Court Opinion

ID: 9394191
Source: CourtListenerOpinion
Date Created: 2023-05-12 17:02:38.296245+00
Date Added: 2024-06-11T17:18:57.783594
License: Public Domain

Rel: May 12, 2023

Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern
Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts,
300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0650), of any typographical or other
errors, in order that corrections may be made before the opinion is printed in Southern Reporter.

         SUPREME COURT OF ALABAMA
                             OCTOBER TERM, 2022-2023

                                _________________________

                                      SC-2022-0675
                                _________________________

 Hyundai Construction Equipment Americas, Inc., and Hyundai
                 Heavy Industries Co., Ltd.

                                                  v.

                              Southern Lift Trucks, LLC

                    Appeal from Washington Circuit Court
                               (CV-22-900029)

                                _________________________

                                      SC-2022-0676
                                _________________________
SC-2022-0675 and SC-2022-0676

Hyundai Construction Equipment Americas, Inc., and Hyundai
                Heavy Industries Co., Ltd.

                                  v.

                    Southern Lift Trucks, LLC

             Appeal from Washington Circuit Court
                        (CV-22-900029)

COOK, Justice.

     These consolidated appeals arise out of a commercial dispute

between Southern Lift Trucks, LLC ("Southern"), and Hyundai

Construction Equipment Americas, Inc. ("Hyundai Construction") -- an

alleged subsidiary of Hyundai Heavy Industries Co., Ltd. ("Hyundai

Heavy Industries"). 1 Southern is a heavy-equipment dealer for Hyundai

Construction. Southern filed suit against Hyundai Construction and

Hyundai Heavy Industries (collectively referred to as "Hyundai")

asserting various claims, including claims under the Alabama Heavy

Equipment Dealer Act ("the AHEDA"), § 8-21B-1 et seq., Ala. Code 1975.

     1Although   Hyundai Heavy Industries is alleged to be a parent of
Hyundai Construction, it was not a signatory to the dealer agreements
at issue in these appeals.
                                  2
SC-2022-0675 and SC-2022-0676

Southern also sought a preliminary injunction to prevent Hyundai (1)

from unlawfully terminating one of the dealer agreements at issue in

these appeals and (2) from unlawfully adding a second dealer in the

territory that was covered under another dealer agreement at issue. In

response, Hyundai moved to compel arbitration. The Washington Circuit

Court granted Southern's request for a preliminary injunction and

denied Hyundai's motion to compel arbitration.

     In appeal no. SC-2022-0675, Hyundai appeals the trial court's order

granting Southern's request for a preliminary injunction. For the reasons

provided herein, we affirm in part and reverse in part the trial court's

order and remand the cause for the trial court to enter an order consistent

with this opinion.

     In appeal no. SC-2022-0676, Hyundai appeals the trial court's order

denying its motion to compel arbitration. For the reasons provided

herein, we affirm in part and reverse in part the trial court's order and

remand the cause for the trial court to enter an order consistent with this

opinion.

                      Facts and Procedural History

     Southern is a heavy-equipment dealer based in Mobile. In 2019, it

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SC-2022-0675 and SC-2022-0676

entered into a dealer agreement with Hyundai Construction to serve as

a dealer of lift trucks manufactured by Hyundai Construction ("the

forklift agreement"). A year later, in 2020, it entered into a second dealer

agreement to serve as a dealer of construction equipment manufactured

by Hyundai Construction ("the construction-equipment agreement").

     Among other things, the forklift agreement covered the sales,

service, and distribution of forklifts and other "lift trucks." The

construction-equipment agreement covered the sales, service, and rental

of the provision of parts for, and warranties regarding earth-moving

equipment used in the construction industry, such as excavators, wheel

loaders, rollers, and breakers.

     The territories covered by the dealer agreements overlapped, but

were not identical. Specifically, the territory covered under the forklift

agreement included Washington, Clarke, Choctaw, Sumter, Marengo,

Wilcox, Baldwin, Conecuh, Escambia, Mobile, and Monroe Counties in

Alabama, as well as certain counties in Mississippi and Florida. The

territory covered under the construction-equipment agreement included

only Washington, Choctaw, Clarke, Baldwin, Conecuh, Escambia,

Mobile, and Monroe Counties in Alabama.

                                     4
SC-2022-0675 and SC-2022-0676

     When the parties entered into the dealer agreements, Southern was

the only dealer of lift trucks and construction equipment for Hyundai

Construction within those territories. However, neither agreement was

exclusive by its terms.

     According to Southern, since entering into the dealer agreements,

it has incurred significant expenditures building its business location,

acquiring inventory and hiring and training full-time sales and mechanic

staff to promote, sell, and service Hyundai Construction's products in the

territories covered by the agreements. Southern provided evidence

indicating that it employed 6 salespeople (including 1 customer-service

specialist) -- having an average of 35 years' experience -- to handle

Hyundai Construction's products. In addition, Southern provided

evidence   indicating     that   it   maintained,   on   a   full-time   basis,

approximately 3 road and shop technicians, each with 10-20 years'

experience, who have been "Hyundai Factory Trained" to service

Hyundai Construction's product.

     In both dealer agreements, Southern agreed to arbitrate any and

all disputes that it had with Hyundai Construction. For example, in the

forklift agreement, the parties agreed to the following:

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SC-2022-0675 and SC-2022-0676

          "In order to effectively resolve disputes between the
    parties efficiently and at the least cost and inconvenience, the
    parties agree to resolve their disputes pursuant to the terms
    set forth in this Section 25. All disputes between the parties
    relating to or arising out of this Agreement or the making,
    performance or breach thereof, or the subject matter hereof,
    shall be resolved by arbitration in the following manner:

               "(a) The arbitration shall be conducted in
         accordance with the American Arbitration
         Association arbitration rules as in force on the
         date this agreement is executed. The parties
         hereby submit to the exclusive personal
         jurisdiction of such arbitrators for all matters
         unless such matters are required by law to be
         submitted to a court or other venue; provided that
         either party may apply to any court of competent
         jurisdiction to seek an order compelling
         arbitration or a declaratory judgment with respect
         to the enforceability of any provision of this
         Agreement.

