Wickersham v. Lynch Motor Company of Auburn, Inc.
Filing
8
MEMORANDUM OPINION AND ORDER directing that defendant's 3 motion to compel arbitration is GRANTED, as further set out; it is further ORDERED that defendant's 3 motion to stay is DENIED, as further set out. Signed by Honorable Judge Susan Russ Walker on 3/6/12. (scn, )
IN THE DISTRICT COURT OF THE UNITED STATES
FOR THE MIDDLE DISTRICT OF ALABAMA
EASTERN DIVISION
TERRI P. WICKERSHAM,
Plaintiff,
v.
LYNCH MOTOR COMPANY
OF AUBURN, INC.,
Defendants.
)
)
)
)
)
)
)
)
)
)
CIVIL ACTION NO. 3:11CV280-SRW
MEMORANDUM OF OPINION
Plaintiff Terri P. Wickersham brings this action against defendant Lynch Motor
Company of Auburn, Inc., asserting several claims under state and federal law arising from
an automobile sale/purchase transaction and the subsequent repossession of the automobile.
Defendant removed the action to this court from the Circuit Court of Tallapoosa County,
Alabama, pursuant to 28 U.S.C. §§ 1331 and 1441, on the basis of the federal questions
presented in Counts Five through Eight of the Complaint.1
This action is presently before the court on defendant’s motion to compel arbitration
and to stay proceedings. (Doc. # 3). Although she was given an opportunity to do so, plaintiff
has not responded to the motion. (See Doc. # 5). The parties have consented to the
jurisdiction of the undersigned Magistrate Judge to conduct all proceedings in this action,
including the entry of final judgment, pursuant to 28 U.S.C. § 636(c). (Docs. ## 6, 7). Upon
1
Plaintiff asserts claims under the Federal Odometer Act, the Truth in Lending Act,
the Fair Credit Reporting Act, and the Equal Credit Opportunity Act. (Complaint, pp. 9-16).
consideration of defendant’s motion, the court concludes that the motion to compel
arbitration is due to be granted and, further, that plaintiff’s claims are due to be dismissed.
BACKGROUND
On August 10, 2010, plaintiff entered into a contract to purchase a vehicle from
defendant. At the time of the purchase, defendant represented to plaintiff that she had been
approved for financing by AmeriCredit Financial Services. Plaintiff signed documents in
connection with the purchase, including a “delivery receipt” that “purport[ed] to make the
sale contingent upon financing.” On September 23, 2010, defendant repossessed the vehicle.
When plaintiff contacted the defendant she was “told that she would need to come in to fill
out additional paperwork in order to get new financing and retrieve her automobile.”
(Complaint, ¶¶ 6-20). Defendant contends that plaintiff is bound by an arbitration agreement
she signed in connection with the transaction at issue to submit the present dispute to binding
arbitration.
DISCUSSION
The Federal Arbitration Act, Title 9 of the United States Code, provides that “[a]
written provision in . . . a contract evidencing a transaction involving commerce 2 to settle by
2
The United States Supreme Court has interpreted the term “involving commerce”
in the Federal Arbitration Act as providing for enforcement of arbitration agreements
“‘within the full reach of the Commerce Clause[.]’” Citizens Bank v. Alafabco, Inc., 539
U.S. 52, 56 (2003)(citation omitted). Defendant’s General Manager, Paul Brockwell, avers
that Lynch “is a seller of new and used automobiles[,]” that these vehicles “are often
transported to Lynch’s dealership in Lee County, Alabama from locations outside the State
of Alabama[,]” and that “Lynch regularly sells and transports vehicles to customers located
2
arbitration a controversy thereafter arising out of such contract or transaction, or the refusal
to perform the whole or any part thereof . . . shall be valid, irrevocable, and enforceable, save
upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C.
