John Howard Homes, Ltd. v. Joel B. Wittmann
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REL: 04/02/2010 Notice: T h i s o p i n i o n i s s u b j e c t t o f o r m a l r e v i s i o n b e f o r e p u b l i c a t i o n i n t h e advance s h e e t s o f Southern R e p o r t e r . R e a d e r s a r e r e q u e s t e d t o n o t i f y t h e R e p o r t e r o f D e c i s i o n s , A l a b a m a A p p e l l a t e C o u r t s , 300 D e x t e r A v e n u e , M o n t g o m e r y , A l a b a m a 3 6 1 0 4 - 3 7 4 1 ((334) 2 2 9 - 0 6 4 9 ) , o f a n y t y p o g r a p h i c a l o r o t h e r e r r o r s , i n o r d e r t h a t c o r r e c t i o n s may b e made b e f o r e t h e o p i n i o n i s p r i n t e d i n Southern R e p o r t e r . ALABAMA COURT OF CIVIL OCTOBER TERM, APPEALS 2009-2010 2090051 John Howard Homes, L t d . v. J o e l B. Wittmann Appeal from Mobile C i r c u i t Court (CV-08-2350) PITTMAN, This Judge. appeal concerns t h e d e n i a l of a motion t o compel a r b i t r a t i o n o f c l a i m s b r o u g h t b y J o e l B. W i t t m a n n a g a i n s t J o h n Howard Court. Homes, L t d . ("John H o w a r d " ) , i n t h e M o b i l e In h i s complaint, filed i n December Circuit 2008, W i t t m a n n 2090051 asserted that representatives o f J o h n Howard a s s e r t e d t h a t a p a r t i c u l a r r e s i d e n t i a l l o t owned by J o h n Howard t h a t W i t t m a n n was considering purchasing t o p o g r a p h y o f t h e l o t was other contiguous Howard had and had filled lots; lowered the would Wittmann fraud, lot. further caused nearby Wittmann's negligence, and alleged l o t a f t e r he had so as t o c a u s e w a t e r t o be Wittmann's level that the no d i f f e r e n t t h a n t h e t o p o g r a p h y o f subject subsequently remain lots set and John purchased i t elevated d i v e r t e d or channeled complaint wantonness, t o be that forth continuing claims and onto of trespass stemming f r o m t h e a l l e g e d c o n d u c t o f J o h n Howard i n m a r k e t i n g , selling, c o n s t r u c t i n g , and constructed attempting to r e p a i r the on W i t t m a n n ' s l o t . I n J a n u a r y 2009, J o h n Howard f i l e d issuance of an order staying a r b i t r a t i o n of Wittmann's c l a i m s . J o h n Howard s u b m i t t e d the incorporated an a motion seeking action and the compelling In support of i t s motion, s e v e r a l documentary e x h i b i t s , i n c l u d i n g a p u r c h a s e a g r e e m e n t d a t e d F e b r u a r y 20, pertinent dwelling addendum that 2005, t h a t contained the expressly following clause: "Any c o n t r o v e r s y o r c l a i m a r i s i n g f r o m o r r e l a t i n g t o t h i s a g r e e m e n t , o r t h e b r e a c h t h e r e o f , o r any and 2 2090051 all claims arising between [John Howard] a n d [ W i t t m a n n ] , t h e i r s u c c e s s o r s , o r a s s i g n s s h a l l be s e t t l e d b y a r b i t r a t i o n i n a c c o r d a n c e w i t h ... t h e a r b i t r a t i o n c l a u s e i n t h e 2-10 Home B u y e r ' s W a r r a n t y as f o u n d on p a g e s 6 a n d 7 o f t h e [Home B u y e r ' s Warranty] Booklet. ... The d e c i s i o n o f t h e a r b i t r a t o r s h a l l be f i n a l a n d b i n d i n g a n d may be e n t e r e d a s a j u d g m e n t i n any S t a t e o r F e d e r a l c o u r t of competent jurisdiction. Arbitration shall i n c l u d e , b u t n o t be l i m i t e d t o , t h e d e t e r m i n a t i o n b y the a r b i t r a t o r o f t h e scope o f a r b i t r a t i o n and t h e arbitrability of controversies or claims. The p a r t i e s acknowledge and agree t h a t t h e t r a n s a c t i o n s c o n t e m p l a t e d by t h i s Agreement, which i n c l u d e t h e use o f m a t e r i a l s a n d components f r o m o u t o f s t a t e i n t h e home, i n v o l v e i n t e