Ex Parte Williams
Maurine Williams petitions this Court for a writ of mandamus directing Judge William H. Robertson of the Barbour County Circuit Court to set aside his order of October 30, 1995, compelling arbitration of the claims presented in Ms. Williams‘s action against The Money Tree, Inc. Judge Robertson entered that order four days before this Court released its opinion in Allied-Bruce Terminix Companies v. Dobson, 684 So.2d 102 (Ala.1995). As explained in that opinion, if the validity or scope of an arbitration agreement is in issue, the parties are entitled to a trial by jury on those questions. Id. Because Judge Robertson did not have the benefit of the principles set forth in that opinion, we direct that he reconsider his order compelling arbitration, in light of that opinion and this one.
For Judge Robertson‘s benefit, we make the following observations. Williams‘s complaint includes an allegation that there was “ineffective assent to the contract including the arbitration clause,” because, she says, she cannot read and understand the terms of the contract. The Federal Arbitration Act states that arbitration agreements are “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.”
“In any event, § 2 gives States a method for protecting consumers against unfair pressure to agree to a contract with an unwanted arbitration provision. States may regulate contracts, including arbitration clauses, under general contract law principles and they may invalidate an arbitration clause `upon such grounds as exist at law or in equity for the revocation of any contract.’
9 U.S.C. § 2 (emphasis added).”
A contract may be avoided because of incapacity if it is shown that “the incapacity was of such a character that, at the time of execution, the person had no reasonable perception or understanding of the nature and terms of the contract.” Williamson v. Matthews, 379 So.2d 1245, 1247 (Ala.1980), citing Weaver v. Carothers, 228 Ala. 157, 160, 153 So. 201 (1934), and cited in Lloyd v. Jordan, 544 So.2d 957 (Ala.1989). See Cancanon v. Smith Barney, Harris, Upham & Co., 805 F.2d 998 (11th Cir.1986).
INSTRUCTIONS ISSUED.*
SHORES, KENNEDY, INGRAM, COOK, and BUTTS, JJ., concur.
HOOPER, C.J., and HOUSTON, J., concur in the result.
MADDOX, J., dissents.
HOUSTON, Justice (concurring in the result).
In this case, some of the preliminary “arbitrability” issues raised by Maurine Williams include claims of fraud in the inducement and the lack of mental capacity. Who decides these issues?
In First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995), the United States Supreme Court unanimously held that questions regarding arbitrability are decided by courts, unless the contract very clearly grants to arbitrators the power to decide even preliminary issues of arbitrability. Although Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967), was not specifically overruled or even mentioned in First Options, the reasoning of First Options is dramatically opposed to that of Prima Paint, so Prima Paint and its progeny must give way to First Options. Apparently, the current nine Justices on the United States Supreme Court believe that Justice Hugo Black‘s dissent in Prima Paint, which concludes with the following sentence, is the correct understanding of the Federal Arbitration Act: “If there has never been any valid contract, then there is not now and never has been anything to arbitrate.” 388 U.S. at 425, 87 S.Ct. at 1817. This is consistent with the words of
The only reasonable interpretation of First Options and of