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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 17-14705
Non-Argument Calendar
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D.C. Docket No. 2:16-cv-00406-MHT-CSC
ALTON R. GRIGGS, JR.,
Plaintiff-Appellee,
YUSEF BRINSON,
Plaintiff-Intervenor-Appellee,
versus
KENWORTH OF MONTGOMERY, INC.,
Defendant-Appellant.
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Appeal from the United States District Court
for the Middle District of Alabama
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(June 4, 2019)
Before MARCUS, ROSENBAUM, and GRANT, Circuit Judges.
PER CURIAM:
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Kenworth of Montgomery Inc. brings this interlocutory appeal under the
Federal Arbitration Act (FAA), 9 U.S.C. § 16, contending that the district court
erred in denying its motions to compel arbitration of the claims brought against it
by Alton Griggs and Yusef Brinson. The district court made the contested ruling
in a summary order, saying only that “the motions to compel arbitration (doc. nos.
26 & 52) are denied without prejudice and with leave to reinstate, following
resolution of” another defendant’s “pending motion to dismiss.” The order noted
that resolution of the then-pending motion to dismiss would “affect the course of
this litigation.” That was it. The order did not provide any legal conclusions or
factual findings. After careful review, we conclude that, given the summary nature
of the district court’s order and the current state of the record, we are not able to
conduct meaningful appellate review of Kenworth’s argument. We therefore
vacate and remand for further proceedings.
I.
Alton Griggs, a commercial truck driver, was driving a tractor-trailer when
the truck’s engine unexpectedly lost power and turned off. To have the truck
repaired, Griggs contacted the organization that owned the truck, A.K.G. Freight
Carriers, LLC, and the seller of the truck, as the truck was still under warranty.
The seller, Arrow Truck Sales, Inc., allegedly instructed Griggs to take the truck to
Kenworth, an automobile repair shop in Montgomery, Alabama. At that repair
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shop, Griggs signed two invoices, each of which contained the same arbitration
clause. The arbitration clause provides:
4. Arbitration.
Any controversy or claim arising out of or relating to this
Invoice or otherwise relating in any fashion to the purchase
or sale of equipment, parts or service thereon shall be
submitted to arbitration in the county in which the
dealership is located, in accordance with the rules of the
American Arbitration Association. Judgment upon any
award rendered in such proceedings may be entered in any
court having jurisdiction thereof, and the parties hereto
submit to the jurisdiction of all State and Federal courts
having venue in the county in which the dealership is
located.
Shortly after Kenworth returned the truck to Griggs, the truck again lost power,
causing it to run off the road and crash.
To recover for the damages that he suffered during that wreck, Griggs sued
Kenworth and Arrow in the U.S. District Court for the Middle District of Alabama.
Griggs brought state-law claims for negligence and negligent
misrepresentation/fraud against Kenworth, alleging that Kenworth failed to make
appropriate repairs and misrepresented that it had fixed the truck’s mechanical
problems. As to Arrow, Griggs accused it of negligence, breach of express and
implied warranties, and negligent misrepresentation/fraud, arguing that Arrow
failed to properly evaluate and repair the truck before selling it to A.K.G. Invoking
the arbitration agreements in the repair orders, Kenworth moved to compel
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arbitration of Griggs’s claims under the FAA, 9 U.S.C. § 1 et seq. Griggs opposed
that motion, arguing that he was not a party to any arbitration agreement and that
he was not bound by the agreements because he signed the invoices in his capacity
as a member of the trucking organization, A.K.G.—not in his individual capacity.
Yusef Brinson—a passenger in Griggs’s truck at the time of the accident—
then stepped in to intervene as a plaintiff in the action, asserting negligence claims
against both Kenworth and Arrow. Kenworth moved to compel arbitration of
those claims, too. Kenworth asserted that, even though Brinson had not signed the
arbitration agreements, he was still bound by the agreements due to an Alabama-
specific equitable doctrine that binds non-signatories to arbitration agreements.
Meanwhile, Arrow moved to dismiss the claims against it, arguing that the
Alabama court lacked personal jurisdiction.
In response to these motions, the district court issued a summary order
denying Kenworth’s arbitration motions “without prejudice and with leave to
reinstate, following resolution of defendant Arrow Truck Sales, Inc.’s pending
motion to dismiss.” The court noted that “resolution of” the then-pending motion
to dismiss “will affect the course of this litigation.” But the court did not make any
legal conclusions or factual findings. Kenworth now appeals.
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II.
We review de novo the district court’s order denying the motions to compel
arbitration. Bess v. Check Express, 294 F.3d 1298, 1302 (11th Cir. 2002).
III.
A.
Before delving into the merits of this dispute, we explain why we have
appellate jurisdiction to review the district court’s order. “Ordinarily, courts of
appeals have jurisdiction only over ‘final decisions’ of district courts.” Arthur
Andersen LLP v. Carlisle, 556 U.S. 624, 627 (2009) (quoting 28 U.S.C. § 1291).
