Opinion ID: 1821998
Heading Depth: 1
Heading Rank: 1

Heading: Monsanto and Delta

Text: Monsanto and Delta argue that the doctrine of equitable estoppel requires that the arbitration agreement between the plaintiffs and DAS must also apply to Monsanto and Delta, so that they are entitled to compel arbitration of the plaintiffs' claims against them based on DAS's arbitration provision. Although this Court has recognized the applicability of the doctrine of equitable estoppel in certain cases involving a nonsignatory's motion to compel arbitration, see Ex parte Isbell, 708 So.2d 571 (Ala. 1997), that doctrine is not applicable in cases such as this one, where the arbitration provision is specifically limited to the signing parties (i.e., where the provision is not broad enough to indicate an intent on the plaintiffs' part to arbitrate with a nonsignatory). See, e.g., Med Center Cars, Inc. v. Smith, 727 So.2d 9 (Ala.1998); Ex parte Isbell, supra ; Ex parte Jones, 686 So.2d 1166 (Ala.1996); Ex parte Martin, 703 So.2d 883 (Ala. 1996); Ex parte Stripling, [694 So.2d 1281 (Ala.1997)]; Ex parte Stallings & Sons, Inc., 670 So.2d 861 (Ala.1995). First Family Fin. Servs., Inc. v. Rogers, 736 So.2d 553, 560 (Ala.1999). See Ex parte Lovejoy, 790 So.2d 933 (Ala.2000), quoting this same passage. Therefore, we consider whether the arbitration provision in this case is broad enough to show that the plaintiffs intended to arbitrate their claims with the nonsignatories, Monsanto and Delta. We find two opinions particularly instructive, Parkway Dodge, Inc. v. Yarbrough, 779 So.2d 1205 (Ala.2000), and Carriage Homes v. Channell, 777 So.2d 83 (Ala.2000). In Parkway Dodge, the plaintiff purchased an automobile from Parkway Dodge that had been manufactured by DaimlerChrysler Corporation. After experiencing a number of problems with the vehicle, the plaintiff sued both Parkway, the dealer, and DaimlerChrysler, the manufacturer, on various claims, including fraud, suppression, deceit, and breach of warranty. When the plaintiff Yarbrough purchased the automobile, she executed a Buyer's Order that contained the following arbitration clause: The Dealer and Purchaser(s) mutually covenant, stipulate and agree, in connection with the resolution of any dispute arising out of the contract(s) entered into by the parties of and concerning the within described motor vehicle, as follows:... The undersigned agree that all disputes not barred by applicable statutes of limitations or otherwise barred by law, resulting from or arising out of the sales transaction entered into,... Dealer and the Purchaser(s) agree to submit such dispute(s) to BINDING ARBITRATION.... 779 So.2d at 1206. Both Parkway and DaimlerChrysler moved to compel arbitration, based on the arbitration clause. This Court held that Parkway was entitled to compel arbitration, but that the manufacturer, DaimlerChrysler, was not. In affirming the trial court's order denying DaimlerChrysler's request for arbitration, this Court emphasized that the language of the arbitration agreement referenced only the `dealer' and the `purchaser' and that it did not mention the manufacturer or any other third party. 779 So.2d at 1209-10. Although the arbitration clause did not expressly limit arbitration to disputes between the purchaser and the dealer, we determined that DaimlerChrysler could not compel arbitration because the arbitration clause made no mention of any parties other than the purchaser and the dealer and was therefore not broad enough to encompass the manufacturer. Although this Court has recognized the applicability of the doctrine of equitable estoppel in certain cases involving a nonsignatory's motion to compel arbitration, the arbitration agreement in this case is specifically limited to the signing parties, namely, Yarbrough, as the purchaser, and Parkway, as the dealer. The language of the arbitration agreement is not broad enough to reach the manufacturer; therefore, DaimlerChrysler is not entitled to compel arbitration based upon the terms of the arbitration agreement between Yarbrough and Parkway. Id. In Carriage Homes, supra, the plaintiffs sued the dealership that had sold them their mobile home; the mobile-home manufacturer; and the company that had financed the purchase. The plaintiffs stated various claims, including breach of warranty, breach of contract, negligence, misrepresentation, and fraud. The plaintiffs had executed the following arbitration agreement with the mobile-home dealership: The seller and the buyer(s) also agree that in the event of any controversy, dispute and/or difference of opinion arising out of or related in any manner to their contract or arising out of or related in any manner to any negotiations and/or representations made in connection[ ] with the sale of the mobile home or execution of the contract, then such controversy and/or dispute shall be resolved through binding arbitration.... 777 So.2d at 85. The mobile-home manufacturer, which was not a signatory to the arbitration agreement, moved to compel arbitration of the plaintiffs' claims. This Court held that the manufacturer was not entitled to compel arbitration: The arbitration agreement is specifically applicable to the parties who executed it, namely, the [plaintiffs], as the buyers, and Johnson Mobile Homes, as the seller. The language of the arbitration agreement does not reach the manufacturer; therefore, [the manufacturer] is not entitled to compel arbitration based upon the terms of the arbitration agreement between the [plaintiffs] and Johnson Mobile Homes. Id. at 86. We explained that the plaintiffs' allegations that Johnson Mobile Homes was an agent for the manufacturer did not entitle the manufacturer to arbitration. We noted that [t]he arbitration agreement embraces agents of Johnson Mobile Homes and does not include a third party who might be a principal of Johnson Mobile Homes. 777 So.2d at 86. In the case before us, the arbitration provision in the delivery tickets and the invoices limits its application to [y]ou, your agents, and any other persons having or claiming to have a claim against Seller,  and states that those claims may be settled by arbitration, at Seller's discretion. (Emphasis added.) Thus, the arbitration provision contained in the delivery tickets and invoices is specifically limited to the buyer and the seller and is not broad enough to cover the plaintiffs' claims against Monsanto and Delta. Both the facts and the law support the order of the trial court denying Monsanto and Delta's motions to compel the plaintiffs to arbitrate; therefore, the order denying those motions is due to be affirmed. Parkway Dodge, supra ; Carriage Homes, supra ; see also Norman v. Occupational Safety Ass'n of Alabama Workmen's Compensation Fund, 776 So.2d 788 (Ala.2000); Southern Energy Homes, Inc. v. Kennedy, 774 So.2d 540 (Ala.2000); Homes of Legend, Inc. v. Fields, 751 So.2d 1228 (Ala. 1999); Universal Underwriters Life Ins. Co. v. Dutton, 736 So.2d 564 (Ala.1999); Rogers, supra .