## Facts

- Gary and Deborah Stamey contracted with Hallmont Homes, Inc., operated by Jarod Hall and Gaylon Hall, to purchase land and a mobile home, with assurances that Hallmont would install a septic system and a light pole.
- The Stameys alleged the septic system and light pole were not installed, leading to sewage-related problems.
- The purchase and improvements were financed through a Green Tree Financial Corporation loan agreement containing a broad arbitration clause covering disputes “arising from or relating to” the contract or the parties and invoking the Federal Arbitration Act (FAA).
- A county health officer filed a public health enforcement action in Mobile Circuit Court regarding sewage/septic issues, naming the Stameys among other defendants.
- The Stameys filed third-party claims against Green Tree, Hallmont, and the Halls, asserting contract and related claims tied to the promised septic system and utility pole.
- Green Tree, Hallmont, and the Halls moved to compel arbitration based on the arbitration clause in the Green Tree financing agreement; the trial court granted the motion.
- The Stameys petitioned for a writ of mandamus directing the trial court to vacate its order compelling arbitration.

## Issues

1. Whether the trial court erred in compelling arbitration of the Stameys’ third-party claims under the arbitration clause in the financing agreement.
2. Whether the clause was broad enough to cover the asserted claims arising from the mobile-home transaction and related improvements.
3. Whether nonsignatories to the financing agreement (Hallmont and its employees) could enforce the arbitration clause against the signatory borrowers.
4. Whether mandamus relief was available to overturn the arbitration order.

## Decision

- The Supreme Court of Alabama denied the petition for writ of mandamus.
- The Court held the arbitration clause was valid and sufficiently broad to reach the Stameys’ claims connected to the financed transaction.
- The Court held Hallmont and the Halls, though nonsignatories, could compel arbitration because the claims against them were closely connected to and intertwined with the contract containing the arbitration clause.
- The Court applied the FAA as specified in the contract and found no sufficient contract defense to prevent enforcement of the arbitration agreement.
- Because the Stameys did not show a clear legal right to relief, mandamus was not warranted.

## Legal Principles

- Arbitration clauses covering disputes “arising from or relating to” the contract or the parties are construed broadly to include transaction-related contract and tort claims.
- When a contract evidences interstate commerce and invokes the FAA, courts enforce the arbitration agreement absent a generally applicable contract defense that defeats the clause.
- Nonsignatories may compel arbitration when the signatory’s claims are intertwined with the agreement containing the arbitration provision, including through equitable estoppel and related doctrines (such as agency or third-party-beneficiary principles).
- Mandamus is an extraordinary remedy and will not issue to undo an order compelling arbitration absent a clear legal right and clear error by the trial court.

## Conclusion

The Alabama Supreme Court left in place an order compelling FAA-governed arbitration of borrowers’ claims arising from a financed mobile-home transaction, including arbitration compelled by nonsignatory seller-related defendants because the claims were intertwined with the financing agreement’s broad arbitration clause.


Ex parte Stamey, 776 So. 2d 85 (Ala. 2000)