§ 2. Section 4 of the Act allows a party to an agreement containing an arbitration provision
to petition the court for an order compelling the other party to arbitrate. “[U]pon being
satisfied that the making of the agreement for arbitration or the failure to comply therewith
is not in issue, the court shall make an order directing the parties to proceed to arbitration in
accordance with the terms of the agreement.” 9 U.S.C.§ 4. “Parties cannot be forced to
submit to arbitration if they have not agreed to do so.” Chastain v. Robinson-Humphrey Co.,
957 F.2d 851, 854 (11th Cir. 1992)(citations omitted). “Thus, ‘the first task of a court asked
to compel arbitration of a dispute is to determine whether the parties agreed to arbitrate that
dispute.’” Id. (quoting Mitsubishi Motors Corp. v. Soler Chrysler- Plymouth, Inc., 473 U.S.
614, 626 (1985)). “When deciding whether the parties agreed to arbitrate a certain matter
. . . courts generally . . . should apply ordinary state-law principles that govern the formation
of contracts.” First Options of Chicago v. Kaplan, 514 U.S. 938, 944 (1995); see also
Employers Insurance of Wausau v. Bright Metal Specialties, Inc., 251 F.3d 1316, 1322 (11th
outside Alabama.” (Brockwell aff., ¶¶ 1-2). Brockwell further states that the particular
vehicle at issue in this case was manufactured in Japan, that the retail installment agreement
was to be assigned to Americredit Financial Services, a financial institution outside the state
of Alabama and that, in connection with financial transaction at issue, Lynch had “numerous
communications with Americredit at its offices outside Alabama in an effort to get Ms.
Wickersham fully and finally approved for credit.” (Id., ¶¶ 3-5). The “involving commerce”
requirement of the FAA is satisfied in this case.
3
Cir. 2001)(“Federal law establishes the enforceability of arbitration agreements, while state
law governs the interpretation and formation of such agreements.”). “[A]s with any other
contract, the parties’ intentions control, but those intentions are generously construed as to
issues of arbitrability.” Mitsubishi Motors Corp., supra, 473 U.S. at 626.
The Existence and Scope of an Agreement to Arbitrate
Defendant has provided copies of the invoice, buyer’s order, retail installment sales
contract, and two arbitration agreements concerning the transaction at issue. (Brockwell
affidavit, ¶¶ 3-5 and Exhibits 1-5). The buyer’s order is dated “8/6/2010” and includes a
sentence just above the customer’s signature that states, “In order to complete this
transaction, the customer will be required to enter into arbitration agreement.” The buyer’s
order is signed by both the customer and the manager. (Exhibit 2 to Brockwell aff.). 3 The
installment sales contract includes a statement referencing arbitration and alternative dispute
resolution, printed in bold type, above plaintiff’s signature. It reads as follows:
You agree to the terms of this contract and any dispute resolution agreement
you signed with this contract. You confirm that before you signed this contract
and any dispute resolution agreement, we gave them to you and you were free
to take them and review them. You acknowledge that you have read both sides
of this contract, including the arbitration clause on the reverse side before
signing below. You confirm that you received a completely filled-in copy of
these documents when you signed them.
CAUTION – IT IS IMPORTANT THAT YOU THOROUGHLY READ THE
CONTRACT BEFORE YOU SIGN IT.
3
Plaintiff does not contend that the signatures on the exhibits attached to Brockwell’s
affidavit are not hers.
4
(Exhibit 3 to Brockwell aff., at p. 2). The contract is signed by plaintiff and by a
representative of “Lynch Toyota Scion.” (Id.). The arbitration clause is included in a text
box with the heading “ARBITRATION CLAUSE,” followed by the statement, ‘PLEASE
REVIEW – IMPORTANT – AFFECTS YOUR LEGAL RIGHTS[.]” (Id., pp. 4, 5). It
provides, inter alia, that “[a]ny claim or dispute, whether in contract, tort, statute or
otherwise (including the interpretation and scope of this Arbitration Clause, and arbitrability
of the claim or dispute), between you and us or our employees, agents, successors or assigns,
which arises out of or relates to y[our] credit application, purchase or condition of this
vehicle, this contract or any resulting transaction or relationship ... shall, at your or our
election, be resolved by neutral, binding arbitration[,]” unless federal law provides that such
claim is not subject to binding arbitration. (Id.). In a separate single-page agreement entitled
“BINDING PRE-DISPUTE ARBITRATION AGREEMENT[,]” the parties agree to
arbitration of any dispute arising out of or relating to “the undersigned’s acquisition or
attempted acquisition of the “below described vehicle,”4 except as to claims brought in the
state district courts of Alabama in which the requested relief does not exceed $10,000.00.
