Title: Northcom, Ltd. v. James
Citation: 848 So. 2d 242
Docket Number: 1002072
State: Alabama
Issuer: Alabama Supreme Court
Date: October 11, 2002

848 So. 2d 242 (2002)
NORTHCOM, LTD., et al.
v.
R.E. JAMES et al.
1002072.

Supreme Court of Alabama.
October 11, 2002.
*243 Richard W. Whittaker, Enterprise, for appellants.
Joe C. Cassady of Cassady, Fuller &amp; Marsh, L.L.P., Enterprise, for appellees.
BROWN, Justice.
Northcom, Ltd., Jerry Oakley, and William R. McDonald III, the defendants in an action pending in the Coffee Circuit Court, appeal from an order issued on July 17, 2001. That order held that the defendants had failed to initiate arbitration, removed the case from the trial court's administrative docket, and ordered the defendants to answer the complaint against them filed by R.E. James, Roberta Gwenn James, and Kathy James Pittman (hereinafter collectively referred to as "the plaintiffs"). Oakley and McDonald are shareholders in Northcom, Ltd., and we will refer to all three defendants collectively as "Northcom." We reverse the trial court's order and remand with instructions.
In 1986, Northcom entered into a contract with the plaintiffs for the purchase of two radio stations.[1] The contract contained the following arbitration clause:
In May 1994, the plaintiffs brought a breach-of-contract action against Northcom in the Coffee Circuit Court. Northcom moved to compel arbitration, but the trial court denied the motion. Northcom appealed the trial court's order denying arbitration to this Court. We reversed the order of the trial court, holding that the plaintiffs were required to arbitrate their claims against Northcom pursuant to the arbitration agreement in the contract. See Northcom, Ltd. v. James, 694 So. 2d 1329 (Ala.1997).
On remand to the Coffee Circuit Court, the plaintiffs purported to continue the litigation of this case. The record indicates that the plaintiffs served interrogatories on Northcom in February 1998. Northcom refused to answer the interrogatories. On May 5, 1998, the plaintiffs filed a motion to compel Northcom to answer the interrogatories, and on May 7, 1998, the trial court granted that motion. On May 15, 1998, Northcom moved the trial court to comply with this Court's remand order and stay the action pending arbitration. After a hearing on the motion, the trial court entered a stay in the case on September 8, 1998, pending arbitration.
On January 27, 1999, the plaintiffs filed with the Coffee Circuit Court a motion to "require defendants to appoint an arbitrator." The trial court granted the motion on February 12, 1999, and ordered Northcom to appoint an arbitrator within 10 days. Northcom then moved the trial court to set aside its February 12, 1999, order, arguing that the plaintiffs had not yet initiated arbitration proceedings. The trial court denied Northcom's motion on August 26, 1999. After the trial court denied a motion to reconsider its order, Northcom filed a petition for a writ of mandamus with this Court; we denied the petition on February 10, 2000. Northcom moved the trial court to dismiss the plaintiffs' case against it. On July 17, 2001, the trial court entered the following order:
"IT IS, THEREFORE, ORDERED AND ADJUDGED as follows:
It is undisputed that although the plaintiffs purported to select an arbitrator, they never initiated arbitration proceedings after this Court's May 9, 1997, opinion. Northcom now appeals the trial court's July 17, 2001, order.
Northcom argues that the trial court's July 17, 2001, order is due to be reversed because, it argues, the order is based upon the erroneous assumption that Northcom bears the burden of initiating arbitration proceedings in this case and because the order holds that Northcom waived its right to arbitrate by failing to initiate such proceedings. We agree.
A trial court is vested with the authority "`to manage its affairs in order to achieve the orderly and expeditious disposition of cases.'" Mangiafico v. Street, 767 So. 2d 1103, 1105 (Ala.2000) (quoting Iverson v. Xpert Tune, Inc., 553 So. 2d 82, 87 (Ala.1989)). However, a trial court may not enter orders compelling parties to act in a manner that is inconsistent with the parties' own arbitration agreement.
BankAmerica Hous. Servs. v. Lee, 833 So. 2d 609, 618 (Ala.2002). Furthermore, a trial court may not mandate "mechanisms and procedures inconsistent with the mechanisms and procedures set out in the [Commercial Arbitration] Rules [of the American Arbitration Association]." 833 So. 2d  at 618.
This Court has already held that the contract between Northcom and the plaintiffs contains a valid arbitration provision and that the plaintiffs must, in accordance *246 with the contract, submit their claims against Northcom to arbitration. See Northcom, Ltd. v. James. The arbitration provision in this case clearly states that arbitration is to take place "under the rules of the American Arbitration Association" ("the AAA").
Ex parte Dan Tucker Auto Sales, Inc., 718 So. 2d 33, 36 (Ala.1998) (second alteration added). Thus, because the contract between Northcom and the plaintiffs refers to the AAA's rules governing the arbitration of disputes, those rules are made applicable to this case by the contract, and they govern this dispute, including the procedures for initiating the arbitration proceedings.
The Commercial Arbitration Rules of the AAA, which govern the transaction in this case,[2] provide as follows:
Our caselaw clearly dictates that under the Commercial Arbitration Rules, the party asserting a legal claim, i.e., the plaintiff, must initiate arbitration proceedings.
Ex parte Dan Tucker Auto Sales, Inc., 718 So. 2d  at 36 (some alterations original; some alterations added). See also Huntley v. Regions Bank, 807 So. 2d 512 (Ala.2001) (rejecting Regions Bank's argument that Huntley, the defendant, failed to properly invoke the arbitration agreement and holding that Regions Bank, as the plaintiff, bore the burden of properly invoking the arbitration agreement); and Universal Underwriters Life Ins. Co. v. Dutton, 736 So. 2d 564 (Ala.1999)(holding that the plaintiffs were the "claimants" under the AAA's Commercial Arbitration Rules and that the claimants, as the initiating parties, were responsible for advancing the filing fee).
Thus, in this case, under the AAA's Commercial Arbitration Rules, the plaintiffs, as the party initiating this legal action, are the claimants, and Northcom, the defendant, is the respondent. As the claimants, the plaintiffs must pursue their claims against Northcom by giving Northcom, the respondent, a written notice, or demand, for arbitration. The demand must meet all of the requirements specified by the Commercial Arbitration Rules. Furthermore, the plaintiffs must file two copies of the demand with the AAA, along with a copy of the arbitration agreement and a filing fee. In other words, the plaintiffs must initiate arbitration proceedings according to the AAA rules. The record before us indicates that the plaintiffs have not done so; instead, they have purported to "appoint" an arbitrator, and they allege that Northcom must do the same. Appointing an arbitrator does not initiate the arbitration process as provided in the Commercial Arbitration Rules.
Moreover, although we are aware that Rule R-14(a) of the Commercial Arbitration Rules allows parties to agree on the method for selecting arbitrators as the parties have done in this case, this provision does not address the initiation of arbitration proceedings as defined in Rule R-4 of the Commercial Arbitration Rules.
The trial court erred in ordering the parties to commence arbitration in a manner that conflicted with the provisions of *248 the arbitration agreement. Furthermore, it is clear that Northcom could not have waived its right to arbitrate by failing to initiate arbitration proceedings when it never had the burden to do so under the terms of the arbitration agreement. Thus, the trial court erred in concluding that Northcom waived its right to arbitrate. Therefore, we reverse the July 17, 2001, order of the trial court and remand the case. On remand, the trial court shall order the plaintiffs to initiate arbitration in accordance with their agreement to arbitrate and shall stay the case pending arbitration or shall dismiss the case if the plaintiffs persist in failing to initiate arbitration.
REVERSED AND REMANDED WITH INSTRUCTIONS.
SEE, LYONS, JOHNSTONE, HARWOOD, WOODALL, and STUART, JJ., concur.
MOORE, C.J., dissents.
[1]  A more detailed statement of facts is contained in our earlier opinion in this case, Northcom, Ltd. v. James, 694 So. 2d 1329 (Ala. 1997).
[2]  Both parties agree that the arbitration is to be conducted pursuant to the Commercial Arbitration Rules. Moreover, Rule R-1 of the Commercial Arbitration Rules provides, in part:

"The parties shall be deemed to have made these [Commercial Arbitration Rules] a part of their arbitration agreement whenever they have provided ... for arbitration by the AAA of a domestic commercial dispute without specifying particular rules."
(Emphasis added.)