Luther, Collier, Hodges & Cash, LLP – Attorneys at Law

Alabama Legal Updates – December 2015

Arbitration Unavoidable

Ameriprise Financial Services, Inc., and Robert Shackleford v. Paul D. Jones
and Eleanor G. Jones.
Arbitration compelled where claims dependent on the contract containing
arbitration provision.

In Ameriprise, the petitioner sought reversal of the trial court’s refusal to compel arbitration of the plaintiffs’ tort-of-outrage claim. At issue was an agreement between the defendant and decedent Charles Jones which contained an arbitration provision requiring all controversies arising between the parties to be arbitrated. The plaintiffs alleged that they were beneficiaries of the Ameriprise accounts made the basis of the agreement between Jones and Defendant, Jones having died prior to the suit being filed. The Plaintiffs sought to distinguish their tort-of-outrage claim as not dependent on the existence of the agreement containing the arbitration clause.

The Court noted that by acknowledging that they were bound to arbitration on some of their claims because they were seeking to claim benefits dependent upon the agreement, “the plaintiffs both necessarily established themselves as third-party beneficiaries of the agreement and rendered themselves subject to the accompanying burdens created thereby.” The Court emphasized that “[t]he language of the agreement refers to “any controversies” that arise between the parties and is not limited to those related to or arising from the agreement.” The Court conducted a fact-specific analysis, finding, “[t]he plaintiffs’ tort-of-outrage claim arises from conduct by the defendants that occurred in connection with the plaintiffs’ attempts to effect a beneficiary change under the agreement. Without the agreement, the plaintiffs would never have contacted Ameriprise, and Ameriprise would never have contacted law enforcement with concerns regarding whether the documents submitted to effectuate the change had been forged and Charles had been kidnapped.”

The Court ultimately issued a writ compelling arbitration, noting that “[t]he scope of the arbitration provision in the agreement is indisputably broad enough to encompass the plaintiffs’ tort of-outrage claim” and that “the events surrounding the change of beneficiary on the Ameriprise accounts form the basis for all of the plaintiffs’ claims.”

For a copy of the decision, see:

Seriously Inconvenient?

Ex parte Riverfront, LLC

Failure to establish forum was “seriously inconvenient” means parties must try suit
in Tuscaloosa County.

In Ex parte Riverfront, LLC, the petitioner sought a writ of mandamus to have an action transferred from Tuscaloosa County back to Etowah County. The Court has previously analyzed the issue when one of the parties petitioned to have the case transferred from Etowah to Tuscaloosa. In ruling on the first petition that the case should be transferred to Tuscaloosa, the Court noted that the forum-selection clause in the lease between the parties was valid and that no evidence has been presented to the trial court that Tuscaloosa was a “seriously inconvenient” forum. In the second petition, the petitioner argued that Tuscaloosa was a seriously inconvenient forum, noting that the property and restaurant made the basis of the litigation were over 100 miles from the Tuscaloosa County courthouse, while less than one mile from the Etowah County Courthouse.

In reviewing the petition, the Court stated the standard for determining whether a forum was seriously inconvenient: “In order to demonstrate that the chosen forum is seriously inconvenient, the party challenging the clause must show that a trial in that forum would be so gravely difficult and inconvenient that the challenging party would effectively be deprived of his day in court.” The court held that this issue had already determined, and that Tuscaloosa was not a “seriously inconvenient” forum. Additionally, the petitioner claimed that the action was due to be transferred pursuant to § 6-3-21.1, Ala. Code 1975, Alabama’s forum non conveniens statute. The Court found the argument unpersuasive noting that, “Section 6-3-21.1 only applies if there is more than one court “in which the action might have been properly filed.”” As the Court had previously determined that Tuscaloosa was the proper venue pursuant to the lease agreement, the statute was inapplicable.

In granting the writ of mandamus, and transferring the case back to Tuscaloosa County, the Court stated “[Petitioner] could have challenged Tuscaloosa County as a “seriously inconvenient” forum in the Etowah Circuit Court and before this Court in Riverfront I. Fish Market did not do so and may not now have a second bite at the forum apple and relitigate that issue.”

For a copy of the decision, see:

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