Directory Assistants, Inc. v. Cooke, No. 2080256 (Ala. Civ. App. 4/16/2010)

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Directory Assistants, Inc., v. Cooke, Cameron, Travis and Company, P.C.

Cooke, Cameron, Travis and Company, P.C., v. Directory Assistants, Inc.

No. 2080256.

No. 2081186.

Court of Civil Appeals of Alabama.

Decided April 16, 2010.

Appeal from Jefferson Circuit Court, (CV-07-902773).

Appeal from Jefferson Circuit Court, (CV-09-1775).

After Remand from the Alabama Supreme Court.

PITTMAN, Judge.

These consolidated appeals arise out of a dispute between an Alabama law firm, Cooke, Cameron, Travis and Company, P.C. ("the law firm"), and a Connecticut advertising-consulting firm, Directory Assistants, Inc. ("the consulting firm"). In June 2006, the law firm and the consulting firm entered into a three-page written agreement pursuant to which the consulting firm agreed to help the law firm to "identify business factors"; to "disclos[e] information, cost saving suggestions, theories, options, and advice" to be considered by the law firm in contracting for its printed and online telephone-directory advertising; to assist the law firm with advertising design and placement; to review and verify advertising placement; and to review and verify current advertising costs and forecast future costs. The consulting firm agreed to perform those actions for three years in consideration for payment of a fee based upon cost savings inuring to the law firm. The contract further contained the following provisions regarding to resolution of disputes "The parties agree to resolve any dispute arising out of or relating to this contract through confidential binding arbitration conducted pursuant to the Federal Arbitration Act and agree to choose a mutually agreeable arbitration service, location and choice of law forum. In the event the parties are unable to agree on an arbitration service, location or choice of law forum for the arbitration, or if one party refuses to participate in choosing, the party filing the demand shall have the sole right to choose the arbitration service, the location of the arbitration and the choice of law forum and both parties hereby expressly consent to and waive any and all objections to the arbitration service, all jurisdictional issues or the choice of law forum chosen.

"The arbitration will be administered under the chosen service's most expedited commercial arbitration rules. The parties agree the total arbitrator compensation will not exceed $2,500.00 total and that each side will be limited to two witnesses. The [alternative dispute resolution] service will render an award within forty-five days of the appointment of an arbitrator. Within two weeks of a demand being filed, [the consulting firm] agrees to provide the [law firm] with its complete file and the [law firm] agrees to provide [the consulting firm] with all its advertising contracts and confirming orders for the past three years. Failure to do so will waive any objection to [the consulting firm's] damage[s] calculation. The parties agree that if the arbitrator finds there is a contract, he/she is required to award [the consulting firm] all its attorney's fees, all arbitration costs and all interest from the date the first book in the baseline program closes.

"The parties also agree the arbitrator will have no authority to award punitive damages, will not render any `middle ground' or `compromise awards' and must hold the parties to the tenns of the contract. A judgment upon an arbitration award may be obtained and entered upon the award in any court in either Connecticut or the home state of the [law firm], at the option of the prevailing party, and both parties hereby expressly consent to and waive any objection to the jurisdiction of the court selected by the prevailing party for purposes of seeking a judgment on any arbitration award."

The contract bears signatures of representatives of both parties that are dated June 8, 2006.

At some point after the contract was signed, representatives of the law firm notified one of the consulting firm's agents that the law firm would need no services provided by the consulting firm because the law firm would no longer be advertising in commercial telephone directories in Alabama. Although the consulting firm issued an invoice to the law firm seeking payment for consulting services, the law firm refused to pay the invoice, denying that the law firm owed any monetary obligation to the consulting firm. The consulting firm then notified the law firm that the consulting firm would be initiating arbitration proceedings. In December 2007, an arbitrator held a hearing and then rendered a decision as to the parties' dispute in which it was determined that the parties' contract was "valid and enforceable," that the parties' dispute was arbitrable, and that the law firm was due to pay the consulting firm liquidated damages of $23,716.80 plus late fees, copying costs, and arbitration costs.

