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Waiver of Right to Compel Arbitration

Fagan v. Warren Averett Companies, LLC, [Ms. 1190285, Oct. 23, 2020], ___ So. 3d ___ (Ala. 2020). The Court (Wise, J.; Parker, C.J., and Bolin, Sellers, and Mitchell, JJ., concur; Stewart, J., recuses) reverses the Jefferson Circuit Court’s order compelling arbitration in a dispute arising under a Personal Services Agreement (“PSA”) where Fagan alleged that Warren Averett Companies, LLC (“Warren Averett”) had substantially underpaid her. Fagan filed a demand for arbitration with the American Arbitration Association (“AAA”). Ms. *4. When the AAA sent Warren Averett an invoice that exceeded half of the initial arbitration filing fee, Warren Averett refused to pay it, contending it was only required to pay half of the filing fee. Ms. *6. After the AAA closed its file on the arbitration demanded by Fagan, Fagan filed suit in circuit court. Ms. *8.

The Court concludes that Warren Averett was in default of the arbitration agreement and reverses the order compelling arbitration. The Court rejects Warren Averett’s argument that its refusal to pay more than half of the AAA filing fee was not a default under the PSA. The Court explains,

“[t]he PSA does not specifically state that the parties will equally share all the costs of arbitration. Rather, it provides only that the parties will equally share “the fees or expenses of any arbitrator(s)” as well as the costs for the use of any facility.”

Ms. *19.

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