Opinion ID: 1702725
Heading Depth: 1
Heading Rank: 17

Heading: AmSouth's Right to Compel Arbitration as to Mrs. Dees

Text: Based on the findings and legal conclusions we have expressed thus far, it is clear that Mr. Dees, as a signatory to the credit agreement, is obligated to arbitrate the claims he has asserted against AmSouth. Whether Mrs. Dees is likewise obligated to submit her claims to arbitration requires further analysis. As noted, she is not a signatory to the credit agreement, but she was a signatory to an associated document which identified her as an account holder as to the line-of-credit account. Also, as previously noted, Mr. and Mrs. Dees allege in their complaint that they took out the line of credit and that they borrowed money on it. Mrs. Dees, along with Mr. Dees, alleges a breach of contract in connection with AmSouth's wrongfully combining Plaintiffs' mortgage loan into his equity line of credit. The rest of the claims and entitlements to damages are asserted equally on her and his behalf. In their brief to this Court, the Deeses take note of Mrs. Dees's status as a nonsignatory only in passing, as follows: On April 16, 1996, the [Deeses] entered into an Equity Line of Credit Agreement (`Equity Line') with AmSouth Bank which provided them with a $15,000 line of credit. Only Leffie Dees, III actually signed the Equity Line of Credit Agreement. Nonetheless, we are obliged to consider her status because we will affirm the trial court [as to Mrs. Dees] if its ruling is correct on any valid ground or rationale, even one rejected or not considered by the trial court. Rogers Found. Repair, Inc. v. Powell, 748 So.2d 869, 872 (Ala.1999). We conclude that Mrs. Dees must submit to arbitration her part of the claims she asserts jointly with her husband against AmSouth. The legal principles dictating that result were well stated in Cook's Pest Control, Inc. v. Boykin, 807 So.2d 524, 526-27 (Ala.2001): The first means by which [Mrs. Dees] could be forced to arbitrate her claims against [AmSouth] would be under a theory that she is a third-party beneficiary to the contract. This Court has on several occasions addressed the issue of when a nonsignatory to a contract can be bound by an arbitration agreement contained therein. In Georgia Power Co. v. Partin, 727 So.2d 2 (Ala.1998), an employee sued, alleging negligence, wantonness, and breach of contract against the owner and operators of a loading facility; the trial court refused to enforce an arbitration agreement contained in the contract. This Court stated the general rule that `[i]t is... clear that a third-party beneficiary cannot accept the benefit of a contract, while avoiding the burdens or limitations of that contract.' 727 So.2d at 5. Because the plaintiff had specifically invoked the contract as a basis for his action, he could not avoid certain elements of the contract. Justice Shores, in her dissent, expressed the implicit holding of that case when she wrote that `the plaintiffs could have avoided arbitration by not amending their complaint to state a contract claim.' Id. at 8. This Court had earlier analyzed the issue whether a third-party beneficiary could be compelled to arbitrate, in Ex parte Dyess, 709 So.2d 447 (Ala.1997). Because Dyess had sued upon a contract, this Court held that he could not avoid the arbitration clause found therein. We also noted that `[a] party claiming to be a third-party beneficiary of a contract must establish that the contracting parties intended, upon execution of the contract, to bestow a direct, as opposed to an incidental, benefit upon the third party.' Id. at 450 (quoting Weathers Auto Glass, Inc. v. Alfa Mut. Ins. Co., 619 So.2d 1328, 1329 (Ala. 1993)). See also Ex parte Stamey, 776 So.2d 85 (Ala.2000) (holding that the intent of the parties as expressed in the contract determines whether a nonsignatory is a third-party beneficiary). . . . . We recognize a second exception to the general rule that nonsignatories cannot be bound to arbitrate their claims: If a nonsignatory's claims are `intertwined with' and `related to' the contract, arbitration can be enforced. See, e.g., Ex parte Napier, 723 So.2d 49 (Ala. 1998); Sunkist Soft Drinks, Inc. v. Sunkist Growers, Inc., 10 F.3d 753 (11th Cir.1993); Dunn Constr. Co. v. Sugar Beach Condo. Ass'n, Inc., 760 F.Supp. 1479 (S.D.Ala.1991).... Our cases recognizing `intertwining claims' as a basis for compelling arbitration have typically involved arbitration clauses broad enough to embrace intertwined claims ... and allegations of a conspiracy between the nonsignatory and the signatory to the arbitration agreement. See Ex parte Isbell, 708 So.2d 571 (Ala.1997). As similarly analyzed in Credit Sales, Inc. v. Crimm, 815 So.2d 540, 546 (Ala. 2001), to the extent that Mrs. Dees bases her claims on another party's contract with the defendants, she cannot avoid the operation of the arbitration provision of that contract.... [S]he cannot pick and choose which contract provisions she wishes to have benefit her and reject those she does not wish to have bind her; instead, she must accept or reject the entire contract. If Mrs. Dees were to take the position that she is not a party to, and is not bound by any of the terms of, the credit agreement, then she would have no standing to seek damages for the alleged wrongful increase of the indebtedness owing under that agreement or the increase of the interest rate. She does claim damages for those changes in the credit line established by that agreement, however, and therefore must accept the entire contract.