Court Opinion

ID: 7764925
Source: CourtListenerOpinion
Date Created: 2022-07-30 20:43:10.424778+00
Date Added: 2024-06-11T16:27:55.812330
License: Public Domain

The majority states that a motion to compel arbitration is analogous to a summary-judgment motion. With respect to the initial evidentiary burden of the movant and, assuming the movant satisfies that burden, the subsequent shifting of the evidentiary burden to the nonmovant, this analogy is supported by our caselaw. See, e.g., Aronov Realty Brokerage,Inc. v. Morris, [Ms. 1001292, April 26, 2002] 838 So.2d 348 (Ala. 2002) (plurality opinion).
The majority, however, attempts to extend the analogy by meshing with the foregoing evidentiary-burden principles separate and different
principles pertaining to what evidence trial and appellate courts may consider in evaluating a summary-judgment motion. Those separate
principles were stated by the Alabama Supreme Court in PrudentialInsurance Co. of America v. Coleman, 428 So.2d 593 (Ala. 1983), a case cited by the majority, as follows:
 "In determining the propriety of summary judgment, . . . we are limited in our review to the same factors considered by the trial court when it initially ruled on the motion, Ex parte Bagby Elevator Electric Co., Inc., 383 So.2d 173 (Ala. 1980), and on such a motion the trial court can consider only the material which is before it at the time of submission of the motion. Stallings v. Angelica Uniform Co., 388 So.2d 942
(Ala. 1980)."
428 So.2d at 598. While these principles are well established with regard to a summary-judgment motion, see, e.g., Ex parte Organized CommunityAction Program, Inc., [Ms. 1010316, August 30, 2002] 852 So.2d 92 (Ala. 2002) (quoting Bean *Page 561 v. State Farm Fire Casualty Co., 591 So.2d 17, 20 (Ala. 1991)), the parties have cited us to no case in which these separate principles have been applied to a motion to compel arbitration.
Assuming for the sake of discussion, however, that these separate principles are to be applied to a motion to compel arbitration, I do not believe these principles operate in the present case so as to foreclose the trial court's consideration of the affidavits filed by Washington Mutual Finance, LLC ("WMF") following the trial court's initial denial of its motion to compel arbitration.
Even as to a motion for a summary judgment, although a trial court may consider only the evidence that is before it at the time established by the trial court for submission of the motion and an appellate court's evaluation of the trial court's ruling on such a motion must be conducted on the basis of the same evidence the trial court had before it at the time of its ruling, this does not mean that a trial court may notreconsider its ruling, particularly a ruling denying a motion for a summary judgment.1 Such an order is interlocutory and, accordingly, our Supreme Court has held that it may be reconsidered by the trial court at any time before trial:
 "We recognize that, in some jurisdictions, denial of a motion for summary judgment becomes the law of the case, and bars rehearing of a subsequent motion for summary judgment unless new grounds are asserted or new proof offered. . . . We are of the opinion, however, that Illinois provides the better rule; a court may reconsider its ruling on a motion for summary judgment and may correct an erroneous ruling at any time before final judgment. . . .
 "This rule is eminently fairer . . . . Denial of a motion for summary judgment by the presiding judge, hearing the motion under Rule 78, amounts to a denial of a final determination on the existence vel non of a genuine issue of material fact, leaving that determination to the trial judge before whom the case is set for trial. The number of times a subsequent motion for summary judgment will be allowed rests within the sound discretion of the judge before whom the case is to be tried."
Food Serv. Distribs., Inc. v. Barber, 429 So.2d 1025, 1027 (Ala. 1983) (emphasis added). Even evidence submitted by a nonmovant in an effort to obtain a revision of an order granting a motion for a summary judgment that is interlocutory in nature because it does not constitute a complete adjudication of all claims as to all parties, see Rule 54(b), Ala.R.Civ.P.,2 "can be considered by the court if the nonmovant can offer a proper explanation for its failure to submit the evidence earlier." Hail *Page 562 v. Regency Terrace Owners Ass'n, 782 So.2d 1271, 1278 (Ala. 1999).
Like an order denying a motion for a summary judgment, a trial court's denial of a motion to compel arbitration is interlocutory. Therefore, I see no reason why it should not be within the trial court's discretion whether to allow such a motion to be reconsidered or renewed.3 In the present case, the circumstances that presented themselves were such that, in my view, the trial court abused that discretion in not allowing its order as to arbitration to be reconsidered.
