsequently filed a motion to dismiss the complaint, asserting that the lease agreement contained an arbitration clause and that "said complaint[] fails to state any measures that have been taken in lieu of the fulfillment of such agreed Arbitration Clause." The trial court denied both Russell Realty and MRT's motion for a default judgment and Chen's motion to dismiss. About a month after this, Chen filed a motion to compel arbitration, asserting that, as "part of Plaintiffs['] lease agreement, plaintiff[s] agreed to binding arbitration. In 2013, Chen filed a second motion to dismiss, alleging that Russell Realty and MRT had refused to mediate and had refused to arbitrate. Russell Realty and MRT filed an objection to Chen's second motion to dismiss, asserting that "time of the stay set by the court has almost expired and Defendant Yan Chen has not made any movement, act, or effort to seek Arbitration to resolve the issues." Russell Realty and MRT again sought a default judgment against the defendants, including Chen. She asserted that counsel for Russell Realty and MRT had failed to respond to her attempts to seek a settlement before the hiring of a mediator or arbitrator and that, subsequently, she had contacted a mediator/arbitrator and Russell Realty and MRT had not responded to her choice of mediator/arbitrator. The trial court then entered an order stating that the Chen's appeal was moot as the court had not yet entered a final order. In early 2015, the trial court entered an order awarding Russell Realty and MRT $682,050.10 against all the defendants, including Chen, jointly and severally. Chen appealed. Based on its review of the facts in the circuit court record, the Supreme Court reversed with regard to Chen and remanded the case for the trial court to enter an order requiring arbitration in accordance with the terms of the lease agreement. View "Chen v. Russell Realty, LLC" on Justia Law

In 2011, 74-year-old Garnell Wilcoxon lived alone. He suffered a stroke, awoke on the floor of his bedroom covered in sweat, feeling sore and with no memory of how he got there. Wilcoxon was admitted to the Troy Regional Medical Center for analysis and treatment for approximately one year before he died. Following Wilcoxon's death, Brenda McFarland, one of Wilcoxon's daughters, filed a complaint as the personal representative for Wilcoxon's estate, asserting claims for : (1) medical malpractice; (2) negligence; (3) breach of contract; (4) negligent hiring, training, supervision, and retention; and (5) loss of consortium. In its answer, Troy Health asserted, in part, that McFarland's claims were barred from being litigated in a court of law "by virtue of an arbitration agreement entered into between plaintiff and defendant." Troy Health then moved to compel arbitration, asserting that forms signed by one of Wilcoxon's other daughters, acting as his attorney-in-fact, contained a valid and enforceable arbitration clause. McFarland argued that "Wilcoxon did not have the mental capacity to enter into the contract with [Troy Health,] and he did not have the mental capacity to give legal authority to enter into contracts on his behalf with" relatives who initially helped admit him to Troy Health facilities when he first fell ill. According to McFarland, "[t]he medical records document that Wilcoxon was habitually and/or permanently incompetent." Therefore, McFarland argued, both a 2011 arbitration agreement and a 2012 arbitration agreement were invalid. The circuit court denied Troy Health's motion to compel arbitration. The Supreme Court reversed, finding that McFarland failed to prove that Wilcoxon was mentally incompetent when he executed a 2012 durable power of attorney naming his other daughter as his attorney-in-fact, and also failed to demonstrate that Wilcoxon was "permanently incompetent" before that date, and because there was no other issue concerning the validity of the 2012 arbitration agreement. View "Troy Health and Rehabilitation Center v. McFarland" on Justia Law

