Oaks v. Parkerson Constr., LLC

303 So.3d 1141

Jeanne Lacy OAKS

v.PARKERSON CONSTRUCTION, LLC

1171193

Supreme Court of Alabama.

February 28, 2020

Melissa D. Endsley and Thomas S. McGrath of McGrath Law Firm, Huntsville, for appellant.

Christopher J. Zulanas and David T. Gordon of Friedman, Dazzio, Zulanas & Bowling, P.C., Birmingham, for appellee.

MITCHELL, Justice.

Jeanne Lacy Oaks and Parkerson Construction, LLC ("Parkerson"), are engaged in a dispute concerning Parkerson's reconstruction of Oaks's fire-damaged residence in Huntsville. Parkerson initiated the action, claiming that Oaks owed it more than $50,000 for its work. Oaks filed counterclaims alleging, among other things, that Parkerson misrepresented itself and performed deficient work. Parkerson moved the trial court to order that Oaks's counterclaims be arbitrated based on a provision in an unauthenticated work-authorization agreement that was attached to the motion. The trial court granted Parkerson's motion and ordered that Oaks's counterclaims be arbitrated. We reverse the trial court's arbitration order, however, because Parkerson did not meet its burden of establishing the existence of a contract calling for arbitration.

Facts and Procedural History

Parkerson sued Oaks in the Madison Circuit Court on February 17, 2017, based primarily on a work-authorization agreement it allegedly had entered into with her to rebuild her fire-damaged residence in Huntsville. Oaks answered the complaint and later filed counterclaims based in part upon representations Parkerson made in a work-authorization agreement and in part upon alleged deficiencies in Parkerson's work. In support of her counterclaims, Oaks inserted into the body of the pleading two photocopied paragraphs from an unattached work-authorization agreement. The first paragraph authorized Parkerson to perform services at a property in Brevard, North Carolina. The second paragraph contained representations allegedly made by Parkerson upon which Oaks bases some of her counterclaims.

On December 20, 2017, Parkerson filed a motion to stay the proceedings as to Oaks's counterclaims and to compel arbitration of the counterclaims ("the motion to compel arbitration"). In support of the motion to compel arbitration, Parkerson attached one exhibit: what purported to be a copy of the work-authorization agreement between Oaks and Parkerson, dated September 29, 2015 ("the September 2015 agreement"). The September 2015 agreement, apparently signed by Oaks, contained the following language:

"The parties to this Agreement shall make a good faith attempt to agree on all disputes by mutual agreement. If any dispute arises between the parties that cannot be resolved by their mutual agreement, both parties agree to submit any dispute to binding arbitration subject to the rules of the American Arbitration Association (‘AAA’) Construction Industry Arbitration Rules in effect at the time this agreement is signed."

The September 2015 agreement also contained language identical to the two paragraphs that Oaks photocopied into the pleading in which she asserted her counterclaims. Parkerson did not submit any evidence to authenticate the September 2015 agreement.

On January 4, 2018, Oaks filed a response in opposition to Parkerson's motion to compel arbitration. She argued to the trial court, among other things, that, because Parkerson failed to submit any evidence to authenticate the September 2015 agreement, Parkerson had not met its burden of proving the existence of an arbitration agreement. Before the hearing on the motion to compel arbitration, Oaks filed a supplemental response making similar arguments to those contained in her initial opposition and stating that the September 2015 agreement was due to be struck. The trial court held a hearing on the motion to compel arbitration on May 18, 2018. Despite the fact that more than four months had elapsed between the date Oaks raised the issue of authentication and the date of the hearing, Parkerson never addressed that issue. Nor is there any record of Parkerson submitting such authenticating evidence at the hearing.

On May 21, 2018, the trial court entered an order granting Parkerson's motion to compel arbitration based on "consideration of [that motion], matters submitted in support of and in opposition thereto, applicable law, and argument of counsel." Oaks filed a motion under Rule 59(e), Ala. R. Civ. P., to alter, amend, or vacate the trial court's order. That motion was denied by operation of law. See Rule 59.1, Ala. R. Civ. P. Oaks then appealed under Rule 4(d), Ala. R. App. P.

