JOHN H. ENGLAND, III, Magistrate Judge.
On March 17, 2016, Defendant Performance Imports, LLC filed a motion to compel arbitration and to dismiss, or, in the alternative, stay proceedings. (Doc. 3). Plaintiff John Thornell consented to arbitration and requested the Court stay the proceedings pending the outcome of arbitration. (Doc. 9). On April 29, 2016, the Court did so. (Doc. 10). On June 29, 2016, Defendant moved to have the Court appoint the arbitrator. (Doc. 11). Plaintiff opposed the motion. (Doc. 13). Upon consideration, Defendant's motion, (doc. 11), is
On August 18, 2015, the parties entered into a purchase agreement for a 2003 Ford Mustang. (Doc. 8-2 at 1). That agreement contained an arbitration agreement with the following relevant provisions:
(Doc. 8-2 at 4; doc. 13-1 at 2). Neither party has challenged the arbitration agreement's validity or applicability to this case. (Doc. 3 at 2-7; doc. 9 at 1).
Defendant seeks to have this Court appoint an arbitrator, (doc. 11), presumably under the section of the Federal Arbitration Act that gives courts the power to appoint an arbitrator, where, inter alia, a method for appointing an arbitrator is provided in the agreement but "any party thereto shall fail to avail himself of such method." 9 U.S.C. § 5. The dispute between the parties is essentially about whether there is ambiguity in the arbitration agreement's provision for the selection of the arbitration rules and administration and, if so, how it should be interpreted. The disputed sentence states:
(Doc. 8-2 at 4). Defendant contends the arbitration provision's "subject to your approval" language applies to the entire prepositional phrase, not just its second subpart, and, therefore, Plaintiff, by insisting on using the American Arbitration Association, has been effectively refusing to comply with the agreement's method of appointing an arbitrator. (Doc. 11 at ¶¶ 2, 3, & 5
"[S]tate law governs the interpretation and formation of [arbitration] agreements." Employers Ins. of Wausau v. Bright Metal Specialties, Inc., 251 F.3d 1316, 1322 (11th Cir. 2001). When a court is interpreting an arbitration agreement governed by Alabama law, the following general rules of contractual interpretation are applicable:
Homes of Legend, Inc. v. McCollough, 776 So.2d 741, 746 (Ala. 2000).
On a purely grammatical level, the disputed sentence could withstand the torture necessary to make it ambiguous. Because the modifier at issue ("subject to your approval") appears at the end of the sentence and is offset by a comma, it would not be grammatically impossible to read it as part of the second alternative phrase, the prepositional phrase as a whole, or the sentence as a whole. However, the sentence is not legally ambiguous because Plaintiff's interpretation of the sentence is, by far, the most natural reading. See Progressive Specialty Ins. Co. v. Naramore, 950 So.2d 1138, 1141 (Ala. 2006) ("In determining whether the language of a contract is ambiguous, courts construe the words according to the interpretation ordinary men would place on the language used therein.") (internal quotation marks omitted).
In Plaintiff's interpretation, the modifier ("subject to your approval") is attached to the word it modifies ("select"), which is both the generally accepted referent and most natural. See Goldberg v. Companion Life Ins. Co., 910 F.Supp.2d 1350, 1351 (M.D. Fla. 2012) ("`When a word such as a pronoun points back to an antecedent or some other referent, the true referent should generally be the closest appropriate word.' . . . `[W]hen modifying words are separated from the words they modify, readers have a hard time processing the information. Indeed, they are likely to attach the modifying language first to a nearby word or phrase.'") (quoting Bryan A. Garner, Garner's Modern American Usage 540 (Oxford 2009)). See also Antonin Scalia & Bryan A. Garner, READING LAW: THE INTERPRETATION OF LEGAL TEXTS 152-53 (Thomson/West 2012) (discussing the Nearest-Reasonable-Referent Canon). Other syntactic canons and rules of interpretation similarly cut against Defendant's interpretation so, even if the Court were to find the sentence ambiguous, Plaintiff's interpretation would prevail. See Scalia & Garner, supra, at 149 (discussing how, under the Series-Qualifier Canon, the backward reach of a postpositive modifier of a series is generally cut off by a determiner, such as the "any other" used here, before the second item in the series); McCollough, 776 So. 2d at 746 (stating that, if all other interpretive measures fail, the text is construed against the drafter).
Not only is this the most natural reading that jumps to mind first upon reading the sentence, it also leads to the most reasonable result. See id. ("[W]here there is a choice between a valid construction and an invalid construction the court has a duty to accept the construction that will uphold, rather than destroy, the contract and that will give effect and meaning to all of its terms."). Under Plaintiff's interpretation, the agreement gives the buyer the option of choosing either (1) the rules and administration of the default, pre-approved American Arbitration Association, or (2) the rules and administration of any other arbitration organization of which the seller also approves. Defendant's interpretation, on the other hand, creates a situation in which, on the face of the terms, Defendant could veto every arbitration organization Plaintiff selects without any provision for how to break such a stalemate. This would lead to either (1) the untenable result of Defendant having the power to block arbitration by refusing to approve any organization's rules and administration or (2) the need to apply outside correctives (such as an unstated, judicially implied duty of good faith in exercising the approval power, or the statutory power of the court to appoint an arbitrator under 9 U.S.C. § 5). Neither an unaddressed stalemate nor an implied resort to outside remedies would be the expected intent of the contracting parties—especially in light of the language itself supporting a more reasonable interpretation that creates a default, pre-approved organization to provide rules and administration in the absence of other agreement and does not require the courts to meddle with the contractual relationship.
Because the plain language and most reasonable interpretation of the contract leads to the conclusion Defendant's power of veto only extends to Plaintiff's opportunity to choose an organization other than the American Arbitration Association, there is no indication Plaintiff has refused to comply with the arbitration agreement's provision for selecting an arbitrator. Accordingly, Defendant's motion, (doc. 11), is