author: JOHNSTONE, Justice. LYONS, Justice HOUSTON, Justice SEE, Justice

text:
    Frank J. HALES and Iva Jean P. Hales v. PROEQUITIES, INC.
    1011015.
    Supreme Court of Alabama.
    July 11, 2003.
    Rehearing Denied Jan. 23, 2004.

      David H. Marsh, Jeffrey C. Rickard, and Thomas M. Powell of Marsh, Rickard & Bryan, P.C., Birmingham; and Randy Beard of Beard & Beard, Guntersville, for appellants.
    W. Stancil Starnes, John P. Scott, Jr., and Joshua H. Threadcraft of Starnes & Atchison, LLP, Birmingham, for appellee.
   JOHNSTONE, Justice.

Appellants-plaintiffs Frank J. Hales and Iva Jean P. Hales appeal the order entered by the trial court compelling them to arbitrate their claims against appellee-de-fendant ProEquities, Inc., an investment company. We reverse and remand.

In July 1994, Wayne Gregory, an agent of ProEquities, convinced the Haleses to put their life savings of $430,000 in an investment account with ProEquities. On July 20, 1994, Frank Hales, alone, signed a “New Account Application,” an individual retirement account (“IRA”) application, and an IRA beneficiary designation form. The contractual documents include a pre-dispute arbitration agreement.

On August 5, 1999, in the Marshall County Circuit Court, the Haleses sued ProEquities and Gregory for conversion, breach of contract, fraud, breach of fiduciary duty, and willfulness and wantonness. Specifically, the Haleses alleged that, following the defendants’ advice to “re-invest $150,000 in InsNet, Inc. stock,” and to invest $60,000 in “a viatical settlement contract issued by The Old Line Life Insurance Company of America,” the Ha-leses instructed the defendants to make these investments on their behalf. The Haleses alleged that the defendants had not made these investments but had converted the $210,000.

On September 10, 1999, defendant Gregory moved to dismiss the complaint or, in the alternative, to transfer the case to Madison County. On September 14, 1999, ProEquities moved to dismiss the complaint on the ground of improper venue. On November 2, 1999, the Marshall County Circuit Court heard arguments by counsel on the motions to dismiss. On November 12, 1999, the Marshall County Circuit Court granted the motion to transfer and transferred the case to the Madison County Circuit Court.

On November 22, 1999, defendant Gregory moved for a stay of the case pending his appeal of his criminal convictions. The trial court purported to grant the motion. On November 2, 2000, the Haleses’ attorney noticed the deposition of Frank Hales for December 15, 2000. On December 5, 2000, the Haleses’ attorney re-noticed the deposition of Frank Hales for January 16, 2001. The Haleses canceled the January 16, 2001 deposition at the request of the attorney for ProEquities in order for the attorneys for both parties to discuss a possible conflict of interest on the part of one of the Haleses’ attorneys and to discuss a possible settlement of the case.

On January 31, 2001, the trial court ordered the parties to mediate the dispute and to report to the court the status of mediation by March 1, 2001. The trial court placed the case on its administrative docket while mediation occurred. The court further ordered that, if mediation failed to resolve the case, the case would be set for trial within 60 days. On March 27, 2001, ProEquities waived a possible conflict of interest affecting one of the Haleses’ attorneys in his representation of the Haleses.

On May 24, 2001, the Haleses’ attorney re-noticed the deposition of Frank Hales for June 6, 2001. On May 25, 2001, ProEquities noticed the deposition of Frank Hales for June 6, 2001 and included a request that he produce certain documents at his deposition. On May 25, 2001, ProEquities also noticed the deposition of Iva Hales for June 6, 2001 and included a request that she produce certain documents at her deposition. The parties canceled the Haleses’ depositions to explore a settlement of the case. On May 31, 2001, ProEquities answered the complaint and asserted various affirmative defenses.

On June 20, 2001, the Haleses amended their complaint to assert claims against ProEquities for negligent and wanton hiring, training, monitoring, supervision, and retention, and for negligent and wanton failure to adopt, to promulgate, or to enforce policies and procedures in accordance with the “Alabama Securities Commission Code.” On June 22, 2001, the Haleses served ProEquities with interrogatories and requests for production.

On July 10, 2001, the Haleses’ attorney re-noticed the deposition of Frank Hales for August 13, 2001. On July 19, 2001, ProEquities re-noticed the deposition of Frank Hales for August 13, 2001 and included a request that he produce certain documents at his deposition. On July 19, 2001, ProEquities re-noticed the deposition of Iva Hales for August 13, 2001 and included a request that she produce certain documents at her deposition. On July 25, 2001, ProEquities answered the amended complaint and again asserted various affirmative defenses.

On August 13, 2001, the parties deposed Frank Hales. Thereafter, the Haleses filed a second amended complaint substituting McDowell Enterprises stock for Ins-Net, Inc., stock. In a letter dated September 6, 2001, defendant Gregory told the trial court that, because of his incarceration, he could not attend the trial on the scheduled date, apparently during the first week of November 2001. He asked the court to delay the trial until he could obtain his records and prepare for trial.

On October 5, 2001, ProEquities answered the second amended complaint and again asserted various affirmative defenses. For the first time, ProEquities moved to compel the Haleses to submit their claims to arbitration pursuant to the pre-dispute arbitration agreement signed by Frank Hales and moved to stay the Hales-es’ action pending the arbitration. In its motion to compel arbitration, ProEquities claimed that the motion was timely because, ProEquities said, it had learned for the first time at Frank Hales’s deposition that the Haleses’ claims “relate[d] directly to plaintiffs account with ProEquities, Inc., which was opened in July 1994.” ProEquities also filed evidentiary materials and a supporting brief.

On October 15, 2001, ProEquities filed a supplemental brief in support of its motion to compel arbitration. On October 29, 2001, the Haleses filed a memorandum and evidentiary materials in opposition to the motion to compel arbitration. The Hales-es contended that ProEquities had waived its right to arbitration by waiting over two years to move to compel arbitration and by failing to assert arbitration as an affirmative defense in its initial answer to the complaint.

On November 6, 2001, the trial court heard arguments by counsel on the motion to compel arbitration. Thereafter, both ProEquities and the Haleses filed affidavits by their respective attorneys. The attorney for ProEquities states that over a two-year period he had engaged in discussions with one of the Haleses’ attorneys about a possible conflict of interest in his representation of the Haleses. He states that in January and February 2001 he engaged in settlement discussions with one of the attorneys representing the Haleses. He advised the Haleses’ attorneys that ProEquities had agreed to waive the possible conflict affecting the one attorney in his representation of the Haleses. One of the Haleses’ attorneys states that the Ha-leses, through their attorneys, had expended “a great deal of time, money, and effort in preparing [the Haleses’], case for trial before a jury.” The attorney specifically states that, during the pendency of the case, he and an attorney for ProEquities engaged in discussions about settling the Haleses’ claims against ProEquities. “At no time during any of these discussions was arbitration mentioned. Arbitration was first raised over two years after the suit was filed and one month before the case was to be tried.” On January 11, 2002, the trial court rejected the Haleses’ assertion that ProEquities had waived its right to compel arbitration and granted the motion to compel arbitration.

On appeal, the Haleses raise one issue: “[Wjhether the trial court erred by granting the motion to compel arbitration ... given that ProEquities actively participated in the litigation for more than two years before moving to compel arbitration and given that ProEquities failed to raise the affirmative defense of arbitration until more than two years after ProEquities served and filed its initial Answer.”

The Haleses’ contend that they were prejudiced by the delay of ProEquities in invoking the arbitration agreement. They contend that they incurred considerable litigation expenses in preparing their case for trial. The expenses include the cost of videotaping the deposition of Frank Hales, whose health is failing, for use at trial.

Standard of Review

The parties have invoked two different arguably applicable standards of review. First, “the standard of review of a trial court’s ruling on a motion to compel arbitration at the instance of either party is a de novo determination of whether the trial judge erred on a factual or legal issue to the substantial prejudice of the party seeking review.” Ex parte Roberson, 749 So.2d 441, 446 (Ala.1999). Accord Lewis v. Conseco Fin. Corp., 848 So.2d 920, 922 (Ala.2002) (“[tjhis Court reviews de novo the [grant] or denial of a motion to compel arbitration”). Second, “[o]rdinarily, we review issues regarding waiver of arbitrability under an abuse-of-discretion standard.” Karl Storz Endoscopy-America, Inc. v. Integrated Med. Sys., Inc., 808 So.2d 999, 1008 (Ala.2001). However, in Karl Storz Endoscopy-America, because the defense of waiver was submitted entirely on documentary evidence, we conducted a de novo review of that defense. Id.