               "(b) The arbitration tribunal shall be formed
         of three arbitrators. The arbitrators shall be
         persons who are familiar with the commercial and
         manufacturing practices of heavy construction
         equipment business. In the event of incapacity,
         death or resignation of an arbitrator during the
         course of the arbitration proceedings, a substitute
         arbitrator shall be appointed or chosen pursuant
         to procedures set forth above.

               "(c) The arbitration shall take place in
         Gwinnett County, Georgia or at such other
         location as the parties may agree and shall be
         conducted in the English language.

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SC-2022-0675 and SC-2022-0676

                "(d) The arbitration award shall be final,
           binding on the parties, not subject to any appeal
           and shall deal with question of cost of arbitration
           and all matters related thereto.

                 "(e) Judgment upon the award rendered may
           be entered by any court having jurisdiction, or
           application may be made to such court for a
           judicial recognition of the award or any order of
           enforcement thereof."

(Emphasis added.) Likewise, the construction-equipment agreement

contained a virtually identical arbitration provision.

     Immediately after Southern entered into the construction-

equipment agreement in 2020, Southern sold four pieces of construction

equipment. However, Southern made no sales of construction equipment

in 2021 or in 2022.

     According to Southern, in August of 2021, Hyundai began efforts to

"oust Southern as a dealer," including by threatening to reduce

Southern's line of credit unless it agreed to stock a large inventory of

equipment that it was not contractually required to stock. Southern

claims that this was part of a plan to "create an environment in which it

would not be feasible for Southern to continue as a Hyundai dealer so

Hyundai could 'push out' Southern and install other dealers." Southern's

brief at 11. However, Hyundai explained that its offer was intended as
                                    7
SC-2022-0675 and SC-2022-0676

an effort to help rectify Southern's lack of construction-equipment sales

and noted that, despite factory supply shortages and supply-chain delays,

its other construction-equipment dealers across the country were

recording record sales and profits. In the end, Southern did not agree

with Hyundai's demands.

     On March 2, 2022, Hyundai Construction notified Southern of its

intent to terminate the construction-equipment agreement. Hyundai

Construction's correspondence to Southern informed Southern that it

had a cure period of 90 days from the date of the notice and that, if it did

not make corrective efforts during that cure period, the construction-

equipment agreement would officially terminate on June 30, 2022 -- or

120 days from the date of its March 2, 2022, notice.

     Southern responded to the termination notice on March 5, 2022,

requesting information regarding Hyundai Construction's inventory of

construction equipment and sales of construction equipment in

Southern's territory before the construction-equipment agreement was

entered into.

     In response to Southern's request, on March 8, 2022, Hyundai

Construction informed Southern that it was being terminated as a dealer

                                     8
SC-2022-0675 and SC-2022-0676

because Southern had failed to adequately stock construction equipment

and had failed to take advantage of opportunities to place stock orders to

build an inventory. Southern disputes both of these justifications and

points to documents and testimony of Hyundai witnesses that cast doubt

on these proffered reasons.

      That same day, Hyundai Construction granted a portion of

Southern's territory under the construction-equipment agreement to

another dealer located in southern Alabama -- Taylor Machine Works,

Inc., d/b/a Taylor Construction Equipment ("Taylor"). A few weeks later,

Hyundai Construction issued a press release stating that its construction

equipment was now being offered by Taylor through new "Hyundai-

authorized" locations in Southern's territory. Hyundai Construction then

listed Taylor as a dealer in that territory on its Web site. Likewise,

Taylor issued an advertisement announcing that it was proud to be a

dealer   of   construction    equipment   manufactured     by    Hyundai

Construction.

     Hyundai Construction's actions, however, were not limited solely to

its construction equipment. On April 11, 2022, Hyundai Construction

sent a correspondence to Southern notifying Southern that it intended to

                                    9
SC-2022-0675 and SC-2022-0676

assign an additional dealer -- Thompson Tractor Company ("Thompson")

-- to serve as a lift-truck dealer in the Alabama territory covered by

Southern under the forklift agreement. Hyundai Construction's

correspondence also advised Southern that it intended for this

arrangement to take effect after 60 days had passed and that it intended

for the new dealer and Southern to work together as Hyundai

Construction dealers.

     Specifically, Hyundai Construction's correspondence stated:

     "1. The cause of overlay of the territory is warranted due to
     market conditions including anticipated future changes with
     the competition.

     "2. The past, present and anticipated retail sales and service
     business transacted by Thompson that would improve
     Hyundai Construction's market position within the assigned
     territory.

     "3. Overall market coverage with head-count to improve the
     level of support of current and future customers."

Hyundai Construction informed Southern that it intended to add

Thompson as another lift-truck dealer in Southern's territory because of

an expected upcoming market opportunity.        According to Hyundai

Construction, effective July 1, 2022, one of its major competitors,

Mitsubishi Logisnext Americas, canceled its relationship with Thompson

                                  10
SC-2022-0675 and SC-2022-0676

and replaced Thompson with another heavy-equipment dealer. As a

result, Hyundai Construction believed that all of Thompson's customers

would be looking for a new lift-truck dealer and that this served as a good

reason to add Thompson to the territory.

       Hyundai Construction framed the addition of this new dealer as

beneficial for Southern because, it explained, Southern would receive the

benefit of Thompson's infrastructure and servicing capabilities while

being able to continue to purchase and sell lift trucks manufactured by

Hyundai Construction. Not surprisingly, Southern did not see it the same

way.

       It is undisputed that Southern's lift-truck sales, unlike its

construction-equipment sales, had been thriving during the previous two

years. Southern had often met or exceeded its sales goals, and, in the first

quarter of 2022 alone, its sales were 240% of its sales goals.

