Lyles v. Pioneer Housing Systems, Inc.

858 So. 2d 226, 2003 Ala. LEXIS 80, 2003 WL 1145466
CourtSupreme Court of Alabama
DecidedMarch 14, 2003
Docket1010908
StatusPublished
Cited by9 cases

This text of 858 So. 2d 226 (Lyles v. Pioneer Housing Systems, Inc.) 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
Lyles v. Pioneer Housing Systems, Inc., 858 So. 2d 226, 2003 Ala. LEXIS 80, 2003 WL 1145466 (Ala. 2003).

Opinion

858 So.2d 226 (2003)

Debra LYLES and Derrick Lyles
v.
PIONEER HOUSING SYSTEMS, INC.

1010908.

Supreme Court of Alabama.

March 14, 2003.

*227 James G. Bodin and G. William Gill of McPhillips, Shinbaum & Gill, L.L.P., Montgomery, for appellants.

David L. Selby II, Kyle C. Barrentine, and Olivia S. Matuszak of Kee & Selby, L.L.P., Birmingham, for appellee.

BROWN, Justice.

Debra and Derrick Lyles, plaintiffs in an action pending in the Elmore Circuit Court, appeal from that court's order compelling them to arbitrate their claims against the defendant, Pioneer Housing Systems, Inc. ("Pioneer"). We affirm in part, reverse in part, and remand.

Facts and Procedural History

On October 14, 1999, Debra Lyles and Derrick Lyles bought a new mobile home from a dealer located in Clanton. The home was manufactured by Pioneer. After the mobile home was delivered to the Lyleses in Wetumpka, they began to experience various problems with the home.[1] On January 12, 2001, the Lyleses sued Pioneer, alleging breach of contract, breach of implied and express warranties, violation of the Magnuson-Moss Warranty—Federal Trade Commission Improvement Act, negligence, and fraud.

On March 2, 2001, Pioneer filed a motion to compel the Lyleses to submit all of their claims against Pioneer to arbitration. In support of the motion to compel, Pioneer submitted a copy of a written warranty, a copy of an unsigned arbitration agreement, and an affidavit of Parker Holloway, Pioneer's director of service. On May 7, 2001, the Lyleses voluntarily dismissed their breach-of-express-warranty claim against Pioneer. After a hearing on Pioneer's motion to compel arbitration, the court granted that motion on October 9, 2001. On October 12, 2001, the Lyleses voluntarily dismissed their Magnuson-Moss Act claim against Pioneer. On December 21, 2001, Pioneer filed a notice, purporting to consent to the voluntary dismissal of the express-warranty and Magnuson-Moss Act claims. The Lyleses filed a motion to *228 vacate the order compelling arbitration, and the trial court scheduled a hearing. When the Lyleses and their counsel failed to appear at the hearing because of scheduling conflicts, the trial court denied the motion to vacate on December 21, 2001. On January 31, 2002, the Lyleses filed a notice of appeal with this Court.

Standard of Review

We review de novo a trial court's ruling on a motion to compel arbitration to determine whether the trial judge erred in deciding a factual or legal issue, and, if so, whether the error substantially prejudiced the party seeking review. See Potts v. Baptist Health Sys., Inc., 853 So.2d 194, 196-97 (Ala.2002).

"The burden of proof on the party seeking to compel arbitration is well established. `A motion to compel arbitration is analogous to a motion for a summary judgment.' Ex parte Caver, 742 So.2d 168, 172 n. 4 (Ala.1999). `The party seeking to compel arbitration has the initial burden of proving the existence of a contract calling for arbitration and proving that the contract evidences a transaction substantially affecting interstate commerce.' American Gen. Fin., Inc. v. Morton, 812 So.2d 282, 284-85 (Ala.2001) (plurality opinion). See Sisters of the Visitation v. Cochran Plastering Co., 775 So.2d 759 (Ala.2000). `If the party seeking to enforce the arbitration agreement fails to make such a showing, then the opposing party has no burden of resisting arbitration and the motion should be denied.' Brown v. Dewitt, Inc., 808 So.2d 11, 14 (Ala.2001)."

Brookfield Constr. Co. v. Van Wezel, 841 So.2d 220, 221 (Ala.2002)(footnote omitted).

Analysis

I.

The Lyleses argue that the trial court erroneously compelled them to arbitrate their claims against Pioneer because, they maintain, they never entered into a written contract calling for arbitration. Pioneer responds by asserting that the Lyleses, by accepting benefits under Pioneer's written warranty, agreed to arbitrate their claims against Pioneer. The warranty contains the following provision: "Warranty disputes will be settled under the Rules of Arbitration, unless prohibited by state law." Specifically, Pioneer contends that the Lyleses accepted the benefits of the written warranty by alleging in their complaint a breach-of-express-warranty claim and a Magnuson-Moss Act claim. The Lyleses respond that because they voluntarily dismissed both of those claims, there is no evidence in the record indicating that they received the written warranty from Pioneer or that they claimed benefits under the written warranty.

The dispositive issue is whether the Lyleses availed themselves of the benefits of Pioneer's written warranty, thus manifesting their agreement to the arbitration provision contained in it.

"`"[A]rbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit."' AT & T Techns., Inc. v. Communication[s] Workers of America, 475 U.S. 643, 648 (1986)(quoting United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582 (1960)); and see Ex parte Lovejoy, 790 So.2d 933 (Ala. 2000). `"When deciding whether parties agree to arbitrate a certain matter (including arbitrability) courts generally... should apply ordinary state-law principles that govern the formation of contracts."' Oakwood Mobile Homes, Inc. v. Barger, 773 So.2d 454, 459 (Ala. 2000) (quoting First Options of Chicago, *229 Inc. v. Kaplan, 514 U.S. 938, 944 (1995)). `"The requisite elements of [a contract] include: an offer and an acceptance, consideration, and mutual assent to terms essential to the formation of a contract."' Ex parte Grant, 711 So.2d 464, 465 (Ala.1997) (quoting Strength v. Alabama Dep't of Finance, Div. of Risk Mgmt., 622 So.2d 1283, 1289 (Ala.1993)). `Assent must be manifested by something. Ordinarily, it is manifested by a signature. [However], [a]ssent may be manifested by ratification.' Southern Energy Homes, Inc. v. Hennis, 776 So.2d 105, 108 (Ala.2000) (citing Southern Energy Homes, Inc. v. Harcus, 754 So.2d 622, 625 (Ala.1999)), wherein this Court remanded the case to the trial court for a finding of whether the purchasers of a manufactured home ratified and thereby accepted an arbitration provision by accepting repairs pursuant to a warranty containing the arbitration provision."

Ex parte Cain, 838 So.2d 1020, 1027-28 (Ala.2002).

Furthermore, assent to a contract may be manifested when a plaintiff accepts the benefits of a contract:

"It is well established ... that `[a] plaintiff cannot simultaneously claim the benefits of a contract and repudiate its burdens and conditions.' Southern Energy Homes, Inc. v. Ard, 772 So.2d 1131, 1134 (Ala.2000); see Ex parte Stamey, 776 So.2d 85 (Ala.2000); Infiniti of Mobile, Inc. v. Office, 727 So.2d 42 (Ala.1999); Ex parte Dyess, 709 So.2d 447, 451 (Ala. 1997); Ex parte Warren,

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Bluebook (online)
858 So. 2d 226, 2003 Ala. LEXIS 80, 2003 WL 1145466, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lyles-v-pioneer-housing-systems-inc-ala-2003.