Hillwood Office Center Owners’ Association v. Carol A. Blevins
In July 2015, Blevins reached a settlement agreement with the Hillwood Office Center Owners’ Association (HOCOA) and two of its board members, as well as Mitchell Properties and Malone Staffing relating to claims made against them, which were filed in May 2015. As a part of the agreement, the HOCOA Board agreed to send a letter to Mitchell Properties and Malone Staffing, asking that they take appropriate action to ensure their employees were not disruptive to other members of the HOCOA. Following the execution of the settlement agreement and the dismissal of Blevins’ claims, Blevins notified the Board and its counsel of ongoing issues with Malone Staffing. The Board’s counsel notified Blevins that it would discuss the issues with Malone Staffing. Unsatisfied with the response, Blevins notified the Board and its counsel that she wished to invoke the arbitration provision in the settlement agreement. The Board agreed to proceed with arbitration.
In December 2016, following a contentious dispute between the parties regarding payment of the arbitrator’s fees, Blevins filed a complaint against board members Nelson, Rousso, and Fullove (who was not a party to the settlement agreement) in their individual capacities and their official capacities as board members, asserting various claims relating to the board members’ failure to address water damage to Blevins’ office unit, and the members’ failure to provide Blevins access to corporate records relating to the roof work. Shortly thereafter, the board members moved the trial court to dismiss the complaint, arguing that they were not proper defendants, and that they were entitled to immunity under the Volunteer Service Act. After Blevins subsequently filed a second amended complaint adding the HOCOA as a defendant, Blevins moved the trial court to enforce the settlement agreement. The trial court entered an order ordering the parties to proceed with arbitration “forthwith” and added that any attempts to block arbitration would likely be met with sanctions. The HOCOA appealed.
On appeal, the HOCOA and its board members argued that, because Fullove was not a party to the original 2015 action, he could not be bound by the settlement agreement containing the arbitration provision. The board members also argued that they did not agree to submit to arbitration in their individual capacities. The Alabama Supreme Court held that the trial court should have resolved the issue of whether Fullove is bound by the arbitration provision before the parties were ordered to arbitrate. The HOCOA and board members also argued that the arbitration provision was unenforceable, because Blevins presented no evidence that the settlement agreement involved a transaction related to interstate commerce; however, the Court held that because the HOCOA and the board members originally agreed to arbitrate, they waived their right to object to the validity of the arbitration agreement.