Opinion ID: 1859920
Heading Depth: 2
Heading Rank: 2

Heading: Propriety of Discovery

Text: There remains the issue of the extent to which the parties, before the court holds a hearing on the issue whether Welch entered an agreement or agreements to arbitrate, are entitled to discovery limited to the issues to be tried concerning the existence of agreements to arbitrate. We do not write to this issue on a clean slate. In Ex parte Jim Burke Automotive, Inc., 776 So.2d 118 (Ala.2000), we recognized the propriety of permitting discovery when the making of an arbitration agreement is in issue: The Federal Arbitration Act makes enforceable a written arbitration provision in a contract evidencing a transaction involving interstate commerce. 9 U.S.C. § 2; see Rogers Found. Repair v. Powell, 748 So.2d 869, 871-72 (Ala.1999). However, if there is a question whether the parties actually entered an agreement to arbitrate, that question is for the court to decide. See Premiere Chevrolet, Inc. v. Headrick, 748 So.2d 891 (Ala.1999). The trial judge did not err in allowing the parties to conduct discovery. However, he did err in failing to limit the discovery to be conducted. See Jack Ingram Motors, Inc. v. Ward, 768 So.2d 362 (Ala.1999); Universal Underwriters v. Dutton, 736 So.2d 564 (Ala.1999); and Mutual Assurance, Inc. v. Wilson, 716 So.2d 1160 (1998) (allowing for limited discovery without waiver of right to arbitrate). We conclude, and the parties agree, that discovery should be limited to the question whether [the plaintiff] agreed to arbitrate his dispute with the defendants.  776 So.2d at 121-22 (emphasis added). We have also addressed the question of what record is necessary to support the right to have limited discovery when the enforceability of an arbitration agreement is at issue and that issue is appropriate for resolution by the trial court. In First Family Financial Services, Inc. v. Jackson, 786 So.2d 1121 (Ala.2000), this Court addressed the parties' right to discovery when the court was called upon to resolve the issue whether an arbitration agreement was unconscionable: The problem in this case is that [the plaintiff] Jackson did not present the substantial evidence we have discussed in those cases mentioned in the preceding paragraph, but seeks the opportunity to create a record containing such evidence. Jackson asked for an opportunity to conduct discovery, but he offered no evidence whatever in opposition to First Family's motion to compel arbitration. Discovery is not necessary in order for a party to present evidence, such as the party's affidavit detailing the facts about which he has knowledge, or a compilation of information regarding the number of finance companies that will not make consumer loans without the borrower's signing an arbitration clause or agreement. We recently addressed a similar question in Fleetwood Enterprises, Inc. v. Bruno, 784 So.2d 277 (Ala. 2000). In that case, the plaintiff had requested an evidentiary hearing, but had submitted no evidence opposing the defendant's motion to compel arbitration. Justice Lyons, in a special concurrence in Fleetwood Enterprises, wrote: `It is well settled that a motion to compel arbitration is analogous to a motion for summary judgment. After a motion to compel arbitration has been made and supported, the burden is on the nonmovant to present evidence indicating that the supposed arbitration agreement is not valid or does not apply to the dispute in question. ' 786 So.2d at 1130-31 (citations omitted). Welch and his daughter responded to Mitchell's affidavit by presenting evidence that supported Welch's allegations that the signatures on the sale documents that purported to be Welch's signatures were invalid. Under the circumstances, the parties have the right to conduct discovery limited to the issue of the making of the arbitration agreements. The United States District Court for the Southern District of New York has discussed the scope of discovery on an issue relating to the execution of an arbitration agreement, in Blatt v. Shearson Lehman/American Express, Inc., (No. 84 Civ. 7715-CSH, July 16, 1985), 1985 WL 2029 (S.D.N.Y.1985) (unpublished). We find the district court's comments to be helpful in this case: Here Mrs. Blatt alleges that she never executed the contract at all. That is precisely the issue which, under Almacenes [Fernandez, S.A. v. Golodetz, 148 F.2d 625 (2d Cir.1945)], must be resolved by the Court under section 4 of the [Federal Arbitration] Act. I will schedule a bench trial on this issue after the parties have completed pre-trial discovery, which in my experience is useful in preparing such issues for resolution. Depositions should be taken of both plaintiffs, and of representatives of defendants with knowledge of the facts, in order to ascertain the circumstances under which the agreement attached to the motion papers came into being. (Parenthetically I note that plaintiff Irwin Blatt makes no allegation that the signatures purporting to be his are not genuine.) During the course of discovery, Mrs. Blatt will also be required, if so requested by defendants, to provide known samples of her handwriting, and to execute handwriting exemplars. We also recognized in Meadows the utility of expert testimony concerning handwriting, on the issue of the execution of an arbitration agreement; the plaintiff in Meadows presented the affidavit of a forensic examiner concerning the questioned documents.