ARBITRATION - WELLS FARGO BANK, N.A. AND TERESA GRIER V. CHAPMAN
In
Wells Fargo Bank, N.A. and Teresa Grier v. Chapman, [Ms. 2101200, Feb. 24, 2012] __ So. 3d __(Ala. Civ. App. 2012), the Alabama
Court of Civil Appeals issued a series of holdings related to an arbitration
agreement related to a bank account. First, the plaintiff argued that
Wells Fargo failed to prove that he was provided with the bank regulations
that included the arbitration agreement. However, because Plaintiff signed
an acknowledgment of receipt of those regulations, the Court held that
the argument had no merit. Second, the plaintiff argued that the arbitration
clause was invalid because his daughter (whose estate he was administering)
was a minor at the time she opened the account and became bound by the
arbitration agreement. However, the Court held there was no evidence that
the daughter disaffirmed her contract during her minority or within a
reasonable time after she reached the age of majority and thus the daughter's
minority at the time she opened the account did not serve to render the
original arbitration agreement invalid. Third, the plaintiff argued that
he was not bound by amendments to the arbitration agreement imposed by
Wells Fargo as a successor to the original bank (SouthTrust). The Court
recognized that the Alabama Supreme Court has held that "[a]mendments
to the conditions of unilateral-contract relationships [like those between
a bank and its customers] with notice of the changed conditions are not
inconsistent with the general law of contracts" and, as a result,
"such amendments, when promulgated with the requisite notice, are
impliedly assented to by the customer when the customer holds open his
or her account after notice of the amendments."
See SouthTrust Bank v. Williams, 775 So. 2d 184, 190-91 (Ala. 2000). Because there was no evidence in
the present case "that notice of the various changes in the account
regulations over the years or notice of the mergers between SouthTrust
and Wachovia and Wachovia and Wells Fargo were provided to [the plaintiff
or his daughter]," the Court could not conclude that
Wells Fargo's arbitration agreement governs the case by virtue of the amendments to
the account regulations since 2003. However, the Court nevertheless noted
that "Chapman, individually, and in his capacity as administrator
of the estate, because, insofar as he is advancing any claims that belonged
to [his daughter] while she was alive, stands in [his daughter's]
shoes. . .is bound by the
original SouthTrust arbitration agreement" (emphasis added). Fourth, the Plaintiff
argued that his wrongful death claim was not subject to the arbitration
clause. The Alabama Court of Civil Appeals held that arbitration agreements
can be enforced with respect to wrongful death claims "when the personal
representatives had themselves been signatories to the arbitration agreements,"
which was the case. Finally, with respect to the individual defendant,
the Court held that "a nonsignatory employee is entitled to rely
on the arbitration agreement of his or her employer when the employee
is sued for conduct occurring in the line and scope of his or her employment."
Thus, for all these reasons, the Court held that the original arbitration
agreement at issue was enforceable.
RELATED DOCUMENTS