Alabama Appellate Watch : Blog Published by Lightfoot Franklin & White : Alabama Litigation Lawyer & Attorney : Appellate, Alabama Supreme Court (Supreme Court of Alabama)

This case retreads familiar ground, with small nominal and procedural twists. The upshot of the decision is that a defendant’s “motion to dismiss,” which asked the circuit court to send the plaintiff’s claims to arbitration, was a motion to compel arbitration. When the circuit court denied this motion, Rule 4(d) of the Alabama Rules of Appellate Procedure gave the defendant the right to appeal that denial. The Court of Civil Appeals erred by holding that the circuit court had merely denied a motion to dismiss (in a more generic sense), so that its order could not be appealed.

The defendant in this contract case filed a “motion to dismiss” the plaintiff’s claims. The defendant argued that the parties’ contract obligated the plaintiff to arbitrate its claims. The circuit court disagreed and denied the motion to dismiss. The defendant appealed to the Alabama Supreme Court.

Some unusual appellate procedure then ensued. (This does not seem to have affected the substantive decision, but readers may find it useful.) The Supreme Court first ordered the defendant to show cause why its appeal should not be dismissed as being from a non-appealable order. The parties submitted briefs on this topic. After receiving these, the Supreme Court transferred the case to the Court of Civil Appeals under Ala. Code § 12-2-7(6).

The Court of Civil Appeals dismissed the appeal. It held that the circuit court’s order was one

denying a motion to dismiss, rather than an order granting or denying a motion to compel arbitration, and that the order is, therefore, an interlocutory order rather than a final judgment or an order that will support appellate review under Ala. Code 1975, § 12-22-2, or Rule 4(d), Ala. R. App. P.

(Citations omitted).

The defendant then persuaded the Supreme Court of Alabama to hear the case on certiorari under appellate Rule 39(a)(1)(D). The state’s high court reversed the Court of Civil Appeals. Contrary to the latter court’s reading, the defendant’s motion to dismiss was “tantamount” to a motion to compel arbitration. The defendant had argued in the trial court that the plaintiff’s claims should be dismissed precisely because they were contractually subject to arbitration. The defendant had repeated this argument throughout its motion, and the circuit court had clearly understood that the issue which the motion presented was whether the plaintiff’s claims had to be arbitrated.

The motion’s denial could therefore be appealed. Appellate Rule 4(d) specifically provides that denials of motions to compel arbitration may be appealed as a matter of right. The Court of Civil Appeals erred by treating the motion to dismiss as non-appealable, and should not have dismissed the appeal. 

(The state’s high court also observed that, if the circuit court had postponed decision on the defendant’s arbitration motion, “in order to permit discovery,” that act would be reviewable by petition for mandamus.)

The decision of the Court of Civil Appeals was reversed and the case remanded for further proceedings.

Following Horton Homes, Inc. v. Shaner, [Ms. 10616589] (Ala. June 20, 2008) and Jenks v. Harris, 990 So. 2d 787 (Ala. 2008), the Alabama Supreme Court dismissed an appeal of an arbitration award because the Circuit Court Clerk had not entered the arbitration award at issue as a judgment - a necessary prerequisite of judicial review of an arbitration award.  The Supreme Court remanded the case so that the judgment could be entered and the review process commenced in the trial court.

In dismissing the appeal, the Supreme Court rejected two other bases on which it was argued the Court had jurisdiction even though no judgment was entered in the trial court.  First, the appellants argued that that entry of the judgment was not necessary because the case was originally filed in the Circuit Court and had been stayed pending the arbitration.  The appellants argued that the entry of the arbitration judgment is to give the trial court jurisdiction and, because the trial court already had jurisdiction, the entry of the arbitration judgment was superfluous.  The Court rejected this argument, noting that the exact same scenario was present in Jenks, and the Court dismissed the appeal in that case as well.

Second, the appellant argued that entry was not necessary because the motion to vacate was made pursuant to the Federal Arbitration Act, 9 USC sec 9.  Section 9 first states that the parties in the arbitration agreement may specificy the court in which the judgment is to be entered, and the trial court has jurisdiction to review that award. The arbitration agreement in this case, however, did not specify the court in which judgment is to be entered, so the terms of 9 USC sec 9 were not met.

