Appeal Order Denying Motion to Compel Arbitration
A direct appeal is the proper procedure by which to seek review of a trial court's order denying a motion to compel arbitration. See Crimson Industries, Inc. v. Kirkland, 736 So. 2d 597, 600 (Ala. 1999); A.G. Edwards & Sons, Inc. v. Clark, 558 So. 2d 358, 360 (Ala. 1990);
see also Federal Arbitration Act ("FAA"), 9 U.S.C. 16 (1994) (providing that an appeal may be taken from an order denying a motion to compel arbitration). This Court reviews de novo a trial court's denial of a motion to compel arbitration. See Kirkland, 736 So. 2d at 600; Patrick Home Center, Inc. v. Karr, 730 So. 2d 1171, 1171 (Ala. 1999).
Section 2 of the FAA, 9 U.S.C. 2, provides in pertinent part:
"A written provision in ... a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract."
Section 2 (except for certain employment contracts, see 9 U.S.C. 1) has the effect of preempting conflicting Alabama law, in particular Ala. Code 1975, 8-1-41(3), and thereby making enforceable a predispute arbitration agreement in a contract evidencing a transaction that involves interstate commerce.
See Allied-Bruce Terminix Companies, Inc. v. Dobson, 513 U.S. 265, 273-74, 277, 281, 130 L. Ed. 2d 753, 115 S. Ct. 834 (1995); Crown Pontiac, Inc. v. McCarrell, 695 So. 2d 615, 617 (Ala. 1997).
As the United States Supreme Court explained in Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 24-25, 74 L. Ed. 2d 765, 103 S. Ct. 927 (1983):
"Section 2 is a congressional declaration of a liberal federal policy favoring arbitration agreements, notwithstanding any state substantive or procedural policies to the contrary.
The effect of the section is to create a body of federal substantive law of arbitrability, applicable to any arbitration agreement within the coverage of the Act. ... the Arbitration Act establishes that, as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability."
Questions of arbitrability--that is, whether the parties agreed to submit their particular dispute to arbitration--"must be addressed with a healthy regard for the federal policy favoring arbitration," id. at 24; but, in determining whether the parties agreed to arbitrate a dispute, this Court "should apply ordinary state-law principles that govern the formation of contracts."
First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944, 131 L. Ed. 2d 985, 115 S. Ct. 1920 (1995); accord Quality Truck & Auto Sales, Inc. v. Yassine, 730 So. 2d 1164, 1167-68 (Ala. 1999).
Consequently, "in applying general state-law principles of contract interpretation to the interpretation of an arbitration agreement within the scope of the Act, due regard must be given to the federal policy favoring arbitration, and ambiguities as to the scope of the arbitration clause itself resolved in favor of arbitration." Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ., 489 U.S. 468, 475-76, 103 L. Ed. 2d 488, 109 S. Ct. 1248 (1989).
However, the federal policy favoring arbitration does not require this Court to ignore the contractual intentions of the parties.
See Volt Information Sciences, Inc., 489 U.S. at 478-79; Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 57, 131 L. Ed. 2d 76, 115 S. Ct. 1212 (1995).
Instead, "this Court has clearly and consistently held that a party cannot be required to submit to arbitration any dispute he has not agreed to submit." Ex parte Stallings & Sons, Inc., 670 So. 2d 861, 862 (Ala. 1995) (internal quotation marks and citations omitted); accord AT&T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643, 648, 89 L. Ed. 2d 648, 106 S. Ct. 1415 (1986).
The FAA "simply requires courts to enforce privately negotiated agreements to arbitrate, like other contracts, in accordance with their terms," and "parties are generally free to structure their arbitration agreements as they see fit." Volt Information Sciences, Inc., 489 U.S. at 478-79.
Accordingly, "as with any other contract, the parties" intentions control, but those intentions are generously construed as to issues of arbitrability." Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626, 87 L. Ed. 2d 444, 105 S. Ct. 3346 (1985).