Thomas C. Crews v. National Boat Owners Association Marine Insurance Agency, Inc., et al.

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Rel: 01/29/2010 Notice: T h i s o p i n i o n i s s u b j e c t t o formal r e v i s i o n b e f o r e p u b l i c a t i o n i n t h e advance s h e e t s o f Southern R e p o r t e r . R e a d e r s a r e r e q u e s t e d t o n o t i f y t h e R e p o r t e r o f D e c i s i o n s , A l a b a m a A p p e l l a t e C o u r t s , 300 D e x t e r A v e n u e , M o n t g o m e r y , A l a b a m a 3 6 1 0 4 - 3 7 4 1 ( ( 3 3 4 ) 2 2 9 ¬ 0 6 4 9 ) ) , o f a n y t y p o g r a p h i c a l o r o t h e r e r r o r s , i n o r d e r t h a t c o r r e c t i o n s may b e made b e f o r e t h e o p i n i o n i s p r i n t e d i n Southern R e p o r t e r . SUPREME COURT OF ALABAMA OCTOBER TERM, 2009-2010 1051804 Thomas C. Crews v. N a t i o n a l Boat Owners A s s o c i a t i o n M a r i n e Inc., e t a l . Appeal PARKER, f r o m Montgomery C i r c u i t (CV-05-2232) I n s u r a n c e Agency, Court Justice. Thomas C. C r e w s a p p e a l s arbitrate Association h i s claims Marine from a judgment c o m p e l l i n g against Insurance the National Agency, Boat I n c . ("NBOA"), him t o Owners Markel 1051804 American Crews Insurance sued both Company ( " M a r k e l " ) , individually and J a c k i e a n d as an a g e n t Ashe, whom f o r NBOA. We affirm. Background and P r o c e d u r a l P o s t u r e B e g i n n i n g i n t h e m i d 1990s, Crews p u r c h a s e d his boats a n n u a l l y from transactions. required listing policy Crews a l l boats insurance. who represented As p a r t o f t h e a n n u a l - r e n e w a l that year. Ashe, complete that would NBOA, i n turn, The p o l i c i e s 9 t o be e f f e c t i v e Crews s t a t e s until were insurance f o r NBOA procedure, i t s watercraft Markel renewable each November that i n October NBOA application, be c o v e r e d b y t h e p o l i c y selected i nthe for the to provide the year on N o v e m b e r 9 of the following year. 2 0 0 3 he p a i d t h e p r e m i u m f o r the renewal p o l i c y c o v e r i n g t h e p e r i o d f r o m N o v e m b e r 9, 2 0 0 3 , t o N o v e m b e r 9, 2 0 0 4 . Among t h e b o a t s c o v e r e d b y t h e p o l i c y was a 45-foot renewal Sea Ray C r u i s e r policy amendments i n January to the policy previous year, in the yacht which including would yacht. He r e c e i v e d a copy 2004; the renewal that had been changes policy issued The r e n e w a l included t o cover the to the geographic be c o v e r e d . of the locations policy also i n c l u d e d a "General Amendatory Endorsement" that i n c o r p o r a t e d 2 1051804 an arbitration section of agreement earlier into the the General policy. The Loss policy Conditions contained a p r o v i s i o n t h a t a l l o w e d Crews t o c a n c e l t h e p o l i c y b y r e t u r n i n g it. Crews d i d n o t r e t u r n In of September Alabama, 2004, the policy. Hurricane and Crews's 45-foot Ivan advised restriction the boat June him that he of the policy, would had 1, a n d N o v e m b e r 1, the canceled thep o l i c y by a l e t t e r dates yacht was navigational he h a d w a r r a n t e d o f Savannah, both Coast a c l a i m f o r t h e damage, violated under which n o t be s o u t h the Gulf Sea Ray C r u i s e r d a m a g e d b y t h e s t o r m . When C r e w s f i l e d NBOA struck Georgia, inclusive." that "between NBOA then t o Crews m a i l e d on O c t o b e r 19, 2004. Crews against a complaint NBOA, M a r k e l , and tort the action answers filed i n t h e Montgomery C i r c u i t and Ashe, alleging breach claims against a l l three defendants. to federal that court, i t has i n c l u d e d where Markel as a p p e n d i c e s the record. During collectively 1 1 "The r e c o r d on a p p e a l the filed pendency with this cannot removed motions to i t s brief t h i s Court. Markel asks t h i s Court t o i n c l u d e those in of contract Markel filed Court be and to appendices supplemented of this appeal the parties Court s e v e r a l motions t o s t r i k e . 3 1051804 or e n l a r g e d b y t h e a t t a c h m e n t o f an a p p e n d i x t o an brief. Jenkins v. State, 1987)." G o r e e v . S h i r l e y , 765 S o . 