Valerio's Auto Sales, Inc. v. Flowers

375 So.3d 772

VALERIO’S AUTO SALES, INC.

v.Audriana FLOWERS

1210295

Supreme Court of Alabama.

October 21, 2022

M. Andrew Gable of Keith Rodgers & Associates, LLC, Montgomery, for appellant.

Submitted on appellant’s brief only.

MITCHELL, Justice.

Audriana Flowers sued Valerio’s Auto Sales, Inc., in the Montgomery Circuit Court, claiming that Valerio’s wrongfully attempted to repossess a vehicle it had sold her. Citing an arbitration provision in the contract Flowers signed at the time of purchase, Valerio’s moved the trial court to stay the proceedings and to compel arbitration. The trial court denied the motion. Valerio’s appeals. We reverse and remand.

Facts and Procedural History

Flowers purchased a 2013 Chevrolet Traverse from Valerio’s, financing the purchase over 40 months. The sale and financing contract authorized Valerio’s to "repossess the vehicle" if Flowers failed "to pay any installment when due." The contract also contained an arbitration provision stating that "[a]ny Dispute shall … be resolved by binding arbitration and not in court." The arbitration provision further defined a "Dispute" as "any contract, tort, statutory, or other claim or dispute between you and Seller arising out of or relating to your credit application, this contract, or any resulting transaction or relationship," and it specifically stated that "Dispute" included "any disagreement over the interpretation and scope of this clause, or the arbitrability of the Dispute."

About a month after the purchase, Flowers’s vehicle began having transmission problems. Valerio’s agreed to replace the transmission and took possession of the vehicle, but it was unable to obtain a replacement transmission for over two months. Flowers alleges that when she asked about a loaner vehicle she was told that Valerio’s could not provide one but that she could forgo making her monthly payments until her vehicle was repaired. Flowers then retook possession of her repaired vehicle.

The following month, Valerio’s retained a company to repossess Flowers’s vehicle because of a missed payment. When the company’s agents went to Flowers’s address to get the vehicle, there was an altercation with Flowers and her family. Flowers ultimately left with the vehicle before it could be taken.

The next day, Flowers went to Valerio’s office to complain. She says that Valerio’s did not offer a valid reason for the attempted repossession but that she ended up making a payment because she needed her vehicle. Sometime later, Flowers was arrested on robbery charges stemming from the altercation with the individuals who had attempted to repossess her vehicle.

[1] Flowers filed a pro se complaint against Valerio’s based on its attempt to repossess the vehicle. Valerio’s did not immediately retain counsel and file a formal answer but, instead, submitted an unsigned letter to the court explaining its version of events.¹ After neither party appeared for a virtual scheduling hearing, the trial court set the matter for a bench trial.² When the case was called on the trial date, only Flowers appeared. Accordingly, the trial court took testimony from her and then entered a default judgment against Valerio’s for $100,000.

Four days later, Valerio’s -- now represented by counsel - moved the trial court to set aside the default judgment. The trial court granted that motion and scheduled another bench trial. Six weeks before the rescheduled trial date, Valerio’s moved the court to stay the proceedings and to compel arbitration in accordance with the arbitration provision in the parties’ contract. The trial court denied Valerio’s motion that same day without stating a rationale. After the trial court likewise denied its motion to reconsider, Valerio’s appealed the denial of its motion to compel arbitration to this Court.

Standard of Review

[2] A trial court’s order denying a motion to compel arbitration "is appealable as a matter of right." Rule 4(d), Ala. R. App. P. We review such orders de novo to determine, first, whether the appealing party submitted evidence to the trial court proving both the existence of a contract calling for arbitration and, second, that the contract evidences a transaction affecting interstate commerce. Oaks v. Parkerson Constr., LLC, 303 So. 3d 1141, 1144 (Ala. 2020). If those requirements are met, we then consider any arguments and evidence submitted by the party opposing arbitration that would indicate that the arbitration provision in question is not valid or does not apply to the current dispute. Id.

Analysis

[3] In support of its motion to compel arbitration, Valerio’s submitted to the trial court a copy of the contract Flowers signed when she purchased her vehicle; that contract contained the arbitration provision described above. Valerio’s further noted in its motion this Court’s caselaw indicating that the sale of a used vehicle is in every instance a transaction affecting interstate commerce. See, e.g., Edwards v. Costner, 979 So. 2d 757, 762 (Ala. 2007) ("It is unquestionable that the sale of an automobile, either new or used, ‘use[s] the channels of interstate commerce,’ ‘involve[s] … things in interstate commerce,’ and ‘involve[s] general activities having a substantial effect on interstate commerce.’ " (quoting McKay Bldg. Co. v. Juliano, 949 So. 2d 882, 885 (Ala. 2006))); Dan Wachtel Ford, Lincoln, Mercury, Inc. v. Modas, 891 So. 2d 287, 292 (Ala. 2004) ("This Court has previously recognized that the purchase of a used automobile from an automobile dealer was a transaction that involved interstate commerce."). Thus, Valerio’s met its initial burden of showing that it was entitled to an order granting its motion to compel arbitration.³

[4] The trial court denied Valerio’s motion to compel arbitration the same day it was filed and denied Valerio’s motion to reconsider that ruling the day after that motion was filed. Under these circumstances, it is not surprising that Flowers -- who at the time was represented by counsel -- never submitted any argument or evidence to the trial court opposing arbitration. The trial court did not state its rationale for denying the motion to compel arbitration, and Flowers, who is now proceeding pro se, has not filed a...