This week’s Alabama Law Weekly Update discusses two decisions from the Supreme Court of Alabama. In the first case, the Court considered a worker’s compensation case where the trial court awarded permanent total disability benefits in accordance with the Workers’ Compensation Act. In the second, the Court decided how broadly to construe an arbitration clause taken in conjunction with an exception for items dealing with specific performance.

In re Madison Academy v. Hanvey, No. 1131235 (Ala. January 30, 2015) (holding that there was substantial evidence to support that the employee was permanently and totally disabled following an exposure to chemicals in the workplace, regardless of the fact that employee was in remission for six months following treatment)

The Alabama Supreme Court’s decision in In re Madison Academy v. Hanvey arose out of a worker’s compensation claim after Ms. Hanvey was exposed to chemicals while employed as a janitor for Madison Academy (the “employer”). The trial court found that Hanvey had suffered a compensable injury caused by her exposure to chemical fumes and awarded her permanent total disability benefits in accordance with the Workers’ Compensation Act (the “Act”). The Court of Civil Appeals reversed the trial court’s judgment. The Supreme Court of Alabama granted Hanvey’s petition for a writ of certiorari and held that there was substantial evidence to support the trial court’s determination that Hanvey was permanently and totally disabled.

Ms. Lisa Hanvey was 44 years old at the time of the trial. She has a high school education, and attended special education classes since elementary school. She reads on a third grade level. Ms. Hanvey suffers from myasthenia gravis, a neuromuscular and autoimmune disease, which causes muscle fatigue. Ms. Hanvey worked at Madison Academy as a janitor from September 2006 until her health prevented her from continuing in 2011.

In May and June of 2011, Ms. Hanvey was exposed to certain chemicals at work used to clean and treat the floors. The chemicals are shown by their Material Safety Data Sheets to be capable of causing respiratory problems. Ms. Hanvey’s family physician stated that, “When she got exposed to those floor chemicals, she did a crash and burn, I can’t breathe, showed up in my office with an 02 sat on room air of 70 percent and had to go immediately into the ICU.”

In this case, the parties did not dispute that Hanvey suffered a compensable injury under the Act, which was caused by her exposure to chemical fumes during the course of her employment; instead, the dispute, as claimed by the employer, is whether Hanvey’s exposure to the chemical fumes only temporarily aggravated her underlying myasthenia gravis. The employer argued that Hanvey had proven only that her myasthenia gravis had been temporarily aggravated by her exposure to chemicals in the workplace, and that the flare-up of symptoms was resolved with medications as Hanvey had been in remission since her treatment.

Under the Act, a worker is permanently and totally disabled if the worker is “incapacitated … from working at and being retrained for gainful employment.” Ala. Code 1975, § 25-5-57(a). A worker is not required to be totally helpless; he simply must be unable to perform his trade or obtain other gainful employment.

In the case at hand, the Supreme Court held that the record contained substantial evidence to support the trial court’s finding that the injury Hanvey suffered rendered her permanently and totally disabled under the Act. The Court found that although Hanvey’s myasthenia gravis eventually went into remission following a full-blown myasthenia gravis “crisis,” the medical testimony presented demonstrates that any attempt by Hanvey to engage in the type of physical labor she was able to perform before her exposure to chemicals would case her myasthenia gravis to become symptomatic. Further, due to the limits of her education, a vocational expert testified that Hanvey would be unable to obtain other gainful employment as she “is not a viable candidate for vocational retraining assistance.” Therefore, the Court found that the record contained substantial evidence to support the trial court’s determination that Hanvey was permanently and totally disabled, despite her remission.

Porter et al. v. Williamson, No. 1130282 (Ala. January 30, 2015) (finding that where a shareholder’s agreement required all claims arising out of the agreement be arbitrated except for items of specific performance, the lower court could deny a motion to compel arbitration only insofar as the motion related to specific performance)

The Alabama Supreme Court’s decision in Porter et al. v. Williamson stems from a dispute over a shareholder’s agreement. Marc Porter and Donald Porter are brothers; they founded a number of business entities, collectively referred to as the “Porter companies.” In 1992, the Porters hired their nephew, Williamson, as an employee of the Porter companies, and later in 2004, Williamson, Marc Porter and Donald Porter entered into a shareholder’s agreement, which made Williamson a 10% shareholder.

In August of 2012, Williamson’s employment was terminated, and Williamson thereafter demanded that his shares in the corporations be purchased by the Porter companies pursuant to the shareholder agreement. The parties, however, were unable to agree on the value of Williamson’s shares and interest, giving rise to this lawsuit. Williamson brought one claim for specific performance, but also brought claims for rescission, misrepresentation, and conversion. In trial court, the Porter defendants filed a motion to compel arbitration, pursuant to a clause in the shareholder’s agreement requiring that all claims arising out of the agreement be arbitrated, except for items of specific performance. The trial court denied the motion to compel arbitration for all claims. At issue before the Supreme Court, was whether the trial court rightly denied the Porter defendants’ motion to compel arbitration of the claims asserted against them by Williamson.

The Supreme Court stated that the Federal Arbitration Act requires that if a dispute presents multiple claims, some arbitrable and some not, the former must be sent to arbitration even if this will lead to piecemeal litigation. See Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 (1985). Therefore, the Supreme Court affirmed the trial court’s denial of the Porter defendants’ motion to compel arbitration only insofar as that motion related to Williamson’s request for specific performance. Also, the Court emphasized that a party cannot be required to arbitrate a dispute that he or she did not agree to arbitrate. See American Family Life Assur. Co. of Columbus v. Parker, 92 So.3d 58, 66 (Ala. 2012). However, with regard to Williamson’s remaining claims, seeking rescission and alleging misrepresentation and conversion, the Court instructed the trial court to either dismiss the claims or to grant the Porter defendants’ motion to compel arbitration.