Thomas v. Sloan Homes, 1100395 (Ala. 9-16-2011)
81 So. 3d 309
Ala.2011Background
- Thomases entered a general residential sales contract with an arbitration clause for disputes arising from the contract.
- The deed delivered at closing contained no arbitration provision and referenced only title/transfer elements.
- A separate Limited New Home Warranty was provided; it also lacked an arbitration clause.
- Thomases filed suit in Blount County alleging breach of warranty, construction defects, and related tort/contract claims.
- Sloan Homes moved to compel arbitration, attaching the sales contract; Thomases argued merger nullified arbitration.
- Circuit court granted arbitration; Thomases appeal challenging merger-based nullification.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether merger nullifies the arbitration clause | Merger doctrine extinguishes the arbitration clause when deed delivers title. | Merger does not extinguish collateral obligations; arbitration remains valid. | Merger does not extinguish arbitration clause. |
Key Cases Cited
- Russell v. Mullis, 479 So. 2d 727 (Ala. 1985) (classic merger limitation in real estate contracts)
- Brogden v. Durkee, 16 So. 3d 113 (Ala. Civ. App. 2009) (merger exception for collateral duties survives deed)
- Holmes v. Worthey, 159 Ga. App. 262 (Ga. Ct. App. 1981) (dual-purpose contract; build/construct obligations survive merger)
- Davencourt at Pilgrims Landing Homeowners Ass'n v. Davencourt at Pilgrims Landing, LC, 221 P.3d 234 (Utah 2009) (mortgage-like or collateral acts survive deed; merger not sole basis)
- Starr v. Wilson, 11 So. 3d 846 (Ala. Civ. App. 2008) (recognizes exception to merger for collateral terms)
- Ridley v. Moyer, 230 Ala. 517 (So. 1935) (early articulation of merger limitations in real estate)
- Rickenbaugh v. Asbury, 28 Ala. App. 375 (Ala. App. 1938) (illustrates collateral duties survive deed)
