Perkins v. M&N Dealerships XII LLC

Filing 12

ORDER granting 4 Metro Ford's Motion to Compel Arbitration and for Evidentiary Hearing and Stay of Proceedings, COMPELLING arbitration of plaintiff's claims, and STAYING further proceedings as to plaintiff's claims pending arbitration (as more fully set out). Signed by Honorable Vicki Miles-LaGrange on 2/13/2017. (ks)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
LASANDRA PERKINS,
Plaintiff,
vs.
M&N DEALERSHIP XII, LLC d/b/a
METRO FORD OF OKC,
Defendant.

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Case No. CIV-16-796-M

ORDER
Before the Court is defendant M&N Dealerships XII, LLC d/b/a Metro Ford of OKC’s
(“Metro Ford”) Motion to Compel Arbitration and for Evidentiary Hearing and Stay of Proceedings,
filed July 27, 2016. On August 17, 2016, plaintiff filed her response, and on August 24, 2016, Metro
Ford filed its reply. On January 27, 2017, the Court held an evidentiary hearing in this matter.1
Based upon the parties’ submissions, and the evidence presented at the hearing, the Court makes its
determination.
I.

Introduction
This case arises from a used vehicle sale at Metro Ford’s dealership. Plaintiff bought a 2013

Toyota Rav4 from Metro Ford on June 19, 2015. As part of the sale, plaintiff executed a Purchase
Agreement that contained a Dispute Resolution Clause. The Dispute Resolution Clause provides:
This Dispute Resolution Clause applies to any controversy, claim or
dispute between the Purchaser and the Dealer arising out of, or
related, to this sale or transaction, including, but not limited to, any
and all issues or disputes arising as a result of this sale or transaction,
whether said issues arise prior to, during or subsequent to the sale or

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The issues addressed at the evidentiary hearing were (1) whether plaintiff was fraudulently
induced into signing the arbitration agreement, and (2) whether the fee-shifting provisions would
be unconscionable under the facts of this case.

attempted sale of a vehicle and whether said sale or attempted sale is
a cash sale or is based upon financing or extended credit, or arises as
a result of any financing contract, agreement or sales document
related to the sale or attempted sale of a vehicle. The Purchaser and
Dealer agree that all matters addressed within this Clause shall be
submitted to binding arbitration, with an Arbitration Service or
Arbitrator of the parties’ choosing, pursuant to the Federal
Arbitration Act, Title 9 U.S.C. § 1, et seq. The parties agree and
understand that all disputes arising under case law, statutory law, and
all other laws, including but not limited to, all contract, tort and
property disputes, including any claim regarding the use, misuse,
and/or disclosure of any information or documentation, including, but
not limited to, personal or financial information obtained by the
Dealer from the Purchaser, or about the Purchaser, which may arise
from the sale relationship or otherwise during the sale, or at any time
in the future, will be subject to binding arbitration in accord with this
Contract. The parties specifically exclude from this Dispute
Resolution Clause all claims or disputes subject to the Small Claims
Procedures Act of the State of Oklahoma. The parties agree that the
arbitrator shall have authority provided for by the law and contract,
including but not limited to authority to grant an award or order for
money damages, consequential damages, exemplary damages,
declaratory relief, or injunctive relief. Arbitration shall be conducted
in compliance with the Rules of an Arbitration Service or Arbitrator
of the parties’ choosing and in conformity with the Federal Rules of
Civil Procedure. Any evidence submitted shall be in conformity with
the Federal Rules of Evidence. The Arbitrator’s award(s) will be
entered as a judgment in a court having jurisdiction over the parties.
Both the Purchaser and Dealer acknowledge and understand that they
are waiving their right to a jury trial by entering into this agreement
and acknowledge that there shall be no right or authority for any
claims to be arbitrated on a class action basis. It is agreed that the
party filing the arbitration claim shall be responsible for the filing fee.
The arbitrator’s fee shall be equally divided between the parties. The
prevailing party shall be entitled to attorney fees and costs as allowed
by Oklahoma and/or Federal statutes. Dealer and Purchaser agree
that if Dealer must hire legal counsel to enforce or defend Dealer’s
legal rights under this Dispute Resolution Clause, Purchaser will pay
to Dealer its attorney fees and costs incurred by Dealer in Dealer’s
successful defense of Dealer’s rights hereunder.
Purchase Agreement, attached as Exhibit 1 to Defendant’s Motion to Compel Arbitration and for
Evidentiary Hearing and Stay of Proceedings. Additionally, as part of the sale, plaintiff executed
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a Retail Installment Sales Contract (“RISC”), which Metro Ford later assigned to Consumer
Portfolio Services (“CPS”).
Plaintiff alleges that two to three months after the sale, Metro Ford demanded that she pay
an additional $3000 down payment or return the Rav4. Metro Ford took the Rav4 back, refunded
plaintiff the $800 down payment, and gave plaintiff $200 for the trade-in vehicle that had been sold.
On June 17, 2016, plaintiff filed the instant action in the District Court of Oklahoma County, State
of Oklahoma, asserting the following causes of action: (1) fraud, (2) fraud in the inducement, (3)
misrepresentation, (4) violation of the Oklahoma Credit Code, (5) violation of the Truth in Lending
Act, (6) conversion, (7) violation of the Oklahoma Consumer Protection Act, (8) defamation of
credit, (9) invasion of privacy/false light, and (10) violation of the Equal Credit Opportunity Act.
On July 13, 2016, Metro Ford removed this action to this Court. Metro Ford now moves this Court
to compel plaintiff to arbitrate her claims in this action pursuant to the Dispute Resolution Clause
and to stay proceedings in this case until arbitration is completed.
II.

