Bedii Okay v. Terrence Murray d/b/a Centennial Residential Developments, Inc.

Annotate this Case

Download PDF

REL: 6-4-2010 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 1081193 Bedii Okay v. T e r r e n c e M u r r a y d/b/a C e n t e n n i a l R e s i d e n t i a l Inc. Appeal STUART, from Limestone C i r c u i t (CV-08-900088) Developments, Court Justice. Bedii Okay appeals from Circuit Court appointing dispute with Terrence the order an a r b i t r a t o r Murray of t h e Limestone to preside d/b/a C e n t e n n i a l over h i s Residential 1081193 Developments, Inc. arguing the that (hereinafter arbitrator referred was selected i n c o n s i s t e n t w i t h t h e method a g r e e d t o by arbitration agreement. We reverse to and as in "CRDI"), a manner the p a r t i e s i n their remand. I. On October property Okay for 18, 2005, CRDI signed l o c a t e d at 29025 Highway 72 $272,500. That contract a contract to purchase i n Limestone County contained the following arbitration provision: "In c o n n e c t i o n w i t h t h e p u r c h a s e and s a l e o f the above d e s c r i b e d p r o p e r t y , [ C R D I ] and [ O k a y ] m u t u a l l y c o v e n a n t , s t i p u l a t e and a g r e e i n c o n n e c t i o n w i t h t h e r e s o l u t i o n o f any d i s p u t e o r c o n t r o v e r s y a r i s i n g out of or r e l a t i n g to t h i s agreement or c o n c e r n i n g the within described property, or the breach, t e r m i n a t i o n , o r v a l i d i t y t h e r e o f , as f o l l o w s : T h a t the t r a n s a c t i o n contemplated in this agreement directly involves interstate commerce, and said transaction has been and will continue to be regulated by the laws of the United States of A m e r i c a ; and, t h a t t h e c o n t r a c t ( s ) e n t e r e d i n t o by the parties concerning this property evidence t r a n s a c t i o n s i n v o l v i n g and a f f e c t i n g commerce. The undersigned a g r e e s t h a t a l l d i s p u t e s not b a r r e d by applicable s t a t u t e s of limitations or otherwise b a r r e d by law, r e s u l t i n g f r o m o r a r i s i n g out o f t h i s agreement [sic]; that [CRDI] and [Okay] a g r e e t o submit such dispute(s) to binding arbitration, p u r s u a n t t o t h e p r o v i s i o n s o f 9 U.S.C. S e c t i o n 1, e t s e q . , and a c c o r d i n g t o t h e C o m m e r c i a l R u l e s o f t h e American A r b i t r a t i o n A s s o c i a t i o n then e x i s t i n g i n the County where p r o p e r t y b e i n g s o l d i s l o c a t e d . The p r e p a i d a r b i t r a t i o n f i l i n g f e e s a n d a l l o t h e r 2 from 1081193 p r e p a i d c o s t s o f t h e a r b i t r a t i o n p r o c e e d i n g s h a l l be p a i d by t h e p a r t y s e e k i n g t o i n v o k e arbitration, w i t h t h e a s s i g n m e n t o f t h o s e c o s t s t o be d i v i d e d b e t w e e n t h e p a r t i e s as t h e a r b i t r a t o r s e e s f i t i n s e t t i n g the a r b i t r a t i o n award. I t i s hereby agreed that i t i s the i n t e n t of the p a r t i e s that the a r b i t r a t o r ' s a w a r d i s t o be f i n a l a n d b i n d i n g a n d j u d g m e n t upon t h e award r e n d e r e d by t h e a r b i t r a t i o n may be e n t e r e d i n any c o u r t h a v i n g jurisdiction thereof. T h i s a r b i t r a t i o n s h a l l be i n f u l l l i e u o f any c i v i l l i t i g a t i o n i n any c o u r t , and i n l i e u o f any t r i a l by j u r y . " ( E m p h a s i s added.) sometime Some adjacent CRDI c l o s e d on i t s p u r c h a s e o f t h e p r o p e r t y i n December months 2005. t h e r e a f t e r , CRDI to the property discovered i t had p u r c h a s e d that property f