2 d 6 6 1 , 662 2000). A c c o r d i n g l y , which should See R u l e we filed, stay the accordance trial with court motion to presented unaware App. 2d 944 ( A l a . Crim. Markel's presented to the t r i a l remanded proceedings and the a r b i t r a t i o n issued compel in this an order on arbitration court. the case to the s t a t e court to compel Circuit as Court arbitration in agreement i n the p o l i c y . The July 2006, the "with a c t i o n . " Crews of the existence request, P. and M a r k e l moved t h e M o n t g o m e r y 2 App. ( A l a . C i v . App. to consider p r o p e r l y have been The f e d e r a l c o u r t to So. decline 1 0 ( f ) , A l a . R. untimely 516 appellant's 31, respect appeals, to arguing of the a r b i t r a t i o n granting a l l claims t h a t he was agreement and t h e All t h e m o t i o n s were i n t e n d e d to s t r i k e from the b r i e f s documents and r e l a t e d arguments t h a t were n o t i n c l u d e d i n t h e r e c o r d . We do n o t a d d r e s s t h e m o t i o n s b e c a u s e m o s t c o n c e r n e d documents t h a t are not a p p l i c a b l e t o our c o n s i d e r a t i o n of the p r o p r i e t y o f t h e o r d e r c o m p e l l i n g a r b i t r a t i o n ; t h e r e s t were not used i n our d e l i b e r a t i o n s . 2 8 U.S.C. § 1 4 4 6 ( b ) p r o v i d e s : "The n o t i c e o f r e m o v a l o f a c i v i l a c t i o n ... s h a l l b e f i l e d w i t h i n t h i r t y d a y s a f t e r t h e r e c e i p t b y t h e d e f e n d a n t ... o f a c o p y o f t h e i n i t i a l p l e a d i n g " M a r k e l f i l e d i t s n o t i c e o f r e m o v a l on N o v e m b e r 1, 2 0 0 5 , m o r e t h a n 30 d a y s a f t e r i t r e c e i v e d t h e c o m p l a i n t on S e p t e m b e r 12, 2 0 0 5 . A s h e a n d NBOA w e r e s e r v e d on S e p t e m b e r 1 0 , 2 0 0 5 . 2 4 1051804 navigational r e s t r i c t i o n s when he r e n e w e d argues by i m p l i c a t i o n navigational restrictions because, he says, October 2003 when issue on court's we do that appeal they concerns a n d he agreement and t h e the a r b i t r a t i o n are were he p a i d the policy, not not a a part t h e premium only the part of of address the issues policy the p o l i c y in full. propriety order g r a n t i n g M a r k e l ' s motion t o compel not the in Because the of the trial arbitration, related to the navigational reads in i t s entirety restrictions. The arbitration agreement follows: "IX. Arbitration " I n t h e e v e n t t h a t Y o u o r We d i s a g r e e concerning whether any o r a l l o f t h e l o s s i s c o v e r e d by t h e p o l i c y , Y o u a n d We w i l l r e s o l v e t h i s d i s a g r e e m e n t through a r b i t r a t i o n . A r b i t r a t i o n w i l l take place i n the c o u n t y where You l i v e . It will be c o n d u c t e d under the rules of the American Arbitration Association u n l e s s Y o u o r We o b j e c t . I n t h a t c a s e , You w i l l select a n a r b i t r a t o r a n d We w i l l select other [ s i c ] another a r b i t r a t o r . The t w o selected a r b i t r a t o r s w i l l then s e l e c t a t h i r d . I f t h e two arbitrators are unable to agree on the t h i r d a r b i t r a t o r w i t h i n 30 d a y s , t h e j u d g e o f t h e c o u r t o f record in the county of jurisdiction where arbitration i s pending will appoint a third arbitrator. " L o c a l c o u r t r u l e s g o v e r n i n g procedure and e v i d e n c e will apply unless the a r b i t r a t o r s a g r e e on o t h e r rules. The decision i n writing of any two 5 as 1051804 a r b i t r a t o r s w i l l be b i n d i n g on Y o u a n d U s , subject t o t h e t e r m s o f i n s u r a n c e . J u d g m e n t on a n y a w a r d may be e n t e r e d i n a n y c o u r t h a v i n g jurisdiction. "You w i l l p a y t h e a r b i t r a t o r t h a t Y o u c h o o s e a n d We w i l l p a y t h e a r b i t r a t o r t h a t We c h o o s e . The expense o f t h e t h i r d a r b i t r a t o r and a l l o t h e r e x p e n s e o f t h e a r b i t r a t i o n w i l l be s h a r e d e q u a l l y b y Y o u a n