Case Title: Serra Chevrolet, Inc. v. Hock

Citation: 891 So. 2d 844

Docket Number: 1030302, 1030303

State: alabama

Court: Alabama Supreme Court

Date: 2004-04-23T00:00:00Z

Document:
891 So. 2d 844 (2004)
SERRA CHEVROLET, INC.
v.
Scott D. HOCK.
World Omni Financial Corporation
v.
Scott D. Hock.
1030302 and 1030303.

Supreme Court of Alabama.
April 23, 2004.
*845 Cecil H. Macoy, Jr., and Michael L. Jackson of Wallace, Jordan, Ratliff & Brandt, L.L.C., Birmingham, for appellant Serra Chevrolet, Inc.
C. Stephen Alexander, Birmingham, for appellant World Omni Financial Corporation.
Eric J. Breithaupt, Maxwell H. Pulliam, and Lynn S. Darty of Christian & Small, LLP, Birmingham, for appellee.
WOODALL, Justice.
Serra Chevrolet, Inc. ("Serra"), and World Omni Financial Corporation ("Omni"), the defendants in an action pending in the Jefferson Circuit Court, appeal from an order denying their motions to compel arbitration of an action against them commenced by Scott D. Hock. We reverse and remand.
On May 27, 2003, Hock filed a complaint against Serra and Omni, alleging, in pertinent part:
(Emphasis added.)
Hock sought damages on theories of defamation, negligence, suppression, fraud, and conspiracy to commit fraud. Regarding the fraud and conspiracy claims, Hock alleged that Serra and Omni "misrepresent[ed] to [him] that the lease agreement [Hock] signed ... had a term of 51 months and allowed the truck to be driven fifteen thousand (15,000) miles per year with no disposition fee," and that they "worked in concert to allow the original lease dated March of 1998 `to be corrected,' when in fact [Serra and Omni] fraudulently altered the terms of the March 1998 lease and forged [Hock's] name thereto." Hock also sought declaratory and injunctive relief. More specifically, he sought a judgment *847 declaring, in effect, that the second lease, which Hock had not signed ("the Serra-Omni lease"), was fraudulent and void, that the provisions of the initial lease, which Hock had signed ("the Hock lease"), had been fully executed, and that the execution of the Hock lease had extinguished his obligations to Serra and Omni.
Serra and Omni each moved to compel arbitration of the dispute based on an arbitration provision, which stated, in pertinent part:
(Emphasis added.) This provision appeared in the Serra-Omni lease on which Serra and Omni rely, and in the Hock lease, which Hock admittedly signed.
After the trial court denied the motions to compel arbitration, Serra and Omni appealed. The single issue presented on appeal is whether the arbitration provision in the Hock lease is broad enough to encompass this action. We hold that it is.
The Federal Arbitration Act, 9 U.S.C. § 2 ("the FAA"), renders specifically enforceable "[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."[3] Because it is undisputed that Hock signed the Hock lease, the fact that Serra and Omni produced an additional document, namely, the Serra-Omni lease, which also purports to control the lease transaction and calls for arbitration, adds nothing to the analysis. Neither is it relevant that Hock disclaims all reliance on the allegedly fraudulent Serra-Omni lease.
In the Hock lease, Hock agreed to arbitrate every "dispute, controversy or claim, involving any Lessee, ... Lessor or Assignee ... [that] arises out of or relates to [the] Lease, or the breach of [the] Lease." (Emphasis added.) This Court has repeatedly stated "`that the words "relating to" in the arbitration context are given a broad construction.'" AmSouth Bank v. Dees, 847 So. 2d 923, 932 (Ala.2002) (quoting Karl Storz Endoscopy-America, Inc. v. Integrated Med. Sys., Inc., 808 So. 2d 999, 1013 (Ala.2001)) (emphasis added). See also Vann v. First Community Credit Corp., 834 So. 2d 751, 754 (Ala.2002); Bama's Best Housing, Inc. v. Hodges, 847 So. 2d 300, 303 (Ala.2002); Beaver Constr. Co. v. Lakehouse, L.L.C., 742 So. 2d 159, 165 (Ala.1999); Reynolds & Reynolds Co. v. King Autos., Inc., 689 So. 2d 1 (Ala.1996); Old Republic Ins. Co. v. Lanier, 644 So. 2d 1258 (Ala.1994).
Hock contends that he is "assert[ing] no claims arising out of or relating to the [Hock lease]." Hock's brief, at 19. Therefore, *848 he contends, "there is no dispute to which the arbitration agreement contained in the [Hock lease] applies." Hock's brief, at 19. The factual allegations and claims in the complaint, however, belie these contentions.
The complaint alleges that Serra and Omni fraudulently altered the Hock lease in order to charge Hock amounts in excess of those he agreed to pay to lease the 1998 Chevrolet pickup truck. Hock also sought a judgment declaring that the Hock lease was the only valid instrument governing this transaction and that he owed nothing further under it. Indeed, the forgery issue is nothing more than a variation of a claim that Serra and Omni breached the Hock lease. In other words, if Serra and Omni breached the Hock lease by claiming a net termination liability based on a 12,000-mile-per-annum limitation, it matters not, for purposes of the arbitration provision, whether they did so under color of an allegedly forged instrument, namely, the Serra-Omni lease. Hock's right to relief turns solely on whether the rights of the parties to this dispute are defined by the Hock lease, and Hock admits that he attached that lease to his complaint because it "is factually relevant to the invalidity of the [Serra-Omni] Lease." Hock's brief, at 19. Thus, Hock cannot disclaim reliance on the Hock lease.
Clearly, this "dispute ... relates to ... [the Hock] Lease, or the breach of [the Hock] Lease," within the meaning of the arbitration provision in the Hock lease, which Hock admittedly signed. (Emphasis added.) The trial court erred, therefore, in denying the motions of Serra and Omni to compel arbitration. Consequently, the order is reversed and the cases are remanded.
1030302  REVERSED AND REMANDED.
1030303  REVERSED AND REMANDED.
HOUSTON, LYONS, BROWN, and JOHNSTONE, JJ., concur.
[1]  The exhibits referred to in Hock's complaint are not attached to this opinion.
[2]  The Serra-Omni lease was also dated March 22, 1998, and bore a signature of "Scott D. Hock."
[3]  It is uncontroverted that the transaction in this case bears a nexus with interstate commerce sufficient to invoke the FAA.