(251) 299-0101

Substantive Arbitrability - Scope of Agreement

Wiggins v. Averett, LLC., [Ms. 1170943, Feb. 7, 2020] __ So. 3d __ (Ala. 2020). A plurality of the Court (Shaw, J.; and Bolin, Bryan, and Mitchell, JJ., concur; Shaw, J. and Donaldson, Special Justice, concur specially; Parker, C.J., and Wise, Sellers, and Mendheim, JJ., dissent; Stewart, J., recuses) affirms the Baldwin Circuit Court’s judgment that plaintiff doctor Wiggins was compelled to arbitrate his claims against the defendant, Warren Averett, LLC, an accounting firm. The contract containing the arbitration agreement was between Eastern Shore Children’s Clinic, P.C. and Warren Averett. Plaintiff Wiggins was a shareholder and employee of Eastern Shore, but was not a party to the arbitration agreement.

In pertinent part, the arbitration agreement provided that Eastern Shore “agrees that any controversies, issues, disputes, or claims (disputes) asserted or brought by or on behalf of Eastern Shore shall be resolved exclusively by binding arbitration administered by the American Arbitration Association.”

Wiggins sued Warren Averett alleging accounting malpractice arising from Warren Averett allegedly disclosing his personal confidential financial information to Eastern Shore which caused Eastern Shore to oust him as a shareholder/employee. Ms. *3. Although conceding that he was a third-party beneficiary of the contract between Eastern Shore and Warren Averett, Wiggins contended that the narrow scope of the arbitration clause limited it to claims “by or on behalf of Eastern Shore.” Ms. *5. The plurality opinion holds that “when an arbitration provision indicates that the AAA rules will apply to the arbitration proceedings, ... that it is ‘clear and unmistakable’ that substantive-arbitrability decisions are to be made by the arbitrator; this includes the decision whether the arbitration provision may be enforced against a non-signatory to the contract ....” Ms. *8, citing Federal Ins. Co. v. Reedstrom, 197 So. 3d 971, 976 (Ala. 2015).

Related Documents

Categories: