Title: Kennamer v. Ford Motor Credit Company LLC
Citation: N/A
Docket Number: 1120689
State: Alabama
Issuer: Alabama Supreme Court
Date: February 28, 2014

REL:02/28/2014
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
OCTOBER TERM, 2013-2014
____________________
1120689
____________________
Paul Kennamer and Dorothy Kennamer
v.
Ford Motor Credit Company LLC and Ray Pearman Lincoln, Inc.
Appeal from Marshall Circuit Court
(CV-12-0172)
BOLIN, Justice.
Paul Kennamer and Dorothy Kennamer appeal an order
entered by the Marshall Circuit Court compelling them to
arbitrate their claims against Ford Motor Credit Company LLC
1120689
(hereinafter "Ford Credit") and Ray Pearman Lincoln, Inc.
(hereinafter "the dealership").
Facts and Procedural History
On November 7, 2009, the Kennamers purchased a used
automobile from the dealership. As part of their purchase, the
Kennamers entered into a retail-installment contract with the
dealership, 
which 
the 
dealership 
subsequently 
assigned 
to 
Ford
Credit.  The installment contract contained an arbitration
provision, which provided as follows:
"Arbitration 
is 
a 
method 
of 
resolving 
any 
claim,
dispute, or controversy (collectively, a 'Claim')
without filing a lawsuit in court. Either you or
Creditor ('us' or 'we') (each, a 'Party') may choose
at any time, including after a lawsuit is filed, to
have any Claim related to this contract decided by
arbitration. Such Claims include but are not limited
to the following: 1) Claims in contract, tort,
regulatory or otherwise; 2) Claims regarding the
interpretation, scope or validity of this clause, or
arbitrability of any issue; 3) Claims between you
and us, your/our employees, agents, successors,
assigns, subsidiaries, or affiliates; 4) Claims
arising out of or relating to your application for
credit, this contract, or any resulting transaction
or relationship, including that with the dealer, or
any such relationship with third parties who do not
sign this contract. 
"RIGHTS YOU AND WE AGREE TO GIVE UP
"If either you or we choose to arbitrate a
claim, then you and we agree to waive the following
rights:
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"RIGHT TO A TRIAL, WHETHER BY JUDGE OR JURY
"RIGHT TO PARTICIPATE AS A CLASS REPRESENTATIVE
OR A CLASS MEMBER IN ANY CLASS CLAIM YOU MAY HAVE
AGAINST US WHETHER IN COURT OR IN ARBITRATION
"BROAD RIGHTS TO DISCOVERY AS ARE AVAILABLE IN
A LAWSUIT
"RIGHT TO APPEAL THE DECISION OF AN ARBITRATOR
"OTHER RIGHTS THAT ARE AVAILABLE IN A LAWSUIT
"Either 
Party 
must 
contact 
one 
of 
the
associations listed below and the other Party to
start 
arbitration. 
The 
applicable 
rules 
(the
'Rules') may be obtained from the association. 
"American 
Arbitration 
Association
('AAA'), 
at 
1-800-778-7879, 
or 
www.adr.org; 
"National 
Arbitration 
Forum, 
at 
1-800-
474-2371, or www.arb-forum.com
"If there is a conflict between the Rules and
this contract, this contract shall govern.  This
contract is subject to the Federal Arbitration Act
(9 U.S.C. § 1 et seq.) and the Federal Rules of
Evidence.  The arbitration decision shall be in
writing with a supporting opinion.  We will pay your
total reasonable arbitration fees and expenses (not
including attorney fees, except where applicable law
otherwise provides) in excess of $ 125.  We will pay
the whole filing fee if we demand arbitration first. 
Any portion of this arbitration clause that is
unenforceable shall be severed, and the remaining
provisions shall be enforced."
(Capitalization in original.)
