Nissan North America, Inc. ("Nissan") appealed from an order of the Montgomery County Circuit Court compelling it to arbitrate the claims filed against it by the Plaintiff.

On July 16, 2015, Adrienne Scott purchased a new 2015 Nissan Juke automobile from Jack Ingram Motors, Inc. ("Jack Ingram"). In connection with the purchase of the vehicle, Scott signed an arbitration agreement with Jack Ingram. Nissan was not a signatory to the arbitration agreement. 

On November 22, 2016, Scott filed suit against Jack Ingram and Nissan for negligence, wantonness, breach of warranty and product liability under the Alabama Extended Manufacturer’s Liability Doctrine.  On December 27, 2016, Jack Ingram moved to compel arbitration of the claims filed against it based on the arbitration agreement Scott had signed. Scott filed a response indicating that, although she was willing to arbitrate her breach-of-warranty and negligence claims against Jack Ingram, she objected to litigating part of the case, i.e., her claims against Nissan, because, she said, "to do so would require all of the parties to incur extra expenses and could result in inconsistent judgments." She indicated in her response that she was willing to arbitrate the case or to litigate the case, but she objected to having to do both. On February 22, 2017, the trial court entered an order holding that, "in the interest of judicial economy," the entire matter should be arbitrated. Nissan filed a motion to reconsider, which the trial court denied. Nissan appealed pursuant to Ala. R. App. P. 4. 

On appeal, the Alabama Supreme Court held that “[j]udicial economy, however, is not a proper basis for compelling arbitration against a nonsignatory.” The Court went on to hold that “arbitration is a matter of contract, and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.” Because Nissan was a nonsignatory to the arbitration agreement, the Court reversed the trial court’s order and held that it was error to compel Nissan to arbitrate the claims filed against it.  

Daphne Automotive, LLC (“the dealership”), and its employee, Robin Sanders appealed a circuit court order denying their motion to compel arbitration of the claims filed against them by Eastern Shore Neurology Clinic, Inc. (“Eastern Shore”), and Rassan Tarabein. Tarabein owned Eastern Shore and Infotec, Inc. Tarabein hired his nephew, Mohamad Tarbin, as an employee of Infotec. As part of Tarbin’s compensation, Tarabein agreed to provide him with the use of a vehicle for as long as he was employed with Infotec. Tarabein purchased a vehicle from Daphne Automotive. Tarabein, Tarbin, and the dealership agreed that the dealership would arrange for the vehicle to be titled in Tarbin’s name, but that Eastern Shore would be listed on the title as lienholder.

 

In conjunction with the sale, Tarbin signed the sales contract, which contained an arbitration clause. Tarabein executed only the documents to establish Eastern Shore as lienholder on the title for the vehicle. In January 2014, the Department of Revenue issued an original certificate of title for the vehicle that listed no lienholders to Tarbin. A few months later, Tarbin was terminated from his job with Infotec, and Tarabein attempted to take back the vehicle, but Tarbin refused. According to Tarabein, the dealership never informed him that it had failed to list Eastern Shore as a lienholder on the application for the certificate of title. As a result, Tarbin held title to the vehicle free and clear, and Eastern Shore held a reissued certificate of title for the same vehicle, listing it as lienholder. Eastern Shore attempted to repossess the vehicle; but Tarbin produced the free-and-clear title to the vehicle.

 

Tarabein thereafter sued the dealership for a variety of claims. The dealership moved to compel arbitration, which the trial court denied. The dealership noted that there are exceptions to the general rule that non-signatories to an arbitration provision cannot be compelled to arbitrate their claims. Specifically, the dealership relied on the third-party-beneficiary and equitable-estoppel exceptions.  The dealership argued that Tarabein and Eastern Shore (“the plaintiffs”) were third-party beneficiaries of the sales contract between it and Tarbin because the plaintiffs purchased the vehicle to compensate Tarbin for his employment with Infotec. The dealership further argued that, even if the plaintiffs are not third-party beneficiaries of the sales contract, they were estopped from denying arbitration because their claims were dependent on the sales contract, which contained and referenced the arbitration agreements.

