Opinion ID: 1959103
Heading Depth: 2
Heading Rank: 1

Heading: Effect of Transactions on Interstate Commerce

Text: In granting the defendants' motions to compel arbitration, the trial court relied on two uncontroverted affidavits. One of those affidavits was from Leon Michael Schmitt, a vice president of Protective Life. It reads as follows:
2. I am employed by Protective Life Insurance Company (`Protective') as Vice President, Administration, Financial Institutions Insurance Division. In this capacity I am responsible for all aspects of credit life insurance sold by Protective. 3. I have reviewed the complaint in this case, the Certificate of Insurance issued to the plaintiffs, the `Credit Insurance Disclosure Statement' signed by the plaintiffs and the plaintiffs' policy history. I am familiar with Protective's operating procedures in regard to policies of credit life insurance such as that purchased by the plaintiffs. 4. Protective regularly sends and receives policy forms, and other information regarding the type of policy at issue in this lawsuit, across state lines, via the U.S. Mail, faxes, phones and computer/electronic transfer. 5. Protective has policyholders throughout the United States, in all fifty states. Protective regularly mails and receives policy forms across state lines. 6. When individuals purchase credit life insurance, the policy form and premium payments are remitted across state lines, through the U.S. Mail, to North Carolina. 7. In the event a claim is made by any beneficiary not living in North Carolina, all claim forms are mailed by the beneficiary, across state lines, to Protective's office in North Carolina. All examination of the claim is done by an examiner located in North Carolina. The claims examination necessarily entails the transfer of information across state lines via phone lines and the U.S. Mail. 8. When a claim is paid, the claim checks are issued in North Carolina and then mailed, across state lines, to the named beneficiary. 9. Should any questions regarding the policy arise, policyholders are instructed to contact Protective's North Carolina office, across state lines, using a 1-800 customer service telephone number. 10. Protective uses premiums collected on insurance policies to support its interstate activities. The other affidavit was from Doyle Kelly, president of CNL. It states: My name is Doyle Kelly. I am over 19 years of age and have personal knowledge of the facts and matters contained in this affidavit. I currently serve as President for CNL/Insurance America and have been employed with this company for 27 years. My office is located in Macon, Georgia. I have reviewed the complaint filed by the plaintiffs in this case, and I am familiar with the insurance policies issued by my company relating to the allegations raised by the plaintiffs. Our company issued a master policy to defendant Acceptance Loan Co., Inc. to be used by Acceptance in soliciting Limited Physical Damage insurance in the State of Alabama. Each of the plaintiffs from Alabama would have been issued an insurance certificate from CNL in Georgia. Each of the plaintiff's insurance transactions with CNL would have been an act involving interstate commerce. Attached to my Affidavit as Exhibits... are true and correct copies of the arbitration agreements signed by each plaintiff in this proceeding with CNL. [4] Based on these uncontroverted affidavits, we believe that the plaintiffs' purchase of credit-life and disability insurance and automobile insurance in connection with obtaining loans through Acceptance clearly involved interstate commerce so as to enforce the arbitration agreements under the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (FAA). See 9 U.S.C. § 2 (providing that the FAA applies to contracts evidencing a transaction involving commerce). Regarding the application of the FAA in the insurance context, we have held: Unquestionably, insurance transactions that stretch across state lines or intrastate insurance transactions that otherwise have the requisite (substantial) effect on interstate commerce constitute `Commerce among the several States,' so as to make them subject to regulation by Congress under the Commerce Clause of the United States Constitution. Southern United Fire Ins. Co. v. Knight, 736 So.2d 582, 586 (Ala.1999) (citing United States v. South-Eastern Underwriters Ass'n, 322 U.S. 533, 546-47, 64 S.Ct. 1162, 88 L.Ed. 1440 (1944) (holding that an insurer that conducts business across state lines is engaged in interstate commerce)). See Humana Inc. v. Forsyth, 525 U.S. 299, 307, 119 S.Ct. 710, 142 L.Ed.2d 753 (1999) (stating that an insurance company doing business across state lines engages in interstate commerce (citing South-Eastern Underwriters )). In this case, Schmitt's affidavit indicates, among other things, that the plaintiffs' Protective Life insurance policies were issued from and are maintained at Protective Life's office in North Carolina. Similarly, Kelly's affidavit indicates that the plaintiffs' CNL insurance policies were issued from and are maintained at CNL's home office in Macon, Georgia. Furthermore, it is undisputed that the plaintiffs' transactions with Protective Life and CNL were the result of, and, in fact, were an integral part of, the plaintiffs' loan transactions with Acceptance. The insurance was obtained through Acceptance as a part of a transaction in which the plaintiffs' borrowed money from Acceptance. [5] Therefore, because, as stated above, the plaintiffs' transactions with Protective Life and CNL sufficiently involve interstate commerce, the transactions with Acceptance must likewise involve interstate commerce. See Green Tree Fin. Corp. v. Lewis, 813 So.2d 820, 824 (Ala.2001) (examining all relevant related transactions to determine whether a particular transaction involved interstate commerce). We affirm the trial court's finding that the defendants met their burden of proving the requisite effect on interstate commerce sufficient to bring the transactions within the provisions of the FAA.