d Us." I n i t s m o t i o n t o s t a y p r o c e e d i n g s and Markel advised insurance the trial t o Crews and the policy contained the policy by In because of arbitration, does not Markel, allows issued a copy m a i l e d . to As a policy of noted above, Crews t o 3 allowed Markel's motion, did exist, not waived i t s right the that apply and had i t had a provision that agreement e x i s t , M a r k e l had it had that arbitration, cancel returning i t . opposition arbitration court compel to that arbitration of arbitration the the parties to to resolve whether a loss i s c o v e r e d and "non-contract claims ... the that i f one motion this to i f one action agreement, an did under compel exists, other than i f effective, a disagreement concerning would thus not arising even agreement, arbitration only that, argued to compel a r b i t r a t i o n untimeliness the Crews from apply [Markel's] to Crews's tortious M a r k e l n o t e d i n i t s m o t i o n t h a t t h e m o t i o n was b a s e d on t h e same p o l i c y a n d G e n e r a l A m e n d a t o r y E n d o r s e m e n t s e c t i o n t h a t Crews had i n c l u d e d i n h i s complaint. 3 6 1051804 c o n d u c t . " The the case trial court granted Markel's motion to a r b i t r a t i o n ; Crews Standard Our r e v i e w of a motion of and ordered appealed. Review to compel arbitration i s de novo. "'[T]he standard of r e v i e w of a t r i a l court's r u l i n g on a m o t i o n t o c o m p e l arbitration at the i n s t a n c e of e i t h e r p a r t y i s a de novo d e t e r m i n a t i o n o f w h e t h e r t h e t r i a l j u d g e e r r e d on a f a c t u a l or legal issue to the s u b s t a n t i a l p r e j u d i c e of the p a r t y s e e k i n g r e v i e w . ' Ex p a r t e R o b e r s o n , 749 So. 2 d 4 4 1 , 446 ( A l a . 1 9 9 9 ) . F u r t h e r m o r e : "'A motion to compel arbitration is a n a l o g o u s t o a m o t i o n f o r summary j u d g m e n t . T r a n S o u t h F i n . C o r p . v . B e l l , 739 So. 2 d 1 1 1 0 , 1114 ( A l a . 1 9 9 9 ) . The p a r t y s e e k i n g to compel a r b i t r a t i o n has t h e b u r d e n of p r o v i n g the e x i s t e n c e of a c o n t r a c t c a l l i n g for arbitration and proving that that contract evidences a transaction affecting i n t e r s t a t e commerce. I d . " A f t e r a m o t i o n t o compel arbitration has been made and s u p p o r t e d , t h e b u r d e n i s on t h e n o n - m o v a n t to present evidence that the supposed a r b i t r a t i o n agreement i s not v a l i d or does not a p p l y to the d i s p u t e i n q u e s t i o n . " ' " F l e e t w o o d E n t e r s . , I n c . v . B r u n o , 784 So. 2 d 2 7 7 , 280 ( A l a . 2000) ( q u o t i n g J i m B u r k e A u t o . , I n c . v. Beavers, 674 So. 2d 1260, 1265 n.1 ( A l a . 1 995) (emphasis o m i t t e d ) ) . " Vann v. F i r s t Cmty. C r e d i t C o r p . , 834 So. 2 d 7 5 1 , 752-53 ( A l a . 2002). Legal A. Vitality Analysis of the a r b i t r a t i o n 7 agreement 1051804 Q u o t i n g Kenworth of Birmingham, 2d 288, 290 contract that M a r k e l has burden contained policy by:" of proving ever an that and valid he there the have this meeting policy, by containing of of which the carry the the on: he i t s brief on "Crews'[s] assent Witness shall not received arbitration premium, the minds on the so 8 that arbitration argues: arbitration the agreement the the be authorized paying to that 10/8/2003 by appeal Markel he trial agreement. In an renewal "In duly that to a policy read: our argues policy 2 of proving neither directed words compel affecting says, "countersigned Those further the on So. containing or page countersigned endorsement no language lines. He Crews application words and failed contract He executed accepted was the to transaction because, 828 existence agreement agreement. the blank unless amendatory to follows representative." after a a a policy arbitration two we that exists signed attention Whereof, arbitration evidences agreement Markel court's i n order commerce. Crews a r g u e s t h a t M a r k e l arbitration nor an contract interstate Langley, the burden of p r o v i n g containing that its v. ( A l a . 