Nevertheless, Hyundai Construction alleged that Southern was not

fulfilling its duties as a lift-truck dealer because Southern did not have

the infrastructure to service the equipment sold. In support of its

contention, Hyundai Construction noted that Southern had failed to meet

its goals for parts sales and that none of its employees had ever been fully

                                    11
SC-2022-0675 and SC-2022-0676

certified to service Hyundai Construction equipment.             Hyundai

Construction also noted that Southern had only a single service facility

and that it was not sufficient in size. Southern vigorously disputed those

assertions.

     It is undisputed that the AHEDA requires 60 days' notice before the

overlay of an additional dealer can occur and that Hyundai

Construction's notice that Thompson would be added as a dealer stated

that it would be effective as of June 13, 2022, i.e., after 60 days had

passed. However, shortly after receiving the notice regarding the

addition of Thompson, Southern became aware that some of its customers

had already been contacted and provided quotes and/or had been

informed that Thompson was the new lift-truck dealer for Hyundai

Construction in Southern's territory.

     As a result, on May 26, 2022, Southern filed suit against both

Hyundai Construction and Hyundai Heavy Industries, alleging claims

under multiple provisions of the AHEDA, breach of contract, multiple

tort claims, and a claim of conspiracy. Southern also moved to

preliminarily enjoin Hyundai from (1) terminating either of the dealer

agreements with Southern and (2) permitting other dealers to market or

                                   12
SC-2022-0675 and SC-2022-0676

sell construction equipment or lift trucks in Southern's territories under

those agreements. Finally, Southern sought a judgment declaring that

     "all provisions of the Dealer Agreements that are inconsistent
     with the AHEDA are unenforceable, null and void pursuant
     to Ala. Code § 8-21B-9; all provisions of the Dealer
     Agreements that are not 'reasonable' as defined by the
     AHEDA are unenforceable, null and void pursuant to Ala.
     Code § 8-21B-10; Hyundai violated the provisions of § 8-21B-
     8(c) and, by extension, the Dealer Agreements, by entering
     into a duplicative dealer agreement with Taylor for the same
     Equipment Territory serviced by [Southern] without
     providing [Southern] written notice at least 60-days prior
     thereto; Hyundai violated the provisions of § 8-21B-8(c) and,
     by extension, the Dealer Agreements, by deciding to enter into
     agreements with Thompson and Taylor within [Southern's]
     Territories without a reasonable basis; Hyundai violated the
     provisions of § 8-21B-8(b) and, by extension, the Dealer
     Agreements, because its actions with respect to [Southern]
     were arbitrary, in bad faith, or unconscionable; Hyundai
     unlawfully terminated or cancelled the Equipment Dealer
     Agreements without good cause in violation of § 8-21B-4; and
     Hyundai violated the provisions of § 8-21B-8(e) and, by
     extension, the Dealer Agreements, by discriminating between
     dealers with regards to price, programs, or terms of sale."

     The trial court entered a temporary restraining order ("TRO") that

same day, granting Southern's request for injunctive relief. Hyundai then

moved to dissolve the TRO, moved to dismiss the action or, in the

alternative, to change venue, and moved to compel arbitration.

     Following a hearing, on June 10, 2022, the trial court granted

Southern's motion for a preliminary injunction, enjoining Hyundai from
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SC-2022-0675 and SC-2022-0676

(1) terminating the dealer agreements with Southern; (2) "entering into

agreements or otherwise permitting other dealers to sell Hyundai

Construction's Construction Equipment or Forklift Equipment" in

Southern's territories; and (3) "advertising or marketing (via website or

otherwise) that other dealers are authorized to sell" the equipment at

issue in Southern's territories. Hyundai appeals that decision in appeal

no. SC-2022-0675. See Rule 4(a)(1)(B), Ala. R. App. P.

     On June 16, 2022, the trial court denied Hyundai's motion to compel

arbitration. Hyundai appeals that decision in appeal no. SC-2022-0676.

See Rule 4(d), Ala. R. App. P.

                            Standard of Review

     First, "[w]hen this Court reviews the grant or denial of a

preliminary injunction, ' "[w]e review the ... [c]ourt's legal rulings de novo

and its ultimate decision to issue the preliminary injunction for [an

excess] of discretion." ' " Monte Sano Rsch. Corp. v. Kratos Def. & Sec.

Sols., Inc., 99 So. 3d 855, 861-62 (Ala. 2012) (quoting Holiday Isle, LLC

v. Adkins, 12 So. 3d 1173, 1176 (Ala. 2008), quoting in turn Gonzales v.

O Centro Espirita Beneficente Uniao do Vegetal, 546 U.S. 418, 428

(2006)). When the trial court, without a jury, receives ore tenus evidence,

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SC-2022-0675 and SC-2022-0676

it " 'determines the weight and credibility of the testimony, and its

findings are presumed correct and will not be disturbed on appeal unless

the record reveals the [findings] to be plainly and palpably wrong or

manifestly unjust.' " Cadle Co. v. Friedman, 631 So. 2d 962, 964 (Ala.

1994) (quoting Wheeler v. Marvin's, Inc., 593 So. 2d 61, 63 (Ala. 1991)).

     Next, with regard to the denial of a motion to compel arbitration,

this Court's standard of review is well settled:

                 " ' " 'This Court reviews de novo the denial of
           a motion to compel arbitration. Parkway Dodge,
           Inc. v. Yarbrough, 779 So. 2d 1205 (Ala. 2000). A
           motion to compel arbitration is analogous to a
           motion for a summary judgment. TranSouth Fin.
           Corp. v. Bell, 739 So. 2d 1110, 1114 (Ala. 1999).
           The party seeking to compel arbitration has the
           burden of proving the existence of a contract
           calling for arbitration and proving that the
           c ontract evidences a transaction affecting
           interstate commerce. Id. "[A]fter a motion to
           compel arbitration has been made and supported,
           the burden is on the non-movant to present
           evidence that the supposed arbitration agreement
           is not valid or does not apply to the dispute in
           question." Jim Burke Automotive, Inc. v. Beavers,
           674 So. 2d 1260, 1265 n.1 (Ala. 1995) (opinion on
           application for rehearing).' " '

     "Hoover Gen. Contractors-Homewood, Inc. v. Key, 201 So. 3d
     550, 552 (Ala. 2016) (quoting Elizabeth Homes, L.L.C. v.
     Gantt, 882 So. 2d 313, 315 (Ala. 2003), quoting in turn
     Fleetwood Enters., Inc. v. Bruno, 784 So. 2d 277, 280 (Ala.
     2000))."
                                    15
SC-2022-0675 and SC-2022-0676

Performance Builders, LLC v. Lopas, 341 So. 3d 1084, 1088-89 (Ala.