Discussion
Metro Ford asserts that plaintiff entered into a valid and enforceable agreement to arbitrate

all of her claims arising from her purchase of the Rav4. Metro Ford further asserts that the Dispute
Resolution Clause appears conspicuously on the front of the Purchase Agreement and was separately
signed by plaintiff. Plaintiff, on the other hand, contends that arbitration is not appropriate in this
case. Specifically, plaintiff contends: (1) the Purchase Agreement is not the final contract between
the parties; the RISC is the only document which contains all of the necessary terms of a credit
extension and it does not contain an arbitration clause; (2) Metro Ford’s Dealer Agreement with CPS
precludes Metro Ford from adding/altering the RISC, even to include an arbitration clause; (3)

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arbitration will not provide complete relief for plaintiff’s claims; (4) Metro Ford rescinded the
Dispute Resolution Clause and/or waived its rights to arbitration; (5) Metro Ford’s agent
fraudulently induced plaintiff into signing the Dispute Resolution Clause; and (6) the Dispute
Resolution Clause is unconscionable.
A.

Whether the Dispute Resolution Clause is superseded by the RISC

Plaintiff asserts that the Dispute Resolution Clause in the Purchase Agreement is not
enforceable because it was superseded by the RISC. Specifically, plaintiff contends that because
the financing terms are essential to a financed transaction and their inclusion is mandated by federal
law, the terms of the RISC control the transaction upon execution. Plaintiff further contends that
the Dispute Resolution Clause cannot be enforced because the RISC contains a merger clause.2
Metro Ford, however, asserts that since the Purchase Agreement and the RISC were executed as one
transaction, they must be construed together.
“It is the general rule that instruments executed at the same time, and for the same purpose,
and in the course of the same transaction, are, in the eye of the law, one instrument, and will be read
and construed together, as if they were as much one in form as they are in substance.” MidContinent Life Ins. Co. v. Goforth, 143 P.2d 154, 157 (Okla. 1943). See also F.D.I.C. v. Hennessee,
966 F.2d 534, 537 (10th Cir. 1992) (“Oklahoma adheres to the widely-accepted rule that when
several contracts relating to the same matter are made by the parties as parts of one transaction, all
of the instruments should be construed together.” ). In the case at bar, Metro Ford and plaintiff