Because of the dichotomy in the two standards of review, we will clarify the standard of review applicable to trial court rulings on motions to compel arbitration opposed on the ground of waiver. The abuse-of-discretion standard for reviewing the acceptance or rejection of the ground of waiver in a ruling by the trial court on a motion to compel arbitration can be traced to Ex parte McKinney, 515 So.2d 693 (Ala.1987), which denied a petition for a writ of mandamus. In McKinney, we stated “‘[m]andamus itself is an extraordinary remedy, which should be granted only when there is clear showing that the trial court abused its discretion.’ ” 515 So.2d at 696 (quoting Ex parte Lang, 500 So.2d 3, 5 (Ala.1986)). However, we no longer review either the grant or the denial of a motion to compel arbitration by petition for a writ of mandamus. Rather, Rule 4(d), Ala. R.App. P., effective on October 1, 2001, authorizes an appeal of an order either granting or denying a motion to compel arbitration. Thus, the mandamus abuse-of-discretion standard for reviewing the grant or denial of a motion to compel arbitration opposed on the ground of waiver is no longer applicable and is inconsistent with our de novo standard of review in appeals from the grant or denial of a motion to compel arbitration. Ex parte Roberson, supra.

Moreover, “a finding that a party has waived its right to arbitration is a legal conclusion.” Price v. Drexel Burnham Lambert, Inc., 791 F.2d 1156, 1159 (5th Cir.1986). Accord Menorah Ins. Co., Ltd. v. INX Reinsurance Corp., 72 F.3d 218 (1st Cir.1995); MidAmerica Fed. Sav. & Loan Ass’n v. Shearson/American Exp., Inc., 886 F.2d 1249 (10th Cir.1989); D.M. Ward Constr. Co. v. Electric Corp. of Kansas City, 15 Kan.App.2d 114, 803 P.2d 593 (1990); In re Bruce Terminix Co., 988 S.W.2d 702 (Tex.1998); Chandler v. Blue Cross Blue Shield of Utah, 833 P.2d 356 (Utah 1992); Steele v. Lundgren, 85 Wash.App. 845, 935 P.2d 671 (1997). “Legal conclusions are never accorded a presumption of correctness on appellate review.” Ex parte Cain, 838 So.2d 1020, 1026 (Ala.2002). Accord Ex parte Perkins, 646 So.2d 46, 47 (Ala.1994).

Additionally, in most cases, the trial court grants or denies a motion to compel arbitration or decides the waiver of the right to compel arbitration on the submission of written evidentiary materials without ore tenus testimony. Therefore, “the trial court is in no better — or different — position than this Court to decide the legal significance of a party’s conduct.” Karl Storz Endoscopy-America, 808 So.2d at 1008. Accordingly, absent the consideration of disputed ore tenus evidence, the grant or denial of a motion to compel arbitration opposed on the ground of waiver is subject to a de novo review on appeal. Id. Accord Restoration Pres. Masonry, Inc. v. Grove Europe, Ltd., 325 F.3d 54 (1st Cir.2003); Thyssen, Inc. v. Calypso Shipping Corp., S.A., 310 F.3d 102 (2d Cir.2002); Fraser v. Merrill Lynch Pierce, Fenner & Smith, Inc., 817 F.2d 250 (4th Cir.1987); Gulf Guaranty Life Ins. Co. v. Connecticut Gen. Life Ins. Co., 304 F.3d 476 (5th Cir.2002); Frye v. Paine, Webber, Jackson & Curtis, Inc., 877 F.2d 396 (5th Cir.1989); Iowa Grain Co. v. Brown, 171 F.3d 504 (7th Cir.1999); Dumont v. Saskatchewan Gov’t Ins., 258 F.3d 880 (8th Cir.2001); Fisher v. A.G. Becker Paribas, Inc., 791 F.2d 691 (9th Cir.1986).

Law and Analysis

“[AJrbitration agreements [are] as enforceable as other contracts, but not more so.” Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 404 n. 12, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967). ‘[A] party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.’ ” AT & T Techs., Inc. v. Communications Workers of America, 475 U.S. 643, 648, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986) (quoting United Steelworkers v. Warrior & Gulf Navig. Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960)).

Waiver is a “defense to arbitrability.” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). Accord Ex parte Colquitt, 808 So.2d 1018, 1022 (Ala.2001), and Big Valley Home Ctr., Inc. v. Mullican, 774 So.2d 558 (Ala.2000).

“It is well settled under Alabama law that a party may waive its right to arbitrate a dispute if it substantially invokes the litigation process and thereby substantial^ prejudices the party opposing arbitration. Whether a party’s participation in an action amounts to an enforceable waiver of its right to arbitrate depends on whether the participation bespeaks of an intention to abandon the right in favor of the judicial process and, if so, whether the opposing party would be prejudiced by a subsequent order requiring it to submit to arbitration. No rigid rule exists for determining what constitutes a waiver of the right to arbitrate; the determination as to whether there has been a waiver must, instead, be based on the particular facts of each case.”

Companion Life Ins. Co. v. Whitesell Mfg., Inc., 670 So.2d 897, 899 (Ala.1995). Accord Ex parte Allen, 798 So.2d 668 (Ala.2001), and Lee v. YES of Russellville, Inc., 784 So.2d 1022 (Ala.2000).

“Prejudice to the party opposing arbitration, not prejudice to the party seeking arbitration, is determinative of whether a court should deny arbitration on the basis of waiver.” Price, 791 F.2d at 1162 (footnote omitted). “Both delay and the extent of the moving party’s participation in judicial proceedings are material factors in assessing a plea of prejudice.” Frye, 877 F.2d at 399.

“Prejudice has been found in situations where the party seeking arbitration allows the opposing party to undergo the types of litigation expenses that arbitration was designed to alleviate.” Morewitz v. West of England Ship Owners Mut. Protection & Indem. Ass’n, 62 F.3d 1356, 1366 (11th Cir.1995). “Sufficient prejudice to infer waiver might be found, for example, if the party seeking the stay [for arbitration] took advantage of judicial discovery procedures not available in arbitration.” Carcich v. Rederi A/B Nordie, 389 F.2d 692, 696 n. 7 (2d Cir.1968). However, “[a] defendant has the right to have the proper venue established before it has any obligation to move to compel arbitration.” Thompson v. Skipper Real Estate Co., 729 So.2d 287, 292 (Ala.1999). Accord Ex parte Allen, 798 So.2d at 673.

In our de novo review, we must determine whether ProEquities substantially invoked the judicial process so as to prejudice the Haleses. We note, first, that the participation of ProEquities in the proceedings to dismiss the action or to transfer the action to a proper venue was not an invocation of the judicial process by ProEquities and was not a waiver of the right to compel arbitration. Ex parte Allen and Thompson, supra.

ProEquities claimed below and claims before us that it first learned that the Haleses’ claims “involved the very ProEq-uities account which contained the arbitration agreement” during Frank Hales’s deposition. ProEquities argues that it had no reason to invoke the arbitration agreement until it learned that the Haleses’ claims related to their ProEquities account and that, therefore, because ProEquities did not sooner know that the Haleses’ claims related to their brokerage account with ProEquities, ProEquities did not waive its right to arbitration by failing to move to compel arbitration until one month before the trial date.

In their complaint the Haleses alleged that the

“defendants advised the plaintiffs to reinvest $150,000 in InsNet, Inc. stock. Gregory represented to the plaintiffs that InsNet stock was a good sound investment and would give the plaintiffs a better return.”

The Haleses alleged that they “relied on the advice and representations of ProEquities and its agents” to invest their life savings with ProEquities. The answer to the complaint filed by ProEquities reveals that ProEquities understood that the Ha-leses’ claims against ProEquities related to their brokerage account with ProEquities. In pertinent part, the answer reads:

“ProEquities states that the transactions alleged were voluntarily undertaken, that the plaintiffs had the opportunity, if not the obligation, to read all documents presented to or signed by the plaintiffs, that the terms of the investments purchased were disclosed to the plaintiffs, that the plaintiffs knowingly entered into the transactions, having either understood the transactions or having failed to avail themselves of the opportunity to understand the transactions, and that some or all of the transactions are now complete, paid and satisfied.”