2021).

                                Discussion

        I. Appeal No. SC-2022-0676 -- Motion to Compel Arbitration

        Hyundai argues that the parties are bound by valid contracts

calling for arbitration of Southern's claims. It contends, therefore, that it

has met its burden of demonstrating that arbitration is applicable and

that Southern has not provided any reason to deny arbitration in this

case.

        A party seeking to compel arbitration must show the existence of a

contract calling for arbitration and that the contract evidences a

transaction involving interstate commerce. STV One Nineteen Senior

Living, LLC v. Boyd, 258 So. 3d 322, 324 (Ala. 2018). Specifically, the

party seeking to compel arbitration "must ' "produce some evidence which

tends to establish its claim" ' " for arbitration. Wolff Motor Co. v. White,

869 So. 2d 1129, 1131 (Ala. 2003) (citations omitted). " 'Once the moving

party meets that initial burden, the party opposing arbitration has the

burden of presenting evidence tending to show that the arbitration

agreement is invalid or that it does not apply to the dispute in question.' "
                                     16
SC-2022-0675 and SC-2022-0676

STV, 258 So. 3d at 324 (quoting Alabama Title Loans, Inc. v. White, 80

So. 3d 887, 891 (Ala. 2011), citing in turn Bowen v. Security Pest Control,

Inc., 879 So. 2d 1139, 1141 (Ala. 2003)).

     Hyundai, the party seeking to compel arbitration, met its initial

burden of proving the existence of two agreements calling for arbitration

and that the agreements involved interstate commerce. Specifically, it is

undisputed -- even by Southern -- that the dealer agreements between

Hyundai Construction and Southern contained nearly identical

arbitration provisions that expressly stated that the parties agreed to

arbitrate "[a]ll disputes between the parties relating to or arising out of"

those agreements. (Emphasis added.) It is also undisputed that the

agreements involved interstate commerce -- i.e., sales, service, and

distribution of construction equipment and lift trucks in Alabama and in

other southern states. Accordingly, the burden then shifted to Southern

to show that the arbitration provisions in the dealer agreements were

invalid or did not apply to the present dispute.

     Southern argues that the arbitration provisions in the dealer

agreements contain express "carve-out" exceptions for matters that are

required by law to be "submitted to a court or other venue" and for certain

                                    17
SC-2022-0675 and SC-2022-0676

declaratory-judgment actions. It further argues that the arbitration

provisions in the dealer agreements are not enforceable because Hyundai

has waived them. Finally, Southern contends that any arbitration

proceedings in the present case should not include Hyundai Heavy

Industries because the arbitration provisions, by their very terms, apply

only to disputes "between the parties" and Hyundai Heavy Industries

was not a party to the dealer agreements. We will address each argument

in turn.

                              A. Carve-outs

     First, Southern argues that the arbitration provisions in the dealer

agreements are not broad enough to cover this dispute because the

arbitration provisions contain an "express carve-out." That "express

carve-out," Southern says, provides an exception to arbitration for

matters that " 'are required by law to be submitted to a court or other

venue.' " Southern's brief at 26.

     We note, however, that Southern not only has quoted this clause

out of context, but also has quoted only a part of the sentence containing

the clause. To begin with, the scope of the arbitration provisions is stated

much earlier in the arbitration provisions, in clear and unambiguous

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SC-2022-0675 and SC-2022-0676

language providing as follows: "All disputes between the parties relating

to or arising out of this Agreement or the making, performance or breach

thereof, or the subject matter hereof, shall be resolved by arbitration in

the following manner …." (Emphasis added). " 'This Court has held

[that] where a contract signed by the parties contains a valid arbitration

clause that refers only to claims "arising out of or relating to" the

contract, that clause has a broader application than an arbitration clause

that refers only to claims "arising from" the agreement.' " STV, 258 So.

3d at 325 (quoting Reynolds & Reynolds Co. v. King Autos., Inc., 689 So.

2d 1, 2-3 (Ala. 1996)) (emphasis omitted).

     In contrast, the carve-out clause quoted by Southern is in subpart

(a) of each arbitration provision, which follows the paragraph containing

this unambiguous language stating the scope of the arbitration provision.

Immediately before subpart (a) are these words: "in the following

manner." In other words, the clause quoted by Southern is in a subpart

that relates to the "manner" of the arbitration and not the scope of the

arbitration provision. For instance, subpart (a) includes text about the

use of the procedural rules of the American Arbitration Association and

about personal jurisdiction. Likewise, the remaining subparts in that

                                   19
SC-2022-0675 and SC-2022-0676

portion of each arbitration provision deal with similar "manner" or

procedural issues -- i.e., the number and qualifications of arbitrators; the

location of arbitration proceedings and the language to be used; the

finality of the arbitration award and the apportionment of costs; and the

judicial-recognition procedure for any arbitration award.

     Further, we do not read the language quoted by Southern as an

"exception" to the mandatory language found in each arbitration

provision. As noted above, Southern omits key language from the

sentence containing the clause that makes clear that the sentence is

describing the parties' agreement to submit to the personal jurisdiction

of the arbitrators -- an issue not in dispute here -- and is, therefore, not

describing the scope of the arbitration provision. The full text of the

relevant portion of the sentence containing the clause in each dealer

agreement is as follows: "The parties hereby submit to the exclusive

personal jurisdiction of such arbitrators for all matters unless such

matters are required by law to be submitted to a court or other venue."