2002), Crews a r g u e s t h a t arbitration, a Inc. agreement 1051804 was m a n i f e s t e d i n at least one o f t h r e e ways. S p e c i f i c a l l y , t h e a r b i t r a t i o n agreement became p a r t of the renewal Policy because: (1) t h e r e n e w a l Policy specifically authorized amendatory endorsements, and the arbitration endorsement accompanied t h e r e n e w a l P o l i c y p r o v i d e d t o Crews; a n d / o r (2) C r e w s d i d n o t c a n c e l t h e r e n e w a l P o l i c y after receiving notice of the arbitration e n d o r s e m e n t ; a n d / o r (3) C r e w s made a c l a i m u n d e r t h e r e n e w a l P o l i c y a n d h a s s u e d M a r k e l f o r , among o t h e r things, breach of contract f o r denying that claim. "Crews initially manifested assent to the a r b i t r a t i o n endorsement because the renewal P o l i c y s p e c i f i c a l l y i n c o r p o r a t e d amendatory endorsements, and the a r b i t r a t i o n endorsement accompanied the renewal P o l i c y p r o v i d e d t o Crews. T h i s C o u r t has l o n g r e c o g n i z e d t h a t e n d o r s e m e n t s a r e e f f e c t i v e when t h e y a r e s p e c i f i c a l l y r e f e r e n c e d i n a c o n t r a c t . See P h i l a d e l p h i a A m e r i c a n L i f e I n s . Co. v . B e n d e r , 8 9 3 S o . 2 d 1104 ( A l a . 2 0 0 4 ) . " Markel's In 893 brief, S o . 2 d 1104 spouse coverage, insurance included plaintiff's a I n s u r a n c e Co. v . f o r both spouse was policy Bender, s i g n e d an the p l a i n t i f f comprehensive spouse but a health-insurance policy. subsequently was When the insurer which arbitration. denied moved The certain the t r i a l issued denied f o r the motion 9 was claims, court denied and arbitration B e n d e r , who p a i d t h e p r e m i u m s a n d made c l a i m s the insurer, compelling Life ( A l a . 2004), the p l a i n t i f f ' s that The plaintiff, sued American f o r health agreement. the 15-16. Philadelphia application the at f o r an after under Bender order Bender 1051804 opposed the motion, policy until signed and that he y e a r s a f t e r i t was received e f f e c t i v e , t h a t he not u n a w a r e t h a t an a r b i t r a t i o n agreement e x i s t e d . by this appeal the insurer, the had the t h a t he was a r b i t r a t i o n agreement, Court determined u n d i s p u t e d t h a t the endorsement c o n t a i n i n g was containing the incorporated issued, and attached to the a r b i t r a t i o n agreement by the reference into policy itself also any endorsements, riders, attached and a l l enrollment that a p p l i c a t i o n s . This unsigned endorsement i s v a l i d referenced parte t h e r e i n . See Rager, Markel Bender, 712 So. asserts its renewal endorsements and states "[i]n that compliance endorsements, that with we h a v e s e l e c t e d as like the policy incorporates a l l agree for the 2d s h o w n on to the a t 1108 an policy (citing 1998)). policy of insurance specifically "any the premium insurance the Declarations in references endorsements" provide 10 included application, provisions the was certificate applicable to i t Court also noted that (Ala. return or i f i t i s attached 333 that i t s terms So. i t endorsement stated papers, B e n d e r , 893 2d The policy stated that the a r b i t r a t i o n policy. any Ex not application containing agreement and had the On was two claiming when payment i t and and any coverage you Page, w h i c h i s p a r t 1051804 of this policy." agreement Markel states: "[L]ike i n Bender, the a r b i t r a t i o n Crews stating: 'THIS ENDORSEMENT CHANGES THE P O L I C Y . brief, ... i t became part endorsement notified CAREFULLY.' that the ([capitalization] arbitration i n this of the renewal Policy, P L E A S E READ I T in original)." Markel's a t 18-19. An u n s i g n e d e n d o r s e m e n t i s v a l i d i f i t i s a t t a c h e d policy Ins. and i s r e f e r e n c e d 0002 clearly references print: The "THIS CAREFULLY." court that endorsement ENDORSEMENT policy. He d o e s before explanation regarding returning the he that "[U]nder Alabama arbitration contains The r e n e w a l the itself i noriginal.) t h e endorsement that suffered arbitration states PLEASE after READ I T he h a d r e n e w e d he h a d n o t r e c e i v e d a n d he to reject no the policy by t h e endorsement l a w , [Crews] m a n i f e s t e d p r o v i s i o n i n s e v e r a l ways. containing [his] assent First, the offers a g r e e m e n t , w h i c h was h i s c o n t r a c t u a l 11 i n bold Crews t o l d t h e t r i a l h i s loss, his failure i t when h e d i d r e c e i v e arbitration ( A l a . 