America's Home Place, Inc. v. Gregory Rampey , 166 So. 3d 655 ( 2014 )

Rel: 10/24/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334)
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before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
_________________________
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America's Home Place, Inc.
v.
Gregory Rampey
Appeal from Chambers Circuit Court
(CV-13-900032)
MAIN, Justice.
The defendant below, America's Home Place, Inc. ("AHP"),
appeals from an order of the Chambers Circuit Court ("the
trial court") denying AHP's motion to compel arbitration of
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the claims brought by the plaintiff below, Gregory Rampey. We
reverse and remand.
I. Facts and Procedural History
In August 2012, Rampey and AHP entered into a contract,
the terms of which provided that AHP would construct a house
for Rampey in Chambers County. AHP constructed the house for
Rampey; however, after he took possession of the house, Rampey
began to notice "settlement and sinking of the foundation,"
which, according to Rampey, resulted in significant structural
and other damage to the house. AHP attempted to stabilize the
foundation and to repair the damage to the house that had
occurred as a result of the unstable foundation; those
efforts, however, were unsuccessful. On March 3, 2013, Rampey
filed in the trial court a complaint against AHP. The
complaint alleged 10 counts against AHP, each count stemming
from the construction of the house that was the subject of the
parties' August 2012 contract.
AHP moved to compel arbitration of Rampey's claims and to
stay the proceedings in the trial court pending the outcome of
arbitration between the parties. In support of its motion,
AHP attached the contract between AHP and Rampey. The
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contract stated that "Contractor and Owner agree as follows"
and then set forth 46 enumerated provisions. Beside each
enumerated provision in the contract (except nos. 4 and 27,
which were inapplicable) there was a line for the "owner"
(i.e., Rampey) to initial. Rampey admittedly wrote his
initials in the line next to every one of the 44 applicable
provisions, including provision no. 37 ("the arbitration
provision"), which states, in toto:
"BINDING ARBITRATION AGREEMENT
"ALL CLAIMS, DISPUTES AND OTHER MATTERS OR QUESTIONS
ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE
BREACH THEREOF, SHALL BE SETTLED BY BINDING
ARBITRATION IN ACCORDANCE WITH THE RULES OF AMERICAN
ARBITRATION ASSOCIATON [sic] (AAA) AND/OR DEMARS &
ASSOCIATES, LTD. (DMA), AND JUDGEMENT UPON THE AWARD
RENDERED BY THE ARBITRATOR OR ARBITRATORS MAY BE
ENTERED IN ANY COURT HAVING JURISDICTION THEREOF.
THE PARTIES EXPRESSLY AGREE THAT THE ARBITRATOR OR
ARBITRATORS SHALL HAVE THE POWER AND AUTHORITY TO
GRANT REASONABLE ATTORNEY'S FEES AND COSTS IN
RESOLUTION OF THE CLAIMS, DIFFERENCES AND/OR
CONTROVERSIES ARISING FROM THIS AGREEMENT WHICH THE
PARTIES HAVE AGREED TO SUBMIT TO BINDING
ARBITRATION.
"THE DEMAND FOR ARBITRATION SHALL BE IN WRITING AND
DELIVERED TO THE OTHER PARTY TO THE AGREEMENT AND
THE ARBITRATOR. THE DEMAND FOR ARBITRATION SHALL BE
MADE WITHIN A REASONABLE TIME AFTER THE CLAIM,
DISPUTE OR OTHER MATTER RELATING TO THIS AGREEMENT
HAS ARISEN, AND IN NO EVENT SHALL BE MADE AFTER THE
DATE WHEN INSTITUTION OF LEGAL OR EQUITABLE
PROCEEDINGS BASED ON SUCH CLAIM, DISPUTE OR OTHER
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MATTER WILL BE BARRED BY THE APPLICABLE STATUTE OF
LIMITATIONS.
"THE COSTS OF THE ARBITRATOR WILL BE PAID BY THE
PARTY WHO IS AT FAULT ON THE POINT BEING ARBITRATED.
IN THE EVENT OF MULTIPLE POINTS BEING ARBITRATED THE
ARBITRATOR'S FEE WILL BE ALLOCATED ON A PRO RATA
BASIS BY THE ARBITRATOR. IF EITHER PARTY FAILS TO
ATTEND THE ARBITRATION, SUCH PARTY SHALL PAY FOR THE
COSTS OF THE ARBITRATOR, PLUS A $1,000.00 PENALTY
FOR LIQUIDATED DAMAGES FOR LOST TIME OF THE PARTY
THAT ATTENDED THE ARBITRATION. CONTRACTOR MAY SECURE
ITS RIGHTS UNDER THE MECHANIC'S LIEN LAW, AND,
SUBSEQUENT TO THE ARBITRATION AWARD, MAY ENFORCE
SAID RIGHT AND OBTAIN A LIEN FORECLOSURE JUDGEMENT."
(Capitalization in original.) Immediately beneath the
arbitration provision were signature lines for the parties to
the contract, including one for "owner," i.e., Rampey. Rampey
also initialed provision no. 42, which states: "[Rampey]
acknowledges that each paragraph of this contract has been
explained and initials acceptance of same. [Rampey] also
acknowledges receipt of this agreement." (Emphasis added.)
Furthermore, Rampey admittedly signed his name at the bottom
of each of the last two pages of the contract.
Rampey filed a response to AHP's motion to compel
arbitration. Rampey's sole argument in his response was that
his signature on the signature line immediately beneath the
arbitration provision was forged, and, thus, he said, there
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exists no proof of his intent to arbitrate any disputes
between himself and AHP. Rampey did not argue that the
contract itself was invalid and/or unenforceable; rather,
Rampey argued only that the arbitration provision in the
contract was unenforceable because, according to Rampey, his
signature immediately beneath the arbitration provision was
forged. Rampey supported his response to the motion to compel
arbitration with, among other evidentiary documents, his own
affidavit, which states:
"My name is Gregory Rampey. I am a resident
citizen of the State of Alabama aged nineteen (19)
years or older and have personal knowledge of the
facts and matters set forth herein which are true
and accurate to the best of my belief and knowledge.
"I am the Plaintiff in the above identified
cause and have personal knowledge of the facts set
forth in this affidavit.
"On August 29, 2012, I entered into a contract
with America's Home Place, Inc.[,] for the
construction of a home located at ___ Springfield
Avenue, Chambers County, Alabama. This contract
contained a binding arbitration agreement on page 5,
paragraph 37. (See Contract, attached to
Plaintiff[']s Opposition as Exhibit 1). I did not
sign the binding arbitration agreement contained
within the contract. I do not know who signed my
name nor did they have my permission. I had no
intention of agreeing to binding arbitration. The
forged signature appearing within the binding
arbitration clause in no way bears any resemblance
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to my actual signature on pages 7-8 of the Contract.
(See Contract)."
After a hearing on AHP's motion to compel arbitration,
the trial court entered the following order: "[AHP's] Motion
to Compel arbitration is denied at this time. [Rampey] has
claimed that the signature on the contract is forged. The
issue of whether an enforceable agreement to arbitrate exists
shall be set for jury trial on the next available jury
docket." AHP appealed.
II. Standard of Review
"Our standard of review of a ruling denying a
motion to compel arbitration is well settled:
"'"This Court reviews de novo the
denial of a motion to compel arbitration.
Parkway Dodge, Inc. v. Yarbrough, 779 So.
2d 1205 (Ala. 2000). A motion to compel
arbitration is analogous to a motion for a
summary judgment. TranSouth Fin. Corp. v.
Bell, 739 So. 2d 1110, 1114 (Ala. 1999).
The party seeking to compel arbitration has
the burden of proving the existence of a
contract calling for arbitration and
proving that the contract evidences a
transaction affecting interstate commerce.
Id. '[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 Automotive, Inc. v.
Beavers, 674 So. 2d 1260, 1265 n. 1 (Ala.
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1995) (opinion on application for
rehearing)."'"
SSC Montgomery Cedar Crest Operating Co., LLC v. Bolding, 130
So. 3d 1194, 1196 (Ala. 2013) (quoting Elizabeth Homes, L.L.C.
v. Gantt, 882 So. 2d 313, 315 (Ala. 2003), quoting in turn
Fleetwood Enters., Inc. v. Bruno, 784 So. 2d 277, 280 (Ala.
2000)).
III. Analysis
The dispositive issue in this case is whether the trial
court erred in denying AHP's motion to compel arbitration
based on Rampey's allegation that his signature immediately
beneath the arbitration provision in the contract was forged.
