Southern Energy Homes, Inc. v. Godwin , 183 F. App'x 441 ( 2006 )

United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS
FIFTH CIRCUIT May 31, 2006
Charles R. Fulbruge III
Clerk
No. 05-60056
SOUTHERN ENERGY HOMES, INC.,
Plaintiff-Appellant,
versus
WILLARD MERRITT GODWIN, JR.; RHONDA M. GODWIN, Nathan Godwin, a
minor, by and through his father and next friend Willard Merritt
Godwin, Jr.,
Defendants-Appellees.
Appeal from the United States District Court
for the Southern District of Mississippi
(2:03-CV-286)
Before KING, BARKSDALE, and PRADO, Circuit Judges.
PER CURIAM:*
Relying only on equitable estoppel (an issue presented for the
first time on appeal), Southern Energy Homes, Inc. contests the
denial of its summary-judgment motion to compel arbitration.
AFFIRMED and REMANDED.
I.
In 1997, the Godwins purchased a mobile home from Rose Mobile
Homes, a Southern Energy dealer in Mississippi. Southern Energy
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
manufactured the home in Alabama. The Godwins live in the home,
which was installed in Mississippi.
Post-purchase, the Godwins discovered in the home a “Home
Owner’s Manual”, which informed customers of an express limited
warranty. The manual did not contain a signature line or require
a signature, nor did it contain a separate signature card to be
returned to manufacturer Southern Energy. The manual’s detailed
table of contents did not suggest an arbitration provision.
Instead, within the manual’s warranty section, several titled
paragraphs (again, none includes any form of the word “arbitrate”)
provide customers with remedies if they encountered problems with
their homes. The final paragraph of this section, titled “IF THE
PROBLEM IS STILL NOT RESOLVED”, begins: “If your problems are not
satisfactorily remedied through the steps set out above, you are
entitled to have the dispute settled through binding arbitration as
set out below”. (Emphasis added.) That paragraph then states:
“In the event of any dispute or claim ... the Manufacturer and the
purchaser of this product agree to submit such dispute or claim to
binding arbitration, pursuant to the provisions of 9 USC 1, et.
seq. and according to the Commercial Rules of Arbitration of the
American Arbitration Association then existing”.
In 1998 and 1999, warranty work was twice performed on the
Godwins’ home. Four additional “Requests for Service” were made in
2
1999, 2000, and 2001; Southern Energy’s records show repair work
completed following these requests was not covered by the warranty.
In October 2002, the Godwins filed an action against Southern
Energy in Mississippi state court. (Neither Rose Mobile Homes nor
any other intermediary were included in this action.) The
complaint raised several claims, some of which maintained Southern
Energy breached its express warranty.
In May 2003, based on diversity jurisdiction, Southern Energy
responded to the state-court action by filing this action to compel
arbitration. It moved for summary judgment, relying on the
affidavit of its director of consumer affairs, which included
copies of the two “Warranty Claim Request” forms showing the
Godwins made requests, and had work performed, under the warranty
on two occasions. (The Godwins’ state-court action has been stayed
pending this action to compel arbitration.)
In opposition to summary judgment, the Godwins provided the
affidavit of Willard Godwin, which stated, inter alia: he never
“signed a written contract or agreement with Southern Energy”; he
never orally agreed to arbitrate any disputes that might arise;
prior to purchase, he never saw, read, or was informed of the
manual or its provisions; after purchase, he read only portions of
the manual; and, when he had repair work performed, he was never
informed that having work done under the warranty subjected him to
binding arbitration.
3
Southern Energy’s summary-judgment motion to compel
arbitration was denied in late 2004. The district court held: the
Godwins did not agree to arbitration; “proof of affirmative mutual
agreement herein is simply lacking”; and the Godwins’ ability to
provide an affidavit showing they did not consent to arbitration
distinguished their case from situations where homeowners had no
evidence of such lack of consent. S. Energy Homes, Inc. v. Godwin,
No. 2:03cv286 (S.D. Miss. 28 Dec. 2004) (unpublished).
II.
Where appropriate, “[a]rbitration is favored in the law”.
