Olshan Foundation Repair Co. of Mobile v. Schultz

64 So. 3d 598, 2010 Ala. LEXIS 200, 2010 WL 4034866
CourtSupreme Court of Alabama
DecidedOctober 15, 2010
Docket1090800
StatusPublished
Cited by6 cases

This text of 64 So. 3d 598 (Olshan Foundation Repair Co. of Mobile v. Schultz) 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
Olshan Foundation Repair Co. of Mobile v. Schultz, 64 So. 3d 598, 2010 Ala. LEXIS 200, 2010 WL 4034866 (Ala. 2010).

Opinion

LYONS, Justice.

Olshan Foundation Repair Company of Mobile, LP (“Olshan”), appeals from the Washington Circuit Court’s denial of its motion to compel arbitration of certain claims asserted against it by Florence B. Schultz and Arnold E. Schultz. We reverse and remand.

Factual Background and Procedural History

The Schultzes own a house in Washington County. Olshan performed repair work on the foundation of the house in August 2006, March 2007, and again in January 2008. In July 2008, the Schultzes sued Olshan, alleging breach of contract, breach of warranty, negligence, and wantonness. Specifically, the Schultzes alleged that Olshan performed the foundation repair work negligently, wantonly, and in an unworkmanlike manner and that their house was damaged as a result. The Schultzes also alleged that the value of their house had decreased as a result of Olshan’s repairs and that they had suffered mental anguish and emotional distress.

Olshan moved to stay the proceedings and to compel arbitration of the Schultzes’ claims against it. The parties engaged in limited discovery on the question of arbitration and presented the following facts to the trial court. Mr. Schultz first hired Olshan to perform repair work on the foundation of the Schultzes’ house in August 2006. Olshan maintains, and the Schultzes admit, that the work in 2006 was done pursuant to a contract signed by Mr. Schultz. That contract, however, cannot be found. It is undisputed that Mrs. Schultz did not sign the 2006 contract. Olshan presented an affidavit of its general manager, who stated that “the contracts Olshan used in connection with its residential foundation repair work in Alabama in 2006 contained an arbitration provision that was identical (or substantially similar) to” the following provision:

“Notwithstanding, any provision in this agreement to the contrary, any dispute, controversy, or lawsuit between any of the parties to this agreement about any matter arising out of this agreement, shall be resolved by mandatory and binding arbitration administered by the American Arbitration Association (‘AAA’) pursuant to the arbitration laws in your state and in accordance with this arbitration agreement and the commercial rules of the AAA to the extent that any inconsistency exists between this ar[600]*600bitration and such statutes by any court having jurisdiction and in accordance with the practice of such court.”

In their response to Olshan’s motion to compel arbitration, the Schultzes, through counsel, stated: “Mr. Schultz does not deny that [the 2006] agreement contained an arbitration provision.” In an affidavit, Mr. Schultz stated that the condition of his house worsened after Olshan completed the foundation-repair work in 2006.

In March 2007, Mr. Schultz again hired Olshan to perform repair work on the foundation of his house. The record does not establish that the foundation-repair work done by Olshan on the Schultzes’ house in 2007 was related to the work it did in 2006. Mr. Schultz stated in his affidavit that Olshan presented him with a contract for the 2007 work but that he does not recall signing it. Olshan presented to the trial court a contract dated March 2, 2007, signed by Mr. Schultz. The 2007 contract provided that Olshan was to install nine “CableLock Plus Pilings,” which would have a lifetime warranty. The 2007 contract also stated, in relevant part:

“10. The owner may order extra work to be done, not contemplated by this Agreement, in which event a separate Agreement for such work shall be entered into between [Mr. Schultz] and [Olshan]. No oral representation made by anyone can change or modify this agreement.
“11. Notwithstanding, any provision in this agreement to the contrary, any dispute, controversy, or lawsuit between any of the parties to this agreement about any matter arising out of this agreement, shall be resolved by mandatory and binding arbitration administered by the American Arbitration Association (‘AAA’) pursuant to the arbitration laws in your state and in accordance with this arbitration agreement and the commercial rules of the AAA to the extent that any inconsistency exists between this arbitration and such statutes by any court having jurisdiction and in accordance with the practice of such court.”

Mr. Schultz has not denied that the 2007 contract presented by Olshan bears his signature. Mrs. Schultz did not sign the 2007 contract. Steve Scates, who was Ol-shan’s general manager at the time Olshan performed foundation-repair work for the Schultzes, testified at his deposition that Olshan actually installed 12 pilings in 2007. Scates stated: “When we lift up the house, cracks open. So what happened, they had nine pilings scheduled. They did the work. They had to add more piers to make the customer happy.” Scates further explained: “What the contract calls for is an area defined by these nine piers that we are going to repair.... We’re responsible for the area that we say we’ll fix. And even though we assume going in that it will take nine piers, it may take twenty piers.” Mr. Schultz stated that the condition of his house worsened after Ol-shan completed the work in 2007 and that he did not pay Olshan for the work it performed under the 2007 contract.

In January 2008, in an effort, according to Scates, “to provide customer service and to collect,” Olshan performed additional work on the foundation of the Schultzes’ house. In an undated letter from Scates to Mr. Schultz, Scates described the January 2008 work, stating:

“I wanted to send in writing the specific options I see we have available for your home. As you are aware, this is a finance project and the financing will have to be re-committed if we delay much longer.
“As you remember we returned to your home on January 2, 2008 and per[601]*601formed additional work to insure your CableLoek Piers were correctly installed. It was at this time that we installed 2 additional piers at no cost to you in an attempt to meet your expectation’s [sic] regarding the repair.
“The interior crawlspace was adjusted and due to the nature of that work may require additional adjustment depending on the moisture content and expansive nature of your soil.
“We planned to return with our mason to repair the cracks in your brick facade and have not received a favorable time frame from you regarding this work. We would certainly like to complete our work and satisfy our agreement so your warranty will be instigated and we can get paid.”

It is undisputed that Olshan and the Schultzes did not enter into an additional written agreement for the work Olshan did in 2008. Mr. Schultz stated that the condition of his house again worsened after Olshan’s January 2008 work and that he did not pay Olshan for that work.

The record shows that the materials Ol-shan used in repairing the Schultzes’ foundation in 2006, in 2007, and in 2008 were manufactured in Texas and were shipped to Olshan’s facility in Alabama before being sent to the Schultzes’ house for installation. To pay for the 2007 work, the Schultzes had arranged for financing from Capital One Home Improvement Finance (“Capital One”). The Schultzes were to make payments to Capital One in Georgia and were instructed to contact Capital One’s offices in Utah with any questions regarding their loan.

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Bluebook (online)
64 So. 3d 598, 2010 Ala. LEXIS 200, 2010 WL 4034866, Counsel Stack Legal Research, https://law.counselstack.com/opinion/olshan-foundation-repair-co-of-mobile-v-schultz-ala-2010.