1997). document n o t argue endorsement See G r e e n e v . H a n o v e r CHANGES THE P O L I C Y . (Capitalization he r e c e i v e d t ot h e " G e n e r a l A m e n d a t o r y E n d o r s e m e n t YHBP 02 0 1 , " t h e e n d o r s e m e n t agreement. the i n the policy. C o . , 700 S o . 2 d 1 3 5 4 , 1 3 5 7 n.3 policy case remedy. tothe [he] f a i l e d t o 1051804 exercise [his] right 712 2d So. submitted Ins. to cancel [333,] 335 v.] H o w a r d , 775 Southern Foodservice 850 So. 2d court's (Ala. a c l a i m under the Co. 316, 320 finding agreement the p o l i c y . 1998). policy. So. 2d Mgmt., I n c . v . a contract arbitrate Waiver his days a f t e r of claims the right by initiating judicially argument, Crews substantially In supervised cites 162-63 f i n d no [(Ala. Fire 2000)]." Co., e r r o r i n the containing to an trial arbitration arbitration the prejudices the on appeal, complaint, compel a r b i t r a t i o n but i n the i t may virtue filed to a s s e r t of case to f e d e r a l discovery. 670 waive i t s r i g h t invokes i t s brief answered the Inc., right i t by Companion Manufacturing, substantially was f i r s t removing the 1 9 9 5 ) ( " [ A ] p a r t y may it against complaint arbitrate, Whitesell [Crews] [Southern United Crews a r g u e s t h a t M a r k e l w a i v e d any 256 Third, exists. B. to Rager, American F i d . Assur. ( A l a . 2 0 0 2 ) . We that Ex p a r t e ... See [156,] See Life So. party Markel 2d 8 97 , process opposing 12 court. to and In s u p p o r t of his Co. 899 by v. (Ala. a dispute i f and thereby arbitration."). to have a l s o to have a s s e r t e d federal i t s right Insurance claims had i t s waiting court, to a r b i t r a t e litigation have "This not only i t s right fact, i f so, to is 1051804 found i n the b r i e f , but must be." 158, 48 Central So. 985 which we "extra" to have of Markel to the of proceedings in state on part intent claims Markel's asserted expressed in proceedings on May 12, This in the state and by the i s the invoke to complaint. in right That Markel's c o m p e l a r b i t r a t i o n and Ala. 145, to the consider, trial as court. The response first I t m a k e s no its 159 refers Crews c o n t a i n e d court. court brief declined court f i l e d by to Ashley, Markel's provided federal complaint v. earlier record to r e c o r d , where, to a v a i l , i t Ry. (1909). notice the removal the i n the Georgia 981, appendices, being of not by i n the record mention of to a r b i t r a t e intent motions was an the first to stay to stay d i s c o v e r y filed 2006. Court determining has whether formulated a party has a two-pronged waived i t s right test to compel arbitration: " I t i s w e l l s e t t l e d under Alabama law t h a t a p a r t y may w a i v e i t s r i g h t t o a r b i t r a t e a d i s p u t e i f i t s u b s t a n t i a l l y invokes the l i t i g a t i o n process and thereby s u b s t a n t i a l l y p r e j u d i c e s the p a r t y opposing a r b i t r a t i o n . W h e t h e r a p a r t y ' s p a r t i c i p a t i o n i n an a c t i o n a m o u n t s t o an e n f o r c e a b l e w a i v e r o f i t s r i g h t t o a r b i t r a t e d e p e n d s on w h e t h e r t h e participation b e s p e a k s an i n t e n t i o n t o a b a n d o n t h e r i g h t i n f a v o r of the j u d i c i a l process and, i f so, whether the o p p o s i n g p a r t y w o u l d be p r e j u d i c e d b y a s u b s e q u e n t order requiring i t to submit to a r b i t r a t i o n . No 13 for 1051804 r i g i d r u l e e x i s t s f o r d e t e r m i n i n g what c o n s t i t u t e s a waiver of the right to arbitrate; the d e t e r m i n a t i o n as t o w h e t h e r t h e r e h a s b e e n a w a i v e r m u s t , i n s t