Section 9 of the FAA  goes on to state that if no court is specified, then the party may seek confirmation or review of the awrad "to the United States court in and for the district in which  such award was made."  The Court noted that the application for review was made in the state courtcuit court, not the federal district court.  Thus, this provision did not provide for jurisdcition without entry of judgment.

The Court recognized that there has been much confusion and contradiction about the relationship between Ala Code 6-6-15, which states that a notice of appeal must be filed within 10 days of the receipt of notice of the arbitration award, and Ala. R. App. P. 4, which states that a party has 42 days to file a notice of appeal.  The Supreme Court finally resolved this issue:

To eliminate any confusion, we now explicitly recognize that Rule 4 does operate to expand the statutory time period for taking an appeal of an arbitrator's award from 10 days from the date of receipt of notice of the award to 42 days from that date.

Slip Op. p. 7.  The Court expressly overruled cases which held or indicated to the contrary.

The Court then addressed what procedures must occur in the trial court before appellate review may proceed.

Ala. Code 6-6-15 "provides that the clerk's entry of judgment on the award becomes final after 10 days, if during that 10-day period the circuit court has not set aside the award.  At that point, 'the judgment shall become final and an appeal shall lie as in other cases.'"  Slip Op. p. 8.  The Court found that this code section anticipates that a motion to vacate will be filed and considered by the trial court before an appeal may lie, and held that a party is required to file a motion to vacate to preserve the right to appeal:

The judgment entered by the circuit court on the arbitrator's award pursuant to 6-6-15 is a conditional one; it does not become a final appealable judgment until the circuit court has had an opportunity to consider a motion to vacate filed by a party seeking review of the arbitration award.  A party seeking review of an arbitration award is required to file a motion to vacate during this period -- while the judgment entered by the circuit court remains conditional -- in order to preserve its ability to later prosecute that appeal to an appellate court once the judgment becomes final.

Slip Op. p. 11-12 (emphasis in original).  This finding by the Supreme Court contradicted prior cases, so prior cases to the contrary were overruled.

However, the Court recognized that 10 days is an unreasonable amount of time for the parties to brief and the trial court to consider a motion to vacate, and held that the review procedure should resemble other post-judgment procedures:

Accordingly, we modify that timeline established in 6-6-15 as follows to make it consistent with the Alabama Rules of Civil Procedure and to allow for a more meaningful review by the trial court.

Rule 59(e), Ala. R. Civ. P., provides that a party has 30 days after the entry of judgment to file a motion to alter, amend, or vacte that judgment.  Accordingly, borrowing from the spirit of Rule 59(e), we hold that a party desiring judicial review of an arbitration award pursuant to 6-6-15 must file in the appropriate circuit court a motion to alter, amend, vacate, or set aside the award with 30 days of filing the notice of appeal of the arbitration award and the clerk's entry of the conditional judgment based thereon.  If that motion is timely filed, the circuit court shall then have 90 days, unless that time is extended by the consent of all parties, to dispose of the motion.  See Ala. R. Civ. P. 59.1 . . .

If the circuit court grants the motion to vacate during this 90-day period, then the nonmovant has 42 days from the order granting the motion in which to file in the circuit court a notice of appeal of the court's judgment.  If the circuit court denies the motion to vacate within 90 days or allows the motion to be denied by inaction after 90 days, then the conditional judgment entered by the circuit clerk becomes final, and the appeal is processed based on the prior notice of appeal.

Slip Op. pp. 13-15 (emphasis in original).  The case was remanded to the trial court for procedures consistent with the opinion.

Justice See filed an opinion concurring in the result, stating that the Court reached a "practical result."  Slip Op. p. 17.  Justice See further stated that he hoped that the civil and appellate rules committees would develop proposed rules on this issue.

Justice Murdock filed a lengthy opinion concurring in the result but dissenting in the rationale.  Justice Murdock stated that the Court could not just pick and choose which provisions of Ala. R. App. P. it chooses to follow.  Justice Murdock provided a detailed analysis of his view on the interplay of Appellate Rule 4 and 6-6-15.