Court Opinion

ID: 43098
Source: CourtListenerOpinion
Date Created: 2010-04-25 21:50:48+00
Date Added: 2024-06-11T17:16:59.517447
License: Public Domain

United States Court of Appeals
                                                                          Fifth Circuit
                                                                       F I L E D
                      UNITED STATES COURT OF APPEALS
                               FIFTH CIRCUIT                             May 31, 2006

                                                                   Charles R. Fulbruge III
                                                                           Clerk
                               No. 05-60056

                       SOUTHERN ENERGY HOMES, INC.,

                                                       Plaintiff-Appellant,

                                  versus

 WILLARD MERRITT GODWIN, JR.; RHONDA M. GODWIN, Nathan Godwin, a
minor, by and through his father and next friend Willard Merritt
                           Godwin, Jr.,

                                                       Defendants-Appellees.

              Appeal from the United States District Court
                 for the Southern District of Mississippi
                               (2:03-CV-286)

Before KING, BARKSDALE, and PRADO, Circuit Judges.

PER CURIAM:*

     Relying only on equitable estoppel (an issue presented for the

first time on appeal), Southern Energy Homes, Inc. contests the

denial   of    its   summary-judgment    motion   to    compel    arbitration.

AFFIRMED and REMANDED.

                                    I.

     In 1997, the Godwins purchased a mobile home from Rose Mobile

Homes, a Southern Energy dealer in Mississippi.             Southern Energy

     *
       Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
manufactured the home in Alabama.     The Godwins live in the home,

which was installed in Mississippi.

     Post-purchase, the Godwins discovered in the home a “Home

Owner’s Manual”, which informed customers of an express limited

warranty.   The manual did not contain a signature line or require

a signature, nor did it contain a separate signature card to be

returned to manufacturer Southern Energy.     The manual’s detailed

table of contents did not suggest an arbitration provision.

     Instead, within the manual’s warranty section, several titled

paragraphs (again, none includes any form of the word “arbitrate”)

provide customers with remedies if they encountered problems with

their homes.   The final paragraph of this section, titled “IF THE

PROBLEM IS STILL NOT RESOLVED”, begins:   “If your problems are not

satisfactorily remedied through the steps set out above, you are

entitled to have the dispute settled through binding arbitration as

set out below”.   (Emphasis added.)    That paragraph then states:

“In the event of any dispute or claim ... the Manufacturer and the

purchaser of this product agree to submit such dispute or claim to

binding arbitration, pursuant to the provisions of 9 USC 1, et.

seq. and according to the Commercial Rules of Arbitration of the

American Arbitration Association then existing”.

     In 1998 and 1999, warranty work was twice performed on the

Godwins’ home. Four additional “Requests for Service” were made in

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1999, 2000, and 2001; Southern Energy’s records show repair work

completed following these requests was not covered by the warranty.

      In October 2002, the Godwins filed an action against Southern

Energy in Mississippi state court.        (Neither Rose Mobile Homes nor

any   other   intermediary    were   included   in   this   action.)        The

complaint raised several claims, some of which maintained Southern

Energy breached its express warranty.

      In May 2003, based on diversity jurisdiction, Southern Energy

responded to the state-court action by filing this action to compel

arbitration.     It   moved   for    summary   judgment,    relying    on   the

affidavit of its director of consumer affairs, which included

copies of the two “Warranty Claim Request” forms showing the

Godwins made requests, and had work performed, under the warranty

on two occasions. (The Godwins’ state-court action has been stayed

pending this action to compel arbitration.)

      In opposition to summary judgment, the Godwins provided the

affidavit of Willard Godwin, which stated, inter alia:                he never

“signed a written contract or agreement with Southern Energy”; he

never orally agreed to arbitrate any disputes that might arise;

prior to purchase, he never saw, read, or was informed of the

manual or its provisions; after purchase, he read only portions of

the manual; and, when he had repair work performed, he was never

informed that having work done under the warranty subjected him to

binding arbitration.

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     Southern        Energy’s     summary-judgment       motion       to     compel

arbitration was denied in late 2004.            The district court held:         the

Godwins did not agree to arbitration; “proof of affirmative mutual

agreement herein is simply lacking”; and the Godwins’ ability to

provide an affidavit showing they did not consent to arbitration

distinguished their case from situations where homeowners had no

evidence of such lack of consent.            S. Energy Homes, Inc. v. Godwin,

No. 2:03cv286 (S.D. Miss. 28 Dec. 2004) (unpublished).

                                        II.

     Where appropriate, “[a]rbitration is favored in the law”.

