Thanks for visiting! Welcome to a new way to research case law. You are viewing a free summary from Descrybe.ai. For citation checking, legal issue analysis, and other advanced tools, explore our Legal Research Toolkit — not free, but close.
Gregerson's Foods, Inc. v. FHL Capital Corp.
Citations: 658 So. 2d 472; 1994 WL 515507Docket: AV93000645
Court: Court of Civil Appeals of Alabama; September 23, 1994; Alabama; State Appellate Court
Richard L. Holmes, Retired Appellate Judge, presided over a case involving Gregerson's Foods, Inc. and FHL Capital Corporation (FHL). Gregerson's sought a court ruling to determine whether their dispute with FHL was subject to arbitration under a 1992 agreement and if FHL was entitled to compensation. FHL argued that the claims were indeed subject to binding arbitration and filed a motion to compel arbitration, supported by an affidavit from its managing director. Gregerson's opposed the motion, providing an affidavit from its president. After a hearing, the trial court compelled arbitration and stayed further proceedings. Gregerson's subsequently filed for reconsideration and sought to make the order a final appealable order, which the court granted, denying the other motions. Gregerson's appealed the decision, focusing on whether the trial court erred in compelling arbitration. On appeal, Gregerson's contended that FHL waived its right to compel arbitration by initiating a lawsuit in Jefferson County and argued that the parties did not foresee substantial interstate commerce when the agreement was made. To prove waiver, Gregerson's must show that FHL substantially invoked the litigation process, leading to prejudice against Gregerson's. Additionally, Gregerson's pointed out that under Alabama law, predispute arbitration agreements are unenforceable unless preempted by federal law, such as the Federal Arbitration Act (FAA), which applies if the agreement involves interstate commerce. The parties disputed whether they contemplated substantial interstate commerce at the time of the agreement's execution. Notably, Gregerson's operates grocery stores in Alabama, while FHL connects buyers and sellers of privately-owned businesses within the state. On June 15, 1992, Gregerson’s entered into an agreement with FHL for assistance in creating a strategic plan that could lead to various transactions, including asset or stock sales, mergers, or business acquisitions. FHL was to act as Gregerson's financial advisor, with disputes arising from the agreement to be settled by arbitration. A controversy arose when Gregerson’s refused to pay FHL after completing a transaction with Super Valu, claiming it fell outside the agreement’s scope. FHL sought arbitration, while Gregerson’s initiated a lawsuit in Etowah County, Alabama, on August 16, 1993, and sent a copy to FHL's attorney. FHL filed a separate complaint in Jefferson County on August 23, 1993, unaware that Gregerson's complaint had already been filed. The Jefferson County action was dismissed, and the case continued in Etowah County. The court determined that FHL did not substantially invoke the litigation process or prejudice Gregerson’s by filing in Jefferson County, thus FHL did not waive its right to arbitration. Additionally, the evidence suggested that both parties anticipated significant interstate activity related to potential investors. The court affirmed the decision, with all judges concurring.