r o m Okay had u s e d a s an u n a u t h o r i z e d dumping c o n t a i n e d l a r g e amounts o f c o n s t r u c t i o n d e b r i s and o t h e r waste, that in violation adjacent of § property g r o u n d by unknown p a r t i e s 22-27-4, was owned A l a . Code by Okay, 1975. and, n o t i f i e d by t h e Alabama Department o f E n v i r o n m e n t a l ("ADEM") that the unauthorized been dump on 1 solid Some after and of being Management his property was in ^ B e f o r e t h e a d o p t i o n o f an amendment e f f e c t i v e A p r i l 1 5 , 2008, § 22-27-4(b) provided that "[t]he formation of u n a u t h o r i z e d dumps i s h e r e b y d e c l a r e d t o be a p u b l i c n u i s a n c e p e r s e , a menace t o p u b l i c h e a l t h , and a v i o l a t i o n o f t h i s article " Section § 22-27-4(b) now provides: "The c r e a t i o n , c o n t r i b u t i o n t o , a n d o p e r a t i o n o f u n a u t h o r i z e d dumps s h a l l be p r o h i b i t e d , r e m o v e d , e n j o i n e d , a n d e n f o r c e d u p o n a n d r e g u l a t e d as p r o v i d e d i n t h i s a r t i c l e g e n e r a l l y " 3 1081193 violation of the statute, property. Other property apparently unauthorized advised CRDI adjacent Okay, with on t o CRDI's s i t u a t e d next the court trial denied, the claims provision entered trial asserted nuisance, court granted the after ADEM Court, claim against the claims contract 18, 2005. 4 from to h i m was him, which to dismiss t o compel him pursuant arbitration. stated for failing against h i s motion court the motion negligence CRDI a l s o Okay named a n d i l l e g a l s o l i d - w a s t e dump. After against of property alleging i t had purchased the t r i a l 22, 2008, fictitiously and t r e s p a s s . to dismiss on O c t o b e r CRDI's up on May parcels and v a r i o u s i n the real-estate into even efforts, o f two o t h e r Circuit denied. Okay moved to clean properties t o an u n a u t h o r i z e d a motion to up t h e t o do s o . the property Okay f i l e d to clean adjacent action their property, fraudulent-suppression that property the cleanup i n the Limestone disclose endeavored no t h e owners and/or wantonness, a of took them o f t h e need sued parties owners dumping Unsatisfied Okay arbitration was of to the a r b i t r a t i o n CRDI and Okay had On N o v e m b e r 2 5 , 2 0 0 8 , t h e and s t a y e d the case pending 1081193 The r e c o r d r e f l e c t s sent letters between he t o Okay's January contact in they alleges agreed that possible Bell, a Northern Okay discuss also the the four occasions requesting selection indicate that had d i d have select multiple court United April the States District i n setting the t r i a l and a p p o i n t e d the case and in Okay discussing 13, 2009, Richard panel an was conversation to appoint on of she an a r b i t r a t o r , on that telephone. conversations However, attorney a of CRDI Warren neutrals Court D i s t r i c t o f A l a b a m a , as t h e a r b i t r a t o r , for alleging the that for arbitration. court granted that motion without B e l l to arbitrate the dispute between Okay. On May alleged, to moved t h e t r i a l by a hearing 16 2009, attorneys had not c o o p e r a t e d CRDI a n d 3, to mutually they Three days l a t e r , April the Birmingham maintained least t o c o n t a c t Okay's a t t o r n e y by arbitrators. unilaterally at letters simultaneously trying that on and A p r i l order Those CRDI a l l e g e s attorney 30, 2009, her arbitrator. which t h a t the a t t o r n e y f o r CRDI t h e r e a f t e r 28, 2009, Okay moved t h e t r i a l order he appointing Bell a n d CRDI h a d a g r e e d 5 as court arbitrator to vacate i t s because, i n the a r b