Grigson v. Creative Artists Agency, L.L.C., 210 F.3d 524, 526 (5th

Cir.), cert. denied, 531 U.S. 1013 (2000); see Primerica Life Ins.

Co. v. Brown, 304 F.3d 469, 471 (5th Cir. 2002) (“The FAA [Federal

Arbitration   Act]     expresses    a   strong      national    policy     favoring

arbitration     of     disputes,     and      all    doubts     concerning       the

arbitrability     of    claims     should      be    resolved    in      favor    of

arbitration.”).        Accordingly, the FAA, 9 U.S.C. § 16(a)(1)(B),

permits an appeal from an order denying arbitration.                       Usually,

however, unlike here, that order is in the context of a defendant’s

seeking to compel arbitration for claims against it in that same

action.   In other words, the arbitration issue is not the sole

reason for the action.          Moreover, at issue here is the denial of

summary judgment. Generally, the denial of summary judgment is not

appealable because the ruling is not a final judgment.                Along that

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line, some might contend that, even though arbitration was denied

in this action pursuant to a summary-judgment motion, subsequently

it might be ordered following trial on that issue.                  See 16 U.S.C.

§ 4.   Nevertheless, in the light of the plain language of 9 U.S.C.

§    16(a)(1)(B),     we    conclude     we    have    jurisdiction        for        this

interlocutory appeal.         (Neither side briefs this issue.)

       Consistent with the well-known standard of review for a

summary-judgment       ruling,     the    denial      of   a   motion   to       compel

arbitration is reviewed de novo.              See Safer v. Nelson Fin. Group,

Inc., 422 F.3d 289, 293 (5th Cir. 2005).               In its brief on appeal,

as it had claimed in district court, Southern Energy contended only

that   the   Godwins       were   required     to   arbitrate      under     a    valid

arbitration agreement. It conceded at oral argument, however, that

its only basis for relief is equitable estoppel.

       The doctrine of equitable estoppel “precludes a party from

claiming the benefits of a contract while simultaneously attempting

to avoid the burdens that contract imposes as well”.                    Wash. Mut.

Fin. Group, L.L.C. v. Bailey, 364 F.3d 260, 267 (5th Cir. 2004).

In agreement with several other circuits, our court has held

equitable    estoppel      may    be   used   to    compel     non-signatories          to

arbitrate.   See id. at 267 (“[A] nonsignatory party may be bound to

an arbitration agreement if so dictated by the ordinary principles

of   contract   and    agency”.        (quoting     Thomson-CSF,     S.A.        v.    Am.

Arbitration Ass’n, 64 F.3d 773, 776 (2d Cir. 1995) (internal

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quotation marks omitted))).            Equitable estoppel permits a non-

signatory to be bound to a contract from which the non-signatory

has benefitted; it prevents parties to a contract from “‘having it

both ways’”.     Id. at 268 (quoting Grigson, 210 F.3d at 528).

     In Bailey, for example, a signatory’s wife contended she

should not be compelled to arbitrate claims arising from her

husband’s loans and insurance, because, although her husband signed

the arbitration agreement, she did not. The district court agreed.

Our court reversed because, although the wife was a non-signatory,

she was attempting to enforce an agreement signed by her husband.

She was trying to “hav[e] it both ways” by “suing based upon one

part of a transaction that she says grants her rights while

simultaneously      attempting    to    avoid      other    parts    of   the   same

transaction that she views as a burden — namely, the arbitration

agreement”.     Id.

     We have not found any decisions, however, where our court

extended this concept to a situation in which, as here, there was

no signatory.    In any event, we decline to reach this issue.                  Based

on our review of the record, it appears Southern Energy failed to

adequately raise this stand-alone equitable estoppel claim in

district   court.      No     authority     need    be     cited    for   the   well-

established     rule   that    summary-judgment          issues    not    raised   in

district court will not be considered on appeal.               In addition, this

new claim is barely mentioned in Southern Energy’s brief here.                     See

                                        6
Yohey v. Collins, 985 F.2d 222, 225 (5th Cir. 1993) (“As a general

rule, this Court does not review issues raised for the first time

on appeal.”).   For all intents and purposes, Southern Energy

presented this issue for the first time at oral argument.        See

Comsat Corp. v. FCC, 250 F.3d 931, 936 n.5       (5th Cir. 2001)

(“Arguments presented for the first time at oral argument are

waived.”).

                              III.

     For the foregoing reasons, the denial of summary judgment is

AFFIRMED and this matter is REMANDED to district court for such

further proceedings as may be appropriate.

                                         AFFIRMED and REMANDED

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