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Daphne Automotive, LLC v. Eastern Shore Neurology Clinic, Inc.

Supreme Court of Alabama

August 11, 2017

Daphne Automotive, LLC, and Robin Sanders
v.
Eastern Shore Neurology Clinic, Inc., and Rassan Tarabein

         Appeal from Baldwin Circuit Court (CV-16-900535)

          SELLERS, Justice. [1]

         Daphne Automotive, LLC, and its employee, Robin Sanders (hereinafter sometimes collectively referred to as "the dealership"), appeal from an order of the Baldwin Circuit Court denying their motion to compel arbitration of the claims filed against them by Eastern Shore Neurology Clinic, Inc. ("Eastern Shore"), and Rassan Tarabein. We affirm.

         Facts and Procedural History

         Rassan Tarabein is the owner of Eastern Shore. Tarabein also owns another company--Infotec, Inc. Tarabein hired his nephew, Mohamad Tarbin, as an employee of Infotec. As part of the nephew's compensation, Tarabein agreed to provide him with the use of a vehicle for as long as he was employed with Infotec. Accordingly, Tarabein purchased, through Eastern Shore, a 2014 Toyota RAV4 sport-utility vehicle ("the vehicle") from Daphne Automotive; the total purchase price was $25, 000. Tarabein, the nephew, and the dealership agreed that the dealership would arrange for the vehicle to be titled in the nephew's name, but that Eastern Shore would be listed on the title as lienholder. In conjunction with the sale, the nephew signed a document entitled "Terms and Conditions, " i.e., the sales contract, which contained the following arbitration provision:

"Buyer/lessee and dealer agree that all claims, demands, disputes or controversies of every kind or nature between them arising from, concerning or relating to any of the negotiations involved in the sale, lease, or financing of the vehicle, the terms and provisions of the sale, lease, or financing agreements, the arrangements for financing ..., the performance or condition of the vehicle, or any other aspects of the vehicle and its sale, lease, or financing shall be settled by binding arbitration in accordance with the procedure set forth on separate Arbitration Agreement form."

(Emphasis added.)

         The stand-alone arbitration agreement referenced in the sales contract was signed by the nephew and the dealership and similarly provides:

"Buyer/lessee and dealer agree that all claims, demands, disputes or controversies of every kind or nature that may arise between them concerning any of the negotiations leading to the sale, lease or financing of the vehicle, terms and provisions of the sale, lease or financing agreement, arrangements for financing, purchase of insurance, purchase of extended warranties, or service contracts, the performance or condition of the vehicle, or any other aspects of the vehicle and its sale, lease, or financing shall be settled by binding arbitration conducted pursuant to the provisions of (9 U.S.C. Section 1 et seq.). And according to the Commercial Rules of the Better Business Bureau of South Alabama, Inc. Without limiting the generality of the foregoing, it is the intention of the buyer/lessee and the dealer to resolve by binding arbitration all disputes between them concerning the vehicle, its sale, lease or financing and its condition including disputes concerning the terms and conditions of the sale, lease or financing, the condition of the vehicle, any damage to the vehicle, the terms and meanings of any of the documents signed or given in connection with the sale, lease or financing[, ] any representations, promises or omissions made in connection with the negotiations for the sale, lease or financing of the vehicle, or any terms, conditions, or representations made in connection with the financing, credit life insurance, disability insurance, and vehicle extended warranty of service contract purchased or obtained in connection with the vehicle.
"Neither of us [is] committed by the terms of this agreement to arbitrate unless you sign below, in which event we will both be committed."

(Emphasis added.) The nephew also signed an Alabama Department of Revenue power-of-attorney form authorizing the dealership to apply for a certificate of title for the vehicle. Tarabein, on the other hand, executed only the documents to establish Eastern Shore as lienholder on the title for the vehicle.[2] The dealership thereafter submitted the application for the certificate of title, neglecting, however, to list Eastern Shore as the lienholder.

         In January 2014, the Department of Revenue issued to the nephew an original certificate of title for the vehicle that listed no lienholders. In April 2014, Tarabein terminated the nephew's employment with Infotec. Tarabein made repeated requests for the nephew to return possession of the vehicle to Eastern Shore, but the nephew refused. In June 2014, Tarabein, believing Eastern Shore was listed as lienholder on the title for the vehicle, inquired of the dealership why he had not received the title to the vehicle. According to Tarabein, the dealership informed him that when it applied for the certificate of title it listed Eastern Shore as a lienholder. After investigating the matter further, the dealership informed Tarabein that the certificate of title for the vehicle had been mailed to the nephew's address. The dealership contacted the nephew, who denied that he had received the certificate of title for the vehicle. According to Tarabein, the dealership never informed him that it had failed to list Eastern Shore as a lienholder on the application for the certificate of title. Rather, he argues, after it became aware of its error, the dealership engaged in a fraudulent scheme of forging the nephew's name on the Department of Revenue power-of-attorney form in order to replace the original certificate of title with a certificate of title listing Eastern Shore as the lienholder. As a result, the nephew held an original certificate of title free and clear of any lienholder, and Eastern Shore held a reissued certificate of title for the same vehicle listing it as the lienholder. After Eastern Shore received its certificate of title, it engaged a towing company to repossess the vehicle. After the vehicle was repossessed and delivered to Eastern Shore, an officer from the Baldwin County Sheriff's Office appeared at Eastern Shore to arrest Tarabein. Tarabein was able to avoid arrest by producing the certificate of title listing Eastern Shore as the lienholder. According to Tarabein, the incident concerning the arrest was the first time he became aware of the possible existence of another certificate of title for the vehicle.

         Tarabein and Eastern Shore (hereinafter collectively referred to as "the plaintiffs") sued the dealership, asserting against Daphne Automotive claims of breach of contract, negligent and wanton supervision, and misrepresentation; against Sanders a claim of negligence; and against both claims of suppression, fraudulent inducement, and civil conspiracy, and seeking damages for mental anguish. The dealership moved to compel arbitration and to stay the litigation based upon the arbitration provision in the sales contract and the stand-alone arbitration agreement (hereinafter referred to collectively as "the arbitration agreements"), both of which the nephew had signed in conjunction with the sale of the vehicle. On September 12, 2016, the trial court entered an order denying the dealership's motion to compel arbitration. The dealership appeals pursuant to Rule 4(d), Ala. R. App. P.[3]

         Standard ...


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