i t r a t i o n he provision 1081193 in the real-estate would be conducted contract that any a r b i t r a t i o n between a c c o r d i n g to the Commercial Arbitration Rules of the American A r b i t r a t i o n A s s o c i a t i o n ("the AAA"). the time this c a s e was referred to arbitration, them At R u l e R-11 o f t h o s e r u l e s s e t f o r t h t h e f o l l o w i n g p r o c e d u r e f o r s e l e c t i n g an arbitrator: " I f t h e p a r t i e s h a v e n o t a p p o i n t e d an a r b i t r a t o r a n d have n o t p r o v i d e d any o t h e r method o f a p p o i n t m e n t , the a r b i t r a t o r s h a l l be a p p o i n t e d i n t h e f o l l o w i n g manner: "(a) Immediately a f t e r the f i l i n g of the submission or the answering statement or the e x p i r a t i o n of the time w i t h i n which the a n s w e r i n g s t a t e m e n t i s t o be f i l e d , t h e AAA s h a l l send s i m u l t a n e o u s l y t o each p a r t y t o t h e d i s p u t e a n i d e n t i c a l l i s t o f 10 ( u n l e s s the AAA d e c i d e s t h a t a d i f f e r e n t n u m b e r i s a p p r o p r i a t e ) names o f p e r s o n s c h o s e n f r o m the National Roster. The p a r t i e s a r e e n c o u r a g e d t o a g r e e t o an a r b i t r a t o r f r o m the s u b m i t t e d l i s t a n d t o a d v i s e t h e AAA o f their agreement. [ 2 ] " ( b ) I f the p a r t i e s are unable to agree upon an a r b i t r a t o r , each party to the dispute shall have 15 days from the t r a n s m i t t a l d a t e i n w h i c h t o s t r i k e names o b j e c t e d t o , n u m b e r t h e r e m a i n i n g names i n o r d e r o f p r e f e r e n c e , and r e t u r n t h e l i s t t o the AAA. I f a p a r t y does n o t r e t u r n t h e l i s t w i t h i n the time s p e c i f i e d , a l l persons named t h e r e i n s h a l l be d e e m e d a c c e p t a b l e . The N a t i o n a l R o s t e r i s a N a t i o n a l R o s t e r o f C o m m e r c i a l A r b i t r a t o r s e s t a b l i s h e d a n d m a i n t a i n e d b y t h e AAA. 2 6 1081193 From among the persons who have been a p p r o v e d on b o t h l i s t s , a n d i n a c c o r d a n c e with the designated order of mutual preference, the AAA shall invite the a c c e p t a n c e o f an a r b i t r a t o r t o s e r v e . I f the p a r t i e s f a i l to agree t o any of the persons named, or i f a c c e p t a b l e a r b i t r a t o r s are unable to a c t , or i f f o r any other r e a s o n t h e a p p o i n t m e n t c a n n o t b e made f r o m t h e s u b m i t t e d l i s t s , t h e AAA s h a l l h a v e t h e p o w e r t o make t h e a p p o i n t m e n t f r o m among other members of the National Roster without the submission of additional lists." A c c o r d i n g l y , Okay a r g u e d , the t r i a l him to a r b i t r a t e his dispute with s e l e c t e d i n a manner CRDI and Okay simultaneously this Court court e r r e d by compelling filed the arbitration a petition the t r i a l On Okay's p e t i t i o n a f o r the w r i t n o t i c e of appeal. briefs, i n the and t h e case The was trial agreed to by Okay o f mandamus i n June 25, 2009, c o u r t d e n i e d Okay's H o w e v e r , on J u l y 1 7 , 2 0 0 9 , t h i s C o u r t proceedings arbitrator provision. f o r the w r i t t h e same r e l i e f . a h e a r i n g on t h e m a t t e r , further an i n c o n s i s t e n t w i t h t h e manner in seeking CRDI b e f o r e after motion. e n t e r e d an o r d e r s t a y i n g court and declaring that o f mandamus w o u l d be t r e a t e d a s parties submitted II. 7 thereafter for a filed decision. appellate 1081193 Okay a p p e a l s to arbitrate appointed the his by manner the order dispute