Volvo Trucks North America, Inc. v. Dolphin Line, Inc.

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REL: 04/23/2010 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 , Alabama 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 ((334) 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 1081277 Volvo Trucks North America, I n c . v. Dolphin Line, Inc. 1081713 Volvo Trucks North America, I n c . v. Dolphin Line, Inc. (Appeals from M o b i l e Circuit Court, CV-06-1226) 1081277, LYONS, 1081713 Justice. Volvo appeals Trucks from of Dolphin North Inc. Line, April Court. entered into agreed (collectively the v e h i c l e s defendants that sued Volvo Group"), of Mobile "the History Trucks, Volvo and Kenworth i n the Mobile Trucks, Volvo defendants") the defendants subsequently suffered would price. t h a t i t had Group, and whereby failed subsequently Dolphin to repurchase financial injury Group of Mobile, Dolphin s e v e r a l v e h i c l e s from the defendants at a s p e c i f i e d Dolphin affirm. ("Kenworth") an a g r e e m e n t w i t h V o l v o that Trucks"), In i t s complaint, Dolphin a l l e g e d to purchase condition We and P r o c e d u r a l Dolphin Trucks ("Volvo award e n t e r e d a g a i n s t i t i n f a v o r Background I n c . ("Volvo d/b/a V o l v o Circuit Inc. Inc. ("Dolphin"). 2006, America, Kenworth America, an a r b i t r a t i o n Factual In North on t h e repurchase alleged that the the vehicles as a r e s u l t . and Dolphin stated claims of breach of contract, misrepresentation, unjust enrichment, and p r o m i s s o r y Kenworth arbitration, moved to estoppel. stay arguing, based the action on c e r t a i n with Dolphin, that arbitration and predispute to compel agreements was r e q u i r e d u n d e r t h e F e d e r a l 2 1081277, 1081713 Arbitration Act, Subsequently, stay the Volvo action arguments. The So. 2d claims to trial 534 and compel 1 et Volvo seq. Group arbitration court denied the appealed the t r i a l ( A l a . 2008), and ("the the action a g a i n s t the agreement they FAA"). jointly based moved on defendants' motions, court's d e c i s i o n to and Court r e v e r s e d the t r i a l trial court compelling Dolphin enter to this Inc., this to to related the directed Subsequently, That Trucks § In K e n w o r t h o f M o b i l e , I n c . v. D o l p h i n L i n e , decision staying U.S.C. and and t h e d e f e n d a n t s Court. 9 988 court's an arbitrate order i t s defendants. on styled April "Post 25, 2008, Dispute agreement p r o v i d e d , i n r e l e v a n t the p a r t i e s Arbitration entered an Agreement." part: "[Dolphin], Volvo North America, Inc. and [Volvo Trucks] (collectively 'Volvo'), and [Kenworth], through c o u n s e l , agree to a r b i t r a t e a l l d i s p u t e s s e t f o r t h i n t h e Demand ( a n d a n y a m e n d m e n t s t h e r e t o ) u n d e r 1975 Code o f A l a b a m a , § 6-6-1, e t seq., according to the following terms and conditions: [ 1 ] It i s u n c l e a r whether Volvo North America, I n c . , and V o l v o G r o u p a r e t h e same e n t i t y . However, V o l v o Group l a t e r p a r t i c i p a t e d i n t h e r e s u l t i n g a r b i t r a t i o n and i n s t a t i n g h i s d e c i s i o n t h e a r b i t r a t o r e x p r e s s l y named " V o l v o G r o u p N o r t h America, Inc." 1 3 1081277, 1081713 "3. I n m a k i n g any a w a r d , t h e A r b i t r a t o r s h a l l f o l l o w c o n t r o l l i n g A l a b a m a laws and p r e c e d e n t s . " Pursuant to arbitrator Kenworth the Dolphin and that arbitration. decision Volvo On 19, by 28, 2008. that Kenworth May awarding June 26, t h i s Court assigned Group, Volvo did 2009, presented to It i s undisputed time reached not a case 2009, V o l v o no. stating 1081277. that filed 71B, Trucks arbitrator against Volvo filed the a r b i t r a t o r ' s that in the issued Group been a motion A l a . R. a n o t i c e of a and on June arbitrator's Civ. P. 26, incorrectly Volvo 2009, Volvo as C i r c u i t Court to award under Rule 59 Group argued that arbitrator's decision c o n f l i c t e d w i t h Alabama law and, this decision i n B i r m i n g h a m News Co. Court's 2 d 27 ( A l a . 