Grigson v. Creative Artists Agency, L.L.C., 210 F.3d 524, 526 (5th
Cir.), cert. denied, 531 U.S. 1013 (2000); see Primerica Life Ins.
Co. v. Brown, 304 F.3d 469, 471 (5th Cir. 2002) (“The FAA [Federal
Arbitration Act] expresses a strong national policy favoring
arbitration of disputes, and all doubts concerning the
arbitrability of claims should be resolved in favor of
arbitration.”). Accordingly, the FAA, 9 U.S.C. § 16(a)(1)(B),
permits an appeal from an order denying arbitration. Usually,
however, unlike here, that order is in the context of a defendant’s
seeking to compel arbitration for claims against it in that same
action. In other words, the arbitration issue is not the sole
reason for the action. Moreover, at issue here is the denial of
summary judgment. Generally, the denial of summary judgment is not
appealable because the ruling is not a final judgment. Along that
4
line, some might contend that, even though arbitration was denied
in this action pursuant to a summary-judgment motion, subsequently
it might be ordered following trial on that issue. See 16 U.S.C.
§ 4. Nevertheless, in the light of the plain language of 9 U.S.C.
§ 16(a)(1)(B), we conclude we have jurisdiction for this
interlocutory appeal. (Neither side briefs this issue.)
Consistent with the well-known standard of review for a
summary-judgment ruling, the denial of a motion to compel
arbitration is reviewed de novo. See Safer v. Nelson Fin. Group,
Inc., 422 F.3d 289, 293 (5th Cir. 2005). In its brief on appeal,
as it had claimed in district court, Southern Energy contended only
that the Godwins were required to arbitrate under a valid
arbitration agreement. It conceded at oral argument, however, that
its only basis for relief is equitable estoppel.
The doctrine of equitable estoppel “precludes a party from
claiming the benefits of a contract while simultaneously attempting
to avoid the burdens that contract imposes as well”. Wash. Mut.
Fin. Group, L.L.C. v. Bailey, 364 F.3d 260, 267 (5th Cir. 2004).
In agreement with several other circuits, our court has held
equitable estoppel may be used to compel non-signatories to
arbitrate. See id. at 267 (“[A] nonsignatory party may be bound to
an arbitration agreement if so dictated by the ordinary principles
of contract and agency”. (quoting Thomson-CSF, S.A. v. Am.
Arbitration Ass’n, 64 F.3d 773, 776 (2d Cir. 1995) (internal
5
quotation marks omitted))). Equitable estoppel permits a non-
signatory to be bound to a contract from which the non-signatory
has benefitted; it prevents parties to a contract from “‘having it
both ways’”. Id. at 268 (quoting Grigson, 210 F.3d at 528).
In Bailey, for example, a signatory’s wife contended she
should not be compelled to arbitrate claims arising from her
husband’s loans and insurance, because, although her husband signed
the arbitration agreement, she did not. The district court agreed.
Our court reversed because, although the wife was a non-signatory,
she was attempting to enforce an agreement signed by her husband.
She was trying to “hav[e] it both ways” by “suing based upon one
part of a transaction that she says grants her rights while
simultaneously attempting to avoid other parts of the same
transaction that she views as a burden — namely, the arbitration
agreement”. Id.
We have not found any decisions, however, where our court
extended this concept to a situation in which, as here, there was
no signatory. In any event, we decline to reach this issue. Based
on our review of the record, it appears Southern Energy failed to
adequately raise this stand-alone equitable estoppel claim in
district court. No authority need be cited for the well-
established rule that summary-judgment issues not raised in
district court will not be considered on appeal. In addition, this
new claim is barely mentioned in Southern Energy’s brief here. See
6
Yohey v. Collins, 985 F.2d 222, 225 (5th Cir. 1993) (“As a general
rule, this Court does not review issues raised for the first time
on appeal.”). For all intents and purposes, Southern Energy
presented this issue for the first time at oral argument. See
Comsat Corp. v. FCC, 250 F.3d 931, 936 n.5 (5th Cir. 2001)
(“Arguments presented for the first time at oral argument are
waived.”).
III.
For the foregoing reasons, the denial of summary judgment is
AFFIRMED and this matter is REMANDED to district court for such
further proceedings as may be appropriate.
AFFIRMED and REMANDED
7