Furthermore, ProEquities did not cite to the trial court and does not cite to this Court any case holding that a defendant’s failure to understand the claims asserted against it by a plaintiff excuses that defendant’s over-two-year delay in asserting its right to compel arbitration. Thus, this argument is unavailing.

The failure of ProEquities to object to the trial setting; the over-two-year delay by ProEquities in moving to compel arbitration after the Haleses first filed suit; the participation of ProEquities in discovery by noticing the depositions of the Ha-leses, by requesting the production of documents by the Haleses at their depositions, and by deposing plaintiff Frank Hales; and the two-month delay by ProEquities in moving to compel arbitration after Frank Hales’s deposition; together evidence “an intention [by ProEq-uities] to abandon the right [to compel arbitration] in favor of the judicial process.” Companion Life Ins. Co., 670 So.2d at 899. Moreover, the failure of ProEquities to object to the trial setting or to move to compel arbitration until one month before trial required the Haleses to proceed with the preparation of their case for the jury trial. The actions and inactions by ProEquities caused the Ha-leses to expend moneys and efforts to prepare for trial and, thus, prejudiced the Haleses. Therefore, ProEquities waived its right to compel the Haleses to arbitrate their claims. Accordingly, we reverse the order of the trial court compelling the Haleses to arbitrate their claims against ProEquities and we remand this case for entry of an order consistent with this opinion.

REVERSED AND REMANDED WITH INSTRUCTIONS.

BROWN, HARWOOD, and STUART, JJ., concur.

LYONS, J., concurs specially.

MOORE, C.J., and HOUSTON, J„ concur in the result.

SEE and WOODALL, JJ., dissent.

LYONS, Justice

(concurring specially).

The Haleses assert that preparation for a jury trial is more expensive than preparation for an arbitration. In Big Valley Home Center, Inc. v. Mullican, 774 So.2d 558, 562 (Ala.2000), this Court found prejudice where the party seeking arbitration had waited until the eve of trial to invoke its right and the attorneys for the party opposing arbitration “had invested time and money preparing for a trial on the merits.” Yet in Jericho Management, Inc. v. Fidelity National Title Insurance Co. of Tennessee, 811 So.2d 514, 515 (Ala.2001), this Court found no intent to abandon the right to arbitrate where the motion to compel arbitration was not made until 19 months after the action was filed. The opinion of the United States Supreme Court in Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265, 115 S.Ct. 834, 130 L.Ed.2d 753 (1995), was not released until approximately one year after the action had been filed in Jericho Management. In Jericho Management this Court also stated: “Moreover, even if we were to conclude that Fidelity had substantially involved itself in the litigation process, we do not believe Jericho met its burden of showing that it was substantially prejudiced.” 811 So.2d at 515.

At the time of the filing of the motion to compel arbitration in Jericho Management, the case had not been set for trial. In this proceeding, even though the record does not contain the notice setting the case for trial, other documents in the record indicate that the trial was scheduled to begin in early November 2001. The motion to compel arbitration was filed just one month before the trial date. The Ha-leses’ assertions that they were substantially prejudiced in preparing for a jury trial, as opposed to arbitration, are not accompanied by any specific details. However, it is difficult to quantify such activity. I have not been away from the practice of law so long as to forget that the details essential to adequate preparation for trial before a jury are more elaborate than when the trial is before the eourt or the case is presented to an arbitrator.

I distinguish Jericho Management on the dual grounds that it is the product of the peculiar circumstance of a change during the pendency of the action in the law governing access to arbitration and the filing of the motion to compel arbitration before the case had been set for trial. Here, the law governing arbitrability was settled as of the commencement of the action and the motion to compel arbitration was filed after the case had been set for trial and just one month before the trial was scheduled to begin.

HOUSTON, Justice

(concurring in the result).

I cannot distinguish this case from Big Valley Home Center, Inc. v. Mullican, 774 So.2d 558, 562 (Ala.2000), an opinion written by Justice Cook, in which I concurred. Big Valley is so similar to this case that I could not vote to affirm the order compelling arbitration in the case at issue without overruling Big Valley or seeking to distinguish it. ProEquities, Inc., does not ask this Court to overrule Big Valley, nor does it attempt to distinguish it. In my opinion, Big Valley was correctly decided by this Court, and I cannot distinguish it from this case. ProEquities, Inc., substantially invoked the litigation process, to the prejudice of Frank and Iva Jean P. Hales, 774 So.2d at 562; therefore, the trial court erred in granting ProEquities’ motion to compel arbitration.

SEE, Justice

(dissenting).

I dissent from the main opinion insofar as it concludes that ProEquities’ participation in the litigation process amounts to a waiver of its right to compel the Haleses to arbitrate. This Court stated in Mutual Assurance, Inc. v. Wilson, 716 So.2d 1160, 1164 (Ala.1998), that “ ‘ ‘[mjerely answering on the merits, asserting a counterclaim (or crossclaim) or participating in discovery, without more, will not constitute a waiver [of the right to compel arbitration].’ ” ’ ” (Quoting Ex parte Merrill Lynch, Pierce, Fenner & Smith, Inc., 494 So.2d 1, 3 (Ala.1986), quoting in turn other cases).

We are to look at the facts of each case to determine whether a party has waived its right to enforce a valid arbitration agreement. See Companion Life Ins. Co. v. Whitesell Mfg., Inc., 670 So.2d 897, 899 (Ala.1995). The United States Court of Appeals for the Third Circuit in Hoxworth v. Blinder, Robinson & Co., 980 F.2d 912, 925-26 (3d Cir.1992), stated that it had

“approved of cases finding waiver ‘where the demand for arbitration came long after the suit commenced and when both parties had engaged in extensive discovery.’ .... [Prejudice is the touchstone for determining whether the right to arbitrate has been waived....
“... [I]n this case defendants participated in numerous pretrial proceedings during the more than eleven months before Blinder, Robinson moved to compel arbitration. Defendants filed a motion to dismiss the complaint for failure to state a claim on which relief could be granted and a motion to disqualify plaintiffs’ counsel; they took the deposition of each of the named plaintiffs, depositions that would not have been available in arbitration; ... they inadequately answered plaintiffs’ discovery requests, prompting plaintiffs to file two motions to compel the production of documents and answers to interrogatories, which defendants opposed; and they later moved for a stay of discovery. In addition, defendants consented to the district court’s first pretrial order consolidating the three class actions, and they filed a lengthy memorandum in opposition to plaintiffs’ motion for class certification. Only on December 21, 1988, after defendants’ motion to dismiss the complaint was denied and plaintiffs’ motion to compel discovery was granted, did Blinder, Robinson file its motion to compel arbitration.
“Plaintiffs have characterized the prejudice they suffered from defendants’ failure to raise arbitration promptly as twofold: plaintiffs devoted substantial amounts of time, effort, and money in prosecuting the action, while defendants were able to use the Federal Rules [of Civil Procedure] to conduct discovery not available in the arbitration forum.”

In Big Valley Home Center, Inc. v. Mullican, 774 So.2d 558 (Ala.2000), this Court held that Big Valley had waived its right to compel arbitration; only after all trial preparations were complete, all discovery had been completed, and Mullican refused its settlement offer made on the day trial was to begin, did Big Valley move the next day to compel arbitration. Even though arbitration is strongly favored by federal law (see Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985)), this Court, like the Third Circuit in Hoxworth, found a waiver of the right to compel arbitration. The expense of completed trial preparations and the information gained through extensive discovery (which could not have been obtained through arbitration) showed sufficient prejudice to warrant a decision that the right to compel arbitration had been waived.

In the case before us today, the timeline is as follows: On August 5, 1999, the Ha-leses sued ProEquities and Gregory for conversion, breach of contract, fraud, breach of fiduciary duty, and willfulness and wantonness. On September 10, 1999, defendant Gregory moved to dismiss the complaint or, in the alternative, to transfer the case to Madison County, and on September 14, 1999, ProEquities moved to dismiss the complaint on the ground of improper venue. On November 12, 1999, the Marshall Circuit Court transferred the case to the Madison Circuit Court. On November 22, 1999, Gregory moved for a stay of the case pending appeal of his criminal convictions. A year later, on November 2, 2000, the Haleses’ attorney noticed the deposition of Frank Hales for December 15, 2000, and later re-noticed Hales’s deposition for January 16, 2001. The Haleses canceled the January 16, 2001, deposition at the request of ProEquities’ attorney so that attorneys for both sides could discuss a possible conflict of interest on the part of one of the Haleses’ attorneys and to discuss a possible settlement.