Southeast Construction, L.L.C. ("SEC"), appealed a circuit court order that found WAR Construction, Inc., had provided SEC with certain releases as previously ordered by the circuit court and that SEC was accordingly now required to pay the outstanding $263,939 remaining on a $373,939 judgment previously entered on a February 16, 2011, arbitration award obtained by WAR against SEC, along with interest accruing from February 16, 2011. After review, the Supreme Court affirmed that judgment to the extent it held that WAR provided all required releases and that SEC was obligated to fulfill the judgment entered on the arbitration award. However, the Court reversed the judgment inasmuch as it held that SEC is required to pay interest on the award as calculated from February 16, 2011. On remand, the circuit court was instructed to calculate interest on the principal at the rate set forth in the arbitration award accruing from September 8, 2014. View "Southeast Construction L.L.C. v. WAR Construction, Inc." on Justia Law

Gladys Tellis, Sherry Bronson, Gwendolyn Moody, Nadine Ivy, and Uneeda Trammell (collectively, "the policyholders") initiated separate actions against American Bankers Insurance Company of Florida, asserting generally that American Bankers had sold them homeowner's insurance policies providing a level of coverage they could never receive, even in the event of a total loss involving the covered property. American Bankers moved the trial court hearing each action to compel arbitration pursuant to arbitration provisions it alleged were part of the subject policies; however, the trial courts denied those motions, and American Bankers appealed. The Supreme Court consolidated the five appeals for the purpose of writing one opinion, and reversed those orders denying the motions to compel arbitration. The Court based its decision on its holdings that the policyholders manifested their assent to the arbitration provision in their policies by continuing to renew the policies, that the sale of the policies affected interstate commerce, and that the arbitration provision in the policies was not unconscionable. View "American Bankers Ins. Co. of Florida v. Tellis" on Justia Law

Defendants below, J. Don Gordon Construction, Inc. and Western Surety Company appealed the circuit court's judgment on an arbitration award entered against them. The defendants argued that the award should have been vacated for various reasons under section 10(a) of the Federal Arbitration Act, 9 U.S.C. 1 et seq. ("the FAA"). After review of their arguments, the Alabama Supreme Court was unpersuaded by the argument: the arbitrator's failure to recuse himself upon learning the information about a domestic-violence case did not indicate evident partiality. The large award of legal fees against Western Surety –– an award the arbitrator testified was "significantly less" than the amount claimed by the plaintiffs –– did not indicate evident partiality, either. "The alleged partiality at most suggests a 'mere appearance' of bias that is remote, uncertain, and speculative rather than 'direct, definite, and capable of demonstration.' [ . . .] A reasonable person would not have to conclude that the arbitrator was partial given these facts." The Court affirmed the circuit court's order. View "J. Don Gordon Construction, Inc. v. Brown" on Justia Law

IBI Group, Michigan, LLC, f/k/a Giffels, LLC ("Giffels"), appealed a circuit court order ordering it to arbitrate its claims against Outokumpu Stainless USA, LLC, f/k/a ThyssenKrupp Stainless USA, LLC ("OTK"), and ThyssenKrupp Steel USA, LLC, f/k/a ThyssenKrupp Steel and Stainless USA, LLC ("TK Steel") (collectively, "the steel companies"), pursuant to an arbitration provision in the contracts at the center of this dispute. Giffels initiated this action after the steel companies commenced arbitration proceedings once it became apparent that the action the steel companies had initiated in the federal district court involving the same contract dispute would be dismissed for lack of subject-matter jurisdiction. The trial court thereafter granted the steel companies' motion to stay the action pending the completion of arbitration, and Giffels appealed, arguing that, under the circumstances, the steel companies either had no right to compel arbitration or had waived that right. The Supreme Court found that the language of the arbitration provisions in the contracts executed by the parties gave the steel companies the broad right to select arbitration as a method to resolve any disputes based on those contracts, and, because Giffels failed to demonstrate substantial prejudice as a result of the steel companies' actions, the steel companies did not waive their right to proceed in arbitration. Accordingly, the order of the trial court sending the case to arbitration and staying all proceedings pending the completion of the arbitration of the claims presented in this action was affirmed. View "IBI Group, Michigan, LLC v. Outokumpu Stainless USA, LLC" on Justia Law