We conclude that the trial court did err. As noted, the
contract contains a binding arbitration provision (enumerated
provision no. 37 in the contract); Rampey admittedly wrote his
initials in the line provided next to the arbitration
provision. Also, as noted, provision no. 42 of the contract
states: "[Rampey] acknowledges that each paragraph of this
contract has been explained and initials acceptance of same.
[Rampey] also acknowledges receipt of this agreement"; Rampey
admittedly wrote his initials beside that provision.
Furthermore, provision no. 39 of the contract states: "This
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Agreement constitutes the sole and entire Agreement between
the parties hereto and no modifications of this Agreement
shall be binding unless signed by all parties to this
Agreement. No representation, promise, or inducement not
included in this Agreement shall be binding upon any party
hereto." Moreover, on page 7 of the contract, directly above
one of the two places in which Rampey admittedly signed the
contract, it states, in pertinent part: "This agreement[,
i.e., the contract,] shall be binding on the parties thereto
...." The contract language quoted above shows that Rampey
and AHP entered into a binding contract, which Rampey does not
dispute, that includes two signatures Rampey agrees are
legitimate and that the contract includes a binding
arbitration provision. The fact that Rampey's signature
immediately beneath the arbitration provision was (allegedly)
forged is of no consequence because his signature was not
required immediately beneath the arbitration provision and,
furthermore, Rampey assented to be bound by that provision
when he admittedly wrote his initials on the line next to the
arbitration provision. See, e.g., Stiles v. Home Cable
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Concepts, Inc., 994 F. Supp. 1410 (M.D. Ala. 1998), which
aptly explains the fallacy of Rampey's argument:
"Stiles'[s] '[f]irst and foremost' objection is
that he did not sign the arbitration clause at
issue. It is, of course, a matter of general
contract law that a party must agree to a contract
in order to be bound by it. See Old Republic Ins.
Co. v. Lanier, 644 So. 2d 1258, 1260 (Ala. 1994);
Roberson v. Money Tree of Ala., Inc., 954 F. Supp.
1519, 1528 (M.D. Ala. 1997), citing Restatement of
Contracts, 2d. § 17. This provision of general
contract law applies even if the arbitration clause
is subject to the Federal Arbitration Act [('the
FAA')]. See 9 U.S.C. § 2 (arbitration clause not
enforced where invalid 'upon such grounds as exist
at law or in equity for the revocation of any
contract'). In addition, the FAA also requires that
an arbitration clause be written to be enforceable.
9 U.S.C. § 2 (a 'written provision'); Continental
Grain Co. v. Beasley, 628 So. 2d 319, 322 (Ala.
1993).
"While written agreement is required for
arbitration, however, there is no requirement that
every single provision of a contract, including the
arbitration clause, must be signed in order to form
part of the agreement. Indeed, it is axiomatic that
'parties may become bound by the terms of a
contract, even though they do not sign it, where
their assent is otherwise indicated.' 17A Am. Jur.
2d § 185. ... The FAA has no separate requirement of
a signed arbitration clause. As noted by the
Northern District of Alabama, '[i]t is well
established that a written agreement to arbitrate
need not be signed by the parties as a prerequisite
to the enforcement of the agreement.' Middlebrooks
v. Merrill Lynch, Pierce, Fenner & Smith, Inc., [No.
CV 89-HM-5015-NW, April 5, 1989] (N.D. Ala. 1989)
[not reported in F. Supp.].
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"Stiles has cited this court to three cases
which allegedly stand for the proposition that he
must sign an arbitration agreement for it to be
enforceable. His reliance is misplaced, however. The
first that he cites, Old Republic Ins. Co., 644 So.
2d at 1260, only stands for the proposition that a
party must agree to a contract to be bound by it.
The second, Continental Grain Co., 628 So. 2d at
322, merely notes that the FAA requires arbitration
clauses to be written. Finally, the third, Ex parte
Jones, 686 So. 2d 1166 (Ala. 1996), only stands for
the proposition that someone who is 'not a party to
the contract containing the arbitration agreement'
may not compel arbitration. None states the
proposition that the arbitration clause itself must
be signed. Indeed, these cases could not state that
proposition. Alabama law is not permitted by the FAA
to treat arbitration clauses any differently than
other contracts. See Doctor's Assoc., Inc. v.