In this case, WMF attached to its motion to compel arbitration the alternative-dispute-resolution agreement (the "arbitration agreement") between it and Steele. Among the assertions contained in this agreement was a clause that stated, in part: "Lender and Borrower acknowledge and agree that the Loan Agreement involves `commerce' as defined in the United States Arbitration Act." The majority cites three cases for the proposition that such general recitations in an arbitration clause do not "meet a proponent's burden of showing that a transaction did in fact substantially affect interstate commerce." 866 So.2d at 558. See alsoAronov Realty Brokerage, Inc., 838 So.2d 359 ("[A]s to Aronov's motion to compel arbitration, we are left with: (1) the assertions of interstate impact contained within it, but which have no evidentiary significance and which cannot by themselves satisfy Aronov's burden to show a substantial effect on interstate commerce; and (2) the materials referenced in, and attached to, the notice of filing, excluding the apparently omitted Ross affidavit." 838 So.2d at 355. The pertinent part of the arbitration agreement stated that "`[t]he parties agree that theproperty sold has been involved in, and necessarily involves, interstatecommerce.'" 838 So.2d at 351 (emphasis added)); Green Tree Fin. Corp. v.Lewis, 813 So.2d 820, 823 (Ala. 2001) ("Green Tree contends that the sentence in the arbitration provision stating that '[t]his arbitrationcontract is made pursuant to a transaction in interstate commerce, andshall be governed by the Federal Arbitration Act at 9 U.S.C. § 1,' supports its contention that the Lewises' claims should be arbitrated. However, that statement would not support an order applying the [Federal Arbitration Act] absent a showing that the transaction out of which the arbitration agreement arose had the requisite substantial effect on interstate commerce. This is so because, without such a showing, that statement in the arbitration agreement would violate the public policy of Alabama as set forth in § 8-4-41(3), Ala. Code 1975, where the Legislature has declared that arbitration agreements are not subject to specific performance." (emphasis added)); Rogers Found. Repair, Inc. v.Powell, 748 So.2d 869, 872 (Ala. 1999) ("No evidence whatsoever tends to prove the physical reality of any involvement of or effect on interstate commerce, much less any substantial effect on interstate commerce or the generation of goods or services therein. Rogers relies entirely on the recitation in the arbitration section of the contract that, 'It isacknowledged by Owner and Contractor that the work performed pursuant tothis Contract involves or affects interstate commerce.' This recitation *Page 563 
does not prove that the acknowledged involvement of or effect on interstate commerce is substantial. Because Rogers drafted the contract, it will be construed strictly against Rogers." (third emphasis added)).
As indicated by the parenthetical explanations following each of the above-cited cases, the court in each of those cases explained that the conclusory allegation that a transaction has an effect on interstate commerce, without evidentiary support for such a statement, is an insufficient basis upon which to compel arbitration.
In contrast to the arbitration agreements in the three cases relied upon by the majority, the arbitration agreement in the instant case includes assertions of specific facts that, if true, would be probative of the issue whether the parties' transaction had an effect on interstate commerce. Specifically, the arbitration agreement contains provisions stating that "[t]he parties anticipate that the funding to make Borrower's loan pursuant to the Loan Agreement will come from sources outside the State of Alabama" and that "Lender's credit forms and related documents are printed and data processing for Borrower's loan is performed outside the State of Alabama." It was undisputed that Steele signed the arbitration agreement; Steele offered no evidence to controvert the assertions contained in that agreement. Under our Rules of Evidence, such statements constitute admissions by Steele that, unlike the conclusory assertions in Aronov Realty Brokerage, Inc., RogersFoundation Repair, Inc., and Green Tree Financial Corp., do have evidentiary significance. See Rule 801(d)(2), Ala. R. Evid.
Furthermore, no issue as to the sufficiency of the impact of the transaction on interstate commerce was raised at the hearing on the motion to compel arbitration. Instead, the trial court sua sponte raised this issue for the first time in ruling on that motion. Upon receiving the court's order denying arbitration, WMF promptly responded with a Rule 60(b)(2) motion and the submission of affidavits that corroborated and added to the assertions contained in the arbitration agreement. One of those affidavits contained testimony from an accounting manager for WMF that corroborated the admission in the arbitration agreement as to the "anticipated" source of funds for Steele's loan. Among other things, the accounting manager's affidavit explained that the loan proceeds paid to Steele, as well as the loan proceeds paid to borrowers in Alabama in connection with similar loans, come from bank accounts outside the State of Alabama.4 Likewise, the other statement from the arbitration agreement with evidentiary significance (relating to the processing of Steele's loan from outside of Alabama) was corroborated by the affidavit of a branch manager for WMF, who testified that part of the processing of loans such as and including Steele's is handled by a "customer care center" operated by WMF in Florida.5 *Page 564 
Under the circumstances presented, I believe the trial court erred in not considering both the admissions in the arbitration agreement that detailed the underlying transaction's actual and intended effect on interstate commerce and the affidavits submitted to the trial court following its initial ruling. I therefore respectfully dissent.
