Opinion
CASE NO. 3:06-cv-1026-MEF.
December 22, 2006
MEMORANDUM OPINION AND ORDER
This cause is before the Court on the Motion of Green Tree-AL LLC to Compel Arbitration and Stay Proceedings (Doc. # 3). This motion was filed on November 15, 2006 by Green Tree-AL LLC ("Green Tree"). Although given an opportunity to oppose the motion, Plaintiffs have not done so. For the reasons set forth below, the Court is satisfied that the Motion of Green Tree Servicing LLC to Compel Arbitration and Stay Proceedings (Doc. # 3) is due to be GRANTED.
JURISDICTION AND VENUE
The Court has reviewed this matter and is persuaded that it has subject-matter jurisdiction over this action pursuant to 28 U.S.C. § 1332. It is undisputed that the plaintiff is a citizen of a different state than Green Tree and that more than $75,000 is in controversy in this litigation. The parties have not disputed personal jurisdiction or venue, and the Court finds an adequate evidentiary basis for personal jurisdiction and venue.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
In February of 1996, Brenda Spurlock financed the purchase of a manufactured home, Serial # ALBUS-24636 AB, through an Installment Note, which is now being serviced by Green Tree and its affiliate. At the time Brenda Spurlock purchased the manufactured home, she executed an Arbitration Agreement, which provides as follows:
ANY CONTROVERSY OR CLAIM . . . ARISING OUT OF OR RELATING TO THE INTERPRETATION, PERFORMANCE, OR BREACH OF ANY PROVISION OF RETAIL INSTALLMENT CONTRACT DATED 02/26/96 ON A 1996 Buccaneer 80 X 28 Serial # ALBUS-24636 AB SHALL BE SETTLED EXCLUSIVELY BY ARBITRATION (IN ACCORDANCE WITH THE RULES AND REQUIREMENTS OF THE AMERICAN ARBITRATION ASSOCIATION.)
(Ex. I to Doc. # 3).
On October 10, 2006, Brenda Spurlock and John Spurlock filed suit in the Circuit Court of Russell County, Alabama. Plaintiffs sued Green Tree and numerous fictitious defendants alleging the Alabama tort of invasion of privacy arising out of allegedly improper and harassing attempts to collect payments under the Installment Note. Invoking this Court's subject matter jurisdiction over the action pursuant to 28 U.S.C. § 1332, Green Tree timely removed this action to this Court on November 15, 2006.
Brenda Spurlock has not alleged the nature of John Spurlock's relationship to her or how he has standing to bring claims in this case. It is alleged that John Spurlock was one of the people Green Tree contacted as part of its efforts to collect Brenda Spurlock's debt. Green Tree appears to believe that John Spurlock is married to Brenda Spurlock.
At the same time Green Tree removed the action, it filed the Motion of Green Tree-AL LLC to Compel Arbitration and Stay Proceedings (Doc. # 3). This motion was supported by numerous evidentiary submissions including copies of the Installment Note relating to Brenda Spurlock's purchase, the arbitration agreement, other closing documents, and affidavit authenticating the documents and establishing certain relevant facts about this matter's connection to interstate commerce. On November 22, 2006, the Court entered an Order (Doc. # 5) directing Plaintiffs to show cause why the motion to compel arbitration and to stay should not be granted by no later than December 5, 2006. As of the date of this Order, Plaintiffs have filed nothing in response.
DISCUSSION
The Federal Arbitration Act ("FAA") explicitly permits the use of arbitration and specifically authorizes individuals to contract for arbitration. See 9 U.S.C. §§ 1- 10 (1991). In 1925, Congress enacted the FAA to offset the "hostility of American courts to the enforcement of arbitration agreements." Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 111 (2001). Thus, the FAA establishes "`a federal policy favoring arbitration.'" Shearson/American Exp., Inc. v. McMahon, 482 U.S. 220, 226 (1987) (quoting Moses H. Cone Mem'l Hosp., 460 U.S. at 24 (1983)). As the FAA evinces the "liberal federal policy favoring arbitration," Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S. Ct. 927, 74 L. Ed. 2d 765 (1983), the legislation "compels judicial enforcement of a wide range of written arbitration agreements." Circuit City, 532 U.S. at 111, 121 S. Ct. 1302. Indeed, under the FAA, "any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration." Moses H. Cone Mem'l Hosp., 460 U.S. at 24-25. Therefore, courts must rigorously enforce agreements to arbitrate. See Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 (1985).
