90 So. 3d 774
Ala. Civ. App.2012Background
- Maggie McCall Chapman opened a SouthTrust Bank account in 2003 as a minor (approx. 15) with Chapman as survivorship co-owner; Maggie signed the signature card and an IRS certification.
- The account agreement includes a clause that all parties acknowledge rules and regulations governing deposits and will be bound by amendments, with arbitration under the FAA administered by the AAA.
- Over time SouthTrust merged with Wachovia and then Wells Fargo; account regulations and arbitration provisions persisted, though not identical across eras.
- After Maggie’s death on April 2–3, 2009, Chapman as administrator sued Wells Fargo and Grier among others for wrongful death and related claims arising from Maggie’s access to a CD and the 2009 events.
- Maggie’s CD funds were allegedly made accessible to her after Grier stated Maggie’s name had been removed from the CD; Maggie redeemed the CD for $11,224.17 and later died, with some funds used by others.
- Wells Fargo and Grier moved to compel arbitration, producing accounts regulations and Merck affidavits; the trial court denied; the appellate court granted partial reversal and remand to compel arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence and binding effect of arbitration agreement | Chapman contends no binding arbitration due to lack of notice/signature. | Wells Fargo/Grier argue a valid SouthTrust arbitration agreement bound Maggie/Chapman. | Yes, a valid arbitration agreement existed and bound Chapman. |
| Notice of amendments and mergers applying to Maggie/Chapman | No notice of amendments or bank mergers was shown for Maggie/Chapman. | Notice to account holders consistent with unilateral-contract amendments; continued relationship implies assent. | Not proven that notice was provided; amendments not conclusively binding, but original arbitration remains applicable. |
| Arbitration of the wrongful-death claim | Wrongful-death claim not Maggie’s to arbitrate; decedent’s claims cannot bind personal representative. | Personal representative/Maggie’s signatory status binds Chapman to arbitrate wrongful-death claim. | Chapman bound to arbitrate the wrongful-death claim as Maggie’s signatory through the original agreement. |
| Arbitrability as a question to be decided by arbitrator | Trial court should decide arbitrability, including scope of the agreement. | AAA rules authorize arbitrator to decide arbitrability questions. | Arbitrability is for the arbitrator under AAA rules. |
| Nonsignatory enforcement by Grier | Grier, as a nonsignatory, cannot enforce arbitration. | Grier can enforce arbitration if within the scope as an employee and agent. | Grier is entitled to enforce the arbitration agreement as a Wachovia/Wells Fargo employee within the scope. |
Key Cases Cited
- CitiFinancial Corp., L.L.C. v. Peoples, 973 So.2d 332 (Ala. 2007) (arbitration provisions invoking AAA rules empower arbitrator to decide arbitrability)
- SouthTrust Bank v. Williams, 775 So.2d 184 (Ala.2000) (notice of amendments may be assented to by continued account use)
- UBS PaineWebber, Inc. v. Brown, 880 So.2d 411 (Ala.2003) (continued business relationship after notice implies assent to arbitration terms)
- Ex parte Rush, 730 So.2d 1175 (Ala.1999) (signature not required if mutual assent inferred from conduct and notice)
- Carraway v. Beverly Enterprises Alabama, Inc., 978 So.2d 27 (Ala.2007) (arbitration agreements enforceable involving personal representatives signatories)
- Briarcliff Nursing Home, Inc. v. Turcotte, 894 So.2d 661 (Ala.2004) (arbitration agreements enforceable when personal representatives are signatories)
- Vann v. First Cmty. Credit Corp., 834 So.2d 751 (Ala.2002) (motions to compel arbitration akin to summary judgment; burden-shifting standard)