Appeal
from Madison Circuit Court (CV-17-900803), David A. Mann, J.
Christopher
S. Hamer and Rebecca M. Wright of Hamer Law Group, LLC,
Birmingham, for appellant.
William
R. Lunsford and Stephen C. Rogers of Maynard, Cooper & Gale,
P.C., Huntsville, for appellee Omni Construction Company,
Inc.
L.
Graves Stiff III and G. Matthew Keenan of Starnes Davis
Florie LLP, Birmingham, for appellee KPS, LLC.
OPINION
BRYAN,
Justice.
Page 312
This
appeal concerns who has the power to determine the location
of an arbitration proceeding -- an arbitrator or the Madison
Circuit Court. We conclude that, under the facts of this
case, the arbitrator has that power; thus, we reverse and
remand.
In
2015, KPS, LLC, a/k/a KP Sourcing, LLC ("Kroger"),
entered into a contract ("the prime contract") with
Omni Construction Company, Inc., a/k/a OCC, Inc.
("Omni"), in which Omni agreed to build a grocery
store for Kroger in Madison, Alabama. Omni then entered into
a subcontract ("the subcontract") with Alliance
Investment Company, LLC ("Alliance"), in which
Alliance agreed to perform concrete work on the construction
project. A dispute later arose regarding the payment owed
Alliance for its work on the project, and Alliance
subsequently sued both Kroger and Omni in the circuit court,
alleging several claims. Kroger and Omni jointly filed a
motion to stay the circuit-court proceedings and to compel
arbitration of Alliances claims. The prime contract and the
subcontract each contain an arbitration provision; in moving
to compel arbitration, Kroger and Omni cited both arbitration
provisions. Alliance did not oppose the motion to compel
arbitration. On August 28, 2017, the circuit court stayed the
circuit-court proceedings and ordered the parties to
arbitrate the case "in accordance with the terms of
their agreements."
Alliance subsequently filed a demand for arbitration with the
American Arbitration Association ("the AAA"). A
dispute then arose regarding where the arbitration
proceedings should he held. Alliance, an Alabama company,
contended that the arbitration proceedings should be held in
Alabama, while Kroger and Omni, which are both based in Ohio,
contended that the arbitration proceedings should be held in
Cuyahoga County, Ohio. Alliance argued that its claims are
governed by a section of the arbitration provision in the
subcontract regarding disputes that involve some aspect of
the prime contract. That section requires such disputes to be
resolved under the arbitration provision in the prime
contract. The prime contract in turn requires disputes to be
arbitrated in Alabama. However, Kroger and Omni argued that
the claims are governed by a separate section of the
arbitration provision in the subcontract that requires
disputes to be arbitrated in Cuyahoga County, Ohio. On
January 3, 2018, the AAA made an administrative determination
that the arbitration would be held in Alabama and provided
the parties with a list of potential arbitrators. Shortly
thereafter, Kroger and Omni asked the AAA to reconsider its
decision. On January 10, 2018, the AAA informed the parties
that its administrative determination regarding the location
of the arbitration proceedings would be subject to review by
the arbitrator.
However, on January 11, 2018, before the case could proceed
to an arbitrator, Kroger and Omni filed in the circuit court
a motion titled "Emergency Motion to Clarify Order
Compelling Arbitration." In that motion, Kroger and Omni
argued that the subcontract requires that the claims be
arbitrated in Ohio. They further argued that the provision in
the prime contract requiring arbitration to be held in
Alabama is irrelevant. Accordingly, Kroger and Omni asked the
circuit court to order the parties to arbitrate in Ohio. On
January 22, 2018, the circuit court ordered that the
arbitration proceedings be held in Ohio. In that order, the
circuit court purported to amend its earlier order compelling
arbitration. Alliance then appealed to this Court.
This
Court reviews de novo an order granting or denying a motion
to compel arbitration.
Page 313
Cartwright v. Maitland, 30 So.3d 405, 408 (Ala.
2009). " [A]rbitration is a matter of contract and a
party cannot be required to submit to arbitration any dispute
which he has not agreed so to submit. " AT & T
Techs., Inc. v. Communications Workers of America, 475
U.S. 643, 648, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986) (quoting
United Steelworkers of America v. Warrior & Gulf
Navigation Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 4
L.Ed.2d 1409 (1960) ). "[A]rbitrators derive their
authority to resolve disputes only because the parties have
agreed in advance to submit such grievances to
arbitration." AT & T, 475 U.S. at 648-49, 106
S.Ct. 1415.
On
appeal, Alliance argues that the circuit court lacked the
authority to order, in its order of January 22, 2018, that
the arbitration be held in Ohio. With respect to this
argument, it is useful to discuss the procedural
underpinnings of the circuit courts orders. Rule 4(d), Ala.
R. App. P., provides that an order granting or denying a
motion to compel arbitration is "appealable as a matter
of right." Thus, as this Court stated in Bowater,
Inc. v. Zager, 901 So.2d 658, 667 (Ala. 2004), an order
granting or denying a motion to compel arbitration is
"due recognition as a judgment under Rule 54(a), Ala.
R. Civ. P." Therefore, the circuit courts order of
August 28, 2017, compelling arbitration is a judgment under
the Alabama Rules of Civil Procedure. Of course, the finality
of judgments is important, and a circuit court may revisit a
final judgment only in accordance with the proper procedures
for doing so; Alliance contends that those procedures were
not followed here. Alliance argues that Kroger and Omnis
"Emergency Motion to Clarify Order Compelling
Arbitration" is in substance an untimely Rule 59(e),
Ala. R. Civ. P., motion seeking to amend the August 28, 2017,
judgment compelling arbitration. A Rule 59(e) motion to
alter, amend, or vacate a judgment must be filed no later
than 30 days after the entry of the judgment; Kroger and Omni
filed their motion 136 days after the entry of the judgment
compelling arbitration. Kroger and Omni counter that their
motion was not a Rule 59(e) motion; rather, they say, it was
a motion seeking a "clarification" of the judgment
compelling arbitration that would not be subject to the
30-day time limit found in Rule 59(e). Although Kroger and
Omni argue that the circuit court had the authority simply to
clarify the order compelling arbitration, Alliance argues
that the circuit court impermissibly amended the order
compelling arbitration in response to an untimely Rule 59(e)
motion. See, e.g., George v. Sims,
888 So.2d 1224, 1227 (Ala. 2004) (discussing the limits of a
trial courts power to revisit a judgment and reversing a
circuit courts order purporting to modify a judgment when
the order was not entered in response to a timely
postjudgment motion).
However, as Alliance further argues, regardless of how the
order of January 22, 2018, is characterized, the circuit
court lacked the authority to order the parties to arbitrate
in Ohio for a separate reason. It is undisputed that the
AAAs Construction Industry Arbitration Rules govern the
arbitration in this case. Both the prime contract and the
subcontract provide that disputes must be decided under the
Construction Industry Arbitration Rules. Rule 9(a) of the
Construction Industry Arbitration Rules provides that
"[t]he arbitrator shall have the power to rule on his or
her own jurisdiction, including any objections with respect
to the existence, scope, or validity of the arbitration
agreement." At its core, the ...