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Thomas v. Sloan Homes, 1100395 (Ala. 9-16-2011)
81 So. 3d 309
Ala.
2011
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Background

  • 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)
Read the full case

Case Details

Case Name: Thomas v. Sloan Homes, 1100395 (Ala. 9-16-2011)
Court Name: Supreme Court of Alabama
Date Published: Sep 16, 2011
Citation: 81 So. 3d 309
Docket Number: 1100395
Court Abbreviation: Ala.