ARBITRATION - DON DRENNEN MOTOR CO., INC. V. MCCLUNG
In
Don Drennen Motor Co., Inc. v. McClung, [Ms. 1100734, Sept. 9, 2011] __ So. 3d __(Ala. 2011), the Supreme Court
of Alabama reversed an order from a circuit court requiring the defendant,
Don Drennen, to pay the cost of arbitration stemming from an action filed
by McClung, one of Drennen's former employees. The arbitration agreement
between the two parties stated that the parties must "share equally
the costs, fees, and expenses incurred by arbitration." However,
McClung argued at the trial court that he was without sufficient funds
to initiate an arbitration proceeding and Drennen had far greater resources
to pay all the costs associated with the arbitration proceeding which
Drennen had requested and was awarded against McClung's objections.
Subsequently, the trial court entered an order requiring Don Drennen to
pay all costs associated with the arbitration procedure. On appeal, McClung
conceded that the trial court erred in its order by requiring Drennen
to pay the costs of the arbitration in contravention to the terms of the
arbitration agreement. The Supreme Court held that a trial court may not
enter orders compelling parties to act in a manner that is inconsistent
with the parties' arbitration agreement. Thus, the Court reversed
the trial court's order, insofar as it required Drennen to pay the
entire costs of the arbitration proceedings.