While the arbitration proceedings were taking place, the law firm filed a complaint in the Jefferson Circuit Court. The law firm sought a declaratory judgment that, among other things, determined the alleged contract between the parties to be void on the authority of Alabama's "door-closing" statute, Ala. Code 1975, § 10-2B-15.02, which prohibits foreign corporations that fail to qualify to do business within Alabama from enforcing contracts in the state, and averred that there had been no meeting of the parties' minds so as to cause the formation of a valid contract. The action filed by the law firm, which we will call the declaratory-judgment action, was assigned case no. CV-07-902773 by the trial court.

In February 2008, the consulting firm entered a limited appearance in the declaratory-judgment action and filed a motion to dismiss for lack of subject-matter jurisdiction, averring that the law firm's claims were barred, the consulting firm said, because they were subject to mandatory arbitration, because they were barred or precluded by the previous arbitration decision, and because venue was allegedly improper in the Jefferson Circuit Court. The consulting firm filed a number of evidentiary exhibits in support of its motion to dismiss¹ tending to show that the parties had agreed to arbitration, that arbitration proceedings had been initiated and completed in Connecticut in which the consulting firm had been awarded $33, 421.32 plus interest, and that confirmation of the arbitral award by a Connecticut trial court was expected. The law firm filed a response in opposition to the consulting firm's motion to dismiss. After a hearing, the trial court entered an order on April 3, 2008, denying the motion to dismiss the declaratory-judgment action, citing the door-closing statute and concluding that "[i]f the contract is void, the right to select [a] forum for arbitration would also not be enforceable."

On May 6, 2008, the consulting firm filed a notice of appeal to the Alabama Supreme Court from the trial court's April 3, 2008, order; in its docketing statement, the consulting firm admitted that the order did not dispose of all claims against all parties and that the trial court had not directed the entry of a final judgment pursuant to Rule 54(b), Ala. R. Civ. P., but the consulting firm claimed that the appeal was "taken pursuant to Rule 4(d) of the Alabama Rules of Appellate Procedure, which provides for appeals as a matter of right from an order denying a motion to compel arbitration." On November 21, 2008, after all briefs had been filed, the Alabama Supreme Court entered an order that provided, in pertinent part:

"A copy of the record having been submitted and considered by this Court, and it appearing that the appeal may be from an order that is not appealable, the [consulting firm] is directed to provide this Court, in writing, within ten (10) days, its reasons why this appeal should not be dismissed. The [consulting firm] is specifically directed to address whether the trial court's order dated April 3, 2008 ... is a denial of [a] motion to compel arbitration and is an appealable order pursuant to Rule 4(d), Alabama Rules of Appellate Procedure.

"The [law firm] may file a response within seven (7) days after the filing of the [consulting firm's] arguments."

The parties then filed responses to the Alabama Supreme Court's order; however, before the Alabama Supreme Court made a ruling on the matter, it transferred the appeal to this court on the basis that it fell within this court's jurisdiction (presumably because the aggregate amount awarded in the Connecticut arbitration proceeding did not exceed $50,000). That appeal was then assigned case no. 2080256 by this court. Although this court initially dismissed the consulting firm's appeal for lack of jurisdiction after determining from the record and the parties' briefs that Rule 4(d), Ala. R. App. P., did not apply to that interlocutory appeal, see Directory Assistants, Inc. v. Cooke, Cameron, Travis & Co. (No. 2080256, March 25, 2009), ___ So. 3d ___ (Ala. Civ. App. 2009) (table), our judgment of dismissal was itself reversed by the Alabama Supreme Court, and the cause has been remanded for further proceedings. Ex parte Directory Assistants, Inc., [Ms. 1080852, November 25, 2009] ___ So. 3d ____ (Ala. 2009).

During the pendency of the declaratory-judgment action, the Superior Court of the Judicial District of Hartford, Connecticut, confirmed the December 2007 arbitration award and entered a judgment in favor of the consulting firm for $33,421.32 plus interest. After filing its notice of appeal in the declaratory-judgment action, the consulting firm commenced an action in the Jefferson Circuit Court to register the Connecticut judgment pursuant to the Uniform...