On January 31, 2001, the trial court ordered the parties to mediate the dispute and to report the status of mediation by March 1, 2001. The trial court placed the case on its administrative docket. On May 24, 2001, the Haleses’ attorney re-noticed the deposition of Frank Hales for June 6, 2001. On May 25, 2001, ProEquities noticed the depositions of Frank Hales and Iva Hales for June 6, 2001. The parties again canceled the depositions to explore a settlement of the case.

On May 31, 2001, ProEquities answered the complaint and asserted various affirmative defenses. On June 20, the Haleses amended their complaint to asserts claims against ProEquities for negligent and wanton hiring, training, monitoring, supervision, and retention, and for negligent and wanton failure to adopt, to promulgate, or to enforce policies and procedures in accordance with what they called the “Alabama Securities Commission Code.” On June 22, the Haleses served ProEquities with interrogatories and requests for production. On July 10, the Haleses’ attorney re-noticed the deposition of Frank Hales for August 13, 2001, and on July 19, 2001, ProEquities re-noticed the depositions of Frank and Iva Hales for August 13, 2001, and included a request for the production of certain documents. On July 25, 2001, ProEquities answered the amended complaint and again asserted various affirmative defenses.

On August 13, 2001, the parties deposed Frank Hales. Thereafter, the Haleses filed a second amended complaint substituting McDowell Enterprises stock for Ins-Net, Inc., stock. On September 6, 2001, defendant Gregory wrote the trial court a letter stating that he was incarcerated and could not attend the trial on the scheduled date, apparently during the first week of November 2001. He asked the court to delay the trial until he could obtain his records and prepare for trial. The briefs do not state whether this request was granted.

On October 5, 2001, ProEquities answered the second amended complaint and asserted affirmative defenses. ProEquities moved to compel the Haleses to submit their claims to arbitration pursuant to the predispute arbitration agreement signed by Frank Hales and moved to stay the Haleses’ action pending the arbitration.

ProEquities did not move to compel arbitration until some two years after the Haleses filed their complaint; however, during that two-year period the trial court resolved a venue dispute, stayed the case for a year pending resolution of another defendant’s criminal trial, and again stayed the case while it was referred to mediation. The Haleses amended their complaint twice, substantially altering the grounds on which they sought damages. The parties also jointly postponed discovery numerous times while seeking to settle the dispute. When the Haleses’ claims reached their final form and the first deposition and document production in the case occurred, ProEquities promptly answered the final amended complaint and moved to compel arbitration. ProEquities moved to compel arbitration after only one, jointly noticed deposition had occurred.

“A party seeking to prove waiver of a right to arbitrate must demonstrate ... prejudice to the party opposing arbitration resulting from such inconsistent acts. The party arguing waiver of arbitration bears a heavy burden of proof.” Britton v. Co-op Banking Group, 916 F.2d 1405, 1412 (9th Cir.1990). The Haleses do not make a showing that delay in seeking arbitration prejudiced them, other than to argue in conclusory fashion that the expense of preparations for trial was prejudicial. Unlike the plaintiffs in Hoxworth, the Haleses make no argument that ProEquities, by delaying its motion to compel arbitration, obtained information not available through arbitration. Also unavailing is the Hales-es’ argument that ProEquities waived its right to compel arbitration by not raising it as an affirmative defense in its first answer and that any grant of a motion to compel arbitration made after that point was unduly prejudicial.

“Nor is waiver established by the fact that [the defendant] failed to raise as an affirmative defense the agreement to arbitrate. Absent a showing of prejudice by the [plaintiffs], the bare fact that [the defendant] failed to raise an affirmative defense is inadequate by itself to support a claim of waiver of arbitration. Rush v. Oppenheimer & Co., 779 F.2d 885, 889 (2d Cir.1985).”

Fisher v. A.G. Becker Paribas, Inc., 791 F.2d 691, 698 (9th Cir.1986).

Given the sequence of events occurring in this case before the motion to compel arbitration was filed, and the failure of the Haleses to prove sufficient prejudice caused by the delay in filing the motion to compel arbitration, I respectfully dissent from the main opinion’s holding that ProEquities waived its right to compel the Haleses to arbitrate their dispute.

      . Gregory is not a party to this appeal. The Haleses' complaint claimed likewise against other defendants who are not parties to this appeal.

      . The motion for a stay contains a stamp with the words "Granted” and "Denied” with a place beside each for a check mark and a line with the word “Judge” beside the line. The trial judge checked "Granted” and signed her name. However, the record does not show that the order purporting to grant the stay was filed in the clerk’s office. The case action summary does not contain any entry for the order purporting to grant the stay. Thus, the trial court did not effectuate a stay of the case. Rule 58, Ala. R. Civ. P., and Doe v. Markham, 776 So.2d 757 (Ala.2000).

      . The only indications of the trial date in the record are the November 19, 2001 affidavit by one of the Haleses' attorneys Randy Beard and the October 5, 2001 motion by ProEquities to compel arbitration. The affidavit swears that the motion to compel preceded the trial date by only one month.

      . The trial setting must have complied with Rule 40, Ala. R. Civ. P., which requires that parties be given at least 60 days' notice when a case is set for trial. The letter from defendant Wayne Gregory informing the court that he could not attend what he described as the scheduled trial is dated September 6, 2001. The Haleses' attorney states in his affidavit that “[arbitration was first raised ... one month before the case was to be tried.''

      . The main opinion notes that there is no record that the trial court's order granting the stay was filed in the clerk's office; however, there were no developments in the Haleses’ case during the year that followed the trial court’s “purported” issuance of the stay.


source: Caselaw Access Project

author: WOODALL, Justice. HOUSTON, Justice LYONS, Justice

license: Public Domain

text:
    Ernest MIDDLETON, as administrator of the estate of Lula Mae McDougle, deceased v. Robert LIGHTFOOT, M.D., and Lightfoot and Lightfoot Surgery, P.C.
    1020666.
    Supreme Court of Alabama.
    Oct. 24, 2003.
    Rehearing Denied Jan. 30, 2004.

      Stephen D. Heninger of Heninger, Burge, Vargo & Davis, LLP, Birmingham, for appellant.
    Norman E. Waldrop, Jr., and A. Edwin Stuardi of Armbrecht Jackson, LLP, Mobile, for appellees.
   WOODALL, Justice.

Ernest Middleton, as administrator of the estate of Lula Mae McDougle, deceased, appeals from a judgment entered on a jury verdict in favor of Robert Light-foot, M.D., and Lightfoot and Lightfoot Surgery, P.C. (hereinafter referred to collectively as “Lightfoot”), in Middleton’s medical-malpractice action based on the alleged wrongful death of McDougle. We reverse and remand.

I. Facts and Background

On April 24, 2000, McDougle was admitted to the University of South Alabama Knollwood Park Hospital for surgery to relieve a condition diagnosed by Dr. Light-foot as “cholelithiasis” (gallstones). Dr. Lightfoot performed a “cholecystectomy,” that is, surgical removal of the gallbladder. He first attempted to remove the gallbladder “laparoscopically,” that is, by inserting a series of “ports,” or “trocars,” into the abdominal wall, through which the gallbladder could be removed. He inserted an “umbilical trocar,” which was approximately 11 millimeters in diameter, through the lower abdomen; however, he abandoned the laparoscopic procedure because his vision of and access to the gallbladder were obscured by “adhesions,” that is, scar tissue or “extra-fibrous tissue.” He then removed the trocars and made a larger incision in the lower abdomen, through which he extracted the gallbladder. McDougle was released from the hospital at approximately 9:15 a.m. the following morning, April 25. By 6:30 a.m. on April 26, McDougle was dead. An autopsy revealed an 11-millimeter perforation of the “jejunum,” that is, the “small bowel,” near the incision into which Dr. Lightfoot had inserted the “umbilical trocar” during the abortive laparoscopic cholecystectomy.

On August 25, 2000, Katherine Middleton, as administratrix and personal representative of McDougle’s estate, sued Lightfoot. The complaint alleged, among other things, that Lightfoot “caused or negligently allowed the [gallbladder surgery] to be performed in such a manner that [McDougle] suffered a ‘perforated [bowel ], which led to acute peritonitis and infection that caused [her death].” (Emphasis added.) It also alleged that Light-foot allowed McDougle “to go without proper and necessary evaluation, work-up, diagnosis and treatment of her perforation and resulting peritonitis and prematurely and improperly discharged [her] in spite of signs and symptoms of her problems.” Finally, the complaint averred that Lightfoot “negligently caused or allowed the perforation and resulting peritonitis to occur without proper and timely evaluation of the patient in spite of conditions which should have caused further concern and evaluation of potential complications.” Subsequently, Ernest Middleton was substituted for Katherine Middleton as the administrator of McDougle’s estate and thus the plaintiff.