the trial agreed arbitrator. We of the with court, to by review trial CRDI of review we a motion to compel arbitration. trial judge substantial BankAmerica 2002) erred on prejudice Hous. (quoting of Servs. Ex to a parte before parties order standard the apply compelling an any he of an the same de granting order We says, selecting for applying or or legal 'whether issue to the the v. party Lee, 833 So. 2d 609, 617 (Ala. 749 So. 2d 441, 446 (Ala. Roberson, seeking novo denying "must d e t e r m i n e factual him arbitrator in contravention, the that court review.'" 1999)). III. Okay Federal argues that Arbitration i n a s m u c h as t h e FAA accordance with U.S.C. § this 3. He provision reversed the were a p p o i n t e d the the Act, trial court's 9 U.S.C. § 1 order et violates seq. r e q u i r e s t h a t a r b i t r a t i o n be ("the FAA"), conducted " i n terms of the [ a r b i t r a t i o n ] agreement." f u r t h e r argues on multiple judgments of that this occasions trial courts Court has 9 enforced and has previously when the arbitrators i n a manner i n c o n s i s t e n t w i t h the p r o v i s i o n s 8 the of 1081193 the arbitration 901 S o . 2 d 658 agreement. had arising out of a timber members Society the agreed of at arbitration that they twenty that entered opposed into with the motion were Foresters So. 2d no 20-year who w e r e at 661. licensed The arbitrators licensed trial court appealed court, Attorneys.'" to t h i s Court, of the court When by a n d we r e v e r s e d 9 dispute agreement i t The Society plaintiffs i n part, of American law i n Alabama. parties arbitration). stating: a arguing, arbitration the (quoting the defendant thereafter 901 S o . 2 d a t 662 compelling i n the t o be a t t o r n e y s a n d t h a t to practice trial appointed "'shall standing Id. arbitration, defendant's motion and compelled the who to the a r b i t r a t i o n members disputes 901 S o . 2 d a t 660 t h a t Alabama law r e q u i r e d a r b i t r a t o r s there arbitrators the p l a i n t i f f s . t o compel any in litigation, moved f o r a r b i t r a t i o n p u r s u a n t had In Bowater, the of the p a r t i e s ) . resulted I n c . v. Zager, arbitrate (20) y e a r s Foresters.'" agreement arose would lease before least of American thereafter Bowater ( A l a . 2 0 0 4 ) , as one s u c h c a s e . parties be Okay c i t e s granted the but ordered that only duly "'be (quoting order The 901 defendant the order of the then of the t r i a l 1081193 "This Court has r e c o g n i z e d t h e r i g h t o f a p a r t y to an a r b i t r a t i o n agreement t o r e q u i r e t h a t t h e method f o r s e l e c t i n g t h e a r b i t r a t o r o r a r b i t r a t o r s s e t f o r t h i n t h e a r b i t r a t i o n a g r e e m e n t be f o l l o w e d and has r e v e r s e d t r i a l c o u r t o r d e r s t h a t changed t h e contractually p r e s c r i b e d method o f s e l e c t i n g the arbitrator. E x p a r t e C a p p a e r t M a n u f a c t u r e d Homes, 822 S o . 2 d 385 ( A l a . 2 0 0 1 ) ; B a n k A m e r i c a Housing S e r v s . v . L e e , 833 S o . 2 d 609 ( A l a . 2 0 0 2 ) ; E x p a r t e S o u t h e r n U n i t e d F i r e I n s . C o . , 843 S o . 2 d 151 ( A l a . 2 0 0 2 ) ; N o r t h c o m , L t d . v . J a m e s , 848 S o . 2 d 242 ( A l a . 2 0 0 2 ) ; a n d M c D o n a l d v . H & S Homes, L L C , 853 S o . 2 d 920 ( A l a . 2 0 0 3 ) . "'When a trial court compels arbitration, i t m u s t do s o i n a m a n n e r consistent with the terms of the arbitration provision. See Ex parte C a p p a e r t M a n u f a c t u r e d Homes, 822 S o . 2 d 3 8 5 , 387 ( A l a . 