Cook’s Pest Control, Inc. v. Robert and Margo Rebar1010897Supreme Court of AlabamaDecember 13, 2002FactsOn August 28, 2000, Cook’s Pest Control and Mr. & Mrs. Rebar entered into a renewable “ Termite Control Agreement” for 1 year. Under that agreement, Cook’s Pest Control was obligated to inspect for and treat termites for the Rebars.
On August 16, 2001, Mrs. Rebar paid for the renewal of the contract and submitted an “ Addendum to Customer Agreement”. The agreement changed the terms of the contract, including a statement that “ Arbitration shall not be required for any prior or future dealings between Cook’s and Customer.” The addendum also stated that “ Continued honoring of this account by [Cook’s Pest Control] acknowledges agreement to [the] terms.” Procedural HistoryOn August 30, 2001, the Rebar filed action against Cook’s Pest Control alleging fraud, negligence, breach of contract, breach of warranty, breach of duty to warn, unjust enrichment, breach of duty, negligent training, supervision and retention of employees, and bad-faith failure to pay and bad-faith failure to investigate a claim. Cook’s moved to compel arbitration based upon the arbitration provision contained in the agreement. The Rebars opposed the motion to compel arbitration. On December 18, 2001, the trial court denied Cook’s motion to compel arbitration. Cook’s Pest Control appealed.
IssueThe issue at hand is whether the trial court incorrectly found that Cook’s Pest Control had accepted the terms contained in the Rebar’s addendum.
Arguments of the PartiesCook’s Pest ControlThe appellant argues that the trial court incorrectly found that it had accepted the terms in the addendum, and that the addendum itself was “ an improper attempt to unilaterally modify an existing contract.” Cook’s also asserted that the employees who negotiated the check from the Rebars were not authorized to enter into a contract on behalf of the company.
Mr. & Mrs. RebarThe Rebars argue that a mandatory and binding arbitration agreement did not exist because the agreement had been modified when it was renewed in August 2001.
HoldingsThe court disagreed with all of Cook’s Pest Control’s arguments.
Reasoning of the CourtThe court reasoned that the Rebar’s “ addendum” constituted a counter-offer, which Cook’s could have refused by not renewing the agreement and forgoing receipt of the Rebars’ renewal check. Cook’s Pest Control did not make a counteroffer to the Rebars, either, but deposited the Rebars’ check and continued servicing their home. The court rejected Cook’s assertion that the employees that processed the Rebars’ payment weren’t authorized to agree to any modifications in the contract because there was no limiting language in the agreement.