Jack Ingram Motors, Inc. v. Ward

768 So. 2d 362, 1999 WL 1100875
CourtSupreme Court of Alabama
DecidedDecember 3, 1999
Docket1972027 and 1972165
StatusPublished
Cited by17 cases

This text of 768 So. 2d 362 (Jack Ingram Motors, Inc. v. Ward) 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
Jack Ingram Motors, Inc. v. Ward, 768 So. 2d 362, 1999 WL 1100875 (Ala. 1999).

Opinion

768 So.2d 362 (1999)

JACK INGRAM MOTORS, INC.
v.
Jeffery WARD.
Primus Automotive Financial Services, Inc. d/b/a Mazda American Credit
v.
Jeffery Ward.

1972027 and 1972165.

Supreme Court of Alabama.

December 3, 1999.
Rehearing Denied April 7, 2000.

Paul M. James, Jr., of Rushton, Stakely, Johnston & Garrett, P.A., Montgomery, for appellant Jack Ingram Motors, Inc.

Charles R. Driggars and C. Randal Johnson of Sirote & Permutt, P.C., Birmingham, for appellant Primus Automotive Financial Services, Inc., d/b/a Mazda American Credit.

Frank H. Hawthorne, Jr., and C. Gibson Vance of Hawthorne, Hawthorne & Vance, L.L.C., Montgomery, for appellee.

Rehearing Denied in No. 1972165 April 7, 2000.

*363 PER CURIAM.

This case involves a trial court's denial of a motion to compel arbitration. Jeffery Ward agreed to lease a car from Jack Ingram Motors, Inc., a Mazda automobile dealership. He was assisted by Ron Madrid, a salesman for Jack Ingram Motors, in executing the lease documents. The paperwork Mr. Ward signed indicated that he would not be paying an "acquisition fee." However, Mr. Ward was charged a $450 acquisition fee, and that fee was included in his monthly lease payments. Mr. Ward was not provided with any paperwork that would have placed him on notice that the acquisition fee had been included in his monthly payments. When he entered his lease agreement, Mr. Ward also signed a separate document entitled "American Automotive Arbitration Provision." That arbitration provision read as follows:

"Buyer/lessor acknowledges and agrees that the vehicle purchased or leased herein from Jack Ingram Motors has traveled in interstate commerce. Buyer/lessor thus acknowledges that the vehicle and other aspects of the sales or lease transaction are involved in, affect, or have a direct impact upon, interstate commerce. Buyer/lessor and dealer agree that all claims, demands, disputes or controversies of every kind or nature that may arise between them concerning any of the negotiations leading to the sale or lease of the vehicle terms and provisions of the sale or lease, arrangements for financing, purchase of insurance, purchase of extended warranties or service contracts, the performance or condition of the vehicle, or any other aspect of the vehicle and its sale or lease shall be settled by binding arbitration conducted pursuant to the provisions of 9 U.S.C Section 1 et seq. and according to the commercial Rules of the American Arbitration Association. Without limiting the generality of the foregoing, it is the intention of the buyer/lessor and the dealer to resolve by binding arbitration all disputes between them concerning the vehicle, its sale or lease and its conditions, including disputes concerning the terms and conditions of the sale or lease, the condition of the vehicle, any damage to the vehicle, the terms and meaning of any of the documents signed or given in connection with the sale or lease, any representations, promises or omissions made in connection with negotiations for the sale or lease of the vehicle, or any terms, conditions or representations made in connection with the financing, credit life insurance, disability insurance, and vehicle extended warranty or service contract purchased or obtained in connection with the vehicle.
"Either party may demand arbitration by filing with the American Arbitration Association a written demand for arbitration along with a statement of the matter in controversy. A copy of the demand for arbitration shall simultaneously be served upon the other party. The buyer/lessor and the dealer agree that the arbitration proceedings to resolve all such disputes shall be conducted in the city where dealer's facility is located."

On April 14, 1998, Jeffery Ward filed a complaint against Jack Ingram Motors, Inc., and Primus Automotive Financial Services, Inc., alleging fraud, suppression, and wantonness. Shortly thereafter, the defendants filed motions to compel arbitration of Ward's claims. Ward then filed an amended complaint alleging fraud in the inducement; that allegation related solely to the arbitration contract. The trial court held a hearing on the defendants' motions to compel arbitration, and, after hearing oral arguments from both parties, issued an order denying the defendants' motions to compel arbitration. The defendants appeal from that order.

Primus Automotive Financial Services, Inc.

Did the trial court err in refusing to compel arbitration of the claims against the defendant Primus Automotive Financial *364 Services? The arbitration provision is limited by its terms to disputes arising between the "buyer/lessor" (Ward) and the "dealer" (Jack Ingram Motors). It is not broad enough to include Primus. See Universal Underwriters Life Ins. Co. v. Dutton, 736 So.2d 564 (Ala.1999). Therefore, the trial court properly denied the arbitration motion insofar as it related to the claims against defendant Primus Automotive Financial Services, Inc. The order denying the motion to arbitrate is affirmed insofar as it related to that defendant.

Jack Ingram Motors, Inc.

Did the trial court err in denying the motion to compel arbitration of the claims against the defendant Jack Ingram Motors? Based on this Court's recent opinion in Investment Management & Research, Inc. v. Hamilton, 727 So.2d 71 (Ala.1999), and on the fact that the record in this case is incomplete, we reverse the order as it relates to Jack Ingram Motors and remand with instructions.

In Investment Management, this Court stated that "when a claim of fraud in the inducement is directed toward the arbitration clause itself, the issue is adjudicated by the court." 727 So.2d at 78; see also Anniston Lincoln Mercury Dodge v. Conner, 720 So.2d 898 (Ala.1998). The decision in Investment Management was based on the United States Supreme Court's decision in Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 403-04, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967), which held that "if the claim is fraud in the inducement of the arbitration clause itself—an issue which goes to the `making' of the agreement to arbitrate— the federal court may proceed to adjudicate it." See also Jones v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 604 So.2d 332 (Ala.1991)(holding that a fraud claim directed solely at the arbitration clause itself entitles the party opposing arbitration to a trial involving state-law issues relating to the making of the arbitration clause).

The plaintiff Ward amended his complaint to allege fraud in the inducement of the arbitration agreement. The trial court held a hearing on the defendants' motion to compel arbitration and at that hearing heard oral arguments by both the plaintiff and the defendants. During the hearing, the defendants challenged the plaintiff's claim of fraud in the inducement, arguing that the amended complaint contained no factual allegations of any representations made by anyone at Jack Ingram Motors upon which the plaintiff relied. The plaintiff's counsel twice volunteered to further amend the complaint to provide a more definite statement relating to the facts of the fraudulent-inducement claim, if the trial court felt amendment necessary.

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Cite This Page — Counsel Stack

Bluebook (online)
768 So. 2d 362, 1999 WL 1100875, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jack-ingram-motors-inc-v-ward-ala-1999.