West v. Legacy Motors et al
Filing
15
OPINION AND ORDER granting Defendants' 11 , 12 Motion to Compel Arbitration and Dismiss without prejudice. Signed by District Judge Robert H. Cleland. (LWag)
UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
ANDRE D. WEST,
Plaintiff,
v.
Case No. 16-12101
LEGACY MOTORS, INC., et. al.,
Defendants.
/
OPINION AND ORDER GRANTING DEFENDANTS’
MOTIONS TO COMPEL ARBITRATION AND DISMISS
This matter arises from the circumstances surrounding the sale of a vehicle by
Defendant Legacy Motors Inc. to pro se Plaintiff Andre West, with financing provided by
Defendant Credit Acceptance Corp. (Dkt. # 1.) Plaintiff alleges violations of the Truth in
Lending Act, 15 U.S.C. § 1638(b), the Michigan Consumer Protection Act, Mich. Comp.
Laws § 445.903, and common-law fraud. (Id.) Each Defendant has filed a Motion to
Compel Arbitration and Dismiss under the Federal Arbitration Act, 9 U.S.C. § 1 et. seq.,
citing the written arbitration agreement signed by Plaintiff. (Dkt. ## 11, 12.) Plaintiff
argues that the arbitration clause is unconscionable. (Dkt. ## 1, 14.) After reviewing the
motions and Plaintiff’s Response, filed October 20, 2016 (Dkt. # 14), the court
concludes that further briefing and a hearing are unnecessary. See E.D. LR 7.1(f)(2).
For the reasons that follow, the court will grant Defendants’ motions.
I. BACKGROUND
The following facts are undisputed unless otherwise noted. Plaintiff entered into a
“retail installment contract” with Legacy Motors to purchase a 2006 Cadillac in June of
2015. (Dkt. # 12-1, Pg. ID 113.) Legacy immediately assigned its interests in the
contract to Credit Acceptance. (Id. at Pg. ID 116.) The written contract contained a
page-long arbitration clause. (Id. at Pg. ID 117.) On the first page, two provisions refer
to the arbitration clause, reading:
Arbitration Notice: PLEASE SEE PAGE 4 OF THIS CONTRACT FOR
INFORMAITON REGARDING THE AGREEMENT TO ARBITRATE
CONTAINED IN THIS CONTRACT.
ADDITIONAL TERMS AND CONDITIONS: THE CONDITIONAL TERMS
AND CONDITIONS, INCLUDING THE AGREEMENT TO ARBITRATE SET
FORTH ON THE ADDITIONAL PAGES OF THIS CONTRACT ARE A
PART OF THIS CONTRACT AND ARE INCORPORATED HEREIN BY
REFERENCE.
(Id. at Pg. ID 113 (emphasis in original).) The arbitration clause, on the fourth page of
the contract, provides:
A “Dispute” is any controversy or claim between You and Us arising out of
or in any way related to this Contract, including, but not limited to, any
default under this Contract, the collection of amounts due under the
contract, the purchase, sale, delivery, set-up, quality of the Vehicle,
advertising for the Vehicle or its financing, or any product or service included
in this Contract. “Dispute” shall have the broadest meaning possible, and
includes contract claims, and claims based on [sic] tort, violations of laws,
statutes, ordinances or regulations or any other legal or equitable theories.
Either You or We may require any Dispute to be arbitrated and may do so
before or after a lawsuit has been started over the Dispute or with respect
to other Disputes or counterclaims brought later in the lawsuit. If You or We
elect to arbitrate a Dispute, this Arbitration Clause applies . . . .
If You or We elect to arbitrate a Dispute, neither You nor We will have the
right to pursue that Dispute in court or have a jury resolve that dispute . . . .
It is expressly agreed that this Contract evidences a transaction in interstate
commerce. This Arbitration Clause is governed by the FAA and not by any
state arbitration law.
(Id. at Pg. ID 117.) Plaintiff also had the right to reject the arbitration clause without
affecting the balance of the agreement, which he did not do. (Id.)
2
II. DISCUSSION
The FAA states that every written provision in a contract “evidencing a
transaction involving commerce to settle by arbitration a controversy thereafter arising
out of such contract . . . 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. The
act requires federal courts to stay an action when the issue in the proceeding is
referable to arbitration and to compel arbitration when one party fails or refuses to
comply with the provisions of an enforceable agreement. See 9 U.S.C. §§ 3, 4;
Highlands Wellmont Health Network, Inc. v. John Deere Health Plan, Inc., 350 F.3d
568, 573 (6th Cir. 2003).
