Trista Carter v. Johnny Mack Morrow and Martha Morrow (Appeal from Franklin Circuit Court: CV-23-900162).
SC-2024-0494
Ala.Mar 21, 2025Background
- Trista Carter agreed to purchase a house and 245 acres from Johnny Mack Morrow and Martha Morrow for $1.6 million, with a $25,000 earnest money deposit.
- The contract included a binding arbitration clause for most disputes but explicitly excluded certain types, namely interpleader actions relating to earnest money and specific small claims under paragraph 11(a).
- The sale was not completed; the Morrows sued Carter for breach of contract (for failing to close) and named Crye-Leike, Inc., the escrow agent holding the earnest money, seeking both damages and an order for interpleader of the earnest money.
- Carter moved to compel arbitration, arguing the dispute was subject to arbitration and involved interstate commerce.
- The trial court denied Carter’s motion to compel arbitration on the ground that the Morrows’ claims fell within the contract’s arbitration exceptions. Carter appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicability of Arbitration Clause | Disputes re earnest money/interpleader are excluded from arbitration | All claims arise from the contract and are arbitrable | Interpleader claim excluded from arbitration |
| Breach of Contract Claim Arbitrable? | Only earnest money/interpleader excluded; damages from breach are not | Morrows also seek damages requiring arbitration | Breach of contract claim must go to arbitration |
| Effect of Claims Involving Interstate Commerce | Arbitration agreement covers interstate transaction | Agreement covers interstate transaction | Contract involves interstate commerce |
| Piecemeal Litigation Permitted? | Arbitration can't be compelled if some claims are excluded | Arbitration must be compelled for arbitrable claims | Arbitrable claims proceed to arbitration; others stay |
Key Cases Cited
- Parkway Dodge, Inc. v. Yarbrough, 779 So. 2d 1205 (Ala. 2000) (standard of review for denial of a motion to compel arbitration is de novo)
- TranSouth Fin. Corp. v. Bell, 739 So. 2d 1110 (Ala. 1999) (motion to compel arbitration is analogous to summary judgment)
- Jim Burke Automotive, Inc. v. Beavers, 674 So. 2d 1260 (Ala. 1995) (burden-shifting on arbitration motions)
- Porter v. Williamson, 168 So. 3d 1215 (Ala. 2015) (arbitrable claims must be sent to arbitration even if litigation of other claims is required)
- Thompson v. Skipper Real Estate Co., 729 So. 2d 287 (Ala. 1999) (intrastate real estate contracts can involve interstate commerce)