  
3
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The Kennamers also entered into a separate arbitration
agreement with the dealership, which provided, in pertinent
part, as follows:
 "Buyer/lessee acknowledges and agrees that the
vehicle buyer/lessee is purchasing or leasing from
dealer 
has 
traveled 
in 
interstate 
commerce. 
Buyer/lessee thus acknowledges that the vehicle and
other 
aspects 
of 
sale, 
lease, 
or 
financing
transaction are involved in, affect, or have a
direct impact upon, interstate commerce.
"Buyer/lessee agree that all claims, demands,
disputes, or controversies of every kind or nature
between them arising from, concerning or relating to
any of the negotiations involved in the sale, lease,
or financing, of the vehicle, the terms and
provisions of the sale, lease, or financing
agreements, the arrangements for financing, purchase
of insurance, extended warranties, service contracts
or other products purchased as an incident to the
sale, lease, or financing of the vehicle, the
performance or condition of the vehicle, or any
other aspects of the vehicle and its sale, lease, or
financing, shall be settled by binding arbitration
conducted pursuant to the provision of the Federal
Arbitration Act 9 U.S.C. Section 1 et seq. and
according to the Commercial Arbitration Rules of the
Better Business Bureau of North Alabama. All parties
retain the right to seek relief in a small claims
court for disputes of claims within the scope of its
jurisdiction."
In the summer of 2010, the Kennamers began experiencing
problems with the car.  The Kennamers contend that they
stopped making the monthly payments required under the
installment contract because of the mechanical problems. 
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Although the Kennamers were aware that the car had been
involved in an accident when they purchased it, they
discovered that the damage to the car had been more extensive
than they say they were told.  According to the Kennamers, the
dealership and its salesman misrepresented the extent of the
damage 
to 
the 
car, 
and 
they 
relied 
upon 
those
misrepresentations in purchasing the 
car.  They confronted the
dealership (who contacted Ford Credit) with the allegations,
but the dealership and Ford Credit refused to cancel the
contract or to refund the Kennamers' money.  
   On February 1, 2011, Ford Credit repossessed the car and
sold it at an auction for $13,400.  The sale at the auction
resulted in the Kennamers having a balance owed on the
purchase price of the car of $4,364, which, pursuant to the
terms of the installment contract, the Kennamers were
responsible for.  
On November 2, 2011, Ford Credit sued the Kennamers in
the district court in order to the collect the deficiency,
along with attorney fees, interest, and court costs.   The
Kennamers filed an answer and subsequently responded to 18
interrogatory questions and 16 requests for admissions posed
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by Ford Credit.  On April 10, 2012, Ford Credit filed a motion
for a summary judgment, attaching the Kennamers' responses in
support of the motion.  The Kennamers opposed summary judgment
and stated that they intended to file a counterclaim against
Ford Credit and intended to join the dealership as a party and
to file a claim against it. The Kennamers stated that the
amount of the counterclaim and the claim combined would exceed
the jurisdiction of the district court.   On July 9, 2012, the
district court entered a summary judgment for Ford Credit and
awarded Ford Credit $4,364 and an attorney fee of $654, along
with court costs.  On July 23, 2012, the Kennamers filed a
postjudgment motion seeking to alter, amend, or vacate the
judgment or, in the alternative, a new trial.  The
postjudgment motion was denied by operation of law.  On August
15, 2012, the Kennamers timely filed an appeal to the circuit
court.  
On August 31, 2012, Ford Credit filed a summary-judgment
motion, 
attaching 
documents 
from 
the 
district-court 
action. 
On
September 14, 2012, 
the 
Kennamers filed 
a counterclaim against
Ford Credit, alleging fraud, breach of contract, negligence,
wantonness, and intentional infliction of emotional distress. 
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That same day, the Kennamers moved to serve a complaint on the
dealership, alleging fraud and breach of contract.  In their
complaint against the dealership, the Kennamers also alleged
that "if [the Kennamers] are liable to [Ford Credit] on the
claims 
presented in [Ford Credit's] complaint, they are 
liable
because of the acts and omissions of [the dealership]."  