2004), 13 So. 3d 375 as being Dolphin v. o v e r r u l e d b y H e r e f o r d v . D.R. ( A l a . 2009), i n manifest responded argued to Volvo 4 Horn, the the citing 901 Horton, So. Inc., t h a t t h e a w a r d s h o u l d be d i s r e g a r d of was identified w i t h the Mobile the appeal d e c i s i o n ; that appeal Also i t had amend, o r v a c a t e Rule aside an settlement participate the D o l p h i n $1,245,348 from Trucks, alter, and had d i s p u t e was Trucks. On to the on N o v e m b e r 18 a n d and agreement agreement, set law. Group's motion and 1081277, 1081713 s u b s e q u e n t l y moved t h e decision The trial Volvo as a final trial c o u r t to e n t e r the judgment under Rule c o u r t d i d so on A u g u s t Group renewed i t s motion arbitrator's trial 14, 2009. to a l t e r , d e c i s i o n under Rule court denied "Defendants' 59. 71C, On arbitrator's A l a . R. On the Civ. same the August the 17, 2009, and/or expressly concluding that m a n i f e s t d i s r e g a r d o f t h e l a w was not a v a l i d b a s i s upon it decision. could review September 3, appeal; that the 2009, arbitrator's Volvo filed Subsequently, 6-6-14 o f t h e A l a b a m a A r b i t r a t i o n A c t , § 6-6-1 et no. second on of a s s i g n e d case a which notice a p p e a l was Trucks day, amend, o r v a c a t e Motion to Vacate, A l t e r Amend A w a r d E n t e r e d b y A r b i t r a t o r , " P. 1081713. 2 Analysis Section seq., A l a . Code 1975 ("AAA") p r o v i d e s : "An a w a r d made s u b s t a n t i a l l y i n c o m p l i a n c e w i t h the provisions of this division i s conclusive b e t w e e n t h e p a r t i e s t h e r e t o a n d t h e i r p r i v i e s as t o t h e m a t t e r s u b m i t t e d a n d c a n n o t be i n q u i r e d i n t o o r impeached f o r want of form or f o r i r r e g u l a r i t y i f the award determines the matter or c o n t r o v e r s y T h e n o t i c e s o f a p p e a l i n b o t h c a s e no. 1081277 and 1081713 name " V o l v o Trucks North America, I n c . " as the appellant. The a p p e l l a n t ' s b r i e f s on a p p e a l r e f e r g e n e r a l l y t o t h e a p p e l l a n t as " V o l v o . " I n s e v e r a l m o t i o n s f i l e d i n t h i s C o u r t , t h e a p p e l l a n t r e f e r s t o i t s e l f as " V o l v o G r o u p N o r t h A m e r i c a , I n c . " F o r p u r p o s e s o f t h e s e a p p e a l s , we a r e a s s u m i n g t h a t V o l v o T r u c k s and V o l v o Group a r e a s i n g l e e n t i t y . 2 5 1081277, 1081713 submitted, and such award arbitrators are g u i l t y of c o r r u p t i o n i n making i t . " On appeal, grounds § Volvo Trucks of fraud, argues partiality, 6-6-14, a r b i t r a t i o n a w a r d s based on manifest trial a finding erred that that, i n addition and c o r r u p t i o n under to the identified t h e AAA may be in set aside the arbitrator's of the law. disregard court i s final, unless the fraud, partiality, or Volvo Trucks argues that the otherwise with regard to Volvo i n concluding decision is in Group's postjudgment motion and t h a t t h e a r b i t r a t o r ' s d e c i s i o n is i n manifest disregard Volvo Trucks bases in Birmingham considered News, appeals g o v e r n e d b y t h e FAA. of Alabama l a w on s e v e r a l i t s a r g u m e n t on t h i s supra. from In that case, a r b i t r a t i o n awards 901 S o . 