“The FAA, however, makes an exception to that finality requirement” for certain
interlocutory appeals. Id. Most pertinent here, it permits an interlocutory appeal
from a district-court order “denying a petition under section 4 of this title to order
arbitration to proceed” 9 U.S.C. § 16(a)(1)(B). By that provision’s plain terms, a
litigant who moves to compel arbitration may immediately appeal from a denial of
that motion. See, e.g., Bess, 294 F.3d at 1302 (reviewing at interlocutory stage a
district court’s order denying a motion to compel arbitration).
Here, the parties do not dispute that Kenworth, by moving to compel
arbitration, petitioned the district court to order arbitration to proceed under § 4 of
the FAA. Nor is there any dispute that the court denied those motions. The only
issue is whether our authority to immediately review the order denying the motions
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is affected by the fact that the court denied the motions without prejudice. Under
these circumstances, it is not.
The text of the FAA provision establishing our jurisdiction does not
distinguish between denials with and without prejudice. See 9 U.S.C.
§ 16(a)(1)(B). The text permits us to review any order “denying a petition under
section 4 of this title to order arbitration to proceed” and an order denying a
petition without prejudice can fall within that description; the phrase “without
prejudice” simply permits the moving party to refile the motion again in the future.
Id.; see also Semtek Int’l Inc. v. Lockheed Martin Corp., 531 U.S. 497, 505 (2001)
(“The primary meaning of ‘dismissal without prejudice,’ we think, is dismissal
without barring the plaintiff from returning later, to the same court, with the same
underlying claim.”). While some housekeeping orders—for example, an order
striking a motion to compel arbitration, rather than denying it, or an order denying
a motion to compel arbitration on technical grounds only—may not qualify for
immediate appeal under the FAA, that is not the situation here. See, e.g., Cont’l
Cas. Co. v. Staffing Concepts, Inc., 538 F.3d 577, 580 (7th Cir. 2008) (declining to
exercise jurisdiction over an interlocutory appeal from an order striking a motion
to compel arbitration because the district court did not deny the motion). In the
order here, the district court denied the motions to compel arbitration on the merits.
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So there is no reason to exclude this denial without prejudice from immediate
appellate review under the FAA.
Reviewing this order also aligns with one of the main goals of the FAA,
which is “to allow for efficient, streamlined procedures” for arbitration. AT&T
Mobility LLC v. Concepcion, 563 U.S. 333, 344 (2011). Refusing appellate review
of all orders denying motions to compel arbitration without prejudice until after a
trial court resolves the dispute on the merits would conflict with that goal, as well
as the FAA’s “strong federal policy in favor of arbitration.” Picard v. Credit Sols.,
Inc., 564 F.3d 1249, 1253 (11th Cir. 2009) (per curiam). We therefore see no
reason to not exercise jurisdiction in this case.
Our conclusion that we have jurisdiction to consider this appeal is consistent
with that of other circuits to have considered similar cases. At least three of our
sister circuits have held that the FAA permits immediate appeal of an order
denying a motion to compel arbitration without prejudice. See Janiga v. Questar
Capital Corp., 615 F.3d 735, 737 & 740 (7th Cir. 2010) (reviewing an order
denying a motion to compel arbitration “without prejudice,” and with instructions
that the defendant “could renew its motion if and when” the court resolved other
issues); see also Chorley Enters., Inc. v. Dickey’s Barbecue Rests., Inc., 807 F.3d
553, 561–62 (4th Cir. 2015) (same); Quilloin v. Tenet HealthSystem Phila., Inc.,
673 F.3d 221, 227–28 (3d Cir. 2012) (same); but see Cont’l Cas. Co., 538 F.3d at
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580 (FAA does not permit immediate appeal of an order striking—rather than
denying—a motion to compel arbitration). We conclude that we possess
jurisdiction to consider this appeal.
B.
On the merits, we begin by providing some background rules about
arbitration. Most fundamentally, “arbitration is a matter of contract.” Concepcion,
563 U.S. at 339 (citation omitted). The FAA provides that a contract containing an
arbitration agreement “shall be valid, irrevocable, and enforceable, save upon such
grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C.
§ 2. For agreements that fall within the scope of the FAA, “state law generally
governs whether an enforceable contract or agreement to arbitrate exists.” Caley v.
Gulfstream Aerospace Corp., 428 F.3d 1359, 1368 (11th Cir. 2005). And “the
party resisting arbitration bears the burden of proving that the claims at issue are
unsuitable for arbitration.” Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79,
91 (2000).
With these principles in mind, we turn to the parties’ arguments. Kenworth
contends that the arbitration agreements are valid and enforceable. Kenworth
therefore urges us to reverse the district court’s order denying its motions to
compel arbitration and to order the district court to send the claims against it to
arbitration. But, recognizing that the summary nature of the district court’s order
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may not provide an adequate basis for us to conclude that the arbitration
agreements are valid and enforceable, Kenworth alternatively requests that we
vacate the order and remand for the court to issue a reasoned opinion. Griggs and
Brinson, by contrast, argue that this Court should affirm the order denying the
motions to compel. But if this Court cannot affirm due to the summary nature of
the district-court order, then Griggs and Brinson also ask us to remand for the
district court to supplement its order with the reasoning behind its decision.