The jury trial of the case focused primarily on two issues: (1) the cause of death, and (2) the standard of care. As for the cause of death, the autopsy report failed to attribute death to a specific cause. Middleton’s theory of the case was that Dr. Lightfoot inadvertently punctured the bowel with the umbilical trocar during the laparoscopic procedure and failed to discover and treat the injury. According to this theory, the contents of the bowel escaped through the puncture, resulting in “acute peritonitis,” infection, and ultimately McDougle’s death. Middleton presented expert testimony indicating that Dr. Lightfoot had breached the standard of care in failing to discover and repair the perforation.

Lightfoot did not challenge the autopsy finding that McDougle’s bowel was perforated at the time of her death, but challenged the theory that the perforation occurred during the surgical procedure, as well as Middleton’s theory as to the cause of McDougle’s death. According to Light-foot, the perforation resulted, not from the insertion of the trocar, but from a bowel “impaction.” According to that theory, death resulted, not from peritonitis or infection, but from a “pulmonary embolus,” having no connection with the perforated bowel. The jury returned a verdict in favor of Lightfoot.

Middleton moved for a new trial, on the ground, among others, that the trial court erred in allowing Lightfoot to cross.-examine Middleton’s expert witness regarding medical-malpractice actions that have been brought against the witness. The trial court did not rule on the new-trial motion, and it was denied by operation of law. Ala. R. Civ. P. 59.1. Middleton appealed, reasserting his challenge to the evidence elicited on cross-examination of his expert witness.

II. Standard of Review

“ ‘The standard applicable to a review of a trial court’s rulings on the admission of evidence 'is determined by two fundamental principles.' The first grants’ trial judges wide discretion to exclude or to admit evidence.’ ” Mock v. Allen, 783 So.2d 828, 835 (Ala.2000) (quoting Wal-Mart Stores, Inc. v. Thompson, 726 So.2d 651, 655 (Ala.1998)). Despite the latitude afforded the trial Court in its evidentiary rulings, a trial court exceeds its discretion .where it admits prejudicial evidence that has no probative value. See Powell v. State, 796 So.2d 404, 419 (Ala.Crim.App.1999), aff'd, 796 So.2d 434 (Ala.2001).

“ ‘The second principle “is that a judgment cannot be reversed on appeal for an error [in the improper admission of evidence] unless ... it should appear that the error complained of has probably injuriously affected substantial’rights of the parties.” ’ ” Mock, 783 So.2d at 835 (quoting Wal-Mart Stores, 726 So.2d at 655, quoting in turn Atkins v. Lee, 603 So.2d 937, 941 (Ala.1992)). See also Ala. R.App. P. 45. “The burden of establishing that an erroneous ruling was prejudicial is on the appellant.” Preferred Risk Mut. Ins. Co. v. Ryan, 589 So.2d 165, 167 (Ala.1991).

III. Analysis

Before trial, Middleton filed a motion in limine, seeking to exclude evidence of medical-malpractice actions in which Dr. Mark Gordon, his expert witness, had been a defendant. The motion specifically sought to exclude any reference to one such ease that “involved the cutting of a [bile] duct during gallbladder surgery,” on the grounds that testimony as to that case would be irrelevant and prejudicial. The trial court denied the motion and the case proceeded to trial.

In order to establish that Dr. Lightfoot had breached the standard of care in treating McDougle, Middleton read into evidence at trial deposition testimony of Dr. Gordon. Dr. Gordon expressed the following opinions, among others: (1) that the perforation was caused by Dr. Lightfoot’s insertion of the trocar, (2) that Dr. Light-foot breached the standard of care in failing to discover and repair the perforation, and (3) that McDougle died “by sepsis from acute peritonitis” resulting from the perforation.

During the trial, Lightfoot’s counsel prepared to read into evidence portions of Dr. Gordon’s deposition involving malpractice actions in which Dr. Gordon had been a defendant. At that time, Middleton’s counsel renewed their objections to the evidence on the grounds stated in the motion in limine. The trial court overruled the objection, and the testimony was read into evidence.

The testimony included specific references to three medical-malpractice actions that had been brought against Dr. Gordon, with particular emphasis on a case involving a laparoscopic cholecystectomy, in which Dr. Gordon mistook a small bile duct for a vein and deliberately clipped the duct. In that connection, Lightfoot was allowed to show that the patient not only sued Dr. Gordon, but also sent him threatening correspondence.

Middleton argues that “[p]rior suits against [an expert] witness have no probative value and simply demonstrate an attempt to prejudice the jury regarding the witness.” Middleton’s brief, at 26. He contends that such testimony has “nothing to do with anything except to prejudice the jury into thinking [the] witness must be a bad doctor because he has been sued himself.” Id. at 31.

Lightfoot contends that the testimony elicited from Dr. Gordon was relevant to show “bias and lack of credibility.” More specifically, Lightfoot insists:

“Dr. Gordon allegedly performed an inspection of the operative area [in the laparoscopic-cholecystectomy malpractice action against him] and did not recognize the injury prior to the procedure being completed. The patient was sent home the same day of the procedure. Two days later the patient was admitted to the hospital to repair the injured common bile duct. Even though Dr. Gordon failed to identify the injury after inspecting the operative area and before closure, Dr. Gordon testified in his case, that he complied with the standard of care.
“Dr. Gordon’s [laparoscopic-cholecys-tectomy] case involves the same standard of care issues addressed in the present case, specifically, inspecting the operative area in abdominal surgery and attempting to identify any injury prior to closure. Dr. Gordon, however, has created two unique standards of care; one that applies to himself as a surgeon and one that applies to his role as a professional witness. The inconsistent nature of these standards of care shows Dr. Gordon’s bias [in favor of Middleton] and lack of credibility.”

Lightfoot’s brief, at 36 (emphasis in original) (citations to the record omitted). In support of that proposition, Lightfoot cites Clements v. Dr. John Alvan Stewart, P.C., 595 So.2d 858 (Ala.1992). Clements, however, is inapposite.

Clements was a medical-malpractice action brought by William Clements against Dr. John Alvan Stewart, P.C., and Dermatology Clinic (collectively referred to as “Dr. Stewart”). 595 So.2d at 859. “Before [Dr. Stewart’s] medical expert witness testified, [Dr. Stewart] moved in limine to preclude [Clements] from cross-examining [the expert] witness ‘regarding the fact that he had been a defendant in a [medical negligence] lawsuit.’ ” 595 So.2d at 862-63. The trial court granted the motion, and Clements made that denial the basis for a motion for a new trial, after the jury returned a verdict in favor of Dr. Stewart. 595 So.2d at 863. The issue presented on appeal was “[w]hether [Clements] was unfairly prejudiced by not being permitted to question [Dr. Stewart’s] medical expert witness about that witness’s ‘recent involvement as a defendant in a medical negligence action.’ ” 595 So.2d at 862 (emphasis omitted).

This Court answered that question in the affirmative. In doing so, it said:

“In the present case, the testimony of the defendant’s medical expert was critical to the defendant’s case, in that it was contrary to the opinion that had been expressed by the plaintiffs expert witness, which was to the effect that the defendant had deviated from the appropriate standard of care. The plaintiff made an offer of proof outside the presence of the jury that showed that the defendant’s medical expert had been a defendant in a medical malpractice action; that the witness had been represented in that action by the same law firm that now represents the defendant; and that that action had been settled. Although we are mindful of the trial court’s considerable discretion in ruling on evidentiary matters of this kind, we believe that the trial court unduly and unnecessarily restricted the plaintiffs cross-examination of this witness with respect to any bias that he may have had against plaintiffs in medical malpractice actions and that, as a result, the plaintiff’s case was substantially prejudiced.”

595 So.2d at 864 (emphasis added).

Obviously, Clements presented elements of potential bias not presented in this case. In particular, unlike Dr. Gordon, Dr. Stewart’s expert witness had been represented by the same law firm that was defending Dr. Stewart. Moreover, the posture of Clements was different from this case. In Clements, it was the plaintiff who wanted to explore the possibility that the expert witness’s involvement in prior medical-malpractice actions had prejudiced the defendant’s expert witness against plaintiffs. This case presents the reverse scenario, that is, the defendant doctor invokes Clements for the proposition that he has the right to explore whether prior medical-malpractice actions against the plaintiff’s expert witness have biased that expert in favor of plaintiffs. Neither Clements nor logic will support this right.