On October 3, 2012, Ford Credit filed a motion to dismiss
the 
Kennamers' 
counterclaim 
on 
the 
ground 
that 
the
counterclaim failed to state a claim upon which relief may be
granted.  On October 12, 2012, the circuit court denied Ford
Credit's motion to dismiss and granted the Kennamers' motion
to serve the dealership.   
On October 26, 2012, Ford Credit filed a motion to compel
arbitration and attached to the motion a copy of the
installment contract.  On November 6, 2012, the dealership
filed a motion to dismiss or, in the alternative, to compel
arbitration based on the arbitration agreement between the
dealership and the Kennamers.  The dealership attached an
affidavit from its general manager, which provided:
"The 
automobile 
in 
question 
was 
manufactured 
out
of state and delivered into Alabama prior to the
sale to Mr. and Mrs. Kennamer. As part of the
purchase process, the majority of the purchase price
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was paid by receipt of a loan from Ford Motor Credit
Co., Inc., a corporation foreign to Alabama, with
such money coming into Alabama from out of state.
 
"Furthermore, various aspects of the sale were
regulated by federal laws, including, the Federal
Truth-in-Lending Act, the Federal Trade Commission's
Holder in Due Course regulations, the Federal
Odometer Act (the Motor Vehicle Information and Cost
Savings Act), and the Magnuson Moss Warranty Act.
The transaction as a whole substantially involved
and affected interstate commerce." 
 
On December 12, 2012, the Kennamers responded and
attached an affidavit in support of their opposition to both
motions to compel.  The Kennamers argued that Ford Credit and
the dealership (as the assignor of the installment contract)
waived their rights to arbitrate because Ford Credit had
sought discovery in the district court, had filed a summary-
judgment motion, and had obtained a judgment against the
Kennamers in the district court.  The Kennamers argued that,
in order to avoid the res judicata effect of the district-
court judgment, they had had to appeal that judgment to the
circuit court and had incurred litigation expenses, such as
court costs and attorney fees, in doing so.  The Kennamers
also argued that they were required to file their claims
against Ford Credit and the dealership shortly after filing
their appeal to the circuit court in accordance with Rule
8
1120689
13(j), Ala. R. Civ. P.  Additionally, the Kennamers argued
1
that the transaction did not involve interstate commerce so as
to mandate arbitration.
On December 14, 2012, the dealership filed a response,
arguing that the transaction involved interstate commerce. 
The dealership also argued that it was not a party to the
district-court action and that, 
after 
being served with notice
of the circuit-court action, it filed an answer and a motion
to dismiss or, in the alternative, a motion to compel
arbitration.  The dealership argued that the Kennamers were
not substantially prejudiced by its actions in filing an
answer and a motion to dismiss.  That same day, the Kennamers
filed a response to the motions to compel, contending that if
the circuit court compelled arbitration of their claims
against the dealership then there should be one arbitration
proceeding 
before 
the 
American 
Arbitration 
Association 
("AAA")
instead of a separate arbitration proceeding for the
dealership pursuant to the rules of the Better Business Bureau
Rule 13(j), Ala. R. Civ. P., addresses the filing of
1
counterclaims and cross-claims in actions appealed to the
circuit court for a trial de novo.
9
1120689
as provided for in the arbitration agreement between the
Kennamers and the dealership.
On December 21, 2012, the circuit court granted the
motions to compel arbitration and stayed the action pending
confirmation of the outcome of the arbitration.  On January
16, 2013, the Kennamers filed a motion to alter, amend, or
vacate the judgment and/or seeking clarification.  On January
22, 2013, the dealership filed a response, agreeing to
participate 
in a single arbitration proceeding before the 
AAA.