1 Unlike an order denying a motion for a summary judgment, an ordergranting a motion for a summary judgment as to all claims and all parties constitutes a final judgment. See Rule 54(b), Ala.R.Civ.P. It therefore cannot be reconsidered except to the extent and under the time restrictions allowed by law, including those imposed by Rule 59(b) and (e) and Rule 60, Ala.R.Civ.P. Under Rule 60(b)(2), relief from a final judgment on the basis of "newly discovered evidence" is limited to "evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b)." The present case, however, involves a denial of a motion to compel arbitration, which, like a denial of a motion for summary judgment, is an interlocutory order.
2 Under Rule 54(b), except where the court directs the entry of a final judgment as to less than all of the claims or parties involved, such a judgment generally "is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties."
3 Of course, any effort to seek reconsideration of a motion to compel arbitration could not be successful if, in the mean time, there has been a waiver by the movant of its right to arbitrate because it has "substantially invoke[d] the litigation process and [has] thereby substantially prejudice[d] the party opposing arbitration." See VoyagerLife Ins. Co. v. Hughes, [Ms. 1000835, December 21, 2001] 841 So.2d 1216,1219 (Ala. 2001) (quoting Companion Life Ins. Co. v. Whitesell Mfg.,Inc., 670 So.2d 897, 899 (Ala. 1995)).
4 See generally Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265
(1995) (holding that for an arbitration clause to be enforceable under the Federal Arbitration Act the transaction to which the contract relates must turn out, in fact, to involve interstate commerce, regardless of the contemplation of the parties).
5 The branch manager also testified that, ultimately, payments made by borrowers to the lender in Alabama moved out of state. CompareAmerican General Finance, Inc. v. Branch, 793 So.2d 738 (Ala. 2000) (noting that the lender's parent corporation was a foreign corporation with its headquarters outside Alabama, that loan proceeds came from outside Alabama, and that, ultimately, payments made by borrowers to the lender in Alabama moved out of the state) with Sisters of the Visitationv. Cochran Plastering Co., 775 So.2d 759 (Ala. 2000). In addition, collection calls made from the Florida customer care center constitute the basis for Steele's counterclaim in the present case.
[6] Unlike an order denying a motion for a summary judgment, an ordergranting a motion for a summary judgment as to all claims and all parties constitutes a final judgment. See Rule 54(b), Ala.R.Civ.P. It therefore cannot be reconsidered except to the extent and under the time restrictions allowed by law, including those imposed by Rule 59(b) and (e) and Rule 60, Ala.R.Civ.P. Under Rule 60(b)(2), relief from a final judgment on the basis of "newly discovered evidence" is limited to "evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b)." The present case, however, involves a denial of a motion to compel arbitration, which, like a denial of a motion for summary judgment, is an interlocutory order.
[7] Under Rule 54(b), except where the court directs the entry of a final judgment as to less than all of the claims or parties involved, such a judgment generally "is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties."
[8] Of course, any effort to seek reconsideration of a motion to compel arbitration could not be successful if, in the mean time, there has been a waiver by the movant of its right to arbitrate because it has "substantially invoke[d] the litigation process and [has] thereby substantially prejudice[d] the party opposing arbitration." See VoyagerLife Ins. Co. v. Hughes, [Ms. 1000835, December 21, 2001] 841 So.2d 1216,1219 (Ala. 2001) (quoting Companion Life Ins. Co. v. Whitesell Mfg.,Inc., 670 So.2d 897, 899 (Ala. 1995)).
[9] See generally Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265
(1995) (holding that for an arbitration clause to be enforceable under the Federal Arbitration Act the transaction to which the contract relates must turn out, in fact, to involve interstate commerce, regardless of the contemplation of the parties).
[10] The branch manager also testified that, ultimately, payments made by borrowers to the lender in Alabama moved out of state. CompareAmerican General Finance, Inc. v. Branch, 793 So.2d 738 (Ala. 2000) (noting that the lender's parent corporation was a foreign corporation with its headquarters outside Alabama, that loan proceeds came from outside Alabama, and that, ultimately, payments made by borrowers to the lender in Alabama moved out of the state) with Sisters of the Visitationv. Cochran Plastering Co., 775 So.2d 759 (Ala. 2000). In addition, collection calls made from the Florida customer care center constitute the basis for Steele's counterclaim in the present case.