(Emphasis added.) It is simply not possible to read this as an "exception"

to the mandatory, unambiguous, and broad language regarding the scope

of the arbitration provision discussed above. When reviewing an

                                    20
SC-2022-0675 and SC-2022-0676

agreement, we must review the entire agreement and not simply a

portion of one sentence of a subpart of a paragraph. See, e.g., State v.

Lorillard Tobacco Co., 1 So. 3d 1, 7 (Ala. 2008) ("In construing an

arbitration agreement, a court must construe the contract 'as a whole;

detached words or clauses standing alone are not controlling on the

question of interpretation, each being viewed in relation to the agreement

as an entity.' " (citation omitted)).2

      Southern also argues that the following clause constitutes a second

"express carve-out" exception to the arbitration provisions at issue: "The

parties hereby submit to the exclusive personal jurisdiction of such

      2Even  if we were willing to read the clause quoted by Southern as
creating an exception to arbitration, we would still hold that the dealer
agreements require arbitration of the parties' dispute. Southern argues
that the AHEDA mandates that any contract provision that requires a
dealer to waive its rights to a jury trial is "void and unenforceable," citing
Ex parte Terex USA, LLC, 260 So. 3d 813, 822 (Ala. 2018), which barred
the application of an outbound-forum-selection clause because of the
applicability of the AHEDA. Thus, Southern concludes, this dispute is a
matter "required by law to be submitted to a court." The problem is that
Southern is claiming that the parties' dispute is required by Alabama law
to be submitted to a court. This argument ignores long-standing federal
law. The Federal Arbitration Act, 9 U.S.C. § 1 et seq., clearly preempts
a state law prohibiting arbitration of a particular cause of action. See
Doctor's Assocs., Inc. v. Casarotto, 517 U.S. 681, 686-87 (1996). Such
federal preemption did not exist in Terex, which dealt with a forum-
selection clause. Thus, the parties' dispute is not one "required by law to
be submitted to a court."
                                      21
SC-2022-0675 and SC-2022-0676

arbitrators for all matters unless such matters are required by law to be

submitted to a court or other venue; provided that either party may apply

to any court of competent jurisdiction to seek an order compelling

arbitration or a declaratory judgment with respect to the enforceability

of any provision of this Agreement." (Emphasis added.)

     Unlike the language discussed earlier, the emphasized language

does appear to provide an "express carve-out" exception to the arbitration

provisions at issue ("provided that either party may …."). However, as

Hyundai correctly notes, the scope of that exception is limited because it

applies only "to a declaratory judgment" concerning the "enforceability of

any provision of this Agreement." Thus, those portions of Southern's

declaratory-judgment claim relating to the "enforceability of any

provision" of the dealer agreements are subject to this express carve-out.

                               B. Waiver

     Next, Southern argues that the arbitration provisions in the dealer

agreements are not enforceable because, it says, Hyundai has waived

them. Specifically, Southern argues that Hyundai's motion to dismiss

merely mentioned arbitration in passing in a single sentence and did not

make a full-throated argument for arbitration until it filed its motion to

                                   22
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compel arbitration on the eve of the hearing set for all motions.

     " 'A party seeking to prove a waiver of a right to arbitrate carries a

heavy burden, and the courts will not lightly infer a waiver of the right

to compel arbitration.' " Conseco Fin. Corp.-Ala. v. Salter, 846 So. 2d

1077, 1081 (Ala. 2002) (quoting Lee v. YES of Russellville, Inc., 784 So.

2d 1022, 1028-29 (Ala. 2000)). This Court will find a waiver of the right

to compel arbitration only when " ' "the party seeking arbitration has so

substantially invoked the litigation process that to compel arbitration

will substantially prejudice the party opposing it." ' " Id. (citations

omitted; emphasis added); see also Crews v. National Boat Owners Ass'n

Marine Ins. Agency, Inc., 46 So. 3d 933, 941 (Ala. 2010).

     A party's reference to the arbitrability of a plaintiff's claims in

judicial filings before it has moved the trial court to compel arbitration

evidences just the opposite of waiver -- that is, it evidences an intent not

to waive its right to arbitration. See ClimaStor IV, L.L.C. v. Marshall

Constr., L.L.C., 4 So. 3d 452, 457-58 (Ala. 2008); U.S. Pipe & Foundry Co.

v. Curren, 779 So. 2d 1171 (Ala. 2000) (holding that, by asserting a right

to arbitration in its answer, the defendant preserved its right, which it

later sought to enforce by filing a motion to compel arbitration). See also

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O'Neal v. Bama Exterminating Co., 147 So. 3d 403 (Ala. 2013) (finding

no waiver even though defendant waited 16 months after complaint was

filed to file motion to compel arbitration and had answered and

participated in discovery and had filed a motion for partial judgment on

the pleadings); Mutual Assurance, Inc. v. Wilson, 716 So. 2d 1160, 1164

(Ala. 1998)(" ' " 'Merely answering on the merits, asserting a counterclaim

(or cross-claim) or participating in discovery, without more, will not

constitute a waiver.' … [T]he earliest point at which waiver of the right

to arbitration may be found is 'when the other party files an answer on

the merits.' " ' ") (citations omitted).

      This action was commenced on May 26, 2022. Hyundai filed its

motion to dismiss 6 days later on June 1, 2022, and then filed its motion

to compel arbitration 5 days after that on June 6, 2022 -- 11 calendar

days after the complaint was filed. Hyundai's motion was filed before any

hearings of any kind. The facts here do not support a finding of a waiver

of its arbitration rights by Hyundai. This is especially true when a

preliminary injunction is being sought, sharply increasing the demands

on all counsel.      Thus, we are unpersuaded by Southern's waiver

argument.