 

Tarabein asserted that the dealership failed to meet its burden of demonstrating that, at the time Tarbin and the dealership executed the sales contract, they intended to bestow a direct, as opposed to an incidental, benefit upon the plaintiffs. Specifically, although they financed the purchase of the vehicle and Eastern Shore was ultimately listed as lienholder on the certificate of title, the person directly benefiting from the sale of the vehicle was Tarbin—as “he was the only intended user of the vehicle, the vehicle was titled in his name, the vehicle was part of his compensation as an employee of Infotec, and it was agreed that he would enjoy the use of the vehicle for as long as he was an employee of the company.”

 

The Alabama Supreme Court concluded the dealership failed to meet its burden of proving the existence of a contract calling for arbitration as the sales contract was limited in its scope with respect to disputes arising to parties to the contract and the agreements. Accordingly, the Court found the trial court did not err in denying the dealership’s motion to compel arbitration.

Jack Grieser (“the employee”) appealed from a judgment entered by the Crenshaw Circuit Court (“the trial court”) for, among other things, declining to award him benefits based on his alleged vocational impairment. Before trial, Advanced Disposal Services Alabama, LLC (“the employer”) filed a motion in limine requesting “an Order precluding… any evidence or [] any testimony concerning… any alleged vocational impairment or vocational disability of the [employee].” The employer argued that § 25-5- 57(a)(3)i (“the return-to-work statute”), a part of the Workers’ Compensation Act, precluded the employee from offering evidence of vocational disability. Specifically, the employer argued that the employee had “return[ed] to work at a wage equal to or greater than the [employee’s] pre-injury wage,” and that, although the employee’s employment had subsequently been terminated, it had been terminated “for actual or threatened misconduct committed in connection with his ... work after previous warning to the employee.”

 

The employee objected to the employer’s motion in limine and argued that the entirety of the return to-work statute, as well as the portion of the statute regarding whether the employee’s employment had been terminated “for actual or threatened misconduct committed in connection with his ... work after previous warning to the employee,” were affirmative defenses. He asserted that, because the employer had not raised those defenses in its answer, those defenses were waived.

 

At trial, the employee did not argue that the return-to-work statute did not apply to his claim; instead, the employee argued only that the employer had waived the “affirmative defense” established in the return-to-work statute. The parties litigated that particular point, and the trial court ruled against the employee.

 

On appeal, the employee argued that the trial court erred by applying the return-to-work statute. The Alabama Court of Civil Appeals initially noted that that the return-to-work statute ordinarily does not apply when an employee has been terminated from his or her employment before receiving an award of workers’ compensation benefits. In this case, the employee had returned to work and was earning wages equal to or greater than his preinjury wages. However, by the time of the trial, the employee was no longer employed earning those wages. The employer argued that the employee should not receive permanent-partial-disability benefits based on his alleged vocational disability because the employee was terminated for one of the reasons set forth in the return-to-work statute. However, the Court found that because the employee was seeking an initial disability determination, not petitioning for reconsideration of a previous disability determination, the return-to-work statute did not apply to his claim.

 

The Court noted, “The first sentence of the return-to-work statute makes it clear that an injured worker, who at the time of an initial disability determination has returned to work earning the same or greater wages than he or she was earning before the injury, may receive permanent-partial-disability benefits based only on physical impairment and that a trial court may not consider evidence of the worker’s vocational disability.” Further, the Court noted, “That sentence does not create a means of defeating or reducing a worker’s claim for compensation but, instead, sets forth the method by which a trial court must compute the worker’s earnings in that situation.”

 

The employer argued that it sufficiently raised the relevant affirmative defense set forth in § 25-5- 57(a)(3)i.(iv) by, in its answer, admitting that it was subject to the Act and pleading the defense of the exclusivity provisions of the Act, which are found in § 25-5-52 and § 25- 5-53. However, the Court concluded that the employer’s references to the applicability of the entire Act and to the exclusivity provisions of the Act, which are separate and apart from the return-to-work statute, were insufficient to give notice of the affirmative defense provided in § 25-5- 57(a)(3)i.(iv). The Alabama Court of Civil Appeals concluded that the employer waived the affirmative defense provided in § 25-5- 57. Accordingly, the trial court’s judgment was reversed and remanded to the extent that it declined to consider evidence of the employee’s vocational impairment in determining the employee’s permanent-partial-disability benefits.