On January 28, 2013, the circuit court entered an order
denying the postjudgment motions but clarifying that there
would be one arbitration proceeding before the AAA.  On March
11, 2013, the Kennamers filed a notice of appeal.
Standard of Review
    "'This Court reviews de novo the denial of a
motion to compel arbitration. Parkway Dodge, Inc. v.
Yarbrough, 779 So. 2d 1205 (Ala. 2000).  A motion to
compel arbitration is analogous to a motion for a
summary judgment. TranSouth Fin. Corp. v. Bell, 739
So. 2d 1110, 1114 (Ala. 1999). The party seeking to
compel arbitration has the burden of proving the
existence of a contract calling for arbitration and
proving that the contract evidences a transaction
affecting interstate commerce. Id.  "[A]fter a
motion to compel arbitration has been made and
supported, the burden is on the non-movant to
present evidence that the supposed arbitration
agreement is not valid or does not apply to the
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dispute in question."  Jim Burke Automotive, Inc. v.
Beavers, 674 So. 2d 1260, 1265 n. 1 (Ala.
1995)(opinion on application for rehearing).'"
Elizabeth Homes, L.L.C. v. Gantt, 882 So. 2d 313, 315 (Ala.
2003)(quoting Fleetwood Enters., Inc. v. Bruno, 784 So. 2d
277, 280 (Ala. 2000)).
"It is well settled under Alabama law that a
party may waive its right to arbitrate a dispute if
it substantially invokes the litigation process and
thereby substantially prejudices the party opposing
arbitration. Whether a party's participation in an
action amounts to an enforceable waiver of its right
to arbitrate depends on whether the participation
bespeaks an intention to abandon the right in favor
of the judicial process, and, if so, whether the
opposing party would be prejudiced by a subsequent
order requiring it to submit to arbitration. No
rigid rule exists for determining what constitutes
a 
waiver 
of 
the 
right 
to 
arbitrate; 
the
determination as to whether there has been a waiver
must, instead, be based on the particular facts of
each case."
Companion Life Ins. Co. v. Whitesell Mfg., Inc., 670 So. 2d
897, 899 (Ala. 1995). 
"In order to demonstrate that the right to arbitrate a
dispute has been waived, the party opposing arbitration must
demonstrate both (1) that the party seeking arbitration
substantially invoked the litigation process, and 
(2) 
that the
party opposing arbitration would be substantially prejudiced
11
1120689
by an order requiring it to submit to arbitration." 
SouthTrust Bank v. Bowen, 959 So. 2d 624, 633 (Ala. 2006).
Additionally, "[o]ur cases continue to make it clear that,
because of the strong federal policy favoring arbitration, a
waiver of the right to compel arbitration will not be lightly
inferred, and, therefore, that one seeking to prove waiver has
a heavy burden."  Mutual Assurance, Inc. v. Wilson, 716 So. 2d
1160, 1164 (Ala. 1998).
Discussion
The Kennamers presented the following facts in support of
their contention that their transaction with the dealership
and Ford Credit did not involve interstate commerce: (1) the
Kennamers are residents of Alabama; (2) the previous owners of
the car the Kennamers purchased were residents of Alabama; (3)
the Kennamers were buying the car for consumer, not
commercial, purposes; (4) the dealership is located in
Alabama; (5) the car was delivered to the Kennamers in
Alabama; and (6) all the substantial obligations arising out
of the installment contract were to be performed in Alabama. 
The Kennamers argue that the dealership and Ford Credit failed
to present sufficient evidence showing that the transaction
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involved interstate commerce.  
The Federal Arbitration Act, 9 U.S.C. § 1 et seq. ("the
FAA"), "mandates the arbitration of claims encompassed by an
arbitration clause that is contained in a binding contract
that involves interstate commerce."  Ex parte Conference
America, Inc., 713 So. 2d 953, 955 (Ala. 1998).  "The FAA
'provides for "the enforcement of arbitration agreements
within the full reach of the Commerce Clause."'" Wolff Motor
Co. v. White, 869 So. 2d 1129, 1132 (Ala. 2003)(quoting
Citizens Bank v. Alafabco, Inc., 539 U.S. 52, 56 (2003),
quoting in turn Perry v. Thomas, 482 U.S. 483, 490 (1987)).