“ ‘Relevant evidence’ means evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.” Ala. R. Evid. 401. Under this rule, “[e]vidence is to be admitted if it possesses ‘any tendency,’ in logic or experience, to lead to the fact or inference for which it is offered.” Advisory Committee’s -Notes to Rule 401. The fact that Dr. Gordon has himself been a medical-malpractice defendant has no tendency to prove bias in favor of'plaintiffs.

Additionally, assuming — only for the sake of argument — that a malpractice defendant would, in some case, be entitled to impugn the credibility of the plaintiffs expert witness through reference to extraneous lawsuits, it could not be done in this case. This is so, because, contrary to Lightfoot’s contention, Dr. Gordon’s lapa-roscopic-cholecystectomy case is not remotely similar to the allegedly negligent conduct in this action. In Dr. Gordon’s case, Dr. Gordon deliberately cut a bile duct, which he saw; here, he criticizes Dr. Lightfoot for failing to see an injury he allegedly inadvertently caused. Thus, the evidence has no tendency to show that Dr. Gordon was applying “two unique standards of care.” In short, the evidence had no probative value for any issue, material to this case. The trial court exceeded its discretion, therefore, in allowing Lightfoot to cross-examine Dr. Gordon regarding medical-malpractice actions in which Dr. Gordon was a defendant.

Finally, Middleton has demonstrated that the testimony “probably injuriously affected [his] substantial rights.” Dr. Gordon was Middleton’s only expert witness. Therefore, Dr. Gordon’s testimony as to the breach of the standard of care was crucial to Middleton’s case and was ■ not cumulative. The inadmissible testimony elicited on cross-examination was detailed and copious, spanning 15 pages of trial transcript. Obviously, the evidence tended impermissibly to prejudice the jury against Dr. Gordon.

For these reasons, the trial court erred in denying Middleton’s motion for a new trial. The judgment is reversed, and the case is remanded for proceedings consistent with this opinion.

REVERSED AND REMANDED.

SEE, BROWN, JOHNSTONE, and HARWOOD, JJ„ concur.

HOUSTON, J., concurs specially.

LYONS, J., concurs in the rationale in part and concurs in the result.

STUART, J., concurs- in the result.

HOUSTON, Justice

(concurring specially).

I concur in the majority opinion. I write to note that I believe that the evidence of Dr. Gordon’s past surgical mishaps, even if relevant, should have been excluded. Rule 402, Ala. .R. Evid., states: “All relevant evidence is admissible, except as otherwise provided by ... statute.... Evidence which is not relevant is not admissible.” Here, even if the evidence were relevant, the plain meaning of Ala.Code 1975, § 6-5-551, would operate to exclude it.

Section 6-5-551 states that in a medical-malpractice action, “[a]ny party shall be prohibited from conducting discovery with regard to any other act or omission or from introducing at trial evidence of any other act or omission.” We have repeatedly interpreted this provision according to the plain-meaning rule, ruling inadmissible all evidence of “other act[s] or omission[s]” outside those specifically pleaded. Ex parte Coosa Valley Health Care, Inc., 789 So.2d 208, 218 (Ala.2000); Ex parte Anderson, 789 So.2d 190, 195 (Ala.2000); Ex parte Ridgeview Health Care Ctr., Inc., 786 So.2d 1112, 1116-17 (Ala.2000). Dr. Gordon’s surgical mishap indisputably occurred in a prior case, not the one before us, and is therefore outside the reach of discovery.

Lightfoot argues that § 6-5-551 applies only when a party seeks discovery about the acts or omissions of another party to the medical-malpractice action, and that the statute does not contemplate discovery concerning nonparties. Indeed, we stated in Ex parte Anderson that “[i]f all conditions of the statute are met, then any other acts or omissions of the defendant healthcare provider are exempt from discovery.” 789 So.2d at 195 (emphasis added). However, while this statement seems to cover only parties, such as a defendant, the question then before us was what acts or omissions were covered, not who was covered. Fairly read, our statement in Ex parte Anderson of who was governed by the statute was mere dicta. Thus we must now confront the identity question: Section 6-5-551 prohibits parties from discovering “other acts or omissions” of whom?

The Legislature may have intended to draft § 6-5-551 to concern only actual parties, but if it did, it did not properly express this intent. The language of § 6-5-551 is inclusive, prohibiting discovery “with regard to any other act or omission” (emphasis added). As a court, we must “ ‘enforce the statute as written by giving the words of the statute their ordinary plain meaning.’ ” Ex parte Pfizer, Inc., 746 So.2d 960, 964 (Ala.1999)(quoting Ex parte T.B., 698 So.2d 127, 130 (Ala.1997)). In Ex parte Pfizer, decided before the Legislature amended the statute to prohibit a “party” from conducting discovery as to any other act or omission, we held that a similar prohibition on a “plaintiff’ did not operate to prohibit a defendant from engaging in such discovery. 746 So.2d at 964-65. We stated that if the Legislature intended to mean a “party,” “then the legislature should have used a broader term.” Id. at 965. The Legislature subsequently amended the statute to say just that. Similarly here, if the Legislature intended to prohibit discovery of the acts or omissions of only a “party,” it should have inserted that qualifier in the statute. And the Legislature is always free to insert such qualifying language into the statute. But that job is not for us; “it is our job to say what the law is, not to say what it should be.” Ex parte Pfizer, 746 So.2d at 964. Accordingly, I conclude that the prohibition in § 6-5-551 is broad, denying a party the ability to discover “other acts or omissions” concerning any person, whether a party or not.

Because Ala.Code 1975, § 6-5-551, deems evidence concerning Dr. Gordon’s acts or omissions inadmissible, all such evidence must be excluded under the command of Rule 402, Ala. R. Evid. Because the trial judge admitted this evidence, I believe he exceeded his discretion.

LYONS, Justice

(concurring in the rationale in part and concurring in the result).

I concur with the majority’s analysis of the absence of any basis for justifying the admissibility of Dr. Gordon’s deposition testimony to show Dr. Gordon’s bias. The majority opinion reverses the judgment of the trial court because it allowed evidence to be introduced with respect to Middleton’s expert witness, Dr. Mark Gordon, a physician. I concur in the result as to that portion of the majority opinion.

Dr. Gordon testified that Dr. Lightfoot breached the standard of care in performing a laparoscopic cholecystectomy by failing to recognize that he had inadvertently punctured the bowel with a trocar (a surgical instrument) and then failing to discover and treat the injury before he closed the incision. Lightfoot persuaded the trial court that evidence concerning Dr. Gordon’s alleged deviation from the standard of care in an unrelated medical-malpractice action against Dr. Gordon involving a lapa-roscopic cholecystectomy was admissible in this action charging Dr. Lightfoot with deviating from the standard of care in a laparoscopic cholecystectomy. The evidence related to Dr. Gordon’s deliberately clipping what he thought was a vein, but which was in fact a small bile duct, and then failing to recognize his mistake before closing the incision.

The evidence surrounding Dr. Gordon’s clipping of a bile duct he thought was a vein led to the filing of a medical-malpractice action against him in which he testified that he had not breached the standard of care. Lightfoot argued to the trial court that evidence of this incident is admissible to show a prior inconsistent statement on the part of Dr. Gordon. Lightfoot contends that this evidence shows that Dr. Gordon was applying “two unique standards of care.”

The majority opinion concludes that the facts concerning Dr. Gordon’s laparoscopic cholecystectomy are “not remotely similar to the negligent conduct in this action.” 885 So.2d at 116. The majority opinion bases this conclusion on the following rationale:

“In Dr. Gordon’s case, Dr. Gordon deliberately cut a bile duct, which he saw; here, he criticizes Dr. Lightfoot for failing to see an injury he allegedly inadvertently caused. Thus the evidence has no tendency to show that Dr. Gordon was applying ‘two unique standards of care.’ In short, the evidence had no probative value for the issue material to this ease.”