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The RISC provides: “This contract contains the entire agreement between you and us
relating to this contract. Any change to this contract must be in writing and we must sign it.” Retail
Installment Sale Contract, attached as Exhibit 2 to Plaintiff’s Response and Objection to Defendant’s
Motion to Compel Arbitration and for Evidentiary Hearing and Stay of Proceedings.
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executed both the Purchase Agreement and the RISC at the same time as part of one transaction –
plaintiff’s purchase of the Rav4.3 The Purchase Agreement contained the terms of the sale,
including the Dispute Resolution Clause, and the RISC contained the credit terms. Further, the
Dispute Resolution Clause specifically notes that it applies “whether said sale or attempted sale is
a cash sale or is based upon financing or extended credit, or arises as a result of any financing
contract, agreement or sales document related to the sale or attempted sale of a vehicle.”
Additionally, the Court finds that the terms of the Purchase Agreement, including the Dispute
Resolution Clause, and the terms of the RISC do not conflict with one another. Accordingly, the
Court finds that the Purchase Agreement and the RISC should be construed together and that the
Dispute Resolution Clause is not superseded by the RISC.4
B.

Whether Metro Ford’s Dealer Agreement with CPS precludes arbitration

Plaintiff asserts that the RISC incorporates the CPS Dealer Agreement and that the CPS
Dealer Agreement precludes inclusion of arbitration. Specifically, plaintiff contends that under the
terms of the CPS Dealer Agreement, Metro Ford cannot alter or add additional terms from those in
the RISC. Metro Ford, on the other hand, asserts that the CPS Dealer Agreement does not preclude
arbitration. Having carefully reviewed the parties’ submissions, and particularly the CPS Dealer
Agreement, the Court finds that the CPS Dealer Agreement does not preclude arbitration. The CPS
Dealer Agreement does not expressly preclude arbitration and does not preclude arbitration by

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In fact, plaintiff and Metro Ford executed a number of documents as part of the purchase
of the Rav4.
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Because the Court has found that the Purchase Agreement and the RISC should be construed
together and, in the eye of the law, are one transaction, the Court finds that it need not address
whether the Dispute Resolution Clause was incorporated by reference into the RISC.
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implication. Further, the Court finds the Dispute Resolution Clause in the Purchase Agreement does
not contradict any terms of the RISC.
C.

Whether arbitration will provide complete relief for plaintiff’s claims

Plaintiff asserts that arbitration will not provide complete relief for her claims. The extent
and limits of an arbitrator’s power is derived from the parties’ arbitration agreement. See Sooner
Builders & Invs., Inc. v. Nolan Hatcher Constr. Servs., L.L.C., 164 P.3d 1063, 1071 (Okla. 2007).
The Dispute Resolution Clause provides that “the arbitrator shall have authority provided for by the
law and contract, including but not limited to authority to grant an award or order for money
damages, consequential damages, exemplary damages, declaratory relief, or injunctive relief.”
Based upon the language of the Dispute Resolution Clause, the Court finds that the arbitrator in this
case will have the authority to adjudicate any claim asserted under existing law and would be able
to award all categories of damages that would be available to plaintiff in this Court. Accordingly,
the Court finds that arbitration will provide complete relief for plaintiff’s claims.
D.

Whether Metro Ford rescinded the RISC and waived its right to arbitration

Plaintiff asserts that Metro Ford waived any right it had to arbitration when it elected to
rescind the RISC. Rescission is a remedy available in certain breach of contract actions and is
awarded by a court. Upon review of plaintiff’s response, the Court finds plaintiff’s assertion is more
in the nature of a breach of contract allegation against Metro Ford. Further, having reviewed all of
the parties’ submissions, the Court finds that Metro Ford has not waived its right to arbitration.
E.

Whether Metro Ford’s agent fraudulently induced plaintiff into signing the Dispute
Resolution Clause

Plaintiff asserts that she was fraudulently induced into signing the Dispute Resolution
Clause. Specifically, plaintiff asserts that because Metro Ford’s finance manager told her the
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Purchase Agreement was mainly for the purpose of verifying her information, such as name and
address, the vehicle that was being purchased and traded in, and the price of the vehicle, and did not
mention the Dispute Resolution Clause at all, she was fraudulently induced into signing the Dispute
Resolution Clause.