e a d , be b a s e d on t h e p a r t i c u l a r f a c t s o f each case." Companion Life Insurance Co., 670 Crews a s s e r t s t h a t by removing the initiating Markel in discovery favor of the prejudiced by assertions an are judicial order So. 2d abandoned process both 899. On appeal, a c t i o n to f e d e r a l court i t s right and r e q u i r i n g him accurate, at prongs of to arbitrate he that to would arbitrate. the and test be If have his been satisfied. Markel F o u n d r y Co. responds v. analogizing Curren, 779 So. this case 1171 (Ala. 2000), 2d t h i s C o u r t h e l d t h a t a p a r t y had not litigation a process the p a r t y had in its because Markel by removing asserted initial there the answer. i s no That w h i c h was its motion stay May 12, not answer t h i s to 2006, after the case case to is i n the a s s e r t e d a r b i t r a t i o n as an complaint, substantially over question, eight record the when that against i t filed arbitration litigation. however, because, assuming 14 which however, indicating 2005, u n t i l compel months of in & arbitration a f f i r m a t i v e defense and Pipe invoked inapposite, f i l e d A u g u s t 29, proceedings U.S. federal court a f f i r m a t i v e defense of evidence the to We on need arguendo 1051804 that Markel d i d invoke the l i t i g a t i o n unable t o show t h a t arbitration had arbitration filed had and be was an Co., this been his counsel adverse that services state for a w o u l d be So. that the after the in federal to had secure of about $4,175. to compel was arbitration Id. 33.4 There, affidavit hours of the case to argued that he of He s u b s t a n t i a l l y p r e j u d i c e d i f ordered to a r b i t r a t e quantified no e s t i m a t e of the money s p e n t i n f e d e r a l c o u r t o r e l s e w h e r e . He t h e r e c o r d s h o w s o n l y t h a t he r e s p o n d e d request Markel, right to court. remand basis." complaint expended the to Companion the motion he p r o v i d e d s i g n i f i c a n t d i s c o v e r y i n r e s p o n s e a In p r e j u d i c e b y p r o d u c i n g an counsel cost right case-by-case held months a 2d a t 8 9 9 . when ruling c l a i m . I d . Here, Crews has or 670 of the p a r t y s e e k i n g to compel professional court, waiver a Court five the nonmovant d e m o n s t r a t e d by a on waived only after suffered been Co., filed been substantially prejudiced. decided Insurance Insurance arbitrate has must Companion L i f e Life was there "[W]hether he p r o c e s s , Crews has f o r production, both but by "Regarding the the other suggests that to i n t e r r o g a t o r i e s of which were for determining 15 time to r e q u e s t s , but issued not defendants. standard his prejudice, and by 1051804 we have stated: "'"Prejudice to the party opposing arbitration, not prejudice to the party seeking arbitration, i s determinative of w h e t h e r a c o u r t s h o u l d d e n y a r b i t r a t i o n on the basis of waiver." Price [v. Drexel Burnham Lambert, I n c . ] , 791 F.2d [1156,] 1162 [ ( 5 t h C i r . 1986)] ( f o o t n o t e o m i t t e d ) . " B o t h d e l a y and t h e e x t e n t o f t h e m o v i n g party's participation in judicial proceedings are material factors in a s s e s s i n g a p l e a of p r e j u d i c e . " Frye [v. P a i n e , Webber, J a c k s o n & C u r t i s , I n c . ] , 877 F.2d [ 3 9 6 , ] 399 [(5th C i r . 1989)]. "'"Prejudice has been found in situations where the party seeking a r b i t r a t i o n a l l o w s the opposing p a r t y to undergo the types of l i t i g a t i o n expenses that arbitration was designed to alleviate." M o r e w i t z v. West o f England S h i p Owners Mut. P r o t e c t i o n & Indem. A s s ' n , 62 F.3d 1356, 1366 (11th Cir. 1995). " S u f f i c i e n t p r e j u d i c e to i n f e r waiver might be f o u n d , f o r e x a m p l e , i f t h e p a r t y s e e k i n g the s t a y [ f o r a r b i t r a t i o n ] took advantage of judicial discovery procedures not available in arbitration." Carcich v. R e d e r i A/B N o r d i e , 389 F . 2 d 692, 696 n. 7 (2d C i r . 1 9 6 8 ) . . . . ' " H a l e s v . P r o E q u i t i e s , I n c . , 885 So. 2d 100, 105-06 ( A l a . 