885 So.2d at 116.

I do not consider the distinction between what Dr. Gordon saw and what Dr. Light-foot failed to see at the time of the respective injuries to be determinative. While Dr. Gordon deliberately cut a bile duct, which he saw, the evidence showed that at the time he made the incision, he was under the erroneous impression that the bile duct was a vein, and that he continued to have this erroneous impression up to and past the time he closed the incision. Therefore, Dr. Gordon closed the incision and completed the procedure without realizing that he had cut a bile duct. According to Dr. Gordon, Dr. Lightfoot was guilty of a breach of the standard of care in failing to discover and treat a punctured bowel before closing the incision. Both physicians were thus susceptible to a charge that they had breached the standard of care in failing to discover and treat before closing the incision an injury inflicted during a laparoscopic cholecystectomy. However, the common fact that both physicians closed incisions in ignorance of the facts during the same kind of surgical procedure does not justify admission of the facts surrounding Dr. Gordon’s procedure.

In the case before us, the injury that occurred during the surgery was a punctured bowel. In Dr. Gordon’s case, the patient sustained a biliary injury because of what Dr. Gordon described as a “very rare anatomical anomaly.” Dr. Gordon’s patient, according to the undisputed evidence, was a thin young woman whose bile duct measured only a couple of millimeters and entered into the neck of her gallbladder. Dr. Gordon testified that it was such a tiny duct that he did not recognize it. Dr. Gordon’s procedure took place in the region of the gallbladder, well away from the intestines. According to Dr. Gordon, “the bile duct was so tiny that I probably thought it was a vein because it was not going where it was supposed to be going.” The failure to detect an injury to a tiny bile duct in a region away from the intestines is not similar to a failure to detect a puncture wound to the bowel, a portion of the intestines. Absent similarity, the evidence loses materiality. It is impermissible to impeach a witness with evidence of self-contradiction on an immaterial matter. Charles W. Gamble, McElroy’s Alabama Evidence § 156.01 (5th ed.1996).

The prejudicial effect of this evidence is exacerbated by the phonetic similarity between “bowel” and “bile.” Indeed, the transcript reflects concerns over pronunciation of “bile” in a manner that could be understood as “bowel” during the reading to the jury of portions of Dr. Gordon’s deposition by counsel for Lightfoot.

I therefore reach the same conclusion as the majority opinion as to the absence of similarity between the two incidents, but do so on different grounds. Therefore I must concur in the result as to this aspect of the opinion. It is not necessary to address other bases upon which Middleton relies in his effort to obtain a reversal of the judgment.

      . Indeed, we note that Lightfoot-has presented arguments only in support of the admissibility of evidence of Dr. Gordon's laparoscopic-cholecystectomy case. In other words, Lightfoot ignores Middleton's contention that evidence of the other medical-malpractice actions was offered solely for the purpose of prejudicing the jury against Dr. Gordon.


author: LYONS, Justice. HOUSTON, Justice

text:
    GENERAL MOTORS CORPORATION and Robert T. Feeley, Jr. v. STOKES CHEVROLET, INC., et al.
    1021446.
    Supreme Court of Alabama.
    Oct. 24, 2003.
    Rehearing Denied Jan. 23, 2004.

      Lee M. Hollis, Ivan B. Cooper, and S. Andrew Kelly of Lightfoot, Franklin & White, L.L.C., Birmingham, for appellants.
    Leah 0. Taylor and Rhonda Pitts Chambers of Taylor & Taylor, Birmingham, for appellees.
   LYONS, Justice.

General Motors Corporation (“GM”) appeals from the trial court’s order denying its motion to compel arbitration. We affirm.

I. Facts and Procedural History

In an earlier appeal in this case, General Motors Corp. v. Stokes, 850 So.2d 1239 (Ala.2002) (“Stokes I ”), this Court summarized the operative facts. We restate them here.

“Stokes Chevrolet, Inc. (‘the Stokes dealership’), operates a dealership in Clanton that, in addition to the Chevrolet line of the Chevrolet Motors Division of General Motors Corporation (‘GM’), sold Chrysler, Plymouth, Dodge, and Jeep vehicles (Stokes’s non-GM lines are hereinafter referred to as ‘the Chrysler assets’). Rick Bush Motors (‘Bush’) was a GM dealer that also operated in Clan-ton and that had the authority to sell Buick, Oldsmobile, and Pontiac vehicles, and the GMC line of GM. The Stokes dealership was interested in acquiring from Bush assets to be used in the operation of an Oldsmobile, Pontiac, and Buick dealership. Bush’s dealership agreement with GM required GM’s approval of the sale of its assets to the Stokes dealership.
“The Stokes dealership obtained GM’s approval and purchased Bush’s assets; however, a condition of the approval was the Stokes dealership’s agreement to relocate the Chrysler assets to another site in Clanton.”

850 So.2d at 1240-41.

On April 8, 1999, GM and Stokes Chevrolet, Inc. (“the Stokes dealership”), signed a “Relocation Agreement and Business Plan” (“the relocation agreement”), which paved the way for the Stokes dealership to obtain the authority to sell Oldsmobile vehicles. The relocation agreement mandates that “all claims, disputes, and controversies between the [parties] arising under or relating to [the] agreement” be submitted to arbitration.

On November 1, 2000, the Stokes dealership and GM entered into a “Dealer Sales and Service Agreement” (“the Oldsmobile dealer agreement”), which covered the Oldsmobile line. The Oldsmobile dealer agreement states that the Stokes dealership and GM agreed to resolve disputes in accordance with the terms of the dispute resolution process set out in the agreement. Under this dispute resolution process, disputes are to be resolved through mediation, with certain exceptions, and if the dispute is not resolved through mediation, both parties may then voluntarily agree to arbitrate.

Just over a month later, on December 12, 2000, GM announced that it had decided to halt development of and “phase out” the Oldsmobile line. As a result of the announcement, the Stokes dealership, Kirk A. Stokes, and James H. Stokes (hereinafter referred to collectively as “the Stokeses”) sought to recover damages they alleged arose from GM’s decision to discontinue the Oldsmobile line. The Stokeses specifically alleged in count one of their complaint a violation of the Alabama Motor Vehicle Dealer Act, § 8-20-4 et seq., Ala.Code 1975 (“the Act”), claiming that GM terminated the Oldsmobile line without notice and without good cause as required by the Act. Count two alleged an allocation claim under the Act. Count three alleged a fraud claim based upon GM’s alleged fraudulent suppression and concealment at the time it presented the Oldsmobile dealer agreement to the Stokeses of the fact that it would be shutting down the Oldsmobile line of vehicles. Count four alleged breach of contract and breach of the implied covenant of good faith and fair dealing.

GM filed a motion to compel arbitration pursuant to the relocation agreement. The Stokeses objected to arbitration, arguing that their claims against GM arose solely out of the Oldsmobile dealer agreement. After a hearing, the trial court denied GM’s motion to compel arbitration. GM appeals.

II. Standard of Review

“ ‘[T]he standard of review of a trial court’s ruling on a motion to compel arbitration at the instance of either party is a de novo determination of whether the trial judge erred on a factual or legal issue to the substantial prejudice of the party seeking review.’ ” Vann v. First Cmty. Credit Corp., 834 So.2d 751, 752-53 (Ala.2002) (quoting Ex parte Roberson, 749 So.2d 441, 446 (Ala.1999)).

III. Analysis

The Stokeses argue that their claims relate exclusively to the Oldsmobile dealer agreement and that they are thus outside of the scope of the arbitration provision contained in the relocation agreement. The relocation agreement provides, in pertinent part:

“Subject to the following provisions of this Section, GM and the Dealer agree to submit to final and binding arbitration, upon either party’s written notice, any and all claims, disputes, and controversies between them arising under or relating to this Agreement and its negotiation, execution, administration, modification, extension or enforcement (collectively, ‘Claims’). Such arbitration shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association (AAA) at an AAA regional office nearest the Property.”

The Federal Arbitration Act (“the FAA”) provides that arbitration agreements “shall be valid, irrevocable and enforceable” except “upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. Contract defenses that are generally applicable under state law, such as fraud, duress, or unconscionability, may be applied to invalidate an arbitration agreement, without contravening 9 U.S.C. § 2. Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265, 115 S.Ct. 834, 130 L.Ed.2d 753 (1995). See also Vaca v. Sipes, 386 U.S. 171, 185, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967) (recognizing that an employer can be “estopped by his own conduct to rely on the unexhaust-ed grievance and arbitration procedures as a defense to the employee’s cause of action”). To put that principle into the context of this case, we cannot enforce an arbitration clause under circumstances that conflict with the general principles of judicial estoppel.

