ARBITRATION - FMR CORP. V. HOWARD
FMR Corp. v. Howard, [Ms. 1151149, Jan. 13, 2017] __ So. 3d __ (Ala. 2017). The Court reverses an order of the Pike Circuit Court denying a motion to compel arbitration of a dispute regarding an investment account holder’s responsibility to indemnify Fidelity Management Trust Company and Fidelity Brokerage Services, LLC for losses it might suffer if the investor’s stepchildren prevail on claims they assert against Fidelity in a separate pending arbitration proceeding.
The opinion reviews familiar principles of arbitration law. First, the Court reviews de novo the denial of a motion to compel arbitration. Ms. *8-9, quoting Elizabeth Homes, L.L.C. v. Gantt, 882 So. 2d 313, 315 (Ala. 2003). Second, the party seeking to compel arbitration has the burden of proving the existence of a contract calling for arbitration and proving that the contract evidence is a transaction affecting interstate commerce. Id. Third, once a motion to compel arbitration is made and supported, the burden is on the non-movant to present evidence that the supposed arbitration agreement is not valid or does not apply to the dispute in question. Ibid.
The Court concludes the investor’s two theories for avoiding arbitration must both be decided by the arbitrator. First, her contention that as the indemnification claim is contingent on the outcome in the other pending arbitration proceeding, no dispute was ripe for resolution by the Pike Circuit Court. The Court holds to the contrary that whether a dispute is allegedly not ripe is for the arbitrator to decide, not the court. Ms. *13, citing, inter alia, Transportation Workers’ Union of America v. Veolia Transp. Servs., Inc., 24 F.Supp.3d 223, 230 (E.D.N.Y. 2014). Second, the Court also rejects the investor’s contention that there was a waiver of the right to enforce the arbitration provision because of a failure to timely invoke it. Citing Dudley, Hopton-Jones, Sims & Freeman, P.L.L.P. v. Knight, 57 So. 3d 68 (Ala. 2010), the Court concludes the waiver issue should also be decided by the arbitrator, not the Court. Ms. *14-16.
Accordingly, the judgment entered by the Pike Circuit Court denying the motion to compel arbitration is reversed and the cause remanded for the trial court to enter an order granting the motion.