Ex Parte Stamey
Supreme Court of Alabama
776 So.2d 85 (2000)
George and Deborah Stamey (plaintiffs) contracted to purchase property and a mobile home from Hallmont Homes (Hallmont) (defendant). Under the contract, Hallmont was required to provide a foundation, septic system, and light pole. The Stameys claim Hallmont did not provide a septic system or light pole. The Stameys secured a loan from Green Tree Financial Corporation (Green Tree) (defendant) to pay for the property and installations. The financing agreement included a clause requiring binding arbitration of all claims. The agreement further provided that in exchange for a security interest in the home, Green Tree would pay Hallmont on the Stameys’ behalf. The agreement contained a waiver of the right to a jury trial in any claims arising between the Stameys and the seller (Hallmont). The county health officer sued the Stameys for violations of health laws related to the septic system. The Stameys filed a response and a third-party complaint for conversion, fraud, and breach of contract against Green Tree, Hallmont, and two employees (defendants) on the grounds that one or all of them caused the septic issues. Hallmont and Green Tree filed motions to compel arbitration. The trial court granted both motions, even though Hallmont was not a signatory to the financing agreement that contained the arbitration clause. The Stameys petitioned the Supreme Court of Alabama for a writ of mandamus ordering the trial judge to vacate the order compelling arbitration.
Rule of Law
Holding and Reasoning (Houston, J.)
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