Casarotto, 517 U.S. 681, 686–87, 116 S. Ct. 1652,
1656, 134 L. Ed. 2d 902 (1996) ('Courts may not,
however, invalidate arbitration agreements under
state laws applicable only to arbitration
provisions') (emphasis in original); Allied–Bruce
Terminix Co. v. Dobson, 513 U.S. 265, 281, 115 S.
Ct. 834, 130 L. Ed. 2d 753 (1995) (FAA makes
unlawful any state policy that 'would place
arbitration clauses on an unequal "footing"').
Because Alabama law only requires the contract to be
signed (and only certain contracts at that), and
does not require every single provision of every
contract to be signed, it could not require the
arbitration clause at issue here to be signed.
Doctor's Assoc., 517 U.S. at 682–84, 116 S. Ct. at
1654 (holding that Montana law cannot require
special notice provisions in arbitration contracts).
"Stiles assented to the contract as a whole in
this case. That fact is uncontested. ... Stiles has,
therefore, assented to an arbitration clause, even
absent his signature. ... The provision is not
invalid because not signed."
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Stiles, 994 F. Supp. at 1416 (initial emphasis added).
Furthermore, it is well settled that
"[a] plaintiff cannot seek the benefits of a
contract but at the same time avoid the arbitration
provision in the contract. Wolff Motor Co. [v.
White], 869 So. 2d [1129,] 1136 [(Ala. 2003)].
Instead, 'she must accept or reject the entire
contract.' Credit Sales, Inc. v. Crimm, 815 So. 2d
540, 546 (Ala. 2001). Britta's claims, including her
breach-of-contract claim, rely on the contract to
support her claims for damages. Therefore, she is
bound by the arbitration provision in the contract.
Infiniti of Mobile, Inc. v. Office, 727 So. 2d 42,
48 (Ala. 1999)[1]; Delta Constr. Corp. v. Gooden, 714
So. 2d 975, 981 (Ala. 1998)."
Bowen v. Security Pest Control, Inc., 879 So. 2d 1139, 1143
(Ala. 2003) (emphasis added). See also Southern Energy Homes,
Inc. v. Ard, 772 So. 2d 1131, 1134-35 (Ala. 2000) ("A
plaintiff cannot simultaneously claim the benefits of a
contract and repudiate its burdens and conditions." (citing
Value Auto Credit, Inc. v. Talley, 727 So. 2d 61 (Ala. 1999);
Infiniti of Mobile, Inc. v. Office, 727 So. 2d 42 (Ala. 1999);
1
Notably, in Infiniti of Mobile, Inc., a plurality of this
Court concluded that, "[b]ecause the undisputed evidence
indicates that the second retail-buyer's-order form represents
the final contract between Mr. Office and Infiniti, and
because Mr. Office clearly initialed the arbitration
provisions appearing on both the front side and the reverse
side of that contract, we must conclude that Mr. Office agreed
to arbitrate his claims against Infiniti." 727 So. 2d at 47
(emphasis added).
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Georgia Power Co. v. Partin, 727 So. 2d 2 (Ala. 1998); Delta
Constr. Corp. v. Gooden, 714 So. 2d 975 (Ala. 1998); and Ex
parte Dyess, 709 So. 2d 447 (Ala. 1997))).
Here, Rampey, whose claims are all predicated on alleged
breaches and violations of the contract, attempts to claim the
benefits of the contract while repudiating one of its
conditions, i.e., the binding arbitration provision. However,
as noted, Rampey must "'accept or reject the entire
contract.'" Bowen, 879 So. 2d at 1143 (quoting Credit Sales,
Inc. v. Crimm, 815 So. 2d 540, 546 (Ala. 2001)). As was the
case in Bowen, Rampey's claims, including his
breach-of-contract claim, rely on the contract for support.
