Wolff Motor Co. v. White
Wolff Motor Co. v. White
Opinion
Wolff Motor Company, Pete Wolff III, and Joe Powell (hereinafter referred to collectively as "Wolff") appeal from the trial court's denial of their motion to compel arbitration of the claims filed against them by Stephen M. White and Linda K. White. The trial court denied Wolff's motion to compel arbitration on the ground that the Whites' purchase from Wolff of a vehicle used to transport automobiles did not substantially affect interstate commerce. We reverse and remand.
Wolff Motor Company buys vehicles in Florida, Alabama, Louisiana, Georgia, and Mississippi and resells them to buyers in Alabama and other surrounding states. Wolff has its principal place of business in Evergreen, Alabama. Wolff purchased a 1994 GMC 3500 Rollback tow truck ("the car-hauler") from Musick Enterprises d/b/a Suncoast Wholesale in Pensacola, Florida. Wolff used the car-hauler to haul cars in Florida, Mississippi, Georgia, and Alabama.
On October 27, 2000, Stephen White negotiated the purchase of the car-hauler from Wolff. Stephen White told Wolff that he operated a wrecker business in Flomaton, Alabama, and in Century, Florida, and that he intended to use the car-hauler to haul cars for his business.
Stephen White directed Wolff to complete the paperwork for the purchase of the car-hauler showing Stephen White *Page 1131 and/or Linda White as the buyer. Wolff obtained the Whites' credit information from Equifax Credit Information Services in Atlanta, Georgia. Wolff attempted to obtain financing for the Whites through Firstar Bank, N.A., in Oshkosh, Wisconsin. Firstar declined to provide financing, but Wolff ultimately was able to secure a loan through the Escambia County Bank in Alabama by which the Whites could purchase the car-hauler. Wolff Motor Company and Stephen White executed an arbitration agreement in connection with the sale and purchase of the car-hauler.
On February 26, 2002, the Whites sued Wolff, alleging negligent, reckless, wanton, and/or intentional misrepresentation or suppression of material facts concerning the condition of the car-hauler at the time of the sale. The gravamen of the Whites' complaint is that the 1994 GMC 3500 Rollback tow truck they purchased from Wolff was manufactured and marketed as a commercial car-hauler but has proven unsuitable for that use; the Whites allege that they have been damaged because they have had to have the truck repaired, causing their business to lose money while the car-hauler was out of service during those repairs.1 Wolff moved to compel arbitration of the Whites' claims against it. The trial court denied Wolff's motion, finding that its sale of the car-hauler to the Whites did not substantially affect interstate commerce. Wolff appeals.
"This Court reviews de novo a trial court's denial of a motion to compel arbitration." Homes of Legend, Inc. v. McCollough,
The parties agree that Stephen White signed an arbitration agreement when he purchased the car-hauler from Wolff Motor Company. Wolff argues that this transaction is governed by the Federal Arbitration Act,
Section 2 of FAA provides, in pertinent part:
"A written provision in . . . 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."
Section 2 "has the effect of preempting conflicting Alabama law, in particular Ala. Code 1975, §
Wolff argues that the trial court erred when it relied on this Court's decision in Sisters of the Visitation v. Cochran Plastering Co.,
In Citizens Bank, the Supreme Court of the United States held thatSisters of the Visitation expressed an "improperly cramped view of Congress' Commerce Clause Power," that "appears to rest on a misreading of our decision in United States v. Lopez,
In Citizens Bank, Alafabco, a construction company, sued Citizens Bank alleging, among other causes of action, fraud and breach of fiduciary duty. Alafabco argued in its complaint that it "detrimentally '"incur[red] massive debt"' because [Citizens Bank] had unlawfully reneged on its agreement to provide capital sufficient to complete" one of Alafabco's construction projects.
For each of the three reasons stated in Alafabco, and for a fourth reason, the transaction in this case sufficiently "involves commerce" to fall within the scope of the FAA.4 First, this case involves interstate commerce because both of the commercial enterprises in this case regularly deal in interstate commerce. Although the car-hauler at issue in this case was sold in Alabama by an Alabama resident to an Alabama resident, both Wolff Motor Company and the Whites regularly do business throughout the Southeast. Wolff Motor Company buys vehicles in Florida, Alabama, Louisiana, Georgia, and Mississippi, *Page 1134
and the Whites conduct business in Alabama and Florida. In CitizensBank, the Supreme Court of the United States found that the transaction at issue there fell within the scope of the FAA because "Alafabco engaged in business throughout the southeastern United States."
