Baker Construction Services, LLC v. Rabren General Contractors, Inc., 3:19-cv-00572

Background

Baker Construction Services (concrete subcontractor) and Rabren General Contractors (general contractor) negotiated a 44‑page Subcontract for the Auburn High School project that contained an arbitration clause and a bolded requirement that each page be initialed for the Subcontract to be valid.
Rabren mailed the Subcontract to Baker and requested initials/signature, but neither party initialed or signed it; Rabren nevertheless allowed Baker to begin work and paid Baker partial sums totaling $508,670.44 before Baker left the project alleging nonpayment and racial/ethnic hostility.
Baker submitted an (unsigned) copy of the Subcontract to Rabren’s surety in support of a bond claim; Baker sued Rabren asserting breach of contract (an alleged exclusive‑provider agreement and project‑specific breaches) and a § 1981 hostile‑work‑environment claim.
Rabren moved to compel arbitration based on the arbitration clause in the unsigned Subcontract (arguing Baker’s post‑receipt conduct manifested assent) and alternatively moved to dismiss some claims.
The district court held that the Subcontract expressly required initials/signatures to be valid, neither party signed (including Rabren), disputed facts exist about mutual assent, and therefore Rabren failed to meet its burden under the FAA to compel arbitration; the court denied the motion to compel and denied the motion to dismiss (without resolving the Statute of Frauds issue on the pleadings).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the arbitration clause in the unsigned Subcontract binds Baker	Baker never saw, signed, or agreed to the Subcontract; no assent	Rabren argues Baker manifested assent by performing and by communications/documents after receiving the Subcontract	Denied — Subcontract explicitly required initials/signatures; neither party signed; disputed facts and the express signature/initial requirement prevent summary‑disposition enforcement of arbitration
Whether an unsigned writing can be enforced when it expressly conditions validity on signatures/initials	Post‑receipt performance does not create assent when the contract requires signing	Post‑receipt performance can ratify an unsigned agreement absent an express requirement that signing is required	Court applied Alabama law: where contract expressly makes signing a condition precedent to validity, performance does not substitute; signature required here
Whether the alleged long‑term “exclusive provider” oral agreement is barred by Alabama's Statute of Frauds	The agreement could be completed within a year; statute does not bar	Agreement contemplates performance >1 year, so writing required under § 8‑9‑2	Motion to dismiss denied as premature on the Statute of Frauds defense; issue reserved for summary judgment with factual development
Whether Baker (an artificial entity) can pursue a § 1981 hostile‑work‑environment claim	Baker alleges race/ethnicity‑based hostile conditions affecting performance and payment	Rabren contends § 1981 requires an underlying contract and an artificial entity cannot assert such a claim as a matter of law	Denied as premature; court refused to dismiss now and will revisit at summary judgment when factual record is developed

Key Cases Cited

Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (FAA embodies a liberal federal policy favoring arbitration)
First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (party must clearly agree to delegate arbitrability to arbitrator)
Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213 (FAA preempts contrary state law in appropriate cases)
Stolt‑Nielsen S.A. v. Animal Feeds Int’l Corp., 559 U.S. 662 (arbitration is a matter of contract; state contract law governs formation)
Caley v. Gulfstream Aerospace Corp., 428 F.3d 1359 (11th Cir.) (FAA requires arbitration agreement be in writing but not necessarily signed)
Entrekin v. Internal Med. Assocs. of Dothan, P.A., 689 F.3d 1248 (11th Cir.) (state contract principles control existence of arbitration agreement)
Ex parte Rush, 730 So. 2d 1175 (Ala.) (signature shows mutual assent; contract language requiring signature can preclude enforcement absent signature)
Med Ctr. Cars, Inc. v. Smith, 727 So. 2d 9 (Ala.) (refusing to enforce arbitration when acceptance condition in document not met)
Blue Cross & Blue Shield of Ala. v. Woodruff, 803 So. 2d 519 (Ala.) (arbitration provision unenforceable where amendment lacked required signature)
Baptist Health Sys. v. Mack, 860 So. 2d 1265 (Ala.) (post‑receipt conduct can amount to ratification only where contract language contemplates such conduct)