2 0 0 3 ) . As J u s t i c e See n o t e d i n h i s d i s s e n t i n Hales: "'"A p a r t y seeking to prove w a i v e r of a r i g h t t o a r b i t r a t e must d e m o n s t r a t e ... p r e j u d i c e to the p a r t y opposing a r b i t r a t i o n r e s u l t i n g f r o m s u c h i n c o n s i s t e n t a c t s . The p a r t y a r g u i n g w a i v e r of a r b i t r a t i o n bears a heavy burden of p r o o f . " ' 16 1051804 "885 S o . 2d a t 110 (See, J . , d i s s e n t i n g ) ( q u o t i n g B r i t t o n v . C o - o p B a n k i n g G r o u p , 916 F . 2 d 1 4 0 5 , 1412 (9th C i r . 1 9 9 0 ) ) . " R o g e r s v. (Ala. S t a t e Farm F i r e & Cas. Co., 984 So. 2d 382, 387-88 2007). In d e t e r m i n i n g whether the p l a i n t i f f s substantial plaintiffs prejudice, this Court i n Rogers had e v a l u a t e d the shown amounts had expended i n the l i t i g a t i o n b e f o r e the defendant invoked the a p p r a i s a l c l a u s e . F i n d i n g that the p l a i n t i f f s 4 not a d e q u a t e l y d e f i n e d the expenses under consideration, plaintiffs substantial "have this carried prejudice invocation " Court 984 their from So. 2d as a p p l i c a b l e t o t h e c o u l d not heavy [the at 388. conclude burden As stated had claim that of defendant's] the the showing delayed above, Crews T h e c l a u s e u n d e r c o n s i d e r a t i o n i n R o g e r s was an a p p r a i s a l c l a u s e , but the Court a p p l i e d the s t a n d a r d f o r d e t e r m i n i n g w h e t h e r t h e r e h a d b e e n a w a i v e r o f t h e r i g h t t o i n v o k e an a r b i t r a t i o n agreement. There, t h i s Court s a i d : 4 "Although this Court has never ruled on what standard s h o u l d be applied to determine whether t h e r e h a s b e e n a w a i v e r o f t h e r i g h t t o i n v o k e an a p p r a i s a l c l a u s e i n an i n s u r a n c e p o l i c y , t h e f o r m e r C o u r t o f A p p e a l s p r e v i o u s l y i n d i c a t e d t h a t t h e same s t a n d a r d a p p l i e s t o b o t h a p p r a i s a l and arbitration c l a u s e s . See C h a m b e r s v . Home I n s . Co. o f New York, 29 A l a . A p p . 34, 3 7 , 191 So. 6 4 2 , 644 (1939)." Rogers, 984 So. 2d at 386. 17 1051804 provides money no e v i d e n c e i n d i c a t i n g i n the l i t i g a t i o n failed to prejudice carry that p r o c e s s ; he, l i k e h i s heavy by M a r k e l ' s d e l a y burden of Accordingly, substantially invoke the l i t i g a t i o n to federal the federal has failed of court court even i t s right i f , arguendo, This compel did p r o c e s s by removing t h e substantial prejudice Court has to Markel only after court, remanded t h e case t o t h e s t a t e Markel's action. has substantial and by s e e k i n g a r b i t r a t i o n to demonstrate time or the Rogerses, showing i n asserting arbitration. action he h a s e x p e n d e d Crews as t h e r e s u l t stated: " I n i n t e r p r e t i n g an a r b i t r a t i o n p r o v i s i o n , ' a n y doubts c o n c e r n i n g t h e scope o f a r b i t r a b l e issues s h o u l d be r e s o l v e d i n f a v o r o f a r b i t r a t i o n , w h e t h e r the p r o b l e m a t hand i s the construction of the c o n t r a c t l a n g u a g e i t s e l f o r an a l l e g a t i o n o f w a i v e r , d e l a y , o r a l i k e d e f e n s e t o a r b i t r a b i l i t y . ' M o s e s H. C o n e Mem'l H o s p . v . M e r c u r y C o n s t r . C o r p . , 4 60 U.S. 1, 2 4 - 2 5 , 103 S . C t . 9 2 7 , 74 L . E d . 2 d 765 ( 1 9 8 3 ) . " Dunes o f GP, L.L.C. 2007)(emphasis omitted; C. S c o p e Crews the does argued arbitration v. B r a d f o r d , emphasis 966 S o . 