Party Could Appeal Denied “Motion to Dismiss” Which Sought to Compel Arbitration

 A motion to dismiss — which argued that the plaintiff had to arbitrate its claims — was effectively a motion to compel arbitration. The denial of that motion could be appealed as a matter of right. The Court of Civil Appeals erred by holding that the denied motion to dismiss would not support an appeal. Ex parte Directory Assistants, Inc., No. 1080852 (Ala. Nov. 25, 2009).

This case retreads familiar ground, with small nominal and procedural twists. The upshot of the decision is that a defendant’s “motion to dismiss,” which asked the circuit court to send the plaintiff’s claims to arbitration, was a motion to compel arbitration. When the circuit court denied this motion, Rule 4(d) of the Alabama Rules of Appellate Procedure gave the defendant the right to appeal that denial. The Court of Civil Appeals erred by holding that the circuit court had merely denied a motion to dismiss (in a more generic sense), so that its order could not be appealed.

The defendant in this contract case filed a “motion to dismiss” the plaintiff’s claims. The defendant argued that the parties’ contract obligated the plaintiff to arbitrate its claims. The circuit court disagreed and denied the motion to dismiss. The defendant appealed to the Alabama Supreme Court.

Some unusual appellate procedure then ensued. (This does not seem to have affected the substantive decision, but readers may find it useful.) The Supreme Court first ordered the defendant to show cause why its appeal should not be dismissed as being from a non-appealable order. The parties submitted briefs on this topic. After receiving these, the Supreme Court transferred the case to the Court of Civil Appeals under Ala. Code § 12-2-7(6).

The Court of Civil Appeals dismissed the appeal. It held that the circuit court’s order was one

denying a motion to dismiss, rather than an order granting or denying a motion to compel arbitration, and that the order is, therefore, an interlocutory order rather than a final judgment or an order that will support appellate review under Ala. Code 1975, § 12-22-2, or Rule 4(d), Ala. R. App. P.

(Citations omitted).

The defendant then persuaded the Supreme Court of Alabama to hear the case on certiorari under appellate Rule 39(a)(1)(D). The state’s high court reversed the Court of Civil Appeals. Contrary to the latter court’s reading, the defendant’s motion to dismiss was “tantamount” to a motion to compel arbitration. The defendant had argued in the trial court that the plaintiff’s claims should be dismissed precisely because they were contractually subject to arbitration. The defendant had repeated this argument throughout its motion, and the circuit court had clearly understood that the issue which the motion presented was whether the plaintiff’s claims had to be arbitrated.

The motion’s denial could therefore be appealed. Appellate Rule 4(d) specifically provides that denials of motions to compel arbitration may be appealed as a matter of right. The Court of Civil Appeals erred by treating the motion to dismiss as non-appealable, and should not have dismissed the appeal. 

(The state’s high court also observed that, if the circuit court had postponed decision on the defendant’s arbitration motion, “in order to permit discovery,” that act would be reviewable by petition for mandamus.)

The decision of the Court of Civil Appeals was reversed and the case remanded for further proceedings.