Municipal Workers Compensation Fund, Inc. ("the Fund"), appealed a circuit court's order denying the Fund's motion to vacate a judgment entered on an arbitration award. The Fund entrusted the management and investment of approximately $50 million in assets to Morgan Asset Management, Inc. ("MAM"), and Morgan Keegan & Company, Inc. ("Morgan Keegan"). MAM served as an investment advisor for a managed account and certain mutual funds owned by the Fund. Morgan Keegan served as the broker-dealer for the Fund's managed account and had the authority as the broker-dealer to execute transactions in that account as directed by the Fund. A second account at Morgan Keegan held the mutual funds that had been sold to the Fund through a Morgan Keegan broker. The Fund stated that it directed MAM and Morgan Keegan to invest its funds conservatively and that it relied on MAM and Morgan Keegan for sound financial advice and management. However, according to the Fund, MAM and Morgan Keegan disregarded this mandate by recommending that the Fund purchase and hold what the Fund says were unsuitable investments, by overconcentrating the Fund's assets in investments that had undue exposure to the sub-prime mortgage market and in other risky investments, and by misrepresenting and failing to disclose material facts pertaining to the investments. The Fund claims that it sustained losses in excess of $15 million in 2007 and 2008 as a result of the actions of MAM and Morgan Keegan. The Fund initiated arbitration proceedings against MAM and Morgan Keegan by filing a statement of claim with the Financial Industry Regulatory Authority ("FINRA") pursuant to the arbitration provision contained in its contracts with MAM and Morgan Keegan, asserting claims of breach of fiduciary duty; breach of contract; negligence; fraud; violations of NASD and NYSE Rules; and violations of the Alabama Securities Act. Upon review, the Supreme Court concluded from the admissible evidence entered at trial, the Fund established an evident partiality on the part of one of the arbitrators, and that the Fund was entitled to have the judgment entered on the arbitration award vacated. The Court remanded the case for further proceedings. View "Municipal Workers Compensation Fund, Inc. v. Morgan Keegan & Co." on Justia Law

Donald Porter, Marc Porter, Porter Capital Corporation, Porter Bridge Loan Company, Inc., Lowerline Corporation, Capital Partners Leasing, Inc., and Capital Partners Leasing, LLC (referred to collectively as "the Porter defendants"), appealed the denial of their motion to compel arbitration of the claims asserted against them by Byron Porter Williamson. Marc and Donald Porter are brothers; they founded Porter Capital Corporation in 1991 and thereafter established the related companies Porter Bridge Loan Company, Inc., Lowerline Corporation, CapitalPartners Leasing, Inc., and CapitalPartners Leasing, LLC. In 1992, the Porters hired their nephew Williamson as an employee of the Porter companies. In 2004, Williamson, Marc Porter, and Donald Porter entered into a shareholders agreement that made Williamson a 10% shareholder in Porter Capital Corporation, Porter Bridge Loan Company, Inc., Lowerline Corporation, and CapitalPartners Leasing, Inc. Following his termination and resignation as a shareholder of the corporations and a member of the limited liability company, Williamson demanded that his shares in the corporations and his interest in the limited-liability company be purchased by the Porter companies pursuant to the agreement. The parties, however, were unable to agree on the value of Williamson's shares and interest. Williamson sued Marc Porter, Donald Porter, and the Porter companies. Citing the arbitration provision of the agreement, the Porter defendants moved to dismiss the action without prejudice or to stay discovery and compel arbitration. Williamson opposed the motion, arguing that some or all of his claims fell within the specific-performance exception of the arbitration provision in the agreement. Following a hearing on the Porter defendants' motion to dismiss or to compel arbitration, the trial court issued an order denying the Porter defendants' motion. The Porter defendants appealed. Upon review, the Supreme Court affirmed the trial court's denial of the Porter defendants' motion to compel arbitration insofar as that motion related to Williamson's request for specific performance and injunctive relief. With regard to Williamson's remaining claims seeking rescission and alleging misrepresentation and suppression and conversion, the Court reversed the trial court's order and remanded the case with instructions for the trial court either to dismiss those claims or to grant the Porter defendants' motion to compel arbitration of them. View "Porter v. Williamson" on Justia Law