In Ex parte First Alabama Bank, 883 So.2d 1236, 1244 (Ala.2003), this Court noted the observation of the United States Supreme Court in New Hampshire v. Maine, 532 U.S. 742, 743, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001), that “ ‘ “[t]he circumstances under which judicial estoppel may appropriately be invoked are probably not reducible to any general formulation of principle.” ’ ” (Quoting Allen v. Zurich Ins. Co., 667 F.2d 1162, 1166 (4th Cir. 1982).) However, the United States Supreme Court did identify several factors as informative in determining the applicability of the doctrine of judicial estoppel. 532 U.S. at 750-51, 121 S.Ct. 1808. The Court held that for judicial estoppel to apply (1) “a party’s later position must be ‘clearly inconsistent’ with its earlier position”; (2) the party must have been successful in the prior proceeding so that “judicial acceptance of an inconsistent position in a later proceeding would create ‘the perception that either the first or second court was misled’ ” (quoting Edwards v. Aetna Life Ins. Co., 690 F.2d 595, 599 (6th Cir.1982)); and (3) the party seeking to assert an inconsistent position must “derive an unfair advantage or impose an unfair detriment on the opposing party if not es-topped.” 532 U.S. at 750-51, 121 S.Ct. 1808.

In Stokes I, the Stokeses claimed that GM had breached an alleged promise to reinvoice 63 vehicles the Stokeses acquired from the inventory of Rick Bush Motors (“Bush”), thereby entitling it to a 3 per cent dealer-holdback credit. According to the Stokeses, the promise took place after the Stokes dealership had an agreement “in principal” to purchase the Bush assets. For whatever reason, the promise did not appear in the relocation agreement. The Stokeses, already a GM dealer for the Chevrolet line, contended that their claims did not relate to the relocation agreement because the relocation agreement covered only the promise of the Stokes dealership to relocate the Chrysler assets to another site in Clanton. Unlike the relocation agreement, the preexisting dealership agreement between the Stokes dealership and GM did not contain an obligation to arbitrate. GM rejected that argument and demanded arbitration. The trial court denied GM’s motion to compel arbitration. On appeal, we reversed the trial court’s order and remanded the case.

In this case, the Stokeses quote the following from GM’s earlier brief in Stokes I:

“ ‘[The Stokeses] argue that the terms upon which automobiles may be purchased from [GM] by a dealer are addressed in the various Dealer Agreements, and that because the dealer agreements do not contain arbitration provisions, the current disputes are not subject to arbitration. This argument ignores, however, that the vehicles" at issue in this case were not purchased from [GM], but were acquired by the [Stokeses] as part of their negotiated purchase of the assets of Rick Bush Motors. This purchase was not part of the ongoing order of business between a dealer and GM under existing dealer agreements, but was rather a discrete event solely related to the [Stokeses] acquisition of the Oldsmobile, Buick and Pontiac franchises — which is absolutely and unmistakably covered by the Relocation Agreement and Business Plan containing the arbitration agreement. In addition, [the Stokeses’] claim is not based on the theory that GM breached the Dealer Agreement with respect to the 63 vehicles, but on an alleged, oral statement made during the negotiations related to the purchase and relocation of Bush’s assets. The Stokes organization should have to live up to the terms of the written contract bearing the signature “Stokes Chevrolet, Inc.” ’ ”

Stokeses’ Brief at p. 13 (emphasis added).

This Court accepted that contention and required arbitration, holding as follows:

“Such a transfer of assets is not a part of an ongoing relationship between GM and the Stokes dealership, and it is therefore not subject to the dealer agreement between the parties. Such an alleged promise was a discrete event related to the Stokes dealership’s acquisition of the Oldsmobile, Buick, and Pontiac franchises and, therefore, a claim based on that promise constitutes a claim ‘arising under or relating to’ the ‘negotiation’ of the relocation agreement.”

Stokes I, 850 So.2d at 1243. Now, when the Stokeses assert claims based on GM’s decision to discontinue the Oldsmobile line, GM contends that the Stokeses’ claims alleging fraud, breach of contract, and violations of the Act relate to the relocation agreement as opposed to the Oldsmobile dealer agreement exclusively. In other words, now that claims are being asserted that are clearly “a part of an ongoing relationship between GM and the Stokes dealership,” these claims are also “not subject to the dealer agreement between the parties.”

GM urged this Court in Stokes I to reverse an order denying arbitration in an earlier proceeding between it and the Stokeses by distinguishing the claim in that case from claims that were part of the ongoing order of business between a dealer and GM under existing dealer agreements, thereby indicating that such claims would not be arbitrable. GM cannot now be heard to disavow the logic of its earlier argument in an effort to obtain arbitration of this proceeding involving claims that are clearly part of the ongoing order of business between a dealer and GM under an existing dealer agreement. For this Court to come from the other direction and say a dispute that is a part of the ongoing order of business between a dealer and GM under an existing dealer agreement is also arbitrable under the relocation agreement would suggest that we were misled by GM in Stokes I when we accepted the distinction there advanced by GM between claims arising under a- dealer agreement and claims arising under the relocation agreement. Such a facile construction would unfairly advantage GM.

GM urges us to follow unpublished opinions of the federal district courts that essentially stand for the proposition that disputes over the termination of the Oldsmobile line, arising in the context of a relocation agreement containing an arbitration clause that led to the execution of an Oldsmobile dealer agreement, are sufficiently related to the relocation agreement as to require arbitration. However, those cases do not involve a history of prior litigation between the parties as we have here.

We therefore hold that the claims asserted by the Stokeses in the present action are not subject to the arbitration clause contained in the relocation agreement. Although the trial court denied arbitration without stating a reason, the record reflects that the Stokeses directed the trial court’s attention to the inconsistency between GM’s position in Stokes I and its position in this case. On appeal, the Stokeses advance the same argument in support of the trial court’s ruling although in neither instance do they specifically refer to the concept of “judicial estoppel.” Nevertheless, the arguments made below and reasserted before us are sufficient to make the defense of judicial estoppel to GM’s demand for arbitration a ground for affirmance presented by the record. This Court may affirm a trial court’s judgment on “any valid legal ground presented by the record, regardless of whether that ground was considered, or even if it was rejected, by the trial court.” Liberty Nat’l Life Ins. Co. v. University of Alabama Health Servs. Found., 881 So.2d 1013 (Ala.2003) (citing Ex parte Ryals, 773 So.2d 1011 (Ala.2000), Ex parte Wiginton, 743 So.2d 1071 (Ala.1999), and Smith v. Equifax Servs., Inc., 537 So.2d 463 (Ala.1988)). Our resolution makes it unnecessary to reach the question whether the transaction involves interstate commerce.

IV. Conclusion

The trial court’s order denying GM’s motion to compel arbitration is affirmed.

AFFIRMED.

SEE, JOHNSTONE, HARWOOD, and WOODALL, JJ., concur.

HOUSTON, BROWN, and STUART, JJ., concur in the result.

HOUSTON, Justice

(concurring in the result).

I do not find GM’s argument in this case inconsistent with its argument in General Motors Corp. v. Stokes, 850 So.2d 1239 (Ala.2002).

However, I would affirm the judgment of the trial court. This case is the mirror image of Cavalier Mfg., Inc. v. Clarke, 862 So.2d 634 (Ala.2003). The relocation agreement provides: “This Agreement will survive the execution of the Dealer Agreement, permitting Dealer to conduct Dealership Operations at the Property....” The Oldsmobile dealer agreement the parties executed approximately six months after the relocation agreement provides, in pertinent part:

“Except as provided in the Agreement or in any other unexpired urritten agreements executed by both parties ... there are no other agreements or understandings, either oral or written, between the parties affecting this Agreement or relating to any of the subject matters covered by this Agreement.”

(Emphasis added.)

In Cavalier Manufacturing, this Court held that “[w]hen parties execute successive agreements and the ‘two agreements cover the same subject matter and include inconsistent terms, the later agreement supersedes the earlier agreement.’ ” 862 So.2d at 641 (quoting CMI Int’l, Inc. v. Intermet Int’l Corp., 251 Mich.App. 125, 130, 649 N.W.2d 808, 812 (2002)).

The relocation agreement calls for mandatory arbitration. The dealer agreement, while not expressly preempting any non-conflicting provision of the relocation agreement, did trump the conflicting arbitration provision in the relocation agreement, because the relocation agreement provides for voluntary arbitration and the Stokeses did not agree to arbitrate. Therefore, I would affirm.