Brian Smith; Baltic Holdings, LLC; Arrowhead LM, LLC; Bay Pine LMP, LLC; and Kowaliga Investment Zero, LLC v. ARC Realty, LLC; Joy Dill; Stacey McKinley; Eric McKinley; The Closing Agency, LLC, d/b/a Lake Martin Closing; Martha Louise McKee-Blackham; and Big Fish Real Estate Group at Lake Martin, LLC

Summary

The Supreme Court of Alabama considered consolidated proceedings involving a petition for a writ of mandamus and an appeal from an order staying arbitration. The Court held that the circuit court's order effectively denied a motion to compel arbitration and that, under the arbitration provisions incorporating the AAA rules and containing an express delegation clause, an arbitrator must decide whether claims against nonsignatories are arbitrable. The Court dismissed the mandamus petition, reversed the circuit court's order, and remanded for entry of an order compelling arbitration.

Holdings

1. An order that effectively refuses to allow an arbitrator to decide threshold arbitrability questions constitutes a denial of a motion to compel arbitration and is appealable as a matter of right under Rule 4(d), Ala. R. App. P.
2. When an arbitration agreement clearly and unmistakably delegates arbitrability questions to an arbitrator, including through an express delegation clause or incorporation of the AAA Commercial Arbitration Rules, the arbitrator—not the court—must decide whether claims against nonsignatories fall within the arbitration provision.
3. The circuit court erred by staying the AAA proceedings and failing to grant the defendants' motion to compel arbitration; the order must be reversed and the case remanded for entry of an order granting the motion to compel arbitration.

Questions Presented

1. Whether the circuit court's order staying arbitration effectively denied the defendants' motion to compel arbitration and was appealable under Rule 4(d), Ala. R. App. P.
2. Whether the question of arbitrability of claims against nonsignatories to contracts containing arbitration provisions must be decided by the circuit court or by an arbitrator when the contracts expressly delegate arbitrability and incorporate the AAA Commercial Arbitration Rules.
3. Whether the circuit court erred by staying the AAA proceedings rather than compelling arbitration.

Disposition

reversed_and_remanded