Case Title: Don Drennen Motor Co.,Inc. v. William B. McClung

Citation: 

Docket Number: 1100734

State: alabama

Court: Alabama Supreme Court

Date: 2011-09-09T00:00:00Z

Document:
REL: 09/09/2011
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter.  Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
SPECIAL TERM, 2011
____________________
1100734
____________________
Don Drennen Motor Co., Inc.
v.
William B. McClung
Appeal from Jefferson Circuit Court
(CV-09-3109)
MURDOCK, Justice.
Don Drennen Motor Co., Inc. ("Drennen"), an automobile
dealership, appeals from an order of the Jefferson Circuit
Court requiring it to pay the costs of arbitration stemming
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2
from an action filed by one of Drennen's former employees,
William B. McClung.  We reverse and remand.
I.  Facts and Procedural History
Drennen employed McClung for about two years from 2007 to
2009.  It is undisputed that as part of his employment with
Drennen McClung signed a predispute arbitration agreement
("the arbitration agreement") that provided, in pertinent
part, as follows:
"Covered 
and 
Excluded 
Disputes: 
Disputes
required to be arbitrated include, but are not
limited to, claims based upon ... any statute
prohibiting retaliation or retaliatory discharge
....  
"Rules and Costs/Severability: Don Drennen and
Employee agree that arbitration under this Agreement
shall be in accordance with the FAA [Federal
Arbitration Act] and the Employment Arbitration
Rules 
('Rules') 
of 
the 
American 
Arbitration
Association [('AAA')], and that any proceedings
shall take place in Jefferson County, Alabama.
Notwithstanding those Rules, the parties shall share
equally the costs, fees, and expenses incurred by
arbitration except that if the Employee is unable to
pay the costs of arbitration due to financial
hardship, the Employee may apply to the AAA for 'in
forma pauperis' status in accordance with the
criteria established by the U.S. Court of Appeals
for the Eleventh Circuit, or alternatively, the
Employee may apply to the AAA for the use of a pro
bono arbitrator or for waiver, reduction, or
deferral of the AAA's fees based upon financial
hardship.  The AAA shall determine whether Employee
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3
qualifies 
for 
financial 
hardship 
or 
waiver,
reduction, or deferral of the AAA's fees and costs."
McClung alleges that he sustained injuries while working
in the line and scope of his employment with Drennen and that
he received medical treatment for those injuries.  Drennen
terminated McClung's employment in January 2009.  
On June 19, 2009, before a ruling had been entered on his
discovery petition, McClung filed a petition for pre-action
discovery in the Birmingham Division of the Jefferson Circuit
Court in which he asserted that discovery was necessary before
he could file a complaint against Drennen alleging retaliatory
discharge.  On July 8, 2009, the Bessemer Division court
entered an order permitting McClung to conduct pre-action
discovery.  
On July 28, 2009, Drennen filed a motion for a change of
venue, arguing that McClung's petition should have been filed
in the Birmingham Division of the Jefferson Circuit Court.
Drennen also filed on the same date a motion to stay the
proceeding in the circuit court and to require McClung to
submit all disputes to binding arbitration based on the
arbitration agreement.  On September 8, 2009, the Bessemer
Division of the Jefferson Circuit Court entered an order
1100734
4
transferring the case to the Birmingham Division of the
Jefferson Circuit Court.
On February 12, 2010, the Birmingham Division of the
Jefferson Circuit Court ("the trial court") held a hearing on
pending matters, and on February 22, 2010, McClung filed an
amended petition seeking pre-action discovery.  In response,
Drennen filed a motion to dismiss or to stay the proceeding
and to compel arbitration. 
On February 23, 2010, before a ruling had been entered on
his discovery petition, Mcclung filed a complaint in the
Birmingham Division of the Jefferson Circuit Court against
Drennen alleging retaliatory discharge.  On March 1, 2010,
Drennen filed a renewed motion to dismiss and to compel
arbitration in response to McClung's filing of the complaint.
In the motion, Drennen again requested that arbitration be
ordered in accordance with the arbitration agreement.  The
trial court set the motion for a hearing.  
On July 16, 2010, the trial court heard arguments
concerning Drennen's motion to compel arbitration.  After the
trial judge recused himself and the case was reassigned,
McClung filed a motion to set the case for a status
1100734
5
conference.  Drennen filed a response objecting to a status
conference because its motion to compel arbitration was still
pending before the trial court.
Following a status conference at which the trial court
again heard arguments concerning Drennen's motion to compel
arbitration, the trial court entered an order on December 14,
2010, granting Drennen's motion to compel arbitration,
stating, in pertinent part, that "the arbitration must be
completed within 90 days of the date of this Order.  The
parties are further ordered to appear on April 14, 2011, at
9:00 a.m. in courtroom 650 for a status update."
McClung's counsel proceeded to request from Drennen's
counsel 
through 
e-mail 
communication 
McClung's 
employment 
file
and a list of local arbitrators that would be acceptable to
Drennen, as well as other information.  Drennen's counsel
responded to these communications by e-mailing the requested
information to McClung's counsel multiple times.  McClung's
counsel alleges that he did not receive these responses from