r s t a t e commerce a s t h a t t e r m i s u s e d i n t h e F e d e r a l A r b i t r a t i o n A c t , 9 U.S.C. § 1 e t s e q . The s i t e o f s u c h a r b i t r a t i o n s h a l l be M o b i l e County, Alabama. "[John Howard] and [Wittmann] agree and u n d e r s t a n d t h a t t h e y choose a r b i t r a t i o n i n s t e a d o f l i t i g a t i o n t o r e s o l v e d i s p u t e s . The p a r t i e s f u r t h e r u n d e r s t a n d t h a t t h e y have a r i g h t o r o p p o r t u n i t y t o l i t i g a t e disputes through a court, but they p r e f e r to resolve their disputes through arbitration, e x c e p t as p r o v i d e d h e r e i n . The p a r t i e s v o l u n t a r i l y and k n o w i n g l y w a i v e a n y r i g h t t h e y h a v e t o a j u r y trial. The d e c i s i o n o f t h e a r b i t r a t i o n s h a l l be f i n a l a n d b i n d i n g on t h e p a r t i e s a n d a c c e s s t o j u d i c i a l f o r u m i s f o r e c l o s e d , e x c e p t t o e n f o r c e an arbitral decision. "[John Howard] and [Wittmann] agree and u n d e r s t a n d t h a t a l l d i s p u t e s a r i s i n g under case law, s t a t u t o r y law, and a l l o t h e r laws i n c l u d i n g , w i t h o u t limitation, a l l contract, tort, and property d i s p u t e s , whether o r n o t such d i s p u t e s a r i s e under o r a r e r e l a t e d t o t h i s c o n t r a c t , w i l l be s u b j e c t t o b i n d i n g a r b i t r a t i o n i n a c c o r d w i t h t h i s Agreement." 3 2090051 ( E m p h a s i s added.) pertinent part, Pages 6 a n d 7 o f t h e w a r r a n t y b o o k l e t , i n stated: "Any a n d a l l c l a i m s , d i s p u t e s a n d c o n t r o v e r s i e s by o r b e t w e e n [Wittmann a n d J o h n Howard] ... a r i s i n g from o r r e l a t e d t o t h i s Warranty, t o t h e s u b j e c t Home, t o a n y d e f e c t i n o r t o t h e s u b j e c t Home o r t h e r e a l p r o p e r t y on w h i c h t h e s u b j e c t Home i s s i t u a t e d , o r t h e s a l e o f t h e s u b j e c t Home b y [John H o w a r d ] , i n c l u d i n g w i t h o u t l i m i t a t i o n , any c l a i m o f b r e a c h o f contract, negligent or intentional misrepresentation or n o n d i s c l o s u r e i n t h e inducement, e x e c u t i o n o r performance o f any c o n t r a c t , including this a r b i t r a t i o n a g r e e m e n t , a n d b r e a c h o f any a l l e g e d d u t y o f g o o d f a i t h a n d f a i r d e a l i n g , s h a l l be settled by b i n d i n g arbitration. Agreeing to a r b i t r a t i o n means y o u a r e w a i v i n g y o u r r i g h t t o a jury t r i a l . II "... The d e c i s i o n o f t h e a r b i t r a t o r s h a l l be f i n a l a n d b i n d i n g a n d may be e n t e r e d a s a j u d g m e n t in any S t a t e or Federal court o f competent jurisdiction. " T h i s a r b i t r a t i o n a g r e e m e n t s h a l l be deemed t o be a s e l f - e x e c u t i n g a r b i t r a t i o n a g r e e m e n t . Any disputes concerning the interpretation or the enforceability of this arbitration agreement, including without l i m i t a t i o n , i t s r e v o c a b i l i t y or v o i d a b i l i t y f o r any cause, t h e scope o f a r b i t r a b l e i s s u e s , a n d a n y d e f e n s e b a s e d upon w a i v e r e s t o p p e l o r l a c h e s s h a l l be d e c i d e d b y t h e a r b i t r a t o r . II "The p a r t i e s e x p r e s s l y a g r e e t h a t t h i s W a r r a n t y and t h i s a r b i t r a t i o n a g r e e m e n t i n v o l v e a n d c o n c e r n interstate commerce and a r e governed by t h e p r o v i s i o n s o f t h e F e d e r a l A r b i t r a t i o n A c t (9 U.S.C. 4 2090051 § 1, e t s e q . ) now i n e f f e c t a n d a s t h e same may f r o m t i m e t o t i m e be amended, t o t h e e x c l u s i o n o f a n y different or