Southern Energy Homes, Inc. v. Godwin

183 F. App'x 441
CourtCourt of Appeals for the Fifth Circuit
DecidedJune 1, 2006
Docket05-60056
StatusUnpublished
Cited by1 cases

This text of 183 F. App'x 441 (Southern Energy Homes, Inc. v. Godwin) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Southern Energy Homes, Inc. v. Godwin, 183 F. App'x 441 (5th Cir. 2006).

Opinion

PER CURIAM: *

Relying only on equitable estoppel (an issue presented for the first time on appeal), Southern Energy Homes, Inc. contests the denial of its summary-judgment motion to compel arbitration. AFFIRMED and REMANDED.

I.

In 1997, the Godwins purchased a mobile home from Rose Mobile Homes, a Southern Energy dealer in Mississippi. Southern Energy manufactured the home in Alabama. The Godwins live in the home, which was installed in Mississippi.

Post-purchase, the Godwins discovered in the home a “Home Owner’s Manual”, which informed customers of an express limited warranty. The manual did not contain a signature line or require a signature, nor did it contain a separate signature card to be returned to manufacturer Southern Energy. The manual’s detailed table of contents did not suggest an arbitration provision.

Instead, within the manual’s warranty section, several titled paragraphs (again, none includes any form of the word “arbitrate”) provide customers with remedies if they encountered problems with their homes. The final paragraph of this section, titled “IF THE PROBLEM IS STILL NOT RESOLVED”, begins: “If your problems are not satisfactorily remedied through the steps set out above, you are entitled to have the dispute settled through binding arbitration as set out below ”. (Emphasis added.) That paragraph then states: “In the event of any dispute or claim ... the Manufacturer and the purchaser of this product agree to submit such dispute or claim to binding arbitration, pursuant to the provisions of 9 USC 1, et. seq. and according to the Commercial Rules of Arbitration of the American Arbitration Association then existing”.

In 1998 and 1999, warranty work was twice performed on the Godwins’ home. Four additional “Requests for Service” were made in 1999, 2000, and 2001; Southern Energy’s records show repair work completed following these requests was not covered by the warranty.

In October 2002, the Godwins filed an action against Southern Energy in Missis *443 sippi state court. (Neither Rose Mobile Homes nor any other intermediary were included in this action.) The complaint raised several claims, some of which maintained Southern Energy breached its express warranty.

In May 2003, based on diversity jurisdiction, Southern Energy responded to the state-court action by filing this action to compel arbitration. It moved for summary judgment, relying on the affidavit of its director of consumer affairs, which included copies of the two “Warranty Claim Request” forms showing the Godwins made requests, and had work performed, under the warranty on two occasions. (The Godwins’ state-court action has been stayed pending this action to compel arbitration.)

In opposition to summary judgment, the Godwins provided the affidavit of Willard Godwin, which stated, inter alia: he never “signed a written contract or agreement with Southern Energy”; he never orally agreed to arbitrate any disputes that might arise; prior to purchase, he never saw, read, or was informed of the manual or its provisions; after purchase, he read only portions of the manual; and, when he had repair work performed, he was never informed that having work done under the warranty subjected him to binding arbitration.

Southern Energy’s summary-judgment motion to compel arbitration was denied in late 2004. The district court held: the Godwins did not agree to arbitration; “proof of affirmative mutual agreement herein is simply lacking”; and the God-wins’ ability to provide an affidavit showing they did not consent to arbitration distinguished their case from situations where homeowners had no evidence of such lack of consent. S. Energy Homes, Inc. v. Godwin, No. 2:03cv286 (S.D. Miss. 28 Dec. 2004) (unpublished).

II.

Where appropriate, “[arbitration is favored in the law”. Grigson v. Creative Artists Agency, L.L.C., 210 F.3d 524, 526 (5th Cir.), cert. denied, 531 U.S. 1013, 121 S.Ct. 570, 148 L.Ed.2d 488 (2000); see Primerica Life Ins. Co. v. Brown, 304 F.3d 469, 471 (5th Cir.2002) (“The FAA [Federal Arbitration Act] expresses a strong national policy favoring arbitration of disputes, and all doubts concerning the arbitrability of claims should be resolved in favor of arbitration.”). Accordingly, the FAA, 9 U.S.C. § 16(a)(1)(B), permits an appeal from an order denying arbitration. Usually, however, unlike here, that order is in the context of a defendant’s seeking to compel arbitration for claims against it in that same action. In other words, the arbitration issue is not the sole reason for the action. Moreover, at issue here is the denial of summary judgment. Generally, the denial of summary judgment is not appealable because the ruling is not a final judgment. Along that line, some might contend that, even though arbitration was denied in this action pursuant to a summary-judgment motion, subsequently it might be ordered following trial on that issue. See 16 U.S.C. § 4. Nevertheless, in the light of the plain language of 9 U.S.C. § 16(a)(1)(B), we conclude we have jurisdiction for this interlocutory appeal. (Neither side briefs this issue.)

Consistent with the well-known standard of review for a summary-judgment ruling, the denial of a motion to compel arbitration is reviewed de novo. See Safer v. Nelson Fin. Group, Inc., 422 F.3d 289, 293 (5th Cir.2005). In its brief on appeal, as it had claimed in district court, Southern Energy contended only that the Godwins were required to arbitrate under a valid arbitration agreement. It conceded at oral *444 argument, however, that its only basis for relief is equitable estoppel.

The doctrine of equitable estoppel “precludes a party from claiming the benefits of a contract while simultaneously attempting to avoid the burdens that contract imposes as well”. Wash. Mut. Fin. Group, L.L.C. v. Bailey, 364 F.3d 260, 267 (5th Cir.2004). In agreement with several other circuits, our court has held equitable estoppel may be used to compel non-signatories to arbitrate. See id. at 267 (“[A] nonsignatory party may be bound to an arbitration agreement if so dictated by the ordinary principles of contract and agency”. (quoting Thomson-CSF, S.A v. Am. Arbitration Ass’n, 64 F.3d 773, 776 (2d Cir.1995) (internal quotation marks omitted))).

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183 F. App'x 441, Counsel Stack Legal Research, https://law.counselstack.com/opinion/southern-energy-homes-inc-v-godwin-ca5-2006.