2 d a t 3 0 . This Company decision this Court involving claims Court noted that the appellant, not r a i s e a n y a r g u m e n t s b a s e d on t h e g r o u n d s s e t f o r t h i n § 6- 6-14, t h e B i r m i n g h a m News Court's points. ("the N e w s " ) , d i d stating: "The News d o e s n o t a r g u e t h a t t h e a r b i t r a t i o n awards i n t h i s a p p e a l were t h e p r o d u c t o f f r a u d , partiality, or corruption on the part of the a r b i t r a t o r s . I t contends, however, t h a t our r e v i e w o f t h e a w a r d s s h o u l d be g o v e r n e d b y t h e s t a n d a r d s prescribed b y t h e FAA, as w e l l as by several 'nonstatutory' grounds, including allowing an a r b i t r a t i o n a w a r d t o b e v a c a t e d when t h e a r b i t r a t o r s 6 1081277, have 1081713 been guilty of a 'manifest disregard o f the law.'" 901 So. 2d a t 42-43. that only those this Court's In addressing grounds review stated in § t h e a p p e l l e e s ' argument 6-6-14 o f the a r b i t r a t o r s ' should awards, apply to this Court stated: "The AAA h a s h a d t h r o u g h o u t i t s h i s t o r y , until the l a s t decade, a f i e l d o f operation only with r e s p e c t t o p o s t - d i s p u t e a g r e e m e n t s t o a r b i t r a t e . ... "... [ I ] t i s w e l l e s t a b l i s h e d t h a t t h e s t a n d a r d s set o u t i n t h e FAA f o r r e v i e w i n g an arbitrator's award a r e a p p l i c a b l e t o our r e v i e w i n t h i s case. "To t h e e x t e n t t h a t t h e l i m i t e d g r o u n d s l i s t e d i n § 6-6-14 ( f r a u d , p a r t i a l i t y , o r c o r r u p t i o n ) m i g h t a r g u a b l y g o v e r n j u d i c i a l r e v i e w o f an a r b i t r a t o r ' s award r e s u l t i n g from a p o s t - d i s p u t e agreement t o a r b i t r a t e when t h e p a r t i e s have v o l u n t a r i l y opted f o r a r b i t r a t i o n w i t h f u l l knowledge o f the contours a n d s i g n i f i c a n c e o f t h e i r d i s p u t e , t h o s e g r o u n d s do not provide adequate review of arbitrators' d e c i s i o n s i n t h e numerous and v a r i e d c o m m e r c i a l - and c o n s u m e r - t r a n s a c t i o n d i s p u t e s now b e i n g c h a n n e l e d t o arbitration i n this State through predispute agreements f o r a r b i t r a t i o n . " 901 S o . 2 d a t 4 4 - 4 6 . This Court has § 10 [ o f t h e FAA] as a p p l i c a b l e adopted appeal need 9 U.S.C. o f an a r b i t r a t i o n to retreat from that award then i n this position," 7 concluded: state, "This Court t o an a n d we s e e no 901 S o . 2 d a t 46-47, 1081277, 1081713 noting s u b s e q u e n t l y t h a t the of FAA the included This Court availability reviewing r e v i e w e d the in the have arbitration courts considered arbitration the award." Subsequently, Mattel, Court Inc., 552 for Hereford v. Court States, i t in had additional, D.R. 576 Horton, 13 of arbitrator's decision." So. United the law and courts 'manifest reviewing an L.L.C. v. 3d States as under 375, rejected of available the of the the relief Supreme FAA. In (Ala. 2009), the United conclusion law as an from an B a s e d on H a l l S t r e e t A s s o c i a t e s , this 8 for an 380 Court disregard ground Court concluded: Associates, the Associates] nonstatutory then recognizing Supreme manifest for 50. (2008), "[T]he Street adopted at Street Inc., This available for disregard ground state appellate i n now 2d a i t . and a r b i t r a t i o n awards explained: [Hall of other Hall U.S. reviewing So. as the i n the f e d e r a l c o u r t s states 10 6-6-14. considered law before a ground 901 rejected manifest ground that other then of standard matter as in News awards of the law' forth in § disregard h i s t o r y o f the of set Birmingham Court j o i n s the m a j o r i t y disregard this grounds manifest appellate "This that in of the the grounds f o r review s t a t