inconsistent state or l o c a l law, o r d i n a n c e o r j u d i c i a l r u l e ; and t o t h e e x t e n t t h a t any s t a t e o r l o c a l l a w , o r d i n a n c e o r J u d i c i a l r u l e s h a l l be i n c o n s i s t e n t w i t h a n y p r o v i s i o n o f t h e r u l e s of t h e a r b i t r a t i o n s e r v i c e under which t h e arbitration p r o c e e d i n g s h a l l be c o n d u c t e d , t h e latter rules shall govern the conduct of the proceeding." Wittmann arbitration subject filed i n which a response he c o n t e n d e d to arbitration. warranty that to the motion that he argued o f t h e two claims including asserting claims a number arising of claimed types out of noncompliance that the arbitration c l a u s e s q u o t e d a t l e n g t h above e x c l u d e d s u b s t a n t i v e for compel h i s c l a i m s were n o t Specifically, c o n t a i n e d the second to coverage o f damage, with accepted grading practices or f a i l u r e to maintain the o r i g i n a l grade; c l a i m s o f damage t o d r i v e w a y s o r l a n d s c a p i n g ; c e r t a i n claims b a s e d on s t a n d i n g o r p o n d i n g w a t e r c a u s e d b y c h a n g e s i n g r a d e or placement claims stemming contractor's grades, of sod, f e n c i n g , from failure drainage soil or other erosion obstructions; and r u n o f f to maintain the properly structures, and s w a l e s . The caused and by a established trial court a p p a r e n t l y agreed w i t h Wittmann's p o s i t i o n t h a t t h e w a r r a n t y ' s e x c l u s i o n o f coverage f o r h i s c l a i m s mandated t h e c o n c l u s i o n 5 2090051 that a r b i t r a t i o n s h o u l d n o t be c o m p e l l e d , b e c a u s e t h a t c o u r t e n t e r e d an o r d e r d e n y i n g t h e m o t i o n t o compel a r b i t r a t i o n June 26, appealed 2009. Supreme C o u r t John from Howard t i m e l y that order; 1 to the t h e a p p e a l was on Alabama subsequently t r a n s f e r r e d t o t h i s c o u r t p u r s u a n t t o A l a . Code 1975, § 12-2- 7(6). An appellate court "reviews de novo [a] d e n i a l o f [a] m o t i o n t o c o m p e l a r b i t r a t i o n . " Inc. v. McGrue, 826 So. 2d 122, s e e k i n g t o compel a r b i t r a t i o n , i n i t i a l burden for court's Jim Burke ( A l a . 2002). s u c h as John Howard, Auto., A party "has the of p r o v i n g the e x i s t e n c e of a c o n t r a c t c a l l i n g arbitration and transaction Birmingham, Inc. proving that involving 2007). 128 trial v. interstate Edwards, W i t t m a n n , " t h e n has t h e b u r d e n contract evidences commerce." 973 Once t h a t i n i t i a l b u r d e n that So. i s met, 2d Title 1050, 1052 Max a of (Ala. a nonmovant, s u c h as to present evidence tending to show t h a t t h e a r b i t r a t i o n a g r e e m e n t i s i n v a l i d o r i n a p p l i c a b l e to the case." Id. at 1052-53. Here, John Howard adduced e v i d e n c e t e n d i n g t o show t h a t W i t t m a n n v o l u n t a r i l y a s s e n t e d t o R u l e 4 ( d ) , A l a . R. App. P., a l l o w s f o r an immediate a p p e a l o f an o r d e r g r a n t i n g o r d e n y i n g a m o t i o n t o c o m p e l arbitration. 1 6 2090051 n o t one, b u t two, a g r e e m e n t s i n which the p a r t i e s consented to waive t h e i r r i g h t s t o a j u d i c i a l r e s o l u t i o n of t h e i r in the first instance, choosing instead an disputes alternative- dispute-resolution process. To be sure, agreement as addendum Wittmann and the contends, warranty both the purchase- booklet provide that c o n t r o v e r s i e s or c l a i m s " a r i s i n g from" t h e p u r c h a s e agreement o r t h e w a r r a n t y were s u b j e c t t o a r b i t r a t i o n , a term t h a t has b e e n c o n s t r u e d i n a c o m p a r a t i v e l y n a r r o w manner. Old Republic I n s . Co. v. L a n i e r , 644 So. 2d 1258 (interpreting ( A l a . 