The Supreme Court has described the FAA as manifesting “a liberal federal
policy favoring arbitration agreements” which “requires [the courts] to rigorously enforce
agreements to arbitrate.” Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473
U.S. 614, 625-26 (1985) (citations omitted). In the Sixth Circuit:
when considering a motion to stay proceedings and compel arbitration
under the Act, a court has four tasks: first, it must determine whether the
parties agreed to arbitrate; second, it must determine the scope of that
agreement; third, if federal statutory claims are asserted, it must consider
whether Congress intended those claims to be nonarbitrable; and fourth, if
the court concludes that some, but not all, of the claims in the action are
subject to arbitration, it must determine whether to stay the remainder of
the proceedings pending arbitration.
Glazer v. Lehman Bros., 394 F.3d 444, 451 (6th Cir. 2005).
First, the court concludes that the parties agreed to arbitrate. Id. Plaintiff and
Legacy Motors signed the retail installment contract containing the full-page arbitration
clause. (Dkt. # 12-1, Pg. ID 117.) Plaintiff did not exercise his right to reject under the
contract, which would not have affected the balance of the agreement. (Id.)
3
While Plaintiff argues that the arbitration clause is unconscionable, other courts
have upheld highly similar clauses. See, e.g., Credit Acceptance Corp. v. Davisson, 644
F. Supp.2d 948, 958-59 (N.D. Ohio 2009); Anderson v. Credit Acceptance Corp., 2015
U.S. Dist. LEXIS 70149 (W.D. Mich. June 1, 2015). Plaintiff’s argument that the
arbitration clause is substantively unconscionable is, effectively, that Plaintiff got a bad
deal. (Dkt. # 14, Pg. ID 127-28.) But a contract is not unconscionable “simply because it
is foolish for one party and advantageous to the other.” Home Owners Ins. Co. v. ADT
LLC, 109 F. Supp.3d 1000, 1005-06 (E.D. Mich. 2015) (Ludington, J.) (“Instead, a term
is substantively unreasonable where the inequity of the term is so extreme as to shock
the conscience.”) (citation omitted)). Here, there is no apparent inequity of any kind, far
from any so “extreme as to shock the conscience.” The contract, in plain and prominent
language, simply called for what amounted to an option to arbitrate, which would be
held in the Purchaser’s own home jurisdiction. (Dkt. # 12-1, Pg. ID 117.) The power to
arbitrate or sue is held entirely in the hands of the purchaser. The court finds nothing
unfair or inequitable about such a clause, and concludes that the instant arbitration
clause is enforceable.
Second, the scope of the agreement is broad. The arbitration clause provides for
arbitration of “any Dispute,” and provides that “‘Dispute’ shall have the broadest
meaning possible, and includes contract claims, and claims based on [sic] tort,
violations of laws, statutes, ordinances or regulations or any other legal or equitable
theories.” (Id.) The contractual language clearly calls for a broad scope.
Third, nothing suggests that Congress intended to exempt Plaintiff’s claims from
arbitration. “The burden is on the party opposing arbitration . . . to show that Congress
4
intended to preclude a waiver of judicial remedies for the statutory rights at issue.”
Shearson/Am. Exp., Inc. v. McMahon, 482 U.S. 220, 227 (1987). Plaintiff does not
address the issue, and the court necessarily concludes that Congress has not
precluded arbitration of Plaintiff’s claims. Id.
Finally, because all of Plaintiff’s claims are subject to arbitration, there is no
reason to stay this proceeding rather than dismiss without prejudice. Glazer, 394 F.3d at
451.
III. CONCLUSION
Accordingly, IT IS ORDERED that Defendants’ Motions to Compel Arbitration
and Dismiss (Dkt. ## 11, 12) are GRANTED. This case is DISMISSED WITHOUT
PREJUDICE to the parties’ right to move to re-open this case for entry of an arbitration
award or for any other relief to which the parties may be entitled.
IT IS FURTHER ORDERED that the parties are directed to proceed with
arbitration of Plaintiff’s claims pursuant to the terms of the agreement to arbitrate.
s/Robert H. Cleland
ROBERT H. CLELAND
UNITED STATES DISTRICT JUDGE
/
Dated: November 2, 2016
I hereby certify that a copy of the foregoing document was mailed to counsel of record
on this date, November 2, 2016, by electronic and/or ordinary mail.
s/Lisa Wagner
Case Manager and Deputy Clerk
(313) 234-5522
S:\Cleland\TLH\Civil\16-12101.WEST.mot.dismiss.grant.
5
/
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?