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SC-2022-0675 and SC-2022-0676

                      C. Hyundai Heavy Industries

     Finally, we note that Southern correctly points out that Hyundai

Heavy Industries is not a signatory to either dealer agreement and, thus,

is not technically a party to either arbitration provision at issue.

Southern argues that any arbitration proceedings in the present case

should not include Hyundai Heavy Industries because, it says, the

arbitration provisions -- by their terms -- apply only to disputes "between

the parties." Southern's brief at 36-39 (citing Daphne Auto., LLC v.

Eastern Shore Neurology Clinic, Inc., 245 So. 3d 599, 606 (Ala. 2017), and

Cook's Pest Control, Inc. v. Boykin, 807 So. 2d 524, 527 (Ala. 2001)). It

also argues that Hyundai Heavy Industries is actively disputing in the

trial court whether it is a third-party beneficiary of the dealer

agreements and therefore cannot claim such status for the purpose of

arbitration.

     Hyundai Heavy Industries argues, however, that it is Southern that

is claiming that Hyundai Heavy Industries is a third-party beneficiary of

the entire dealer agreements and that, as a result, Southern is equitably

estopped from disputing that the arbitration provisions apply to it in the

present case. Hyundai Heavy Industries also argues that the claims

                                    25
SC-2022-0675 and SC-2022-0676

against it are "intertwined" with Southern's claims against Hyundai

Construction and that Southern has alleged both a conspiracy and an

agency relationship between both entities. As a result, Hyundai Heavy

Industries contends that the arbitration provisions apply to it and that

arbitration must be compelled in this case.

     It is undisputed that Southern asserted in its complaint that the

allegedly wrongful actions taken by Hyundai Construction "at all

relevant times … described herein were taken at the direction of and/or

for the benefit of [Hyundai Heavy Industries] in an agency capacity."

(Emphasis added.)      Further, Southern specifically alleged in its

complaint that Hyundai Construction and Hyundai Heavy Industries

"conspired together via concerted action to achieve an unlawful purpose

and/or to achieve their purposes by unlawful means, including via direct

and flagrant violations of the AHEDA, as set forth more fully herein."

Southern also alleged in its complaint that Hyundai Heavy Industries

was the parent company of Hyundai Construction.3

     3Southern  also argues to this Court that the preliminary injunction
should apply to Hyundai Heavy Industries based on these very
allegations and argues that an injunction would be "meaningless" if it did
not apply to Hyundai Heavy Industries. Southern's brief at 43.
                                    26
SC-2022-0675 and SC-2022-0676

     In Assurant, Inc. v. Mitchell, 26 So. 3d 1171 (Ala. 2009), the

plaintiff sued an insurer and its parent company asserting breach-of-

contract, bad-faith, and other tort claims. The trial court denied the

motion of the parent company to compel arbitration. In that case, the

arbitration agreement contained language indicating that it applied only

to disputes "between" the contracting parties. It stated that arbitration

applied to disputes "between YOU and US," with "US" being the insurer.

Id. at 1172. Nevertheless, this Court reversed the trial court's order

denying the parent company's motion to compel arbitration and ordered

arbitration because the plaintiff had "alleged an agency or alter ego

relationship" by alleging that the parent company was acting "by and

through" the insurer to commit the alleged wrongs. Id. at 1175. This

Court cited a number of cases in support of its holding. See Jim Walter

Homes, Inc. v. Spraggins, 853 So. 2d 913, 919-20 (Ala. 2002) (recognizing

that a nonsignatory parent company was entitled to invoke right to

arbitration); Ex parte Gray, 686 So. 2d 250 (Ala. 1996) (recognizing that

a nonsignatory "agent" was allowed to invoke right to arbitration);

Stevens v. Phillips 852 So. 2d 123, 131 (Ala. 2002) (recognizing that an

agent "stands in the shoes" of her principal). See also McDougle v.

                                   27
SC-2022-0675 and SC-2022-0676

Silvernell, 738 So. 2d 806, 809 (Ala. 1999) (recognizing that a closing

attorney, as agent of title insurer, had standing to enforce an arbitration

provision even though the attorney was not a party to the agreement

containing arbitration provision).

     The same is true here. Southern has expressly alleged an "agency

capacity" between Hyundai Construction and Hyundai Heavy Industries

and has specifically alleged that the parent -- Hyundai Heavy Industries

-- was acting by and through the subsidiary -- Hyundai Construction. In

fact, there are no allegations that any actions taken in this case were

taken by Hyundai Heavy Industries alone. Instead, the actions taken

were alleged to have been taken by Hyundai Construction as the agent

and co-conspirator of Hyundai Heavy Industries. Under these

circumstances, we are unpersuaded by Southern's argument and hold

that any arbitration proceedings held in this dispute must include both

Hyundai Construction and Hyundai Heavy Industries.

                              D. Summary

     " 'In interpreting an arbitration provision, "any doubts concerning

the scope of arbitrable issues should be resolved in favor of arbitration,

whether the problem at hand is the construction of the contract language

                                     28
SC-2022-0675 and SC-2022-0676

itself or an allegation of waiver, delay, or a like defense to arbitrability." ' "

STV, 258 So. 3d at 325 (citations omitted; emphasis altered). " ' "Thus, a

motion to compel arbitration should not be denied unless it may be said

with positive assurance that the arbitration clause is not susceptible of

an interpretation that covers the asserted dispute." ' " Id. (citations

omitted; emphasis altered). Based on the foregoing, we conclude that

Southern met its burden by demonstrating that the arbitration

provisions do not apply only to portions of its declaratory-judgment claim.

However, it failed to meet its burden to demonstrate that the arbitration

provisions do not apply to its other claims. For these reasons, we affirm

the trial court's order denying Hyundai's motion to compel arbitration as

to any portions of Southern's declaratory-judgment claim relating to the

"enforceability of any provision" of the dealer agreements, but we reverse

the trial court's order denying Hyundai's motion as to all of Southern's

other claims.