1994) t e r m " a r i s i n g u n d e r " as a p p l y i n g o n l y t o t h o s e c l a i m s a c t u a l l y stemming from independent the agreement or c o l l a t e r a l p e r t i n e n t agreements rather than as extending to However, the matters or c l a i m s ) . i n t h i s c a s e go f u r t h e r by a l s o requiring a r b i t r a t i o n o f c l a i m s and d i s p u t e s " r e l a t i n g t o " o r to" those restrictive disputes.'" 2002) agreements, construction a term and that that subject So. 2d 923, Cmty. C r e d i t C o r p . , 7 to a less " ' c o v e r s a b r o a d range AmSouth Bank v. Dees, 847 ( q u o t i n g Vann v. F i r s t is "related of 933 ( A l a . 834 So. 2d 2090051 751, 754 (Ala. 2002)). More 2 importantly, perhaps, t h e d o c u m e n t s go on t o i n c l u d e , w i t h i n t h e s c o p e o f c l a i m s arbitrated, even more potential claims: the t o be warranty s p e c i f i c a l l y r e f e r s t o " c l a i m s , d i s p u t e s a n d c o n t r o v e r s i e s ... related real t o ... any d e f e c t property including on which those nondisclosure," i n or to the subject the subject stemming whereas from the Home Home o r t h e i s situated," "misrepresentation purchase-agreement or addendum b r o a d l y i n c l u d e s w i t h i n t h e scope o f i t s a r b i t r a t i o n agreement "any and a l l c l a i m s cannot against agree w i t h John arising Wittmann Howard p e r t i n e n t agreements between" that the parties. the claims do n o t f a l l within We thus he h a s a s s e r t e d t h e scope of the to arbitrate. I t may w e l l p r o v e t o be t h e c a s e t h a t no p e r s o n o r e n t i t y w i l l be f o u n d t o be c o n t r a c t u a l l y r e s p o n s i b l e , u n d e r t h e t e r m s o f t h e p e r t i n e n t w a r r a n t y , t o c u r e a number o f t h e i t e m s o f damage claimed t o have been incurred by Wittmann. That To t h e e x t e n t t h a t W i t t m a n n s e e k s t o r e l y upon K o u l l a s v. Ramsey, 683 So. 2d 415, 418 ( A l a . 1 9 9 6 ) , a s a u t h o r i t y f o r a d o p t i n g a s t r i c t c o n s t r u c t i o n o f t h e t e r m " r e l a t e d t o , " we n e e d o n l y n o t e t h a t AmSouth Bank s p e c i f i c a l l y n o t e d t h a t t h e s t a t e m e n t s made i n K o u l l a s on t h a t i s s u e were o b i t e r d i c t a . 847 So. 2d a t 932. 2 8 2090051 potential contractual enforcement compelling of an similar does arbitration the r e f e r r a l warranty t o a r b i t r a t i o n . upholding defense of n o t , however, clause i n that warranty "related t o " the a l l claims As a F l o r i d a a p p e l l a t e c o u r t h e l d i n t h e a p p l i c a b i l i t y o f an a r b i t r a t i o n factual bar the and l e g a l context, "[b]y agreement i n a t h e terms of the a r b i t r a t i o n agreement, t h e p a r t i e s agreed t o submit c l a i m s t o arbitration warranty t h a t were f a r b r o a d e r t h a n c l a i m s made u n d e r t h e agreement, as l o n g as those s u b j e c t home o r t h e r e a l p r o p e r t y . " Colon, claims that the t r i a l asserted by Wittmann subject to a r b i t r a t i o n . and court C t . App. 2 0 0 7 ) . erred against The t r i a l related to the M e r c e d e s Homes, I n c . v . 966 So. 2d 10, 12 ( F l a . D i s t . conclude claims i n concluding John Howard We t h u s that the were n o t court's order i s reversed, t h e c a u s e i s remanded f o r t h e e n t r y o f an o r d e r J o h n Howard's m o t i o n t o s t a y a n d t o c o m p e l granting arbitration. REVERSED AND REMANDED WITH INSTRUCTIONS. Thompson, P . J . , a n d B r y a n a n d Thomas, J J . , c o n c u r . Moore, J . , r e c u s e s himself. 9
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