Opinion ID: 1702725
Heading Depth: 1
Heading Rank: 4

Heading: Requirement of Effect on Interstate Commerce

Text: Section 2 of the Federal Arbitration Act (FAA), 9 U.S.C. § 2, provides in pertinent part: 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 ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. Section 2 preempts conflicting Alabama law, including in particular Ala.Code 1975, § 8-1-41(3), which states that [a]n agreement to submit a controversy to arbitration cannot be specifically enforced. However, the FAA applies to render enforceable a predispute arbitration agreement only if the contract containing the agreement, or the transaction the contract evidences, substantially affects interstate commerce. Sisters of the Visitation v. Cochran Plastering Co., 775 So.2d 759, 766 (Ala.2000); accord Equifirst Corp. v. Ware, 808 So.2d 1, 4 (Ala.2001). The party moving to compel arbitration has the burden of proving that the contract in question evidences a transaction substantially affecting interstate commerce. Chesser v. AmSouth Bank, 846 So.2d 1082 (Ala.2002). Undertaking to carry that burden, AmSouth supported its motion with affidavits from four of its officers: a vice president serving as manager of its equity loan center; a senior vice president serving as wholesale funding manager; a senior vice president serving as manager of electronic banking; and a senior vice president serving as manager of deposit operations. Collectively, those affidavits set forth the following information concerning the effects of the equity-line-of-credit transaction on interstate commerce: [5] [1.] In connection with its decision on Mr. Dees's application for the Equity Line of Credit, AmSouth obtained a credit bureau report from Equifax, Inc. (`Equifax'). On information and belief, Equifax is a Georgia corporation with its principal place of business in Atlanta, Georgia. [2.] For AmSouth to approve the application for the Equity Line of Credit and the credit limit increase on same, AmSouth required proof that the residential real property pledged as security for the loan was insured. Proof of insurance was attached to the original Application and the Application for the Credit Limit Increase, indicating that the real property securing the loan was insured by State Farm Fire and Casualty Company. On information and belief, State Farm is an Illinois corporation with its principal place of business in Bloomington, Illinois. [3.] AmSouth purchased a title insurance policy in connection with the Equity Line of Credit Agreement and the Adjustable Rate Line of Credit Mortgage. This title insurance policy was issued by Commonwealth Land Title Insurance Company. On information and belief, Commonwealth is a Pennsylvania corporation with its principal place of business in Philadelphia, Pennsylvania. [The copy of the policy attached as an exhibit to the affidavit in question states that Commonwealth is `a Pennsylvania corporation.'] In connection with the Dees Equity Line of Credit, AmSouth obtained a flood data certification with respect to the real property securing the loan. This flood data certification was provided by First American Flood Data Services, Inc. On information and belief, First American is a Texas corporation with its principal place of business in Austin, Texas. [The copy of the flooddata certification attached as an exhibit to the affidavit in question lists the address of First American as `11902 Burnet Road, Austin, Texas 78758.'] A substantial portion of the accounting and billing functions for the Dees Equity Line of Credit Account are performed by Total System Services, Inc. (`TSYS'). On information and belief, TSYS is a Georgia corporation with its principal place of business in Columbus, Georgia. The statements for the Dees Equity Line Account are printed and mailed by TSYS in Columbus, Georgia. The computer hardware and software used by TSYS to perform accounting and billing functions for the Dees and other equity line accounts are physically located in Columbus, Georgia. [6.] The existence of a prior mortgage(s) and the remaining principal balance on same are important factors in AmSouth's decision regarding whether to loan money to a customer on an equity line of credit. At the time of the application for the Equity Line of Credit, Countrywide was the owner of the First Mortgage on the Dees residence. On information and belief, Countrywide is a New York corporation with its principal place of business in Calibasas, California. Countrywide also has offices in the State of Texas. On his application for the Equity Line of Credit, Mr. Dees listed Countrywide as the owner of the First Mortgage on his house, and gave an address for Countrywide in the State of Texas. [In the `Assignment of Mortgage' whereby AmSouth Mortgage transferred the first mortgage to Countrywide, the mailing address for Countrywide is stated as `400 Countrywide Way, Simi Valley, Ca. XXXXX-XXXX.' In a counterclaim Countrywide filed against the Deeses it identified itself as `a corporation organized and existing under and by virtue of the laws of the State of New York, with its principal place of business located in California.'] [7.] AmSouth's equity line of credit portfolio (the `Equity Lines Portfolio') is composed of the equity lines of credit made available by AmSouth to individual borrowers. The Equity Line of Credit made available by AmSouth to Leffie T. Dees, account number [account number omitted], is included in the Equity Lines Portfolio. [8.] The Equity Lines Portfolio is funded in part by retail deposits made at AmSouth branches in all states where AmSouth branches are located. AmSouth has branches in Alabama, Florida, Georgia, Louisiana, Mississippi and Tennessee. The Equity Lines Portfolio is funded in part by wholesale borrowings by AmSouth. AmSouth makes wholesale borrowings from a number of sources outside the State of Alabama, including, for example, the Federal Home Loan Bank of Atlanta, Georgia (`FHLB of Atlanta'). [10.] AmSouth periodically pledges portions of the Equity Lines Portfolio to the FHLB of Atlanta as security for wholesale borrowings made by AmSouth from the FHLB of Atlanta. The Dees Equity Line of Credit is among the loans that AmSouth has pledged to the FHLB of Atlanta. [11.] With respect to many types of accounts, AmSouth offers its customers the ability to perform banking transactions electronically. AmSouth customers must apply to use electronic banking. AmSouth uses one system to process all electronic banking transactions on its customer accounts. AmSouth's electronic banking system may be accessed by telephone, through the Internet, or through a PC Banking dial-up service. Each of these methods requires the use of telephone lines to transmit data. When the PC Banking dial-up service is used, the customer accesses the system using a personal computer and modem to dial a 1-800 telephone number provided by AmSouth. [12.] On at least four occasions in the past two years, [preceding September 19, 2001] electronic banking transactions were performed in connection with the Dees Home Equity Line of Credit, Account Number [account number omitted]. For each of these transactions, the customer accessed the AmSouth electronic banking system using PC Banking (i.e., via a personal computer and modem). The customer used telephone lines to perform these transactions. [13.] Electronic banking transactions posted to the Dees Home Equity Line Account on September 24, 1999, March 2, 2000, and May 8, 2000. Each of these three transactions represents a withdrawal of funds from the Dees Equity Line Account, and a transfer of those funds to AmSouth checking account number [account number omitted], which checking account is owned by [Mr.] Dees. [14.] On May 8, 2002, a fourth electronic banking transaction posted to the Dees Home Equity Line of Credit account... which was a payment in the amount of $500.00. This payment to the Dees Home Equity Line of Credit account was made by an electronic transfer of funds from AmSouth checking account number [account number omitted], which checking account is owned by [Mr. and Mrs.] Dees and Virginia B. Secrest. The Deeses did not object to, or move to strike, any of these assertions, and they did not offer any evidentiary submissions of their own.