Performance Builders, LLC v. Lopas

341 So.3d 1084

PERFORMANCE BUILDERS, LLC; Chris White ; Shana Tyler Clark; and DSKAT Holdings, LLC, d/b/a A-Pro Home Inspection Services Birmingham

v.Scott LOPAS and Janet Lopas

1190977

Supreme Court of Alabama.

May 28, 2021

Robert S. Elliott of The Elliott Firm, LLC, Birmingham, for appellants.

F. Michael Haney of Inzer, Haney, McWhorter, Haney & Skelton, LLC, Gadsden, for appellees.

MENDHEIM, Justice.

Scott Lopas and Janet Lopas commenced an action in the Etowah Circuit Court against, among others, Performance Builders, LLC, Chris White, Shana Tyler Clark, and DSKAT Holdings, LLC, d/b/a A-Pro Home Inspection Services Birmingham (collectively referred to as "the movants") asserting various causes of actions based on the inspection, appraisal, and sale of a piece of real property purchased by the Lopases.¹ The movants filed a motion to compel arbitration of the Lopases’ claims, which the circuit court denied. The movants appeal the circuit court's order denying their motion to compel arbitration.

Facts and Procedural History

On May 1, 2018, Scott Lopas entered into a contract for the purchase of real property located in Gadsden. The contract was contingent upon the property passing an inspection. Christi Hicks, a realtor hired by the Lopases to aid them in the purchase of the property, recommended that the Lopases hire White and his company, Performance Builders, to conduct the inspection. White's affidavit testimony indicates that he performs "home inspections under the brand name of A-Pro Home Inspection[ Services, LLC,] as an authorized agent of the A-Pro franchisee for the State of Alabama." DSKAT Holdings, LLC, d/b/a A-Pro Home Inspection Services Birmingham ("DSKAT"), is the A-Pro Home Inspection Services, LLC ("A-Pro"), franchisee for the State of Alabama; A-Pro is a Louisiana company. Janet Lopas's affidavit testimony indicates that, before the Lopases contacted White, she had "reviewed ... information on the A-Pro internet site" concerning certain guarantees purportedly offered for inspections performed; Janet attached to her affidavit testimony a printout of the content of the Internet site she visited.²

There is no dispute that the Lopases contacted White, that the Lopases hired White to conduct an inspection of the property, that White conducted an inspection of the property, or that the Lopases paid White for the inspection. There is, however, a dispute as to the agreement between the parties concerning the completed and paid-for inspection. Specifically, there is disagreement as to whether the Lopases signed an arbitration agreement.

White's affidavit testimony states that his "[i]nteractions with clients occur[ ] over telecommunications and internet networks." White's affidavit testimony further states that "A-Pro ... licenses the ... software" that White uses to interact with clients. The affidavit testimony of Clark, the sole owner of DSKAT, states that she "authorize[s] and administer[s] independent contractors who are licensed home inspectors and operate under the brand name of A-Pro Home Inspections," such as White and his company, Performance Builders. Clark's affidavit testimony further states that she "authorize[s], supervise[s], and administer[s] the use of the automated software system owned and licensed by A-Pro," which is called the Inspection Support Network ("the ISN"). White used the ISN in his interactions with the Lopases.

Clark's affidavit testimony states that the ISN documented White's various interactions with the Lopases and that Clark, by reviewing the Lopases' "ISN profile," was able to verify that specific events occurred. Clark's affidavit testimony indicates that Scott or his agent contacted White and requested an inspection of the property.³ In response, White sent Scott the following e-mail on May 6, 2018:

"Hello Scott,

"....

"This email contains a link to the [i]nspection [a]greement necessary for the inspection. Please insert your initials and scroll to the bottom of the page to sign using your computer's mouse and send it back to us by clicking on ‘Submit Signature’ buttons at the bottom. It is very important we receive this paperwork back in our office in a timely manner along with payment as we are unable to release your report without them.

"Click to view and sign your agreement online!

"The total fee for this inspection is $369.00

"Click to pay online."