"It is well established that Congress can regulate three
broad categories of activity pursuant to its commerce power:
(1) the use of the channels of interstate commerce; (2) the
instrumentalities of interstate commerce or persons or things
in interstate commerce; and (3) those general activities
having a substantial effect on interstate commerce."  Wolff
Motor Co., 869 So. 2d at 1132.  Previously, this Court has
recognized the purchase of a used car from a dealer as a
transaction involving interstate commerce.  See Dan Wachtel
Ford, Lincoln, Mercury, Inc. v. Modas, 891 So. 2d 287 (Ala.
13
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2004)(holding 
that the dealer established that the purchase of
the used car involved interstate commerce where there was
evidence that the car was manufactured outside Alabama, a
credit report was obtained from an out-of-state company, the
buyer purchased an extended warranty from an out-of-state
company, and various aspects of the dealer's business were
regulated by federal law); Serra Toyota, Inc. v. Johnson, 876
So. 2d 1125 (Ala. 2003)(holding that dealer established that
the used-car purchase involved interstate commerce where the
dealer submitted evidence that the car was manufactured
outside Alabama, the purchaser bought an extended warranty
from an out-of-state company, the previous 
owner 
lived outside
Alabama, and the dealer had purchased the car from an out-of-
state bank). 
In the present case, the circuit court had before it the
affidavit from the general manager of the dealership that
stated that the car the Kennamers purchased was manufactured
outside Alabama, that the majority of the purchase price was
financed by Ford Credit, an out-of-state company, and that the
transaction was regulated by several federal laws.  Other
information 
before the circuit court indicated that a 
vehicle-
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1120689
history report obtained by the dealership at the time the
Kennamers purchased the car was  performed by an out-of-state
company.  We also note that, after Ford Credit repossessed the
car, it was sold at an out-of-state auction.  Accordingly, we
cannot say that the circuit court erred in concluding that
instrumentalities of interstate commerce were involved in the
transaction. 
Next, the Kennamers argue that Ford Credit and the
dealership waived their right to arbitration by substantially
invoking the litigation process.  Specifically, the Kennamers
argue that Ford Credit waived its right by filing an action in
the district court, by conducting written discovery, and by
obtaining a judgment and causing the Kennamers to appeal to
the circuit court for a trial de novo and to bring their
counterclaim against Ford Credit and their claim against the
dealership.  Although the dealership was not a party to the
district-court action, the Kennamers contend that because
"Ford Credit as assignee pursued [the dealership's] claim
through to judgment in the district court, the [dealership] as
assignor must also be deemed to have waived arbitration of
those claims."  (Kennamers' brief, p. 33.)
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"It is well settled under Alabama law that a
party may waive its right to arbitrate a dispute if
it substantially invokes the litigation process and
thereby substantially prejudices the party opposing
arbitration. Whether a party's participation in an
action amounts to an enforceable waiver of its right
to arbitrate depends on whether the participation
bespeaks of an intention to abandon the right in
favor of the judicial process and, if so, whether
the opposing party would be prejudiced by a
subsequent 
order 
requiring 
it 
to 
submit 
to
arbitration. No rigid rule exists for determining
what constitutes a waiver of the right to arbitrate;
the determination as to whether there has been a
waiver must, instead, be based on the particular
facts of each case."
Companion Life, 670 So. 2d at 899.
"Both substantial invocation of the litigation
process and prejudice must be present to establish
waiver. Ex parte Merrill Lynch, Pierce, Fenner &
Smith, Inc., 494 So. 2d 1 (Ala. 1986).  Because of
the strong federal policy applicable to arbitration
proceedings set forth in the Federal Arbitration
Act, 9 U.S.C. § 1 et seq., one seeking to establish
a waiver of arbitration bears a heavy burden.
