Terminix International Company, L.P. v. Scott
Annotate this CaseTerminix International Company, L.P., and Terminix International, Inc. appealed a trial court's order denying Terminix's motion to vacate or modify an arbitration award entered in favor of Walter Scott III and his wife, Paige. Terminix also appealed the trial court's order referring the Scotts' motion for sanctions to arbitration. In 2001, the Scotts entered into a termite-control-services contract with Terminix for a service known as the Termite Baiting System Protection Plan. Pursuant to the baiting plan, Terminix agreed, among other things, to install the baiting system, to monitor it, and to add or remove termite bait from the system as needed. In 2004 or 2005, Terminix lost the licensing rights to service or sell the termite-baiting-system plan. As a result, Terminix was no longer allowed to monitor or service the baiting system it had installed at the Scotts' house. The Scotts were not informed of this development until 2007, when they received a letter from Terminix which encouraged the Scotts to "update" their baiting system with another Terminix service or to convert their baiting system to the Terminix Liquid Defend System. The Scotts then entered into a new termite-service contract with Terminix for the new system. No live termite infestation was found in the Scotts' house since Terminix began servicing the house in 2001. However, in February 2010, a Terminix employee discovered extensive termite damage throughout the Scotts' house. Terminix agreed to repair the damage. Terminix stated it expended approximately $52,645 in repairs when a dispute arose with the Scotts over the scope of repairs to be made in a bathroom. Later that year, the Scotts petitioned the trial court, pursuant to the Federal Arbitration Act ("the FAA"), to arbitrate certain fraud claims arising from their dispute with Terminix. The Alabama Supreme Court agreed with Terminix to the extent that it argued the trial court erred in denying its postjudgment motion to vacate the ultimate arbitration award without first conducting a hearing on the motion as to the issue of arbitrator bias, and that was not harmless error. However, the Court found that the trial court did not err in denying the postjudgment motion to vacate the arbitration award without first conducting a hearing on the motion as to the issue whether the arbitrator had exceeded his authority under the termite-service contract. Furthermore, the trial court was without jurisdiction to adjudicate in any respect the Scotts' ALAA claim because that claim did not survive the trial court's failure to reserve jurisdiction to hear the claim.
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