2 0 0 1 ) ( " [ s e c t i o n ] 5 [ o f t h e F e d e r a l A r b i t r a t i o n A c t ] mandates t h a t t h e method set forth i n the arbitration a g r e e m e n t be f o l l o w e d " ) ; S o u t h e r n Energy Homes R e t a i l C o r p . v . M c C o o l , 814 S o . 2 d 845 ( A l a . 2001) ( t r i a l c o u r t d i r e c t e d t o vacate i t s order because i t failed to compel a r b i t r a t i o n i n a manner c o n s i s t e n t w i t h t h e terms o f t h e agreement between t h e parties) A trial court's order compelling arbitration that changes the t e r m s o f t h e a r b i t r a t i o n p r o v i s i o n w i l l be r e v e r s e d when "'"it appears that the trial court, although i t ordered the parties to arbitrate, failed to compel arbitration i n a manner consistent with t h e terms of [the] a r b i t r a t i o n provision." "'McCool, 814 S o . 2 d a t 8 4 9 . ' 10 1081193 "BankAmerica, 833 So.2d at 618. "'The t r i a l c o u r t e r r e d i n o r d e r i n g t h e p a r t i e s t o commence a r b i t r a t i o n i n a m a n n e r t h a t c o n f l i c t e d w i t h the p r o v i s i o n s of the a r b i t r a t i o n agreement.' N o r t h c o m , 848 So. 2 d a t 2 4 7 - 4 8 . " ' B e c a u s e t h e t r i a l c o u r t ' s ... t h e p a r t i e s t o s e l e c t an a r b i t r a t o r i n is inconsistent with the terms of agreement to a r b i t r a t e , we reverse M c D o n a l d , 853 So. 2 d a t 9 2 5 . order directs a manner t h a t the parties' that order.' " F i n a l l y , we c a n n o t a g r e e w i t h t h e p r o p o s i t i o n , originally proposed by the p l a i n t i f f s in their o p p o s i t i o n to the motions t o compel arbitration, then adopted by the trial judge i n i t s order compelling arbitration, and now urged by the plaintiffs in their appellees' brief, that arbitrators i n t h e S t a t e o f A l a b a m a m u s t be duly licensed attorneys. The p l a i n t i f f s a r g u m e n t i n t h i s r e g a r d i s a s o p h i s m , r e l y i n g on a s e r i e s o f i n v a l i d premises. " A c c o r d i n g l y , we r e v e r s e t h e t r i a l c o u r t ' s o r d e r ... to the extent that i t required '[t]hat the a r b i t r a t o r s t o be a p p o i n t e d b y e a c h p a r t y a r e t o be d u l y l i c e n s e d A t t o r n e y s ' and o m i t t e d t h e r e q u i r e m e n t that the a r b i t r a t o r s be m e m b e r s o f a t l e a s t 20 years' standing in the Society of American F o r e s t e r s , a n d we r e m a n d t h i s c a s e f o r t h e trial court to enter a revised order compelling a r b i t r a t i o n c o n s i s t e n t w i t h the p r o v i s i o n s of the arbitration agreement." Bowater, 901 So. 2d at 668-71. 11 1081193 CRDI d o e s n o t c o n t e s t the holding argues t h a t Bowater does n o t a p p l y alleges, the t r i a l court's parties' agreement as Rule R-11 states an of order of Bowater; i n this here case because, i s consistent to the appointment the Commercial Arbitration applies a p p o i n t e d an a r b i t r a t o r of appointment." to a "method agree only the arbitrator. Rules of CRDI a r g u e s , of appointment" court to agree -- i t s authority T h i s argument f a i l s , that they Rules would Thus, oral that agreement is require true, that to voluntarily changes method CRDI were argues, thereafter the trial arbitrator. h o w e v e r , b e c a u s e O k a y d e n i e s t h a t he the to those select an i n the Commercial CRDI s t e a d f a s t l y however, not voluntarily by a p p o i n t i n g an the framework s e t f o r t h o f t h e AAA. AAA d i d agree o f an a r b i t r a t o r , a g r e e d t h a t he a n d CRDI w o u l d v o l u n t a r i l y outside have the parties o f an a r b i t r a t o r . on t h e s e l e c t i o n acted within the for selecting parties R u l e R-11 