e d i n § 1081277, 1081713 Court then overruled its earlier d e c i s i o n i n B i r m i n g h a m News , stating: "Under t h e Supreme C o u r t ' s d e c i s i o n i n H a l l S t r e e t Associates, therefore, manifest d i s r e g a r d of thelaw i s no l o n g e r a n i n d e p e n d e n t a n d p r o p e r b a s i s u n d e r t h e [FAA] f o r v a c a t i n g , m o d i f y i n g , o r c o r r e c t i n g an a r b i t r a t o r ' s award. I n l i g h t o f t h e f a c t t h a t t h e [FAA] i s f e d e r a l l a w , a n d i n l i g h t o f t h e S u p r e m a c y Clause of the C o n s t i t u t i o n of the United States, A r t . V I , we h e r e b y o v e r r u l e o u r e a r l i e r s t a t e m e n t i n B i r m i n g h a m News t h a t m a n i f e s t d i s r e g a r d o f t h e l a w i s a ground f o r v a c a t i n g , modifying, or correcting an a r b i t r a t o r ' s a w a r d u n d e r t h e [ F A A ] , a n d we a l s o overrule any such language i n our other cases construing federal a r b i t r a t i o n law." 13 So. 3d a t 3 8 0 - 8 1 . Volvo Trucks contends that manifest-disregard-of-law b r o a d enough t o a p p l y by Volvo Trucks notes Court i n Hereford on language, Hereford overruled arbitration awards governed argues that that, Court's i n Birmingham governed awards solely by of the News was governed t h e AAA. i n o v e r r u l i n g B i r m i n g h a m News , Volvo o n l y t h e F A A , n o t t h e AAA. Trucks argues B i r m i n g h a m News o n l y awards e n t e r e d solely adoption to arbitration to those referenced this to standard not only t h e FAA, b u t a l s o this under b y t h e AAA. that Based Court in i n s o f a r as i t r e l a t e s t h e FAA, n o t a r b i t r a t i o n Volvo the manifest-disregard-of-law 9 this this Trucks standard therefore remains a 1081277, viable 1081713 basis upon w h i c h awards governed In reaching made c l e a r may set aside b y t h e AAA. solely our courts We disagree. i t s c o n c l u s i o n i n B i r m i n g h a m News, t h i s i n response to the appellees' arguments d e c i s i o n was g o v e r n e d b y t h e FAA, n o t t h e AAA. at 44-47. Furthermore, this manifest-disregard-of-the-law the arbitration s t a t u t o r y grounds Court standard s t a t e d b y § 6-6-14, that i t s S e e 901 S o . 2 d indicated would Court that not f a l l the within stating: "To t h e e x t e n t t h a t t h e l i m i t e d g r o u n d s l i s t e d i n § 6-6-14 ( f r a u d , p a r t i a l i t y , o r c o r r u p t i o n ) m i g h t a r g u a b l y g o v e r n j u d i c i a l r e v i e w o f an a r b i t r a t o r ' s award r e s u l t i n g from a p o s t - d i s p u t e agreement t o a r b i t r a t e when t h e p a r t i e s h a v e v o l u n t a r i l y opted for a r b i t r a t i o n w i t h f u l l knowledge of the contours a n d s i g n i f i c a n c e o f t h e i r d i s p u t e , t h o s e g r o u n d s do not provide adequate review of arbitrators' d e c i s i o n s i n t h e numerous and v a r i e d c o m m e r c i a l - and c o n s u m e r - t r a n s a c t i o n d i s p u t e s now b e i n g c h a n n e l e d t o arbitration in this State through predispute agreements f o r a r b i t r a t i o n . " 901 So. 2d a t 46. Accordingly, decision when viewed i n Birmingham News manifest-disregard-of-law may by § a r e e x c l u s i v e , and t h i s rewrite the statute n o t be standard governed 6-6-14 t h e AAA. i n i t se n t i r e t y , with Furthermore, to embrace 10 read this to respect the standards Court the h a s no broader Court's adopt to the cases stated i n authority to standard of 1081277, 1081713 manifest d i s r e g a r d of the law. Inc. v . P a t t e r s o n , 816 S o . 2 d 1, 6 ( A l a . 