SouthTrust Bank v. Bowen, 959 So. 2d 624 (Ala.
2006); Mutual Assurance, Inc. v. Wilson, 716 So. 2d
1160 (Ala. 1998)."
Paw Paw's Camper City, Inc. v. Hayman, 973 So. 2d 344, 347
(Ala. 2007).  
"'Prejudice to the party opposing arbitration,
not prejudice to the party seeking arbitration, is
determinative of whether a court should deny
arbitration on the basis of waiver.' Price [v.
Drexel Burnham Lambert, Inc.], 791 F.2d [1156,] 1162
[(5th Cir.1986)] (footnote omitted). 'Both delay and
the extent of the moving party's participation in
16
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judicial 
proceedings 
are 
material 
factors 
in
assessing a plea of prejudice.' Frye [v. Paine,
Webber, Jackson & Curtis, Inc.], 877 F.2d [396,] 399
[(5th Cir.1989)].
"'Prejudice has been found in situations where
the party seeking arbitration allows the opposing
party to undergo the types of litigation expenses
that 
arbitration 
was 
designed 
to 
alleviate.'
Morewitz v. West of England Ship Owners Mut.
Protection & Indem. Ass'n, 62 F.3d 1356, 1366 (11th
Cir. 1995). 'Sufficient prejudice to infer waiver
might be found, for example, if the party seeking
the stay [for arbitration] took advantage of
judicial discovery procedures not available in
arbitration.' Carcich v. Rederi A/B Nordie, 389 F.2d
692, 696 n. 7 (2d Cir. 1968)."
Hales v. ProEquities, Inc., 885 So. 2d 100, 105–06 (Ala.
2003).
First, we will address the Kennamers' waiver argument as
to Ford Credit.  In the district court, Ford Credit pursued
its claim against the Kennamers seeking the deficiency owed on
the loan following the sale of the car at auction.  Ford
Credit 
sought 
limited 
discovery, 
and, 
ultimately, 
the 
district
court entered a judgment in its favor.  Although we recognize
that discovery is limited in a district court and that Ford
Credit sought answers to a small number of interrogatory
requests and requests for admissions to support its summary-
judgment motion, Ford Credit's acts in pursuing its claim
17
1120689
against the Kennamers evinced a desire to resolve the dispute
to judgment in a court of record through litigation rather
than arbitration.  The Kennamers have shown that they suffered
prejudice in that they had to pay court costs to appeal the
district court's judgment in favor of Ford Credit, a cost not
associated with arbitration.  Also, the Kennamers incurred
legal fees while the case was pending in the district court,
and there was an 11-month delay from the time Ford Credit
filed its action in the district court and the time that it
moved to compel arbitration in the circuit court.
We now turn to the Kennamers' argument that the
dealership is bound by Ford Credit's actions in the district
court because, they argue, the dealership assigned its rights
and liabilities 
under 
the installment contract to Ford Credit.
In support of its argument, the Kennamers cite authority for
the general proposition that an assignee stands in the shoes
of the assignor.  It is well settled that general propositions
of law are not supporting authority for purposes of Rule
28(a)(10), Ala. R. App. P.  Allsopp v. Bolding, 86 So. 3d 952
(Ala. 2011).  
"This Court will not 'create legal arguments for a
party based on undelineated general propositions
18
1120689
unsupported by authority or argument.' Spradlin v.
Spradlin, 601 So. 2d 76, 79 (Ala. 1992). Further, it
is well settled that '"[w]here an appellant fails to
cite any authority for an argument, this Court may
affirm the judgment as to those issues, for it is
neither this Court's duty nor its function to
perform all the legal research for an appellant."' 
