Tefco Finance Co. v. Green
Tefco Finance Co. v. Green
Opinion
The defendants appeal from an order of the trial court denying their motion to compel arbitration. The defendants presented no evidence to the trial court indicating that the contract in this case involved interstate commerce; therefore, the Federal Arbitration Act ("FAA"),
Approximately one month after Green had purchased the Escort, it began to have mechanical problems. Green returned the Escort to T.R. Motors and asked Tefco to pay Adams and Williams Auto Center, Inc. ("AW"), to repair the Escort. On June 26, 1998, Green — according to Tefco — signed an agreement acknowledging that she had asked Tefco to pay AW for the repairs, and agreeing to repay Tefco by adding an additional $20 to each of her scheduled monthly payments. Thereafter, Green received from Tefco a statement that included the additional $20 charge.
Green sued Tefco, T.R. Motors, and AW, alleging fraud, fraudulent suppression, *Page 757 breach of contract, and negligence, asserting that she had never agreed to increase her monthly payments. Tefco and T.R. Motors (the "defendants") moved to stay the judicial proceedings, to compel arbitration, and to transfer the case from Macon County to Lee County.2
In support of their motion, the defendants filed, among other things, a copy of the arbitration agreement and the affidavit of Herman E. Moore, the vice president of both T.R. Motors and Tefco. The arbitration agreement provides, in pertinent part:
"In connection with the Customer(s) [sic] acquisition of the above described motor vehicle . . ., the Customer(s) and the Dealer mutually covenant, stipulate and agree, in connection with the resolution of any dispute arising out of the contract(s) entered into by the parties of and concerning the within described motor vehicle, as follows: That the vehicle described within was manufactured outside of Alabama; has operated and will continue to operate on interstate highways; has been traveling in interstate commerce; the manufacture, transportation, sale an[d] use thereof has been and will continue to be regulated by laws of the United States of America; and that the contract(s) entered into by the parties concerning said motor vehicle evidence transactions involving and affecting commerce. The undersigned agree that all disputes . . . resulting from or arising out of the sale transaction entered into, (including but not limited to: . . . the condition of the motor vehicle; the representations, promises, undertakings, warranties or covenants made by Dealer in connection with the sale of the motor vehicle, or otherwise dealing with the motor vehicle; the terms of financing in connection therewith . . .); that Dealer and the purchaser(s) agree to submit such disputes to BINDING ARBITRATION. . . . THIS ARBITRATION SHALL BE IN LIEU OF ANY CIVIL LITIGATION IN ANY COURT, AND IN LIEU OF ANY TRIAL BY JURY."
(Capitalization in original.) Moore's affidavit states, in pertinent part:
"4. On May 1, 1998, the Plaintiff, Pamela Green, purchased a used 1991 Ford Escort from T.R. Motors in Opelika, Alabama and financed the purchase through Tefco, also of Opelika, Alabama. . . . The plaintiff took possession of the automobile in Opelika, Alabama. . . .
"5. At the time of sale, the Plaintiff also executed several other documents, including an Alternative Dispute Resolution Agreement By Binding Arbitration wherein she agreed to arbitrate. . . .
". . . .
"11. Neither Tefco nor T.R. Motors does or has ever done business in the past in Macon County, Alabama. The automobile was purchased by the Plaintiff in Lee County, Alabama. The financing papers with T.R. Motors which were assigned to Tefco were executed by the Plaintiff in Lee County, Alabama. All negotiations leading to the sales and finance transaction occurred in Lee County, Alabama. The Plaintiff took possession of the automobile in Lee County, Alabama. The Plaintiff had the automobile repaired and executed the Repair Agreement in favor of Tefco in Lee County, Alabama. All of Tefco's and T.R. Motors' business in the present transaction occurred exclusively in Lee County, Alabama. Neither Tefco nor *Page 758 T.R. Motors has engaged or presently engages in any business in Macon County, Alabama with the Plaintiff or anyone else for that matter."
Green did not file a response to the defendants' motion. After conducting a hearing, the trial court denied the defendants' motion to compel arbitration, concluding that the "[d]efendants' business is [not] conducted in interstate commerce, which is a required showing before binding arbitration can take place."3
The defendants argue that the trial court erred in denying their motion to compel arbitration on the ground that their "business is [not] conducted in interstate commerce."4 A "party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration and proving that that contract involves a transaction affecting interstate commerce." Ex parte Caver,
The FAA provides:
"A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract."
The defendants argue that we should apply the principles stated in the main opinion in Hurst v. Tony Moore Imports, Inc.,
However, most recently in Southern United Fire Insurance Co. v.Knight,
We must determine whether Tefco met its burden of proving that the "contract involves a transaction affecting interstate commerce." Ex parteCaver,
AFFIRMED.
Moore, C.J., and Brown, Harwood, and Stuart, JJ., concur.
"Gender-motivated crimes of violence are not . . . economic activity. While we need not adopt a categorical rule against aggregating the effects of any noneconomic activity in order to decide these cases, thus far in our Nation's history our cases have upheld Commerce Clause regulation of intrastate activity only where that activity is economic in nature."
Reference
- Full Case Name
- Tefco Finance Company v. Pamela Green.
- Cited By
- 46 cases
- Status
- Published