Brown v. Denson

895 So. 2d 882, 2004 WL 1418679
CourtSupreme Court of Alabama
DecidedJune 25, 2004
Docket1020430
StatusPublished
Cited by30 cases

This text of 895 So. 2d 882 (Brown v. Denson) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brown v. Denson, 895 So. 2d 882, 2004 WL 1418679 (Ala. 2004).

Opinion

895 So.2d 882 (2004)

Curtis BROWN and Brown Solutions, Inc.
v.
Sheila DENSON.

1020430.

Supreme Court of Alabama.

June 25, 2004.
Rehearing Denied August 20, 2004.

*883 Daniel S. Wolter and Andrew J. Moak of Gaines, Wolter & Kinney, P.C., Birmingham, for appellants.

Myron K. Allenstein and Rose Marie Allenstein of Allenstein & Allenstein, LLC, Gadsden, for appellee.

PER CURIAM.

Curtis Brown and Brown Solutions, Inc., the defendants in an action pending in the Etowah Circuit Court, appeal from the trial court's denial of their motion to compel arbitration of the claims against them in an action filed by Sheila Denson. We affirm.

I. Factual Background and Procedural History

On February 17, 2000, Denson completed an enrollment form for a group disability-insurance policy issued by Unum Life Insurance Company of America. The policy was offered to Denson as an employee of the St. Clair Board of Education. Curtis Brown sold Denson the disability policy. He signed Denson's enrollment form *884 next to the words "Signature of Agent." However, according to a document entitled "Broker Licensing and Selling Agreement" between Brown and Mass Group Marketing, Inc. ("MGM"), Brown was an independent broker and sold the products of various insurance carriers. Brown specifically acknowledged in that agreement that he had "no contractual relationship with the Carriers [to be specified by MGM] and that [he was] not, and that [he would] refrain from holding [himself] out as an Employee, Representative, Partner, Joint Venture or Associate of the Carriers."

Denson's disability coverage, for which she paid monthly premiums of $59.84, became effective on March 1, 2000. In her complaint, Denson says that she did not receive a copy of the insurance policy when she purchased the insurance. Instead, she says, she received a document entitled "Education Salary Protection Plan § 39592-AL2-4C."

Denson alleged in her complaint that before she purchased the Unum disability policy, she told Brown that she suffered from "lupus," a disease "which causes multiple problems," and that she "was under a doctor's care." She alleged that Brown told her that "it didn't matter if [she] had any health problems, because within a year the policy would pay." Denson also alleged as follows:

"During the summer of 2000, [Denson] became ill and spoke to Curtis Brown. [Denson] expressed concern that because she was sick, perhaps she should drop the policy. Curtis Brown represented to [Denson] that she should not drop the policy and that even though a pre-existing condition existed, that should not be a problem on payment of benefits."

On October 27, 2000, Denson was admitted to the hospital, and she was unable to work for a short time. She briefly returned to work in November, but thereafter was unable to return to work. In January 2001, Denson filed a claim with Unum under the disability-insurance policy for long-term disability benefits. Unum denied Denson's claim on the basis that her disability was caused by, was contributed to by, or resulted from a preexisting condition. Denson asked Unum to review its denial of her claim, but Unum did not reverse its decision to deny benefits on the basis of a preexisting condition. Unum also notified Denson that in order to further contest its decision on her claim, she must request arbitration within two years from the date it denied her claim.

On March 12, 2002, Denson sued Curtis Brown and Brown Solutions, Inc., a corporation of which Brown and his wife Janet are the officers, alleging that Brown's representations to her that Unum would pay her disability benefits regardless of her preexisting medical condition were false. Brown and Brown Solutions moved to compel arbitration pursuant to an arbitration clause contained in Denson's disability-insurance policy with Unum.[1] According to that motion, Denson *885 has already engaged in arbitration with Unum as to her claim against it. In support of their motion, Brown and Brown Solutions submitted as exhibits copies of Denson's disability-insurance enrollment form and disability-claim form, a copy of an exemplar summary-of-benefits document issued by Unum, copies of correspondence between Unum and Denson concerning her disability claim, and a copy of Brown's independent-broker agreement with MGM.

In opposition, Denson argued that she did not sign an arbitration agreement with Brown or Brown Solutions and, therefore, that there is no contract between her and Brown or Brown Solutions that requires her to submit her claims against them to arbitration; that Unum is not a party to this action and that she does not seek benefits pursuant to the Unum disability-insurance policy, but instead seeks only damages from Brown and Brown Solutions for fraud; that Brown's misrepresentations did not substantially affect interstate commerce under the test adopted in Sisters of the Visitation v. Cochran Plastering Co., 775 So.2d 759 (Ala.2000); and that the Federal Arbitration Act ("the FAA") is unconstitutional because it was never intended to apply to state causes of action or to a claim such as this. The trial court denied Brown and Brown Solutions' motion to compel arbitration. Brown and Brown Solutions appeal.

II. Standard of Review

This Court's standard of review of an order granting or denying a motion to compel arbitration is well-settled.

"`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., 539 U.S. 52, 53, 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).'
"Hudson v. Outlet Rental Car Sales, Inc., 876 So.2d 455, 457 (Ala.2003) (emphasis omitted)."

Owens v. Coosa Valley Health Care, Inc., 890 So.2d 983, 986 (Ala.2004).

III. Analysis

Initially, Brown and Brown Solutions had the burden of proving that a contract calling for arbitration exists and that that contract evidences a transaction involving commerce within the meaning of the FAA. The arbitration provisions under which Brown and Brown Solutions seek to arbitrate are contained in the exemplar summary of benefits, the only copy in the record of any document allegedly provided *886 by Unum to Denson or her employer. Although a contract calling for arbitration exists, that contract is between Denson and Unum, not between Denson and Brown or Brown Solutions.

Brown and Brown Solutions first argue that they are entitled to compel Denson to arbitrate her claims against them because Brown is, they say, a "signatory agent" for Unum.

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Bluebook (online)
895 So. 2d 882, 2004 WL 1418679, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brown-v-denson-ala-2004.