4
The space for description of the “product/services” was left blank; it does not
include a description of the vehicle plaintiff purchased. (See Exhibit 4 to Brockwell’s
affidavit). However, plaintiff signed it on August 6, 2010 – the date of purchase she alleges
in her complaint (see Complaint, ¶ 11) – and she does not claim that Exhibit 4 does not
pertain to her purchase of the Toyota FJ Cruiser referenced in the accompanying sales
contract. Even if the court were to ignore this particular exhibit, however, plaintiff’s
agreement to arbitrate is evidenced by Exhibits 3 and 5 to Brockwell’s affidavit, executed
on the same day as Exhibit 4.
5
(Exhibit 4 to Brockwell aff.). Plaintiff also signed a separate three-page “ALTERNATIVE
DISPUTE RESOLUTION (ARBITRATION) AGREEMENT.” (Exhibit 5 to Brockwell aff.).
This agreement bears an “AmeriCredit” logo at the top of each page and includes a
description and vehicle identification number of the vehicle that was the subject of the
parties’ transaction. This agreement is signed by both “[b]uyer” and “[s]eller[.]” (Id.). The
agreement provides, in part:
This Agreement sets forth a procedure for resolving disputes arising out of or
relating to our relationship. With limited exceptions set forth herein, either you
or we may elect that any and all disputes, claims or controversies of any kind
and nature between us arising out of or relating to the relationship between us
(hereinafter “Dispute” or “Disputes”) be resolved through binding arbitration,
and not by any court. This Agreement to arbitrate covers, among other things,
Disputes that (a) arise out of or relate to this Agreement, the Retail Installment
Sales Contract, and all ancillary agreements (including, but not limited to,
service contracts, warranties, GAP and insurance agreements) entered into
contemporaneously herewith; (b) arise out of or relate to any past or future
transactions or dealings between us; (c) arise out of or relate to any claim of
improper repossession or replevin of the vehicle that is the subject of any
Retail Installment Sales Contract entered into between us; and (d) arise out of
or relate to any claims about whether a Dispute is covered by this Agreement
or the scope of this Agreement. If you or we elect arbitration, both of us are
forever forgoing our right to bring our Dispute in court and have our
Dispute decided by a judge or jury.
(Id.)(emphasis in original).5
Under Alabama law, “[t]he elements of a valid contract include: an offer and an
acceptance, consideration, and mutual assent to terms essential to the formation of a
5
The only exceptions set forth in this agreement are the parties’ rights “to exercise
self-help remedies and to seek provisional remedies in a court, pending a final determination
of any Disputes by an arbitrator.” (Exhibit 5 to Brockwell aff., p. 2).
6
contract.” Shaffer v. Regions Financial Corp., 29 So.3d 872, 880 (Ala. 2009)(citations and
internal quotation marks omitted). Plaintiff alleges that she “entered into a written contract
with Defendant for the purchase of a vehicle,” and that she accepted possession of a vehicle
from defendant, based on (1) the retail installment sales contract “and other preprinted forms
used by Defendant in the purchase and finance of vehicles” and, (2) defendant’s
representation that plaintiff’s financing was “approved” and “qualified” with AmeriCredit
Financial Services. (Complaint, ¶¶ 7, 9, 10, 11, 14-15, 17-18). Defendant has filed copies
of the retail installment sales contract (which included a well-marked and visible arbitration
clause) and two separate arbitration agreements – all executed by the plaintiff and the seller.
(Brockwell aff., Exhibits 1-5). Accordingly, the court concludes that plaintiff entered into
an agreement with Lynch to arbitrate.
