Under Alabama law, “arbitration may be compelled under the doctrine of ‘intertwining’ where arbitrable and nonarbitrable claims are so closely related that the party to a controversy subject to arbitration is equitably estopped to deny the arbitrability of the related claim. But if the language of the arbitration provision is party specific and the description of the parties does not include the nonsignatory, the inquiry is at an end and the claims against the non-signatory cannot be submitted to arbitration.”
The Eleventh Circuit Court of Appeals held that a non-signatory cannot be compelled to arbitrate because the language of the agreements to arbitrate is party specific, does not include the non-signatory, and expressly states that all other disputes are not subject to arbitration.
The Court did, however, stay the action against the non-signatory, overturning the decision of the District Court for abuse of discretion in refusing to grant the stay, as the claims against the non-signatory and signatories “are based on the exact same factual allegations, the vast majority of which relate to the [signatories] only.”
Variable Annuity Life Insurance Company, et al. v. Brett Laferrera, et al., No. 16-14519 (11th Cir. Feb. 27 2017)
This post written by Nora A. Valenza-Frost.
See our disclaimer.