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The Alabama Supreme Court relied on its own recent precedent in holding that an arbitration agreement applied to a malicious prosecution claim against an automobile dealership.
In Edwards Motors, Inc. v. Hudgins, No. 1051023, 2006 WL 2988690 (Ala. Oct. 20, 2006), Hudgins agreed to buy a motor vehicle from Edwards on an installment plan. As part of the transaction, Hudgins and Edwards entered into an arbitration agreement that covered “any dispute arising out of or relating to or concerning all of the contract(s) and agreements entered into by the parties.”
Several months after the sale, Edwards initiated criminal proceedings against Hudgins, charging him with defrauding a secured creditor in violation of Alabama law. The criminal proceeding was dismissed when Hudgins agreed to return the vehicle.
Hudgins later sued Edwards for malicious prosecution. Edwards moved to compel arbitration pursuant to the arbitration agreement. The trial court denied the motion.
On appeal, the Court held that the malicious prosecution claim fell within the “expansive language” of the arbitration agreement. As support for its holding, the Court noted that Hudgins had the burden of proving that the dispute fell outside the scope of the arbitration agreement. Moreover, in a case involving similar facts, the Court recently held that a malicious prosecution against an automobile dealership was arbitrable. See Dan Wachtel Ford, Lincoln-Mercury, Inc. v. Modas, 891 So.2d 287 (Ala. 2004).
For those reasons, the Court remanded the case with instructions to order arbitration.
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