       II. Appeal No. SC-2022-0675 -- The Preliminary Injunction

      Next, Hyundai contends that the trial court erred in issuing a

preliminary injunction. Specifically, Hyundai argues that the trial court

was without jurisdiction to issue the preliminary injunction in the

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SC-2022-0675 and SC-2022-0676

present case and that the evidence presented during the hearing on the

motion below did not support a finding that Southern was entitled to

injunctive relief.

      Alabama caselaw provides that a trial court has jurisdiction to

enter preliminary injunctive relief to maintain the status quo between

the parties, even when the dispute should be sent to arbitration. See

Spinks v. Automation Pers. Servs., Inc., 49 So. 3d 186, 190 (Ala. 2010)

("[W]e conclude that the trial court had jurisdiction to issue a preliminary

injunction to preserve the status quo pending completion of the

arbitration proceeding." (emphasis added)); and Holiday Isle, 12 So. 3d

at 1177 (stating that the "trial court had jurisdiction to enter a

preliminary injunction to order equitable relief to preserve the status

quo" and reasoning that the American Arbitration Association

Commercial Rules recognize such an option). A trial court may grant

such equitable relief " 'where an arbitral award could not return the

parties substantially to the status quo.' " Holiday Isle, 12 So. 3d at 1177

(quoting Drago v. Holiday Isle, L.L.C., 537 F. Supp. 2d 1219, 1222 (S.D.

Ala. 2007)).

      As explained previously, Southern is the dealer for two separate

                                    30
SC-2022-0675 and SC-2022-0676

lines of equipment and is a party to two separate dealer agreements. We

must, therefore, analyze each agreement separately.

     As to the construction-equipment agreement, the preliminary

injunction was not necessary "to preserve the status quo." The status quo

as to the construction equipment was no sales taking place. The

undisputed facts are that Southern had not sold a single piece of

construction equipment since 2020. Even if there are any sales in the

future by the new dealer -- Taylor -- and even if liability is found,

damages would appear simple to calculate. Likewise, it is difficult to

understand how there could be irreparable harm given the complete lack

of sales of construction equipment, and Southern has not provided such

an explanation in its briefing.4 We, thus, reverse the trial court's order

insofar as it granted Southern's motion for a preliminary injunction as to

the construction-equipment agreement.

     Whether the trial court erred in granting a preliminary injunction

as to the forklift agreement is a closer call. First, Southern has provided

     4Although  Southern argues that the lack of sales could be attributed
to failures and problems of Hyundai (for instance, supply-chain issues),
it remains true that there have not been any such sales for two years.
That is the status quo.

                                    31
SC-2022-0675 and SC-2022-0676

evidence of both significant and consistent sales of lift trucks and other

equipment subject to the forklift agreement. It has also provided

significant evidence indicating that it has invested a great deal in its

efforts to serve as a dealer of Hyundai Construction's lift-truck

equipment, including hiring staff dedicated to selling and servicing the

equipment, training such staff, and building a reputation and a client

base.5 Southern also argues that § 8-21B-13, Ala. Code 1975, a part of the

AHEDA, specifically provides that any party who has suffered "bodily

injury, loss of profit, or property damage as a result of a violation of" the

provisions of the AHEDA "may bring a civil action … to enjoin further

violations."

     Hyundai argues, however, that there would be no irreparable harm,

noting that money damages would be adequate and that such damages

can be easily calculated by reviewing historical sales numbers. Hyundai

     5For  example, Southern provided evidence indicating that it
employs 6 salespeople (including 1 customer-service specialist) -- having
an average of 35 years' experience -- to handle Hyundai Construction's
products. In addition, Southern provided evidence indicating that it
maintained, on a full-time basis, approximately 3 road and shop
technicians, each with 10-20 years' experience, who have been "Hyundai
Factory Trained" to service Hyundai Construction's products.

                                     32
SC-2022-0675 and SC-2022-0676

further argues the forklift agreement is nonexclusive and that the

"unending" injunction provides Southern with more relief than it is

entitled to under either the forklift agreement or the AHEDA. It further

argues that it did not terminate the forklift agreement but merely added

another dealer in the same territory and that the additional dealer will

actually benefit Southern.

     First, although it is true that the AHEDA provides that it may be

enforced by injunction, § 8-21B-13 does not dictate the result here

because it provides for a final injunction, not a preliminary injunction.

However, we agree that such express statutory provisions bear on

whether a trial court should enter a preliminary injunction, given that

the legislature has made an affirmative decision to provide the remedy of

injunction. For instance, if we reverse the preliminary injunction on this

record of significant sales and significant investment by Southern in

people, marketing, training, and relationships, we risk providing a

hollow victory should Southern ultimately prevail, thereby eviscerating

the remedy that the legislature has provided. Strong sales numbers are

the status quo today. Our ruling is confined to this record at this time,

and we emphasize that we do not intend to announce a bright-line rule

                                   33
SC-2022-0675 and SC-2022-0676

that a preliminary injunction should be granted in all AHEDA cases (or

in all cases in which the legislature has listed an injunction as a possible

remedy for a statutory violation).

     Second, Southern has provided evidence of harm to its reputation

and goodwill, as well as evidence of customer attrition, and the trial court

found that such harm was occurring. In other words, Southern not only

has provided evidence of potential harm, but has provided actual

evidence that the status quo was changing. As noted above, shortly after

the notice regarding the addition of Thompson as a dealer, Southern

became aware that some of its customers had already been contacted and

provided quotes and/or had been informed that Thompson was the new

Hyundai Construction dealer for lift-truck equipment in Southern's

territory. In other words, the status quo was changing and was changing

before the expiration of the 60 days' notice period required under the

AHEDA.

     Third, Southern contends that the preliminary injunction as to the

forklift agreement is not "indefinite." We agree. As it currently stands,

the preliminary injunction will last for the duration of the action -- or

until otherwise dissolved upon a motion from one of the parties. It is not

                                     34
SC-2022-0675 and SC-2022-0676

unlimited in time.

