American Family Life Assurance Co. of Columbus v. Parker
92 So. 3d 58
Ala.2012Background
- Consolidated appeals arise from Parker v. Aflac; 1990 cancer policy terminated by later policies, culminating in a 2009 policy incorporating an arbitration agreement.
- 1990 policy provided a Progressive Payout Benefit; Parker paid premiums through 1996.
- 1996 policy terminated the 1990 policy and continued under a new policy with same number (A2043738).
- 2009 policy issued August 16, 2009 with an arbitration agreement attached; Parker signed the policy and arbitration clause.
- Parker sued in 2010 for bad-faith denial of benefits; Aflac moved to compel arbitration under the 2009 arbitration clause; circuit court denied.
- The court analyzes whether an arbitration agreement existed and if it applies to Parker’s claims, under FAA policy and Alabama law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an arbitration agreement existed binding Parker | Parker: no valid arbitration attached to 2009 policy | Aflac/Hunter: 2009 policy incorporated arbitration; contract evidenced by 2009 policy | Yes; arbitration existed and applied to Parker's claims |
| Whether the 2009 policy incorporated arbitration despite lack of Aflac signature | No signature by AFLAC required; no mutual assent | Assent can be shown by conduct; policy signed by Aflac officers; acceptance of premiums shows consent | Yes; arbitration clause incorporated via 2009 policy and conduct, not necessarily by AFLAC signature |
| Whether the arbitration clause is broad enough to cover Parker's claims | Clause not limited to certain disputes; Parker’s claims fall outside scope | Clause broadly states all disputes arising under law will be decided by arbitration | Yes; clause is broad enough to encompass Parker’s claims |
| Whether the contract affected interstate commerce and triggered FAA | Matter not disputed | Unclear; contract involves interstate commerce due to insurance business | Yes; evidence supports interstate-commerce connection and applicability of FAA |
| Whether Parker presented any evidence refuting arbitration | Parker offered no persuasive evidence to refute validity | Parker failed to show arbitration not applicable | Parker failed to refute; court held for arbitration |
Key Cases Cited
- Green Tree Fin. Corp. of Alabama v. Vintson, 753 So.2d 497 (Ala.1999) (FAA policy strong favoring arbitration; de novo review; stay/dismissal upon valid arbitration clause)
- Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Kilgore, 751 So.2d 8 (Ala.1999) (mutual assent may be evidenced by conduct; no signature required in some circumstances)
- Allied-Brewer Terminix Cos. v. Dobson, 684 So.2d 102 (Ala.1995) (doubts resolved in favor of arbitration; but not to compel absent agreement to arbitrate)
- Ex parte Rush, 730 So.2d 1175 (Ala.1999) (written contract provision may be enforceable without signatures under FAA)