Thus, Rampey is bound by all the provisions of the contract,
including the arbitration provision. Accordingly, we conclude
that the trial court erred in denying AHP's motion to compel
arbitration.2
2
Rampey offers, as an alternative basis for affirming the
trial court's denial of the motion to compel arbitration, the
argument that AHP presented no evidence "showing that the
arbitration agreement involved or affected interstate
commerce." Rampey's brief, at 13. See, e.g., Elizabeth
Homes, L.L.C. v. Gantt, 882 So. 2d 313, 315 (Ala. 2003) ("'The
party seeking to compel arbitration has the burden of proving
the existence of a contract calling for arbitration and
proving that the contract evidences a transaction affecting
interstate commerce.'" (quoting Fleetwood Enters., Inc., 784
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IV. Conclusion
The trial court erred in denying AHP's motion to compel
arbitration. Therefore, we reverse the trial court's order
and remand the cause to that court with instructions to vacate
its order denying the motion to compel arbitration and to
enter an order granting AHP's motion to compel arbitration.
REVERSED AND REMANDED WITH DIRECTIONS.
Stuart, Bolin, Parker, Wise, and Bryan, JJ., concur.
Murdock and Shaw, JJ., concur in the result.
So. 2d at 280)). However, Rampey did not raise that argument
in the trial court; therefore, the argument is waived on
appellate review. See, e.g., Andrews v. Merritt Oil Co., 612
So. 2d 409, 410 (Ala. 1992) ("This Court cannot consider
arguments raised for the first time on appeal; rather, our
review is restricted to the evidence and arguments considered
by the trial court."). Furthermore, even if it were not
waived, we could conclude that the argument is unavailing
because the contract shows that the house was built in Alabama
by AHP, which listed its place of business as being in "Hall
County, Gainesville, GA." See Hurst v. Tony Moore Imports,
Inc., 699 So. 2d 1249, 1257 (Ala. 1997) ("[I]f any effect on
interstate commerce can be found in a commercial transaction,
then the transaction is considered to be one involving
interstate commerce.").
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MURDOCK, Justice (concurring in the result).
The main opinion correctly concludes that "Rampey
assented to be bound by [the arbitration] provision when he
admittedly wrote his initials on the line next to [that]
provision" and signed his name in the signature lines at the
end of the contract. ___ So. 3d at ___. I agree, and, based
on general principles of contract law, I find this conclusion
sufficient to the end achieved here. I therefore find it
unnecessary to rely, as does the main opinion, upon the
decision in Stiles v. Home Cable Concepts, Inc., 994 F. Supp.
1410 (M.D. Ala. 1998). In fact, I find Stiles to be
inapposite to the present case.
First, the statements from Stiles quoted in the main
opinion, see ___ So. 3d at ___, were made in the context of an
arbitration clause that, on the one hand, was not accompanied
by a signature line dedicated specifically to that clause and,
on the other hand, was not initialed by the party resisting
arbitration. In this context, the key passage from the
Stiles opinion quoted in the main opinion, i.e., "'there is no
requirement that every single provision of a contract,
including the arbitration clause, must be signed in order to
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form part of the agreement,'" ___ So. 3d at ___ (emphasis
omitted), lacks significant probative value in a case, such as
this one, where the arbitration clause is accompanied by an
unsigned signature line dedicated solely to that clause.
In addition to its lack of significant probative value as
to the peculiar facts presented in this case, I am reluctant
to rely upon Stiles for another reason. In Stiles the federal
district court went so far as to impose upon a consumer a
requirement to arbitrate pursuant to a provision in an
original contract that did not mention arbitration but instead
purported to allow a credit-card issuer to change any of the
terms of the agreement between it and the consumer by
unilateral notification so long as the consumer did not reject
the proposed changes in writing within a prescribed period
following such notification. Regardless of whatever merit
this holding may have in regard to a consumer contract such as
the one at issue in Stiles, I see no reason to quote with
approval from a decision that goes this far in order to
achieve the result achieved in the present case.
I also find inapposite to the present case the principle
invoked in that portion of the main opinion that follows its
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invocation of Stiles. Specifically, the main opinion seizes
upon the proposition that "'[a] plaintiff cannot seek the
benefits of a contract but at the same time avoid the
arbitration provision in the contract.'" ___ So. 3d at ___
(quoting Bowen v. Security Pest Control, Inc., 879 So. 2d
1139, 1143 (Ala. 2003)). The only argument made by Rampey in
the present case, however, is that, because he did not sign
the signature line dedicated to the arbitration provision, the
arbitration provision is not "in the contract." He does not
go further and argue that, even if that arbitration provision
is part of the contract, he would not be bound by it for some
reason, even as he seeks to benefit from other parts of the
contract. The stated principle is therefore inapposite.
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