Clark's affidavit testimony states that the Lopases "accessed and scrolled over the entire [i]nspection [a]greement to reach the field at the bottom where [Scott] executed the [i]nspection [a]greement by electronic signature then clicked on the ‘Submit Signature’ button at the bottom of the page on May 7, 2018." The inspection agreement defines Scott as the client, and an electronic signature appears in the "client" signature block of the inspection agreement. The inspection agreement includes an arbitration clause, which states:

"ARBITRATION: Any dispute arising out of the inspection, report or the interpretation of this agreement, except for non-payment of the inspection fee, shall be resolved in accordance with the Rules of the American Arbitration Association. The parties shall select a mutually agreed upon arbitrator who is a home inspector certified by the International Society of Home Inspectors. If the parties are unable to agree upon an arbitrator, either party may request that a certified home inspector be selected by the International Society of Home Inspectors or American Society of Home Inspectors to arbitrate the proceedings. Such selection shall be binding upon the parties. The prevailing party shall be awarded all arbitration costs."

The inspection agreement specifically states that "[t]his inspection is not considered to be an expressed or implied guarantee or warranty of any kind regarding the condition of the property, its systems or components."

The Lopases paid the $369 inspection fee on May 7, 2018. Clark's affidavit testimony states that the Lopases "received a copy of the [i]nspection [a]greement they signed electronically as well as a receipt." White completed the inspection of the property on May 7, 2018, and completed the inspection report, which was then made available to the Lopases via the ISN. Clark's affidavit testimony states that the ISN "[i]mposes controls on client access to the inspection report by requiring payment of the inspection fee and execution by electronic signature of the inspection agreement before releasing the inspection report to the clients." Clark's affidavit testimony further states that the

"ISN requires clients to access, review and sign the inspection agreement through automated prompts that prohibit clients going to the next step in the procedure until they compete the required sequence of events to gain access [to the inspection report]. This means clients are required to access and review the [inspection] agreement before they are able to make payment."

Janet's affidavit testimony states that she received the inspection report and a receipt for the payment of the inspection fee but that "[n]either ... Scott nor I signed the receipt or any other document with the report." Janet's affidavit testimony also states that, "[b]efore [the Lopases] made payment and before the inspection, neither White nor anyone from A-Pro told me that any disputes had to be arbitrated." Scott did not file an affidavit.

Shortly after moving into the property on July 4, 2018, the Lopases began "having serious concerns about very unsteady and sagging floors," issues that were apparently not documented in White's inspection report. Janet's affidavit testimony indicates that she contacted White to report the issues with the property but that White did not contact the Lopases "regarding [their] concerns or [go] to [their] house to examine it."

Accordingly, on December 20, 2018, the Lopases filed a complaint that, as amended, asserted the following claims against White, Performance Builders, Clark, and DSKAT, among others: misrepresentation, negligence, wantonness, breach of contract, breach of warranty, and fraud. On January 16, 2019, White and Performance Builders filed an answer asserting, among other things, that the Lopases’ claims "are due to be arbitrated by agreement of the parties."

On July 15, 2019, White and Performance Builders filed a motion to compel arbitration. White and Performance Builders argued that the inspection agreement contains an arbitration clause, that the transaction affects interstate commerce,⁴ and that Scott electronically signed the inspection agreement. They further argued that the reference in the arbitration clause of the inspection agreement to the Rules of the American Arbitration Association "is clear and convincing evidence of [the parties'] intent to submit all issues of arbitrability to an arbitrator."

On December 12, 2019, the circuit court, ex mero motu, ordered the parties to mediate the case. On February 14, 2020, the parties engaged in mediation but could not reach a resolution of the Lopases’ claims. On February 18, 2020, White and Performance Builders filed a motion to stay the proceedings pending the circuit court's ruling on their motion to compel arbitration. In their motion to stay, White and Performance Builders stated that, "[p]rior to mediation, all parties assured White and Performance Builders in writing that participation in mediation would not be cited as grounds to assert a waiver of the right to arbitration."

On March 3, 2020, the Lopases filed a response to White and Performance Builders’ motion to compel arbitration. The Lopases argued that Scott did not sign the inspection agreement; they did not address the specific allegations contained in Clark's affidavit testimony, detailed above. The Lopases further argued that the inspection agreement "must be characterized as a contract of adhesion given (a) its boilerplate nature, (b) the fact that it is entirely inconsistent with the ... guarantee, and (c) was part of a receipt that came after ...