Spradlin v. Birmingham Airport Auth., 613 So. 2d
347, 348 (Ala. 1993)(quoting Sea Calm Shipping Co.,
S.A. v. Cooks, 565 So. 2d 212, 216 (Ala. 1990))."
Allsopp, 86 So. 3d at 960.
Even if the Kennamers had properly supported their
argument regarding assignment, it would not support their
contention that the dealership is bound by Ford Credit's
actions in district court.  In this case, Ford Credit provided
the 
dealership 
with financing for used-car purchasers like the
Kennamers.  Ford Credit supplied the dealership with blank
retail-installment-contract forms to filled in by the
dealership and the purchaser before the contract is signed. 
The dealership then assigns the completed contract to Ford
Credit, and Ford Credit administers and collects the loan from
the purchaser.  "An assignment is a contractual transfer of a
right, interest, or claim from one person to another."   6A
C.J.S. Assignments § 1 (2004).  "'Unless the assignment is
void or otherwise invalid, [the assignor losses] all right to
control or enforce the terms of the note ....'" Associates of
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1120689
Selma, Inc. v. Whetstone, 628 So. 2d 578, 580 (Ala.
1993)(quoting 6A C.J.S. Assignments § 96, p. 753 (1975)). 
Generally, an assignment extinguishes the right of the
assignor and transfers it to the assignee.  DuPont v. Yellow
Cab Co. of Birmingham, Inc., 565 So. 2d 190 (Ala. 1990).  The
assignee then stands in the shoes of the assignor and succeeds
to all the rights and remedies of the assignor.  Atlantic
Nat'l Trust, LLC v McNamee, 984 So. 2d 375 (Ala. 2007).
In Nissan Motor Acceptance Corp. v. Ross, 703 So. 2d 324, 
(Ala. 1997), the purchaser bought a new car from a dealership. 
The purchaser and the 
dealership 
entered into a retail-buyer's
order, which contained an arbitration clause.  They also
entered into a retail-sales contract.  Nissan became a party
to the retail-sales contract when the dealership assigned it
to Nissan.  
The 
retail-sales 
contract contained an arbitration
clause.  Nissan argued that, through the assignment, it
stepped into the shoes of the assignor, the dealership, and
could enforce the arbitration provision.  We stated:
"As an assignee, Nissan simply steps into the
shoes of the assignor, Jim Burke, a signatory to the
arbitration agreement. Upchurch v. West, 234 Ala.
604, 609, 176 So. 186, 190 (1937), overruled on
other grounds, Dominex, Inc. v. Key, 456 So. 2d 1047
(Ala. 1984). A valid assignment gives the assignee
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the same rights, benefits, and remedies that the
assignor possesses. Id. Accord John D. Calamari &
Joseph M. Perillo, The Law of Contracts, § 18–3 at
633, 634 (2d ed. 1977). Thus, Nissan has the right
to compel arbitration. See, e.g., I.S. Joseph Co. v.
Michigan Sugar Co., 803 F.2d 396, 400 (8th Cir. 
1986) (stating that, assuming a valid assignment,
the assignee could enforce an arbitration provision
entered into by the assignor); Chatham Shipping Co.
v. Fertex S.S. Corp., 352 F.2d 291, 294 (2d Cir.
1965) (stating that 'absent contrary expression,
assignment of a contract carries with it a right to
arbitration therein provided'); Gruntal & Co. v.
Steinberg, 843 F. Supp. 1 (D.N.J. 1994) (stating
that 'a successor to or assignee of a contract
containing an arbitration clause may be obligated to
arbitrate pursuant to that arbitration clause');
Banque de Paris et des Pays–Bas v. Amoco Oil Co.,
573 F. Supp. 1464 (S.D.N.Y. 1983) (stating that an
assignee may pursue the claims of the assignor and
may enforce an arbitration provision the assignor
had agreed to)."