Standard of Review

In Bugs "R" Us, LLC v. McCants, 223 So. 3d 913, 916 (Ala. 2016), this Court described the standard of review applicable to a trial court's ruling on a motion to compel arbitration:

" ‘ "[T]he standard of review of a trial court's ruling on a motion to compel arbitration at the instance of either party is a de novo determination of whether the trial judge erred on a factual or legal issue to the substantial prejudice of the party seeking review." Ex parte Roberson, 749 So. 2d 441, 446 (Ala. 1999). Furthermore:

" ‘ "A motion to compel arbitration is analogous to a motion for summary judgment. TranSouth Fin. Corp. v. Bell, 739 So. 2d 1110, 1114 (Ala. 1999). The party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration and proving that the contract evidences a transaction affecting interstate commerce. Id. ‘After a motion to compel arbitration has been made and supported, the burden is on the non-movant to present evidence that the supposed arbitration agreement is not valid or does not apply to the dispute in question.’ "

" ‘ Fleetwood Enters., Inc. v. Bruno, 784 So. 2d 277, 280 (Ala. 2000) (quoting Jim Burke Auto., Inc. v. Beavers, 674 So. 2d 1260, 1265 n.1 (Ala. 1995) (emphasis omitted)).’

" Vann v. First Cmty. Credit Corp., 834 So. 2d 751, 752-53 (Ala. 2002) (emphasis omitted)."

Discussion

We begin with the legal framework for deciding whether a party's claims are due to be arbitrated. " ‘The party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration and proving that the contract evidences a transaction affecting interstate commerce.’ " Elizabeth Homes, L.L.C. v. Gantt, 882 So. 2d 313, 315 (Ala. 2003) (quoting Fleetwood Enters., Inc. v. Bruno, 784 So. 2d 277, 280 (Ala. 2000) ). "If the party moving to compel arbitration fails to make such a showing, the burden of proof does not shift to the opposing party and the motion should be denied." Ex parte Greenstreet, Inc., 806 So. 2d 1203, 1207 (Ala. 2001).

Parkerson attached to its motion to compel arbitration only one document -- the September 2015 agreement -- to prove the existence of a contract between it and Oaks calling for arbitration. Oaks contends that the trial court should have struck the September 2015 agreement because it was not authenticated. If Oaks is correct, then the record is devoid of any evidence of an arbitration agreement and the trial court's order granting Parkerson's motion to compel arbitration must be reversed.

In support of her argument, Oaks cites Rule 901(a), Ala. R. Evid., and the associated Advisory Committee's Notes. Rule 901(a) states: "The requirement of authentication or identification as a condition precedent to admissibility is satisfied by evidence sufficient to support a finding that the matter in question is what its proponent claims." The Advisory Committee's Notes further explain:

" Rule 901 embraces the historic requirement that the proponent of real or demonstrative evidence (all nontestimonial evidence, such as writings, objects, etc.) lay a threshold foundation, as a prerequisite to admissibility, sufficient to show that the evidence is what it is represented to be.... When a writing is offered as evidence, Rule 901 continues the necessity for laying a foundation to authenticate the document as genuine."

Oaks cites Barrett v. Radjabi-Mougadam, 39 So. 3d 95 (Ala. 2009), to illustrate how Rule 901(a) applies to a motion for a summary judgment, which, we have held, is analogous to a motion to compel arbitration. See TranSouth Fin. Corp. v. Bell, 739 So. 2d 1110, 1114 (Ala. 1999). In Barrett, the plaintiff sued his sister-in-law, alleging breach of contract. He filed a motion for a summary judgment to which he attached unauthenticated copies of letters he alleged were from his sister-in-law to establish the existence of a contract for a loan. The sister-in-law moved to strike the unauthenticated letters. The trial court, however, considered the letters in entering a summary judgment for the plaintiff. Referring to the requirements of Rule 901, this Court held that copies of letters that did not "include any statement or certification that they [were] true copies of the original letters" were "not admissible in support of [the plaintiff's] motion for a summary judgment." 39 So. 3d at 99. Because "the trial court's judgment was based, at least in part, on ‘material that would [not] be admissible at trial,’ " this Court reversed the summary judgment. 39 So. 3d at 100 (quoting Purvis v. PPG Indus., Inc., 502 So. 2d 714, 715 (Ala. 1987) ) (brackets in Barrett ).

Parkerson does not contend that the September 2015 agreement was authenticated, but it argues that the trial court nevertheless acted within its discretion in considering the September 2015 agreement when ruling on the motion to compel arbitration. All that is required for the trial court to consider the evidence, Parkerson contends, is a possibility that the evidence will "be reduced to an admissible form at trial." Parkerson's brief, pp. 9, 11. Remarkably, Parkerson does not attempt to distinguish Barrett, a controlling precedent, in which this Court held that a trial court should not consider, even in part, unauthenticated documents submitted in support of a motion for a summary judgment when the authenticity of those documents is contested. Instead,...