     Finally, the nonexclusive nature of the forklift agreement does not

dictate the result here; the AHEDA is part of Alabama law, and, as long

as it is constitutional, it supersedes applicable provisions of the forklift

agreement. Ex parte Terex USA, LLC, 260 So. 3d 813, 822 (Ala. 2018).

It is not our role to question the wisdom of the legislature's choices.

     Ultimately, this is a close call in this case. However, based upon the

evidence provided in the record and the trial court's findings, we cannot

say that the trial court exceeded its discretion in enjoining the overlay of

Thompson as a dealer in Southern's territory under the forklift

agreement.

     Based on the foregoing, we affirm the trial court's order insofar as

it granted Southern's motion for a preliminary injunction as to the

forklift agreement. However, we reverse the trial court's order insofar as

it granted a preliminary injunction related to the construction-

equipment agreement.

                                Conclusion

     In appeal no. SC-2022-0675, we affirm the trial court's order insofar

as it granted Southern's motion for a preliminary injunction as to the

                                    35
SC-2022-0675 and SC-2022-0676

forklift agreement. However, we reverse the trial court's order insofar as

it issued a preliminary injunction related to the construction-equipment

agreement, and we remand the cause for the trial court to enter an order

consistent with this opinion.

     In case no. SC-2022-0676, we affirm the trial court's order insofar

as it denied Hyundai's motion to compel arbitration as to any provisions

of Southern's declaratory-judgment claim relating to the "enforceability

of any provision" of the dealer agreement. However, we reverse the trial

court's order insofar as it denied Hyundai's motion to compel arbitration

as to Southern's other claims, and we remand the cause for the trial court

to enter an order consistent with this opinion.

     SC-2022-0675 -- AFFIRMED IN PART; REVERSED IN PART;

AND REMANDED.

     SC-2022-0676 -- AFFIRMED IN PART; REVERSED IN PART;

AND REMANDED.

     Wise, Stewart, and Mitchell, JJ., concur.

     Parker, C.J., concurs in part and dissents in part, with opinion.

     Shaw, Bryan, Sellers, and Mendheim, JJ., concur in the result.

                                   36
SC-2022-0675 and SC-2022-0676

PARKER, Chief Justice (concurring in part and dissenting in part).

     In appeal number SC-2022-0676, I concur in affirming the circuit

court's denial of the motion to compel arbitration filed by Hyundai

Construction Equipment Americas, Inc., and Hyundai Heavy Industries,

Co., Ltd. (collectively "Hyundai"), as to portions of the declaratory-

judgment claim asserted against them by Southern Lift Trucks, LLC

("Southern"). And I concur in reversing the denial of the arbitration

motion as to Southern's other claims that were not based on the Alabama

Heavy Equipment Dealer Act ("AHEDA"), § 8-21B-1 et seq., Ala. Code

1975. But I would affirm that denial as to Southern's other claims that

were based on AHEDA, because those claims were within the arbitration

provisions' exception for "matters … required by law to be submitted to a

court …."

     " 'Agreements to arbitrate are essentially creatures of contract,' and

ordinary contract rules govern the interpretation of arbitration

provisions." Orkin Exterminating Co. v. Larkin, 857 So. 2d 97, 103 (Ala.

2003) (citation omitted). "When interpreting a contract, a court should

give the terms of the contract their clear and plain meaning …."

Brewbaker Motors, Inc. v. Belser, 776 So. 2d 110, 112 (Ala. 2000). Here,

                                   37
SC-2022-0675 and SC-2022-0676

the arbitration provisions expressly exempt from arbitration matters

that are "required by law to be submitted to a court." Section 8-21B-13 of

AHEDA provides: "Notwithstanding the terms, provisions, or conditions

of any dealer agreement, any person who suffers bodily injury, loss of

profit, or property damage as a result of a violation of [AHEDA] may

bring a civil action in a court of competent jurisdiction in this state …."

With that language, AHEDA guarantees heavy-equipment dealers "the

right to bring an action under the AHEDA in this State, and no contrary

provision in a dealer agreement will foreclose the dealer's right to do so."

Ex parte Terex USA, LLC, 260 So. 3d 813, 822 (Ala. 2018) (emphasis

omitted) (dispute regarding in-state versus out-of-state venue). That is,

AHEDA claims are conditionally "required by law to be submitted to a

court": If a dealer chooses to bring the action in State court, it must be

adjudicated there rather than by arbitration.

     Here, Southern exercised its right to bring AHEDA claims in court,

so those claims were "required by law to be submitted to a court."

Accordingly, the arbitration provisions' language does not require

arbitration of Southern's AHEDA claims.

                                    38
SC-2022-0675 and SC-2022-0676

     In appeal number SC-2022-0675, I concur in reversing the

preliminary injunction prohibiting Hyundai from terminating the

construction-equipment agreement. Southern has not demonstrated that

it had no adequate remedy at law via a damages judgment at the end of

the case. But I would also reverse the preliminary injunction prohibiting

Hyundai from adding another forklift dealer, because Southern has not

demonstrated that it satisfied the elements necessary to obtain a

preliminary injunction. See State ex rel. Marshall v. TY Green's Massage

Therapy, Inc., 332 So. 3d 413, 427 (Ala. 2021) (Parker, C.J., concurring

in result) ("To obtain a preliminary injunction, a plaintiff must

demonstrate that (1) without the injunction, the plaintiff will suffer an

irreparable injury; (2) the plaintiff has no adequate remedy at law; (3)

the plaintiff has a reasonable likelihood of success on the merits

(sometimes stated as a 'reasonable chance'); and (4) the hardship that the

injunction will impose on the defendant will not unreasonably outweigh

the benefit to the plaintiff."); Capmark Bank v. RGR, LLC, 81 So. 3d

1258, 1267 (Ala. 2011) (listing elements).

                                   39