Harbar Constr. Co. v. Willis
Harbar Constr. Co. v. Willis
Opinion
The defendants, Harbar Construction Company and Denney Barrow, appeal from the trial court's denial of their motion to compel arbitration. The issue presented for review is whether the parties' sales contract and limited warranty agreements were contracts "evidencing a transaction involving commerce" within the meaning of
"14. Arbitration The Seller and the Buyer acknowledge that this Agreement necessarily involves interstate commerce by virtue of the materials and components contained in the Dwelling. Each of the undersigned hereby agrees that any dispute, controversy or claim arising out of, or relating to, this Agreement or the breach thereof shall be submitted to final and binding arbitration under the Arbitration rules (Binding) of the Better Business Bureau, Inc. The decision of the Arbitrator appointed thereunder shall be final and binding and judgment on the Award may be entered in any Court of competent jurisdiction. The fees and expenses incurred shall be shared equally by both parties. Payment of arbitration fees may be required in advance of any proceedings."
On that same day, the Willises signed a limited warranty agreement. That agreement contained, as an attachment, a separate "Arbitration/Alternative Dispute *Page 99 Resolution (ADR)" agreement, which the Willises signed. On September 14, 2001, the Willises signed another limited warranty agreement, which contained a separate agreement to arbitrate identical to the one attached to the first limited warranty agreement. The arbitration agreements attached to the limited warranty agreements provided, in pertinent part:
"a. The Buyer and Seller agree that should an impasse between the Buyer and Seller arise as to the Seller's obligations under this Limited Warranty Agreement to repair, replace or pay to the Buyer the reasonable cost of repairing or replacing any Latent Defect covered hereunder, both parties will submit to the Alternative Dispute Resolution (ADR) program offered by the Master Builder/Master Remodelers of the Greater Birmingham Association of Home Builders to negotiate a settlement. If this Procedure is not deemed satisfactory for either party, the next step is mediation or arbitration by the Better Business Bureau of Central Alabama.
"b. Any Controversy or claim arising from or relating to this Agreement, or the breach thereof, or any and all claims arising between the Seller and the Buyer, their successors, or assigns shall be settled by arbitration in accordance with the arbitration rules (Binding) of the Better Business Bureau, Inc., except as such rules may be modified herein. . . . The parties acknowledge and agree that the transactions contemplated by this Agreement, which include the use of materials and components from out of state in the Dwelling, involve interstate commerce as that term is used in the Federal Arbitration Act, 9 U.S.C. [§] 1 et seq."
On April 18, 2002, the Willises sued Harbar Construction, Barrow, and fictitiously named defendants involved in constructing the home, alleging breach of contract, breach of warranty, negligence, and wantonness. Specifically, they claimed that the defendants had failed to repair certain items, including the roof, that the Willises discovered were in need of repair during the preoccupancy inspection.
On September 20, 2002, Harbar Construction and Barrow filed a motion to compel arbitration, arguing that the parties had agreed to arbitration and that the parties had agreed that their transaction involved interstate commerce. Following a hearing on November 7, 2002, the trial court denied the motion. On November 18, 2002, Harbar Construction and Barrow filed a "motion to reconsider" the trial court's denial of their motion to compel arbitration. Attached to that motion were invoices, letters from suppliers, and bills of lading that, Harbar Construction and Barrow argued, showed that the underlying transaction affected interstate commerce because supplies used to construct the home came from out of state. The trial court denied the motion to reconsider. Harbar Construction and Barrow filed a notice of appeal with the supreme court. The appeal was transferred to this court by the supreme court, pursuant to §
In Sisters of the Visitation v. Cochran Plastering Co.,
While this appeal was pending, the United States Supreme Court decidedCitizens Bank v. Alafabco, Inc.,
"Congress' Commerce Clause power `may be exercised in individual cases without showing any specific effect upon interstate commerce' if in the aggregate the economic activity in question would represent `a general practice . . . subject to federal control.' Mandeville Island Farms, Inc. v. American Crystal Sugar Co.,
334 U.S. 219 ,236 ,68 S.Ct. 996 ,92 L.Ed. 1328 (1948)."
The FAA "embodies Congress' intent to provide for the enforcement of arbitration agreements within the full reach of the Commerce Clause."Perry v. Thomas,
In Wolff Motor Co. v. White, [Ms. 10111845, June 27, 2003]
In the present case, the transaction involved interstate commerce because Harbar Construction purchased substantial quantities of goods used in the construction of the house that have moved in interstate commerce. "[T]he Commerce Clause gives Congress the power to regulate local business establishments purchasing substantial quantities of goods that have moved in interstate commerce." Citizens Bank,
The trial court, in denying the motion to compel arbitration, did not have the benefit of the United States Supreme Court's recent pronouncement in Citizens Bank. However, we must reverse the trial court's order denying the motion to compel arbitration and remand the case for the trial court to enter an order staying the proceedings and compelling the Willises to arbitrate their dispute with Harbar Construction and Barrow.
REVERSED AND REMANDED.
CRAWLEY, THOMPSON, PITTMAN, and MURDOCK, JJ., concur.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.