703 So. 2d at 326.  
In this case, that means because of the dealership's
assignment to Ford Credit, Ford Credit stands in the shoes of
the dealership, and the dealership no longer has any interest
in the contract.  Ford Credit can enforce the terms of the
contract in any manner or any forum it chooses, but the
dealership cannot.   However, the dealership's assignment to
Ford Credit does not make the dealership bound by Ford
Credit's actions in the district court.  Consequently, the
dealership cannot enforce the arbitration clause under the
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installment 
contract either, because it assigned its right 
and
liabilities to Ford Credit.  Nevertheless, the dealership had
a separate arbitration agreement with the Kennamers.
The dealership did not participate in the district-court
litigation.  The dealership, after being served with the
complaint in the circuit court, filed an answer and a motion
to dismiss or, in the alternative, to compel arbitration. 
"'Merely answering on the merits, asserting a 
counterclaim (or
cross-claim) 
or 
participating 
in 
discovery, 
without 
more, 
will
not constitute waiver.'"  Climastor IV, LLC v. Marshall
Constr., LLC, 4 So. 3d 452, 458 (Ala. 2008)(quoting Voyager
Life Ins. Co. v. Hughes, 841 So. 2d 1216, 1219 (Ala. 2001)).
Although the issue is not addressed by the parties, we
recognize that enforcing arbitration of related claims as to
one defendant but not another may lead to inconsistent results
and a lack of judicial economy.  The United States Supreme
Court 
has recognized that, even though ordering arbitration 
as
to fewer than all defendants may result in proceedings in two
forums, the FAA "requires piecemeal resolution when necessary
to give effect to an arbitration agreement."  Moses H. Cone
Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 19 (1983). 
22
1120689
In Moses H. Cone, the hospital had contractually agreed to
arbitrate any disputes it had with Mercury Construction. The
hospital had a dispute with Mercury and an architect with whom
the hospital had not entered into an arbitration agreement. 
The Supreme Court recognized that the hospital's related
dispute with the architect could not prevent enforcement of
its valid arbitration agreement with Mercury.  The Supreme
Court also recognized that if "the dispute between Mercury and
the Hospital is arbitrable under the [United States
Arbitration] Act [now the FAA], then the Hospital's two
disputes will be resolved separately -- one in arbitration,
and the other (if at all) in state-court litigation."  460
U.S. at 20.  The United States Supreme Court did not require
arbitration of the hospital's dispute with the architect in
the absence of an agreement to arbitrate between the two, even
where the two disputes were closely related.   Id.  Similarly,
2
Arbitration may be compelled under the doctrine of
2
intertwining where arbitrable and nonarbitrable claims are so
closely related that the party to a controversy subject to
arbitration is equitably estopped from denying arbitrability
of the related claim.  Jenkins v. Atelier Homes, Inc., 62 So.
3d 504 (Ala. 2010).  The intertwining-claims doctrine applies
to claims and not to parties and precludes arbitration only
where there are nonarbitrable claims against a party that are
factually 
intertwined 
with 
arbitrable 
claims 
against 
that 
same
23
1120689
Ford Credit's waiver of its right to arbitrate does not
prevent this Court from enforcing the separate arbitration
agreement between the dealership and the Kennamers. 
Conclusion
The judgment of the circuit court is affirmed insofar as
it granted the dealership's motion to compel arbitration and
reversed insofar as it granted Ford Credit's motion to compel
arbitration.  This cause is remanded for further proceedings
consistent with this opinion.   
 
AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.
Stuart, Parker, Murdock, Shaw, Wise, and Bryan, JJ.,
concur.
Main, J., dissents.
party.  Also, a nonsignatory can be bound to an arbitration
agreement when the nonsignatory is also a third-party
beneficiary 
to 
the 
contract 
containing 
the 
arbitration 
clause. 
Edwards v. Costner, 979 So. 2d 757 (Ala. 2007).  Neither of
those exceptions is applicable here. 
24