Pursuant to the FAA, a written arbitration "provision in any . . . contract evidencing a transaction involving commerce . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C.A. § 2 (1991). The effect of Section 2 is "to create a body of federal substantive law of arbitrability, applicable to any arbitration agreement within the coverage of the Act." Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S.1, 24 (1983). Section 3 provides for the stay of proceedings in federal district courts when an issue in the proceedings is referable to arbitration. See 9 U.S.C. § 3 (1991). Section 4 provides for orders compelling arbitration when one party has failed, neglected, or refused to comply with an arbitration agreement. See 9 U.S.C. § 4 (1991); Boyd v. Town of Hayneville, Ala., 144 F. Supp. 2d 1272, 1275 (M.D. Ala. 2001).
Federal courts primarily invoke the FAA to give effect to contracting parties' expectations for resolving disputes. Accordingly, the FAA revolves around contract interpretation. See AMF Inc. v. Brunswick Corp., 621 F. Supp. 456, 460 (E.D.N.Y. 1985) (Weinstein, J.) ("[A]rbitration is creature of contract, a device of the parties rather than the judicial process. If the parties have agreed to submit a dispute for a decision by a third party, they have agreed to arbitration."). Accord, Bullock v. United Benefit Life Ins. Co., 165 F. Supp. 2d 1259, 1261 (M.D. Ala. 2001) (The Court must look to the intent of the parties to determine which claims are arbitrable, and in so doing, the Court looks to the wording of the arbitration clause and gives all provisions of the contract their full effect.).
The Court is satisfied from the record before it that the relevant contract evidences a transaction involving interstate or affecting commerce as the FAA requires. Moreover, there is no dispute that Brenda Spurlock entered into a contract that requires her to submit claims, such as those raised in this lawsuit, to arbitration. See, e.g., Lewis v. Conseco Fin. Corp., 848 So. 2d 920 (Ala. 2002); Oakwood Acceptance Corp. v. Hobbs, 789 So. 2d 847 (Ala. 2001). Finally, the Court is satisfied that John Spurlock must also submit his claims, to the extent that he has any, to arbitration because his claims are intertwined with, indistinguishable from, and dependent upon Brenda Spurlock's claims and the Installment Contract and because of the doctrine of equitable estoppel. See, e.g., Blinco v. Green Tree Servicing LLC, 400 F.3d 1308, 1312 (11th Cir. 2005); Credit Sales, Inc. v. Crimm, 815 So. 2d 540 (Ala. 2001); Ex parte Stamey, 776 So. 2d 85, 98 (Ala. 2000); Ex parte Dyess, 709 So. 2d 447 (Ala. 1997).
The Court notes that due to the failure of Plaintiffs to make any response whatsoever to Green Tree's motion, the Court does not have before it any argument that Spurlock's claims, to the extent that he has any, are not also subject to arbitration despite the fact that he did not sign the arbitration agreement.
CONCLUSION
In light of the liberal federal policy favoring arbitration, this Court will not deny enforcement of the arbitration clause. Thus, Plaintiffs are bound by the contractual agreement to arbitrate any disputes with Green Tree and this matter must be submitted to arbitration as outlined in that agreement. Accordingly, it is hereby ORDERED as follows:
1. Motion of Green Tree Servicing LLC to Compel Arbitration and Stay Proceedings (Doc. # 3) is GRANTED.
2. The parties to this action are hereby ORDERED to submit all controversies, claims, or disputes between them to arbitration in accordance with the terms of the agreement between them.
3. This action is STAYED pending the completion of the arbitration or the resolution of this dispute through negotiated settlement.
4. The parties are hereby ORDERED to file a jointly prepared report on the status of this case. The first such report shall be filed on March 6, 2007, and the parties shall thereafter file a jointly prepared report on the first Tuesday of every month until such time as the parties jointly stipulate that this action can be dismissed. The jointly prepared report shall indicate the status of the arbitration proceedings and the expected date those proceedings will be concluded.