Second, this transaction involves interstate commerce because Wolff Motor Company purchased substantial quantities of goods that have moved in interstate commerce. In this case, Wolff Motor Company engaged in interstate transactions in order to help the Whites finance their purchase of the car-hauler.5 Wolff regularly purchases vehicles 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,
Third, this case involves commerce because the "general practice" of the transaction at issue was of the sort subject to Congress's Commerce Clause power. The Whites purchased the car-hauler from Wolff Motor Company for use in their wrecker business, which operates in both Alabama and Florida.6 Pete Wolff III stated in his affidavit that he purchases vehicles for Wolff Motor Company in Florida, Alabama, Louisiana, Georgia, and Mississippi. He also stated that he has sold vehicles to people who live in states other than Alabama. The automobile business in the aggregate involves interstate commerce. See United Statesv. Evans,
Fourth and finally, as Wolff argues, a car-hauler is an instrumentality of commerce. "The automobile, if anything, is the paradigm of modern interstate commercial activity in the United States. . . . '[C]ars are themselves instrumentalities of commerce.'" United States v. McCoy,
For all these reasons, we agree with Wolff that the trial court erred when it denied the motion to compel arbitration.
The Whites have argued that even if Wolff is entitled to arbitrate this dispute, Linda White, as a nonsignatory to the arbitration agreement, cannot be forced to arbitrate her claims against Wolff. See Cook's PestControl, Inc. v. Boykin,
In Infiniti of Mobile, Inc. v. Office,
Finally, the Whites argue that Joe Powell, an employee of Wolff Motor Company, may not compel them to arbitrate their claims against him because he did not sign the arbitration agreement.10 See Jack IngramMotors, Inc. v. Ward,
We reverse the trial court's order denying Wolff's motion to compel arbitration and remand for the trial court to enter an order staying the proceedings and compelling the Whites to arbitrate their dispute with Wolff Motor Company, Pete Wolff III, and Powell.
REVERSED AND REMANDED WITH INSTRUCTIONS.
HOUSTON, BROWN, HARWOOD, WOODALL, and STUART, JJ., concur.
LYONS, J., concurs in the result.
MOORE, C.J., and JOHNSTONE, J., dissent.
"During the negotiations concerning the potential purchase of the foregoing vehicle, [Wolff was], at all times, possessed of full knowledge concerning the state of mechanical disrepair within which the vehicle existed, which caused the same to be unfit for the purposes for which it was manufactured and marketed.
". . . .
"As a result of the purchase and ownership of the vehicle, the [Whites] have been damaged through the expenditure of significant repair bills and loss of income while the vehicle was forced to be taken out of service for major repairs."
"In describing Congress's power over instrumentalities, `or persons or things in interstate commerce,' the Lopez Court [United States v. Lopez,
514 U.S. 549 (1995)] noted that regulation and protection are permissible `even though the threat may come only from intrastate activities.' 514 U.S. at [559],115 S.Ct. at 1629 . . . . Although it might seem anomalous for the Court to have allowed regulation of activities involving instrumentalities that, even in the aggregate, do not substantially affect interstate commerce, such a result is perfectly in keeping with the purposes underlying the Commerce Clause. Instrumentalities of interstate commerce — e.g., cars, trains, airplanes, see [United States v.] Bishop, 66 F.3d [569,] 588 [(3d Cir. 1995)] — retain the inherent potential to affect commerce, unlike other objects of regulation. Thus, even if a particular activity involving an instrumentality might not, through repetition elsewhere, substantially affect interstate commerce during the moment of regulation, the activity still falls within Category Two because the object of regulation contains the unique capacity to affect commerce at some future point in time."
Wolff also concedes that in Tefco, 793 So.2d at 759-60, and KeelMotors, Inc. v. Tolbert,
"The provision of towing and road services for the national highway system is essential to the free flow of traffic on that system. The fact that such services are a small part of appellee's business renders them no less important to interstate commerce. Even if appellee's contribution to interstate commerce was, by itself, quite small, we cannot ignore the cumulative effect that the many small companies in appellee's position have upon commerce between the states. By regularly servicing vehicles on the Interstate and U.S. Highways, appellee has become part of an industry the cumulative effect of which upon interstate commerce is substantial. . . . The fact that any given, or every given, company's contacts with interstate commerce are extremely small is irrelevant."
Reference
- Full Case Name
- Wolff Motor Company v. Stephen M. White and Linda K. White.
- Cited By
- 49 cases
- Status
- Published