Porter v. Williamson
168 So. 3d 1215
Ala.2015Background
- Marc and Donald Porter (brothers) formed several related companies; their nephew Byron Porter Williamson became a 10% shareholder under a 2004 shareholders agreement and an employee until his termination in 2012.
- The agreement contains a specific-performance provision (Section 28) addressing disputes concerning the sale or disposition of the defined “Securities,” and a broad arbitration clause (Section 29) excepting “items of specific performance referred to above.”
- After Williamson retired as a shareholder, the Porters refused to buy his shares; Williamson sued seeking specific performance (to force purchase), rescission, and tort claims (misrepresentation/suppression and conversion).
- The Porter defendants moved to compel arbitration based on Section 29; the trial court denied the motion in full, reasoning Williamson’s specific-performance claim fell within the Section 28 exception.
- On appeal, the court analyzed whether Williamson’s claims were within the specific-performance exception and whether the trial court erred by denying arbitration for all claims rather than severing arbitrable claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Williamson’s request for specific performance and injunctive relief is arbitrable | Williamson: specific-performance claim falls within Section 28 exception, so it is not subject to arbitration | Porters: Section 28 is narrow and only prevents arbitration of injunctive relief to restrain third‑party sales; other disputes must be arbitrated under Section 29 | Held: Specific-performance and injunctive claims fall within the express Section 28 exception and are not arbitrable |
| Whether the remaining claims (rescission, misrepresentation/suppression, conversion) are arbitrable | Williamson effectively concedes the agreement’s validity and does not contend these claims fall within the specific-performance exception | Porters: remaining claims are subject to arbitration under Section 29 | Held: Trial court erred by denying arbitration in toto; remanded to (1) dismiss any remaining claims the court determines are not viable or (2) compel arbitration of the rest |
| Whether a court must send arbitrable claims to arbitration even if some claims are nonarbitrable | Williamson argued trial court allowed discovery only on specific‑performance, implying other claims resolved | Porters: arbitration must proceed on arbitrable claims | Held: Under Supreme Court precedent, arbitrable claims must be sent to arbitration even if piecemeal litigation results; trial court must sever/send arbitrable claims |
Key Cases Cited
- KPMG LLP v. Cocchi, 132 S. Ct. 23 (2011) (arbitrable and nonarbitrable claims may be severed; arbitrable claims must go to arbitration)
- Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 (1985) (arbitration of some claims notwithstanding remaining judicial claims)
- Serra Chevrolet, Inc. v. Hock, 891 So.2d 844 (Ala.2004) (broad construction of “relating to” in arbitration clauses)
- American Family Life Assur. Co. of Columbus v. Parker, 92 So.3d 58 (Ala.2012) (party cannot be required to arbitrate disputes it did not agree to arbitrate)
- Allied-Bruce Terminix Cos. v. Dobson, 684 So.2d 102 (Ala.1996) (contract interpretation governs the scope of arbitration clauses)
