Fоllowing an accident in which the air bags in Jennifer Ritter's automobile did not deploy, Jennifer Ritter and her husband Daryl Ritter sued Grady Automotive Group, Inc. ("Grady Automotive"), the dealership where she had purchased the vehicle; BMW of North America, LLC ("BMW"), the manufacturer of the vehicle; and fictitiously named parties. The trial court granted the motion to compel arbitration filed by "Grady Buick Company, Inc., incorrectly named Grady Automоtive Group, Inc.," as to both Mr. Ritter's and *1060 Mrs. Ritter's claims, based on an arbitration agreement signed by Mrs. Ritter. The Ritters appeal. We affirm.
While driving the 745Li several months later, Mrs. Ritter was involved in a car accident. None of the air bags in the car deployed. Moreover, the seatbelt allegedly failed to hold Mrs. Ritter in place, and she sustained injuries. Mr. Ritter was not in the car at the time of the accident. Mrs. Ritter sued Grady Automotive, BMW, and fictitiously named defendants, alleging misrepresentations, manufacturing defects, defective design, negligent and/or wanton installation of the air-bag and seatbelt systems, breach of contract, and breach of warranties. Mr. Ritter also sued the defendants, asserting a derivative loss-of-consortium claim.
Grady Buick Company, Inc. ("Grady Buick"), which maintained that it was incorrectly named on the Ritters' complaint as "Grady Automotive Group, Inc.," moved the trial court to compel arbitration of the claims against it based on the arbitration agreement Mrs. Ritter signed at the time she purchased the 745Li. The Ritters objected to the motion, but the trial court compelled arbitration. The Ritters then moved the trial court to alter, amend, vacate, or reconsider its order compelling arbitration, but the trial court denied their motion. The Ritters appeal, arguing that Grady Buick could not compel arbitration because, they argue, it was neither a party to the legal action nor a party to the purchase contract; they argue that they named Grady Automоtive in their complaint and that Grady Automotive was the party with whom Mrs. Ritter entered into the purchase contract, although some other sales documents were executed in the name of Grady Buick. Further, they argue that the merger clause in the purchase contract rendered the separate arbitration agreement invalid and that in any event the arbitration agreement does not bind Mr. Ritter because he did not sign it.
Smith,"The party seeking to compel arbitration must first prove both that a contract calling for arbitration exists and that the contract evidences a transaction involving interstate commerce. . . . Once this *1061 showing has been made, the burden then shifts to the nonmovant to show that the contract is either invalid or inapplicable tо the circumstances presented."
Grady Buick argues that the Ritters have waived this argument by failing to raise it in the trial court. See Totten v.Lighting Supply, Inc.,
"DISCLAIMER OF WARRANTIES
"The Seller, GRADY BUICK CO., Inc. hereby expressly disclaims all warranties, either expressed or implied. . . .
"I COMPLETELY UNDERSTAND GRADY BUICK CO., INC. IS NOT OBLIGATED TO FURNISH TRANSPORTATION WHILE MY VEHICLE IS BEING SERVICED.
"The dealer is not a party to any manufacturer's or third party warranty. . . . "No oral representations are binding unless written on this form and all terms of the agreement are printed or written herein."
(Capitalization in original; emphasis added.) The Ritters arguе that the last sentence of the disclaimer emphasized above constitutes a merger clause and that all prior or contemporaneous agreements and negotiations have thereby been merged into the purchase contract. Therefore, they argue, the separate agreement to arbitrate, which was not mentioned in the purchase contract, is not part of the contract with Grady Buick and does not apply to this case.
A merger clause creates "a presumption that the writing represents an integrated, that is, the final and complete, agreement of the parties." Ex parte Palm HarborHomes, Inc.,
A merger clause, however, does not bar evidence of contemporaneous collateral agreements between the parties.See Alabama Elec. Coop., Inc. v. Bailey's Constr. Co.,
In Hartford Fire, this Court quoted various tests used by other courts tо determine whether an agreement is collateral and therefore outside the scope of a merger clause. The Court quoted Mitchill v. Lath,
We held in Alabama Electric Cooperative that an oral agreement to insure was not collateral to an insurance policy, "[i]n light of the fact that the written contract dealt expressly with the subject matter of the alleged collateral oral agreement."
In this case, the free-standing, written, and separately executed arbitration agreement meets all three prongs of theMitchill test. First, it is "collateral in form." InSouthern Guaranty, the Court of Civil Appeals held that an oral agreеment to, among other things, provide coverage for the insured's son under an automobile insurance policy was not "collateral in form" because it was "identical with the written policy as amended, except for coverage of appellee's son as a driver."
Professor Williston states that "`there are cases where it is so natural to make a separate agreement, frequently oral, in regard to the same subject-matter, that the Parol Evidence Rule does not deny effect to the collateral agreement.'" 11 Richard A. Lord, Williston on Contracts § 33:28 (4th ed.1999) (quoting Magee v. Robinson,
Second, to be collateral, the arbitration agreement "`must not contradict express or implied provisions of the written contract.'" Hartford Fire,
Finally, "the parties would not ordinarily be expected to embody" the arbitration agreement in the purchase contract.Hartford Fire,
Because the arbitration agreement is a collateral agreement, distinct from the purchase contract, the merger clause in the purchase contract does not invalidate the arbitration agreement. The two contracts are separate: one governs the sale of the vehicle, and the other governs the resolution of disputes between the dealer and the buyer. "They are two separate contracts and are to be considered as such." SouthernGuaranty,
To support their argument, the Ritters cite Dickinson, in which a husband and wife purchased a car from a deаlership. As part of the sale, both Mr. and Mrs. Dickinson signed a retail-installment contract. However, only Mr. Dickinson signed the retail buyer's order, which contained an arbitration provision. Four Justices of this Court joined in the opinion holding that, although the arbitration provision applied to Mr. Dickinson's claims, it did not cover Mrs. Dickinson's claims because she did not sign the retail buyer's order.Dickinson,
Grady Buick compares the Ritters' claims to those brought inGeorgia Power Co. v. Partin,
Mr. Ritter's loss-of-consortium claim stems from Mrs. Ritter's purchase of the BMW 745Li. Like Mrs. Partin, Mr. Ritter "alleges that [his] injury was caused by the same breach of duties that [his wife] says resulted in [her] injury."
AFFIRMED.
COBB, C.J., and WOODALL, SMITH, and PARKER, JJ., concur.
"all claims, demands, disputes, or controversies of every kind or nature that may arise between [the buyer and the dealer] concerning any of the negotiations leading to the sale, lease or financing of the vehicle, terms and provisions of the sale, lease or financing agreement, arrangements for financing, purchase of insurance, purchasе of extended warranties or service contracts, the performance or condition of the vehicle, or any other aspects of the vehicle and its sale, lease or financing."
