Summary
The Alabama Supreme Court affirmed an order compelling Michael and Britta Bowen to arbitrate their claims against Security Pest Control, Inc. The court held that the transaction sufficiently involved interstate commerce to trigger the Federal Arbitration Act and that Britta was bound by the arbitration provision despite not signing the contract because she relied on the contract in asserting her claims. The court also affirmed the arbitration order regarding unconscionability, while one justice dissented on the interstate-commerce issue.
Topics
Practice areas
Questions Presented
- Whether the termite-treatment transaction sufficiently affected interstate commerce to trigger application of the Federal Arbitration Act.
- Whether Britta Bowen was bound by the arbitration provision despite not signing the contract containing it.
- Whether the trial court erred by compelling arbitration without expressly stating findings concerning unconscionability.
Holdings
- The termite-treatment transaction sufficiently affected interstate commerce to trigger application of the Federal Arbitration Act.
- Britta Bowen was bound by the arbitration provision because she accepted and acted upon the contractual arrangement and sought benefits under the contract while asserting contract-based claims.
- The absence of express findings on unconscionability did not require remand because the trial court's order was presumed to include the findings necessary to support its judgment, and the Bowens challenged only the absence of findings rather than the merits of unconscionability.
Key quotations
“Based upon the United States Supreme Court's holding in Citizens Bank, we hold that the transaction at issue in the instant case sufficiently involves interstate commerce to trigger application of the FAA.” (1142)
“A plaintiff cannot seek the benefits of a contract but at the same time avoid the arbitration provision in the contract.” (1143)
“We hold that the trial court correctly compelled the Bowens to submit their claims against SPC to arbitration.” (1143)
Factual background
Michael Bowen entered into a termite-treatment contract with Security Pest Control, Inc. that contained a binding arbitration clause. Security Pest Control treated the Bowens' home with Navigator TC, using drilling equipment, and the Bowens later alleged that termites had destroyed approximately one-third of the house, causing about $50,000 in repair costs. Britta Bowen did not sign the contract containing the arbitration clause but signed a document describing the areas treated and asserted claims based on the contract.
Procedural history
The Bowens sued Security Pest Control in May 2001, asserting claims including breach of contract, negligence, and fraud arising from termite damage to their home. Security Pest Control moved to compel arbitration, and the Tallapoosa Circuit Court granted the motion. The Alabama Supreme Court affirmed on application for rehearing and substituted its opinion for its February 28, 2003, opinion.