2 d added). of the a r b i t r a t i o n to the t r i a l agreement] court drafted agreement, quoted above, 18 agreement that by n o t a p p l y t o any o t h e r d e f e n d a n t arbitration 9 2 4 , 927 ( A l a . the "language defendant i n this requires [of Markel ... action." The that " [ i ] n the 1051804 event the this and t h a t Y o u o r We d i s a g r e e c o n c e r n i n g w h e t h e r a n y o r a l l o f loss i s covered disagreement by t h e p o l i c y , through i t r e f e r e n c e s no Plaintiff v. N a t i o n a l Insurance Agency, arbitration." other c o u r t s t a t e d as f o l l o w s Y o u a n d We parties. The i n the case s t y l e d Boat Owners will I t goes order resolve no further, of the trial a s Thomas C. C r e w s , Association (NBOA) Marine I n c . ;e t a l . Defendants: " T h i s m a t t e r h a v i n g come b e f o r e t h i s C o u r t o n D e f e n d a n t M a r k e l A m e r i c a n I n s u r a n c e Company's M o t i o n to Compel A r b i t r a t i o n and Stay P r o c e e d i n g s , i t i s hereby: "ORDERED, ADJUDGED, a n d DECREED AS FOLLOWS: " 1 . The M o t i o n t o C o m p e l A r b i t r a t i o n i s g r a n t e d w i t h r e s p e c t t o a l l c l a i m s p r e s e n t e d i n t h i s a c t i o n : and "2. Arbitration shall contract of insurance I n s u r a n c e Company t o P l a of which i s a t t a c h e d t o proceed pursuant to the i s s u e d by M a r k e l American i n t i f f Thomas C r e w s , a c o p y t h e c o m p l a i n t ; and " 3 . The M o t i o n t o S t a y i s g r a n t e d w i t h r e s p e c t t o a l l proceedings before t h i s Court r e l a t i n g to t h i s cause pending t h e c o m p l e t i o n o f t h e a r b i t r a t i o n o f a l l claims presented i n this action." (Capitalization This Court in original; emphasis added.) has h e l d : "A p a r t y t o a c o n t r a c t c a n b e f o r c e d t o a r b i t r a t e o n l y t h o s e i s s u e s he o r s h e s p e c i f i c a l l y a g r e e s t o submit to a r b i t r a t i o n . F i r s t Options of Chicago, Inc. v . K a p l a n , 514 U.S. 9 3 8 , 9 4 3 - 4 4 , 115 S . C t . 1 9 2 0 , 1 9 2 4 , 131 L . E d . 2 d 985 ( 1 9 9 5 ) . G e n e r a l rules 19 1051804 of c o n t r a c t i n t e r p r e t a t i o n r e q u i r e t h a t t h e i n t e n t o f t h e p a r t i e s be d e r i v e d from t h e words of t h e contract, unless an a m b i g u i t y e x i s t s . Loerch v. National B a n k o f C o m m e r c e , 624 S o . 2 d 552 ( A l a . 19 9 3 ) . " Ryan W a r r a n t y (Ala. Servs., to for the p a r t i e s to the insurance a g r e e m e n t was i n c l u d e d . provide those complaint claims the loss-coverage We hold, o f NBOA's be 418 S o . 2 d 8 9 , 92 brief, trial that that (Ala. court i n the action defendants, of resolved Crews w a i v e d Markel's denial of by t h e a r b i t r a t i o n who on a p p e a l the issue t o compel a r b i t r a t i o n under t h e "When an a p p e l l a n t [initial] containing could out a g r e e m e n t when he f a i l e d its other coverage issue. however, opening b r i e f . presented arise and Ashe's s t a n d i n g arbitration The whether exists l o s s e x i s t s under t h e p o l i c y , and because a l l t h e i n the coverage, p o l i c y i n which The a r b i t r a t i o n a g r e e m e n t a n o n j u d i c i a l means t o d e t e r m i n e a given claims of 694 S o . 2 d 1 2 7 1 , 1 2 7 3 1 9 9 7 ) . The a r b i t r a t i o n a g r e e m e n t b y i t s t e r m s e x t e n d s t o Crews and M a r k e l , the I n c . v. Welch, issue t o argue the i s s u e fails t o argue in his an i s s u e i n i s waived." B o s h e l l v. K e i t h , 1982). extended i t s order and i n c l u d e d to the claims are not s i g n a t o r i e s a l l claims against to the contract t h e a r b i t r a t i o n agreement. Inasmuch as t h i s 20 the aspect 1051804 of t h e o r d e r was of the trial n o t c h a l l e n g e d on a p p e a l , we a f f i r m the court that a l l claims presented i n the order action be policy of arbitrated. Conclusion The arbitration agreement insurance i s s u e d by M a r k e l itself of the waive the litigation right to arbitration t h a t he was actions. order of the the cause relating to arbitration of a l l a part of the to Crews. A l t h o u g h process, demonstrated The is i t did Markel not, because by doing not Markel's court staying a l l proceedings pending claims so, has Crews s u b s t a n t i a l l y p r e j u d i c e d by trial availed the presented completion in this of the action is Bolin, and affirmed. AFFIRMED. Cobb, C . J . , and Lyons, Woodall, Shaw, J J . , c o n c u r . 21 S t u a r t , Smith,

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