Drennen's counsel because the e-mail address Drennen's counsel
used was incorrect.  Drennen's counsel states that he used the
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e-mail address McClung's counsel provided to the Alabama State
Bar.
In any event, on March 3, 2011, McClung filed what he
styled as a "Motion for Instructions Regarding Order
Compelling Arbitration."  In the motion, McClung asserted that
the December 14, 2010, order of the trial court compelling
arbitration of the dispute "does not give any instructions as
to whether or not [Drennen] will be required to pay the costs
of arbitration associated with his request and Motion to
Compel Arbitration which was granted by this Court."  McClung
further alleged that he was "without sufficient funds to
initiate an arbitration proceeding at the present time with
the American Arbitration Association."  He argued that Drennen
"has far greater resources to pay all costs associated with
the arbitration proceeding which they, themselves, requested
and 
were 
awarded 
against 
[McClung's] 
objections."
Consequently, McClung asked the trial court "to clarify its
Order issued December 14, 2010, ... as it pertains to which
party should initiate the arbitration process" and "to require
[Drennen] to pay all costs associated with the arbitration
procedure which they requested and were granted against
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[McClung's] objections."  McClung further requested that the
trial court extend the time within which the parties must
conduct the arbitration.  
The following day, Drennen filed a response in opposition
to McClung's motion in which it contended that the arbitration
agreement addressed and settled the issues McClung had
contended needed clarification from the trial court.  Drennen
also observed that the trial court could not order arbitration
that substantially differed from that outlined in the
arbitration agreement.  
On March 7, 2011, the trial court entered an order that
provided as follows:
"1. The Parties are hereby ordered to submit this
cause for arbitration pursuant to the Federal
Arbitration Act and the contract made the subject of
this dispute.
"2. Accordingly, this cause is hereby stayed pending
the 
outcome 
of 
the 
aforementioned 
binding
arbitration.
"3. The Defendant, Don Drennen Motor Co., Inc., is
hereby ordered to pay the costs associated with the
arbitration procedure, which they requested and were
granted by this Court.
"4. The time for Arbitration completion as mentioned
in the December 14, 2010, order is hereby extended,
for an additional 90 days, as of the date of this
order.
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8
"5. Additionally, the arbitrator and the parties are
ordered to inform the Court of said outcome within
30 days of the resolution. Parties are ordered to
appear on June 30, 2011, at 9:00 AM in Courtroom
650, for a status update.
"6. The previous status update scheduled for April
14, 2011, at 9:00 AM is cancelled."
Drennen appeals from the trial court's March 7, 2011,
order insofar as it orders Drennen to pay the costs associated
with the arbitration proceeding.  
II.  Standard of Review
"[W]e no longer review either the grant or the
denial of a motion to compel arbitration by petition
for a writ of mandamus. Rather, Rule 4(d), Ala. R.
App. P., effective on October 1, 2001, authorizes an
appeal of an order either granting or denying a
motion to compel arbitration."
Hales v. ProEquities, Inc., 885 So. 2d 100, 104 (Ala. 2003).
Our review of the issue presented in this case is de novo.
See generally Lewis v. Conseco Fin. Corp., 848 So. 2d 920, 922
(Ala. 2002).
III.  Analysis
With admirable candor, McClung concedes in his brief that
the trial court erred in its March 7, 2011, order by requiring
Drennen to pay the costs of arbitration in contravention to
the terms of the arbitration agreement.  The arbitration
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9
agreement provided that the parties must "share equally the
costs, fees, and expenses incurred by arbitration," and it
explained the procedure McClung must follow if he lacks the
resources to pay his share of those expenses.  Ultimately that
process involves a determination that, under the terms of the
arbitration agreement, is to be made by the American
Arbitration Association.  As Drennen notes, "'[g]eneral
contract law requires a court to enforce an unambiguous,
lawful contract, as it is written,'" Drennen's brief, p. 19
(quoting Ex parte Dan Tucker Auto Sales, Inc., 718 So.  2d 33,
35 (Ala.  1998)), and "'a trial court may not enter orders
compelling parties to act in a manner that is inconsistent
with the parties' own arbitration agreement.'" Drennen's
brief, p. 19 (quoting Northcom, Ltd.  v.  James, 848 So. 2d
242, 245 (Ala.  2002)).  "'A trial court's order compelling
arbitration that changes the terms of the arbitration
provision will be reversed when "'it appears that the trial
court, although it ordered the parties to arbitrate, failed to
compel arbitration in a manner consistent with the terms of
[the] arbitration provision.'"'" Drennen's brief, pp. 19-20
(quoting Bowater, Inc.  v.  Zager, 901 So.  2d 658, 669 (Ala.
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2004), quoting in turn Southern Energy Homes Retail Corp.  v.
McCool, 814 So.  2d 845, 849 (Ala. 2001), quoting in turn
BankAmerica Housing Servs.  v.  Lee, 833 So.  2d 609, 618
(Ala.  2002)).
The order appealed from is due to be reversed insofar as
it orders Drennen to pay the entire costs of arbitration, and
the cause is remanded for proceedings consistent with this
opinion.
REVERSED AND REMANDED.
Malone, C.J., and Woodall, Bolin, and Main, JJ., concur.