Plaintiff has not responded to the present motion and, therefore, does not present
grounds for avoidance of the contract or argue that the arbitration agreement is unenforceable
for any reason under state law. Neither does she contend that any of the federal statutes on
which her claims rest evince a Congressional intention to preclude arbitration or waiver of
judicial remedies. See Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26
(1991)(noting that “[i]t is by now clear that statutory claims may be the subject of an
arbitration agreement, enforceable pursuant to the FAA” and that the party seeking to avoid
arbitration bears the burden of showing “that Congress intended to preclude a waiver of a
judicial forum” for the federal statutory claim). All of the claims plaintiff asserts in her
7
complaint arise out of the August 2010 vehicle sales transaction evidenced in the exhibits
attached to Brockwell’s affidavit, the parties’ attempt to obtain financing from Americredit
for plaintiff’s purchase of the vehicle, and defendant’s conduct in repossessing the vehicle.
The claims plaintiff seeks to litigate in the present case fall within the scope of her agreement
with Lynch to arbitrate disputes arising out of or relating to their relationship.
Dismissal versus Stay of Action
When all of the claims presented in a case are subject to binding arbitration, dismissal
with prejudice is appropriate. Alford v. Dean Witter Reynolds, Inc., 975 F.2d 1161, 1164 (5th
Cir. 1992)(concluding that 9 U.S.C. § 3 “was not intended to limit dismissal of a case in the
proper circumstances” and stating,“Given our ruling that all issues raised in this action are
arbitrable and must be submitted to arbitration, retaining jurisdiction and staying the action
will serve no purpose. Any post-arbitration remedies sought by the parties will not entail
renewed consideration and adjudication of the merits of the controversy but would be
circumscribed to a judicial review of the arbitrator’s award in the limited manner prescribed
by law.”)(citations omitted); Halford v. Deer Valley Home Builders, 2007 WL 1229339, 3-5
(M.D. Ala. Apr. 25, 2007); Clayton v. Woodmen of the World Life Ins. Society, 981 F. Supp.
1447, 1451 (M.D. Ala. 1997). Because plaintiff has brought no claims before this court that
are not subject to binding arbitration, there is nothing for this court to decide on the merits
of plaintiff’s claims after arbitration.
Accordingly, plaintiff’s claims are due to be dismissed, rather than stayed. Because
8
defendant did not seek dismissal, however, the court will dismiss the claims without
prejudice. See Halford, 2007 WL 1229339 at *4 (“The dismissal shall be without prejudice
because not all Defendants have requested dismissal.”)(citing Jureczki v. Bank One Texas,
N.A., 252 F.Supp.2d 368, 380 (S.D. Tex.), affirmed without opinion, 75 Fed. Appx. 272 (5th
Cir. 2003)); Jureczki, 252 F.Supp.2d at 380 (“When, as here, the defendants have not sought
dismissal, dismissal without prejudice [as opposed to dismissal with prejudice, as in Alford,
supra] is the appropriate measure.”).
CONCLUSION
The undisputed evidence before the court establishes that plaintiff and defendant
entered into an agreement that provided for binding arbitration, and that all of plaintiff’s
claims in the present action are within the scope of that agreement. Accordingly, pursuant
to 9 U.S.C. § 4, it is
ORDERED that defendant’s motion to compel arbitration is GRANTED, and plaintiff
is DIRECTED to pursue her claims, if at all, through binding arbitration as set forth in the
retail sales installment contract, the “binding pre-dispute arbitration agreement” and the
“alternate dispute resolution (arbitration) agreement” she signed on August 6, 2010.
Additionally, because plaintiff asserts no claims before this court that are outside the
scope of her agreement with defendant to submit disputes to binding arbitration, it is further
ORDERED that defendant’s motion to stay is DENIED. A separate judgment will be entered
dismissing this action without prejudice.
9
DONE, this 6th day of March, 2012.
/s/ Susan Russ Walker
SUSAN RUSS WALKER
CHIEF UNITED STATES MAGISTRATE JUDGE
10
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?