2 0 0 1 ) ( " T h e not at l i b e r t y for Alabama 'to 1095, Health appeal, Appeals' and 2d So. decision 823 ( 2 0 0 1 ) . on t h i s 878 2d 79 Jenks before arbitrators' Trucks, and However, none o f t h o s e awards this the 7 92 So. 2d brief v. H&S v. Homes, the L.L.C. Court of I n c . v. Smith, Civil 809 S o . decisions supports the b y t h e AAA may d i s r e g a r d of the law. Court to determine or Legislature.' i n i t s reply award governed a n d H & S Homes, d e c i d e d Hereford, ( A l a . 2000), d e c i s i o n s i n Jenks and Group, on a m a n i f e s t Court i s of Trustees of M i d f i e l d , Court's (2004), t h a t an a r b i t r a t i o n of Stores, quotations omitted)."). (20 08 ) , i n Sanderson s e t aside based In City i t s p o s i t i o n , Volvo So. 910 conclusion f o r that Sys., I n c . v. relies Reed v. Board 778 S o . 2 d 7 9 1 , 794 i t s judgment also 990 McDonald, statutes, ( A l a . 2001) ( i n t e r n a l support Harris, be State Univ., 1097 To 2d to rewrite substitute Baptist on See, e.g., Wal-Mart after Birmingham considered whether appeals News from t h e awards had been e n t e r e d i n m a n i f e s t d i s r e g a r d o f t h e l a w . However, t h e awards at issue i n Jenks arbitration a n d H & S Homes agreements governed 11 resulted by the from FAA. predispute Similarly, 1081277, 1081713 Sanderson before Group, a case this Court's d e c i d e d by t h e Court decision reviewed an arbitration entered in manifest predispute AAA, Trucks, our courts agreement have authority plain language statement grounds as noted, i n Birmingham n o t t o embrace review arguments the relies on a FAA. involve s o l e l y b y t h e AAA. the grounds t o any a u t h o r i t y the plain News manifest of the manifest i s the involved by that, to set aside import critical i n § 6-6-14 i s t h a t t h e g r o u n d s availability for governed i t was an under the arbitration By t h e f o r review o f an i n § 6-6-14 o f t h e AAA a r e e x c l u s i v e ; we h a v e n o t b e e n d i r e c t e d previously which d i s r e g a r d of the law. of the statute, award s t a t e d News, law, Trucks Appeals whether t h e r e f o r e , h a s n o t shown on t h e b a s i s o f m a n i f e s t As the agreements governed award arbitration of none o f t h e c a s e s V o l v o postdispute arbitration Birmingham to determine disregard arbitration Accordingly, Volvo award in of C i v i l of showing of otherwise. this Court's t h e scope a r e so n a r r o w l y d i s r e g a r d of law. of Volvo Trucks's o n a p p e a l , we n e e d n o t c o n s i d e r t h o s e Conclusion 12 drawn Because d i s r e g a r d o f t h e l a w as a foundation of the the ground remaining arguments. 1081277, 1081713 B a s e d on t h e f o r e g o i n g , of the a r b i t r a t i o n Ala. R. award we affirm as a f i n a l the t r i a l judgment court's entry under Rule 71C, C i v . P. 1081277 -- AFFIRMED. 1081713 -- AFFIRMED. Cobb, C . J . , and W o o d a l l , S t u a r t , Smith, B o l i n , Shaw, J J . , c o n c u r . Murdock, J . , concurs i n the 13 result. Parker, and 1081277, 1081713 MURDOCK, J u s t i c e (concurring This case concerns post-dispute Trucks Court So. that America, law" as a b a s i s the limitations Truck's Court's concur made p u r s u a n t t o As t o such awards, I n c . , argues i n i t sappeals i n Birmingham News review that contemplated by are based i n that case. § Co. v . H o r n , Because 14 901 of the A l a . Code 1 9 7 5 . on i t s r e a d i n g o f t h i s I agree with u n d e r s t a n d i n g of the d e c i s i o n i n Birmingham i n the result. this i s not p r o h i b i t e d by 6-6-14, solely Volvo to r e c o g n i z e s "a m a n i f e s t d i s r e g a r d f o rjudicial appeals decision opinion's agreements. the decision 2 d 27 ( A l a . 2 0 0 4 ) , Volvo awards by a r b i t r a t o r s arbitration North i n the r e s u l t ) . t h e main News , I

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