Ex Parte Conference America, Inc.
Ex Parte Conference America, Inc.
Opinion
Conference America, Inc., petitions for a writ of mandamus directing the trial court to vacate its order compelling arbitration of its claims against NCI Information Systems, Inc., and its employee, James Tindell (collectively, "NCI"). Conference America maintains that arbitration is inappropriate because its claims, though related to a prior contract that did contain an arbitration clause, directly arise from a subsequent contract that did not contain an arbitration clause. The subsequent contract clearly stated that it constituted the "entire agreement" between the parties. We grant the petition.
"[A]ll claims, disputes, controversies and other matters in question between the parties arising from or relating to this Agreement, which cannot be resolved through consultation and negotiation, shall be settled by binding arbitration in accordance with the Rules of the American Arbitration Association in effect at the time arbitration is demanded."
(Emphasis added.) NCI completed the February Contract to Conference America's satisfaction, and Conference America paid NCI in full.
In April 1996, after NCI had completed its analysis of Conference America's business and had developed the Plans, Conference America entered into a second contract with NCI (the "April Contract"), in the form of a purchase order.1 The April Contract was separate and distinct from the February Contract; it provided that NCI would perform the extensive work necessary to implement the Plans, in exchange for $223,210. Each of the Plans was expressly incorporated into the April Contract. The April Contract did not include an arbitration clause. It did, however, include an "entire agreement" clause, which provided in pertinent part:
"Acceptance of this purchase order shall be unqualified, unconditional and subject to and expressly limited to the terms and conditions hereon. We shall not be bound by additional provisions at variance herewith that may appear in your quotation, acknowledgement, invoice or any other communication from you to us unless such a provision is expressly agreed to in a writing signed by us. Our acceptance or payment for material shipped shall constitute acceptance of such material subject to the provisions herein, only, and shall not constitute acceptance of any counterproposal *Page 955 submitted by you not otherwise accepted in a writing signed by us. Upon acceptance this purchase order shall constitute the entire agreement between us and may not be modified or rescinded except by a writing signed by both of us."
(Emphasis added.) NCI did not complete the April Contract to the satisfaction of Conference America, and Conference America did not pay NCI in full for the implementation of the Plans.
In December 1996, Conference America sued NCI, alleging breach of contract and fraud. Specifically, Conference America alleged that NCI had failed to properly implement the Plans and that NCI had misrepresented to Conference America that NCI had the staff expertise to perform the April Contract. The trial court granted NCI's motion to stay the proceeding and compel arbitration. Conference America filed this mandamus petition.
Section 2 of the Federal Arbitration Act provides in pertinent part:
"A written provision in any . . . contract evidencing a transaction involving interstate commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . shall be valid, irrevocable, and enforceable. . . ."
The terms of the February Contract prove that the parties intended to arbitrate "all claims . . . arising from orrelating to this Agreement." (Emphasis added.) Were this the only language before us, we would have little difficulty concluding that Conference America's claims would be subject to arbitration. Conference America's claims concern the proper implementation of the Plans that NCI produced pursuant to the February Contract. Thus, the subject matter of Conference America's claims concerning the implementation of the Plans clearly "relates to" the February Contract under which NCI produced those Plans. See Reynolds Reynolds Co. v. KingAutomobiles, Inc.,
The February Contract, however, is not the only contract between the parties. The subsequent April Contract, from which the claims directly arise, contains no arbitration clause. Still, absent indications to the contrary in the April Contract, we would hold that Conference America's claims would be subject to the arbitration clause in the February Contract, because of the close relation of the subject matter of both contracts. See *Page 956 J.J. Ryan Sons, Inc. v. Rhone Poulenc Textile, S.A.,
The April Contract, however, contains an "entire agreement" clause, which states that the April Contract "shall constitute the entire agreement between us." (Emphasis added.) General canons of contract construction require that "if in its terms a contract is plain and free from ambiguity, then there is no room for construction and it is the duty of the court to enforce it as written." Ex parte South Carolina Ins. Co.,
Moreover, this Court has specifically applied the plain meaning interpretation of "entire agreement" clauses to determine whether parties agreed to arbitrate claims. InCrown Pontiac, Inc. v. McCarrell,
Conference America and NCI did not agree to arbitrate claims arising out of the April Contract. They did not include an arbitration clause in the April Contract. They did not expressly or by implication incorporate the February Contract and its arbitration clause into the April Contract. See BenCheeseman Realty Co. v. Thompson,
Conference America has demonstrated a clear legal right to the order sought. The trial court is directed to vacate its order compelling Conference America to arbitrate its claims against NCI.
WRIT GRANTED.
HOOPER, C.J., and MADDOX, HOUSTON, and LYONS, JJ., concur.
ALMON, SHORES, KENNEDY, and COOK, JJ., concur in the result.
Reference
- Full Case Name
- Ex Parte Conference America, Inc., an Alabama Corporation. (Re Conference America, Inc., an Alabama Corporation v. Nci Information Systems, Inc., a Foreign Corporation and James U. Tindell).
- Cited By
- 49 cases
- Status
- Published