was p r e e m p t e d a n d , when t h e p a r t i e s unable with the and have n o t p r o v i d e d any o t h e r In f a c t , to the selection "[i]f CRDI o f an that the procedure set forth i n that rule arbitrator rather, i t alleges select 12 Arbitration t h e r e was a n an a r b i t r a t o r ; Commercial rules that arbitrator Arbitration be s e t f o r t h even i f Rules in writing, 1081193 and t h e r e i s no written agreement Arbitration may rules."). Rule The R-11 CRDI Rule of See the vary AAA the procedure ("The argues because Specifically, CRDI failed that and month a f t e r he that to invoke did not he to do as so after and promptly -- his right to these set forth i t or to to rely object filed no because he the in a counters seeking d i d not trial court granted i t was filed -- that and as or approximately Okay motion a court. objection conducted CRDI's in commenced of B e l l without on objection the filed in followed. as a r b i t r a t o r . arbitrator p r o m p t l y moved t h e t r i a l Bell Okay a written s e l e c t e d by t h e t r i a l participated respond opportunity by forth seeking the appointment h i s appointment of B e l l t h r e e days that such Commercial c o u r t a n d b e c a u s e he conference that B e l l appointment only notes to i t s motion telephone status one set Okay w a i v e d a r b i t r a t i o n b e f o r e the a r b i t r a t o r arbitrator R-1(a), f o r s e l e c t i n g an a r b i t r a t o r that he that parties, procedures t i m e l y manner b e f o r e t h e t r i a l response Rule s h o u l d a c c o r d i n g l y have been also R-11 i n the r e c o r d i n d i c a t i n g existed. Rules agreement, in evidence he the have the an motion thereafter c o u r t to vacate the order a p p o i n t i n g the related 13 petition f o r the w r i t of 1081193 mandamus with transcript in this Court. the status record the of and that whether he Moreover, conference there objected to he argues c o n d u c t e d by is accordingly Bell's no that Bell is evidence appointment the not as during to that conference. We in agree that this that case. Okay a finding There ever Bell his insist agreed to to by indicating being to the that the on in Rules, Paw's C a m p e r C i t y , we may be record conclude selected moreover, would inappropriate indicating arbitration arbitrator parties; CRDI i n the the extent an f o r c e d to r e s t a r t Arbitration evidence participated c o n d u c t e d by right i s no o f w a i v e r w o u l d be there proceedings he by is substantially the no which i t a l s o agreed t o , are v. Hayman, 973 So. 2d method evidence prejudiced t h e p r o c e e d i n g s so t h a t t h e Inc. abandoned by Commercial followed. 344, 347 Paw (Ala. 2007). IV. The the trial court proceedings contravention agreed t o by of the appointed resolving the arbitrator a dispute method parties. an for Because 14 between selecting a trial to preside Okay and that court over CRDI in arbitrator is required 1081193 to compel of the arbitration arbitration appointing that " i n a manner c o n s i s t e n t provision," arbitrator was the entered C a p p a e r t M a n u f a c t u r e d Homes, 822 That CRDI order i s hereby can pursuant pursue to the r e v e r s e d and i t s claims Commercial a g r e e d t o by t h e p a r t i e s , the selection of trial So. in error. the cause Arbitration which rules the court's 2d 385, against with 387 in Rules of specifically order Ex parte ( A l a . 2001). remanded Okay terms so that arbitration t h e AAA, as provide for arbitrators. R E V E R S E D AND REMANDED. Cobb, and Murdock, C.J., and Lyons, Woodall, Shaw, J J . , c o n c u r . 15 Smith, Bolin, Parker,

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.