Ex Parte Smith
Ex Parte Smith
Opinion of the Court
Melvin Smith, Louise Pugh, Willie B. Johnson, and Joseph Collins, the plaintiffs in an action pending in the Macon Circuit Court, petition for a writ of mandamus directing the circuit court to vacate its order requiring arbitration of their claims against the defendant All Star Mobile Homes, Inc. We grant the petition.
On August 15, 1993, the plaintiffs were told that their credit application for the purchase of the mobile home had been approved and that they were required to pay an additional $7,550 down payment on the mobile home. *Page 705 They paid this amount to All Star on August 16, 1993; however, their credit had not actually been approved at that time.
In September 1993, All Star sold the mobile home that was the subject of the July 30 contract, i.e., the mobile home the plaintiffs had "reserved" with their down payment. All Star did not inform the plaintiffs of this until October 16, 1993, when an All Star agent at the Columbus location informed them that the mobile home had been sold to another customer and that they would have to choose another model. The plaintiffs chose a different model from All Star's sales lot in Phenix City, Alabama. They allege that an All Star agent told them that, as a down payment on this second mobile home, they could apply $5,000 of the $7,850 down payment they had already made on the first mobile home. They say the All Star agent told them that the contract for the purchase of the second mobile home would then be complete and that All Star would refund to them the remaining $2,850 from the down payment they had made on the first mobile home.
The plaintiffs went to All Star's Phenix City lot on October 16, 1993, and executed a new purchase agreement, which contained this statement: "Disputes arising out of this agreement are subject to compulsory and binding arbitration." All Star did not deliver the mobile home to the plaintiffs; rather, it later informed them that their credit application was not, after all, accepted, and it refunded $2,850 of the $7,850 down payment. All Star apparently did not return the remaining $5,000.
On January 24, 1994, the plaintiffs sued All Star, alleging fraud in the inducement, fraudulent suppression, and conversion of the unpaid portion of the down payment they had made on the mobile home. All Star answered the complaint approximately one month later, and the plaintiffs thereafter sought to begin discovery. From March 10, 1994, until November 14, 1994, the parties filed various discovery motions and conducted depositions. On November 14, 1994, All Star moved to stay the proceedings and to compel arbitration of the claims, pursuant to the arbitration agreement contained in the purchase agreement the plaintiffs had signed. The trial court granted this motion.
The plaintiffs argue that, while waiting nearly 10 months from the filing of the complaint to ask for arbitration, All Star consistently responded to their discovery requests; answered their amended complaint; and participated in their deposition of All Star's agent Spoonemore. Moreover, during that period All Star conducted its own deposition of Melvin Smith. All Star claims that it took Smith's deposition merely to verify Smith's signature on the purchase agreement as a prerequisite to moving to compel arbitration; however, the facts before us indicate that Smith's deposition is more than 200 pages long and focused on the evidence supporting Smith's claims.
All Star relies upon several cases in which defendants' considerable delays in moving to compel arbitration were held not to constitute a waiver. In one of them, Ex parte MerrillLynch, Pierce, Fenner Smith, Inc.,
In Ex parte McKinney,
All Star presented no evidence of circumstances that would justify its hesitation to seek arbitration of the plaintiffs' claims. Likewise, it presented no evidence that it was procedurally barred from doing so; the claims were not being litigated in another forum, as was the case in Merrill Lynch, and there were no nonarbitrable claims to be litigated before arbitration, as was the case in McKinney. The evidence indicates that All Star was fully aware of its right to compel arbitration, but delayed its request for arbitration merely because it could afford to delay, even as the plaintiffs spent time and money on litigation that All Star perpetuated. Further, even after the parties' depositions had been taken, All Star delayed moving to compel arbitration for three more months, while the plaintiffs' attorney continued to incur the expenses of developing the case for court. Once All Star finally determined that it was time to compel arbitration, the plaintiffs then incurred additional expenses to oppose the arbitration motion, both in the trial court and in this Court. The plaintiffs now owe their attorney over $1,400 for legal work that would not have been done if All Star had promptly moved to compel arbitration. Further, the plaintiffs have been obliged to add the ten-month delay into the time necessary to adjudicate their opposition to arbitration, thus unnecessarily postponing their obtaining any relief. Perhaps other consumers would be less tenacious in exercising their right to oppose arbitration, or even to seek relief at all, if the time required to obtain relief is extended by a defendant's choice to delay seeking arbitration. The fact that the plaintiffs have persisted does not change the fact that they have absorbed an unjustified delay in obtaining an adjudication of their claims.
Under these facts, we agree that All Star's delay in moving to compel arbitration constitutes a waiver of its right to arbitrate. The petition for the writ of mandamus is granted. The circuit court is directed to vacate its order compelling arbitration.
WRIT GRANTED.
ALMON, SHORES, KENNEDY, and COOK, JJ., concur.
HOOPER, C.J., and MADDOX, HOUSTON, and SEE, JJ., dissent.
Dissenting Opinion
I would deny the writ; therefore, I dissent.
In Companion Life Insurance Co. v. Whitesell Manufacturing,Inc.,
HOOPER, C.J., and MADDOX, J., concur.
Reference
- Full Case Name
- Ex Parte Melvin Smith (In Re Melvin Smith v. All Star Mobile Homes, Inc.).
- Cited By
- 14 cases
- Status
- Published