United States District Court, S.D. Alabama, Southern Division
FAIRHOPE PIGGLY WIGGLY-INC., and THOMAS EUGENE CAIN, Plaintiffs,
PS 2 LED, INC., a Texas corporation, and PINNACLE LED SOLUTIONS, LLC, Defendants.
K. DuBOSE CHIEF UNITED STATES DISTRICT JUDGE
matter is before the Court for a non-jury trial on the request
for Declaratory Judgment wherein Plaintiffs seek a
declaration that they are not bound to arbitrate their
dispute with Defendants.
Findings of Fact
case concerns a dispute regarding an LED lighting project at
Plaintiffs' Fairhope grocery store. (Doc. 22). That
dispute is secondary to the dispute over whether the parties
are contractually bound to resolve their dispute in
arbitration -- the basis for Plaintiffs' declaratory
judgment claim (First Cause of Action). (Doc. 22 at 4 at
relevant time period, 2014-1016, Thomas Eugene Cain (Cain)
owned several businesses including T. Cain Grocery, Inc.,
Piggly Wiggly Spanish Fort, Inc. (P.W. Spanish Fort), Piggly
Wiggly-Loxley, Inc. (P.W. Loxley), Piggly Wiggly-Fairhope,
Inc. (P.W. Fairhope) and Piggly Wiggly-Foley Inc. (P.W.
Foley). The first contact Cain had with Defendant PS 2 LED,
Inc. (Pinnacle) was in relation to P.W. Fairhope. Cain wanted
to put new lights in the P.W. Fairhope store and selected
Pinnacle for the project. Pinnacle conducted an audit of the
P.W. Fairhope store in November 2014 to assess the lighting
needs and then submitted a proposal for the installation of
LED lighting to Cain on June 11, 2015. (Def's Tr. Ex. L).
Also during this time period, Pinnacle assisted Cain in
applying for a grant from the United States Department of
Agriculture (USDA) to help fund the transition to LED
lighting in the P.W. Fairhope location, as well as other
in June 2015, Cain asked that the P.W. Fairhope project be
put on hold and that Pinnacle install LED lighting in the new
Spanish Fort location - the P.W. Spanish Fort. For the P.W.
Spanish Fort project, a thirteen page “Turnkey
Agreement for Piggly Wiggly Spanish Fort” (Turnkey
Agreement) was signed in November 2015. (Def's Tr. Ex.
A). The Agreement was executed among Pinnacle Solutions, Bay
Shore Electric, and Piggly Wiggly Spanish Fort, Inc.
(“Buyer”) and is signed by Cain for Piggly Wiggly
Spanish Fort, Inc. (Id. at 1). The Turnkey Agreement
is the standard agreement Pinnacle uses for all of its
projects, with the exception of an added provision found at
2.10 concerning “additional worksites.”
(Id. at 2 at ¶2.10). Provision 2.10 provides:
2.10 Worksite or Site: “Worksite” or
“Site” means the physical addresses where
Products are to be shipped and Services to be performed: 315
Spanish Fort Blvd., Spanish Fort, Alabama 36527. Buyer may
add additional Worksites by issuing an Order to Pinnacle for
Products. All such additional Orders and Worksites shall be
subject to this Agreement…..
(Id.) The Turnkey Agreement defines Order as
“such purchase order or paper or electronic records as
Buyer may send to Pinnacle for the purpose of ordering
Products hereunder at a particular Site of Buyer, including
but not limited to Letters of Intent.” (Id. at
1 at ¶2.5). The Turnkey Agreement also contains
Pinnacle's standard arbitration provision:
“…[a]ny dispute, controversy, or claim relating
to this Agreement or breach thereof, shall be submitted to
arbitration….[t]his arbitration provision is intended
to be construed as broadly as permitted by law.”
(Id. at 4 at ¶5.2).
trial Bill Lane (Lane), Vice President of Business
Development for Pinnacle, testified that provision 2.10 of
the Turnkey Agreement was added to make it easier for Cain to
request that LED lighting be installed in his other grocery
store locations. However, Lane did not discuss this provision
with Cain, and Lane was not aware of whether any other
employee of Pinnacle discussed this provision with Cain. For
Cain's part, he admitted at trial that he may not have
read provision 2.10 and certainly did not pay any attention
to it if he did read it.
the P.W. Spanish Fort project was completed, on March 24,
2016, Cain signed a one page Letter of Acceptance for LED
lighting to be installed at the P.W. Fairhope. (Def's Tr.
Ex. B). The Letter of Acceptance was an acceptance of an
offer by Pinnacle to install LED lighting for a certain price
and under certain terms. The Letter of Acceptance, which was
drafted by Pinnacle, was executed between “Pinnacle
Solutions” and “Cain's Grocery.”
(Id.) Lane testified that the Letter of Intent was
only one page because it was Pinnacle's intent for the
2015 Turnkey Agreement to govern the installation of the LED
lighting in P.W. Fairhope. However, nothing in the Letter of
Acceptance indicates this intent. Lane also testified that
Pinnacle did not know that for each of Cain's grocery
store locations, a separate legal entity operates each
the installation of LED lighting in P.W. Fairhope, Pinnacle
invoiced P.W. Fairhope by sending an August 17, 2016 invoice
for $148, 031.79 to the bank financing the P.W. Fairhope
project. (Def's Tr. Ex. D). P.W. Fairhope had previously
designated the bank as its agent for the payment of invoices
on this particular project. The invoice included a statement
providing that by accepting delivery of the products, P.W.
Fairhope agreed to the terms of Pinnacle's Purchase
Agreement. (Def's Tr. Ex. D). The Purchase Agreement
referenced in the invoice included the same arbitration
provision found in the 2015 Turnkey Agreement.
the invoice was sent, a dispute developed about the total and
final amount owed by P.W. Fairhope. P.W. Fairhope made a
partial payment on the invoice to Pinnacle (paying $136,
231.02, leaving a balance of $11, 800.77).
November 22, 2016, Pinnacle filed an arbitration demand
against P.W. Fairhope before the American Arbitration
Association (AAA) for breach of contract and unjust
enrichment. An arbitrator was appointed and the parties were
scheduled to have a preliminary hearing conference with the
arbitrator, but Plaintiffs disputed the matter is subject to
arbitration and raised an objection to the proceeding.
December 15, 2016, Plaintiffs filed a five (5) count
complaint against “Defendant PS2 LED, Inc. d/b/a
Pinnacle LED Solutions, LLC” in the Baldwin County
Circuit Court, Alabama (05-CV-2016-901424.00), seeking
declaratory and equitable relief and damages for breach of
contract and fraud stemming from its performance with ...