As the parties acknowledge, the summary nature of the district court’s order
poses a challenge for appellate review. When reviewing summary orders, we may
“undertake our own plenary inquiry into the” issues on appeal if “the record is
complete and provides an adequate basis for” appellate review. Hall v. Holder,
117 F.3d 1222, 1226 (11th Cir. 1997). But where summary denials “wholly fail to
provide this Court with an opportunity to conduct meaningful appellate review,”
we will not relieve a district court of its responsibility to decide even purely legal
questions in the first instance. Danley v. Allen, 480 F.3d 1090, 1092 (11th Cir.
2007) (per curiam). Instead, we will vacate the order and remand for the district
court to enter a reasoned order that will allow for meaningful appellate review.
See, e.g., id.
To ascertain whether this record provides an adequate basis for review, we
must examine the parties’ specific arguments. We begin with Griggs’s three bases
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for resisting arbitration. First, Griggs claims that he signed the arbitration
agreements in his capacity as a member of A.K.G., and not in his individual
capacity. He asserts that an Alabama Supreme Court decision provides that when
a person signs an arbitration clause in his capacity as a member of an organization,
the clause does not require arbitration of claims brought in the signatory’s
individual capacity. Clement Contracting Grp., Inc. v. Coating Sys., L.L.C., 881
So. 2d 971, 973–75 (Ala. 2003). Kenworth responds by pointing out that if Griggs
did not want to sign the arbitration agreements in his individual capacity, then he
could have signed the name of A.K.G.’s managing member (with her permission),
or he could have noted under his signature that he signed as a member of A.K.G, as
the signatory in Clement did—but instead he simply signed his own name. Second,
Griggs argues that the arbitration agreements bind A.K.G., not him, because
(1) A.K.G. owned the truck, (2) the repair orders designate A.K.G., and not Griggs,
as the “SOLD TO” party, and (3) Griggs identified A.K.G. as the purchaser of the
parts and services. Kenworth dismisses those facts as irrelevant and directs us
back to the fact that Griggs himself signed the invoices, which contained
arbitration clauses. Third, Griggs asserts that his claims against Kenworth do not
relate to the invoices that he signed. According to Griggs, Kenworth issued three
separate repair invoices for three separate sets of repairs that it completed; Griggs
signed the first two repair invoices but not the third. And in Griggs’s telling, his
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claims against Kenworth relate to the repairs reflected in the third—and
unsigned—invoice. While Kenworth acknowledges that it issued separate
invoices, it insists that “each repair was related to, and a continuation of efforts to
remedy, the same power loss problem.”
Brinson, in turn, asserts that he too is free from the arbitration agreements.
Because he never signed the invoices that contained the arbitration agreements, he
asserts that the agreements have no bearing on his claims. But Kenworth still
seeks to arbitrate Brinson’s claims, relying on an Alabama equitable doctrine that it
claims binds a non-signatory to arbitration agreements when that non-signatory
asserts a legal claim that depends on the existence of the contract containing the
arbitration clause. See Custom Performance, Inc. v. Dawson, 57 So. 3d 90, 97–98
(Ala. 2010). According to Kenworth, Brinson’s claims depend on the existence of
the repair invoices—which contained arbitration clauses—because Brinson alleges
that Kenworth failed to adequately evaluate and repair the truck, and the invoices
document the work that he complains about. But Brinson insists that his claims
have nothing to do with the invoices, and that the equitable doctrine therefore does
not apply.
The district court, by denying Kenworth’s motions to compel arbitration,
presumably agreed with Griggs and Brinson that they do not need to arbitrate their
claims. But we don’t really know. Because the court denied the motions in a
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summary order, without expressing any factual findings or legal conclusions, we
struggle to grasp which of the many reasons offered by Griggs and Brinson the
district court found persuasive. So we are left guessing why the district court
denied the motions—particularly considering the “liberal federal policy favoring
arbitration.” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1,
24 (1983). Without a firm explanation of the rationale for denying the motions, we
cannot conduct meaningful review of the district court’s order. And, although the
parties invite us to analyze their factual and legal disputes for the first time on
appeal, we are a court of review, and we ordinarily “do not decide in the first
instance issues not decided below.” Zivotofsky v. Clinton, 566 U.S. 189, 201
(2012) (quoting Nat’l Collegiate Athletic Ass’n v. Smith, 525 U.S. 459, 470
(1999)); see also Clay v. Equifax, Inc., 762 F.2d 952, 957 (11th Cir. 1985)
(“[A]ppellate review of what the district court did is largely an error-correcting
function.”). We therefore vacate the order and remand for the court below to enter
a reasoned opinion analyzing the motions to compel arbitration. See, e.g., Danley,
480 F.3d at 1091–92; Benoay v. Prudential-Bache Sec., Inc., 805 F.2d 1437, 1441
(11th Cir. 1986) (per curiam) (remanding for the district court “to conduct a more
thorough exploration of the validity of the arbitration issue”).
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IV.
The summary order that Kenworth appeals is insufficient to allow our
appellate review. We therefore VACATE the district court’s order denying the
motions to compel arbitration and REMAND for further proceedings.
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