The Alabama Supreme Court consolidated cases that arose out of an action brought by Guy Willis against three defendants: Alaska Bush Adventures, LLC ("Alaska Bush") and Hugh and Ryan Krank (collectively, the defendants). The Kranks are the owners and operators of Alaska Bush, an outfitter that provided guided hunting trips in Alaska. In December 2011, Willis entered into a written contract with Alaska Bush pursuant to which Alaska Bush would lead a guided hunting trip in Alaska. Willis also claimed that he entered into a separate oral contract to hunt black bears during that guided hunting trip. The guided hunting trip took place in September 2012. A few months after the trip, Willis sued the defendants in Alabama seeking damages for breach of contract, misrepresentation, and suppression. Willis's claims against defendants centered primarily on his allegations that the equipment Alaska Bush provided for the hunting expedition was inadequate in number, unsafe, and inoperable, and he also alleged that he lost hunting time because the defendants were providing services to other hunters who were apparently not included in the guided hunting trip. Willis claimed that he lost most of his personal hunting equipment and had to leave the trip early because he "was caused to be thrown from an improperly repaired, inspected, and/or working motorized boat ...." Willis further alleged that the defendants misrepresented the quantity of wild game that would be available on the hunt. Willis filed an application for the entry of a default judgment against Ryan, and, on the following day, he filed a similar application against Alaska Bush and Hugh. On December 21, 2012, defendants filed an answer to Willis's complaint and an objection to Willis's applications for entry of a default judgment. Thereafter, defendants filed a motion to compel Willis to arbitration pursuant to an arbitration agreement found in the written contract. Defendants then each filed an individual motion to dismiss Willis's complaint for lack of personal jurisdiction. The trial court issued an order denying the defendants' respective motions to dismiss and their motion to compel arbitration. In case no. 1130184, defendants petitioned the Alabama Supreme Court for a writ of mandamus to challenge the denial of their motions to dismiss for lack of personal jurisdiction; in case no. 1130231, they appealed the trial court's denial of their motion to compel arbitration. The Supreme Court concluded after review that defendants were not entitled to mandamus relief on the jurisdiction question, but met their burden in their motion to compel arbitration. View "Willis v. Alaska Bush Adventures, LLC et al." on Justia Law

Regions Bank appealed a trial court's order denying its motion to compel arbitration in its dispute with Jerry Neighbors. Neighbors obtained a home loan from Regions in 1999. As part of the loan application, Neighbors executed a dispute-resolution agreement (DRA). In 2008, Neighbors modified the loan. Neighbors denied he signed the loan-modification agreement; he claimed that his signature on that document was forged. The loan-modification agreement also contained an arbitration provision. In 2013, Neighbors sued Regions, alleging that Regions had negligently and wantonly allowed an imposter to forge Neighbors's signature on the loan-modification agreement. Relying on the DRA, Regions moved to compel the arbitration of Neighbors's claims. Neighbors opposed the motion to compel, arguing that because the dispute in this case involved an alleged forgery, the dispute could not be subject to the provisions of the DRA. Neighbors also suggested that the DRA did not cover his claims because, pursuant to the terms of the judgment divorcing him and his wife, he stopped making payments on the original mortgage in 2006 when his ex-wife remarried. Although Neighbors characterized the dispute otherwise, the Supreme Court concluded that the dispute in this case concerned the scope of the DRA. Accordingly, the Supreme Court reversed the trial court's decision, and remanded the case for further proceedings. View "Regions Bank v. Neighbors" on Justia Law