Metro Ford contends the Dispute Resolution Clause, which appears

conspicuously on the front of the Purchase Agreement in red ink, was fully disclosed to plaintiff.
“[S]ilence as to a material fact is not necessarily, as a matter of law, equivalent to a false
representation; there must have been an obligation to speak.” Silk v. Phillips Petroleum Co., 760
P.2d 174, 179 (Okla. 1988).
A duty to speak may arise from partial disclosure, the speaker being
under a duty to say nothing or to tell the whole truth. One conveying
a false impression by the disclosure of some facts and the
concealment of others is guilty of fraud, even though his statement is
true as far as it goes, since such concealment is in effect a false
representation that what is disclosed is the whole truth.
Key Fin., Inc. v. Koon, 371 P.3d 1133, 1138 (Okla. Civ. App. 2015) (quoting Deardorf v.
Rosenbusch, 206 P.2d 996, 998 (Okla. 1949)). Further,
[i]n determining whether there is a duty to speak, consideration must
be given to the situation of the parties and the matters with which
they are dealing. If on account of peculiar circumstances there is a
positive duty on the part of one of the parties to a contract to speak,
and he remains silent to his benefit and to the detriment of the other
party, the failure to speak constitutes fraud.
Silk, 760 P.2d at 179 (internal citations omitted).
Having reviewed the parties’ submissions, and having heard the evidence presented at the
hearing, the Court finds that plaintiff has not met her burden of showing that she was fraudulently
induced into signing the Dispute Resolution Clause. Specifically, the Court finds that the Dispute
Resolution Clause was clearly visible to plaintiff and that while she did not read the clause, plaintiff

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did see the clause. Further, the Court finds that Metro Ford’s finance manager did not make any
specific statements regarding the Dispute Resolution Clause. Additionally, the Court finds that
while the finance manager stated what the main purpose of the Purchase Agreement was, those
statements were accurate and, under the circumstances, did not give rise to any duty to speak
regarding the Dispute Resolution Clause. Accordingly, the Court finds that Metro Ford’s finance
manager did not fraudulently induce plaintiff into signing the Dispute Resolution Clause.
F.

Whether the Dispute Resolution Clause is unconscionable

Plaintiff first asserts that the Dispute Resolution Clause is unconscionable based upon its feeshifting provisions. The Dispute Resolution Clause, however, provides: “[t]he prevailing party shall
be entitled to attorney fees and costs as allowed by Oklahoma and/or Federal statutes.” Thus,
plaintiff would have the same liability for paying attorney fees if she lost her claims as she would
in this Court. The Court, therefore, finds that the Dispute Resolution Clause is not unconscionable
on this basis.
Plaintiff next asserts that the Dispute Resolution Clause is unconscionable based upon its
provision that the arbitrator’s fee shall be equally divided between the parties. Specifically, plaintiff
asserts that she is a single mom on a limited income and there is no way she could afford such costs
should Metro Ford’s motion be sustained. “[W]here . . . a party seeks to invalidate an arbitration
agreement on the ground that arbitration would be prohibitively expensive, that party bears the
burden of showing the likelihood of incurring such costs.” Green Tree Fin. Corp. - Ala. v.
Randolph, 531 U.S. 79, 92 (2000).
Having carefully reviewed the parties’ submissions, and having heard the evidence presented
at the hearing, the Court finds that plaintiff has not met her burden of showing the likelihood that

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arbitration would be cost-prohibitive in this case. Plaintiff has not presented any evidence of what
actual costs she would incur in this case; plaintiff simply presents the costs of arbitration in other
cases, without any showing as to the similarities between those cases and the instant case and
without any showing that the same arbitrators or arbitration service would be used in this case.
Further, Metro Ford has agreed to using an arbitration service such as American Arbitration
Association, which would cap plaintiff’s arbitration costs at the $200 filing fee. The Court,
therefore, finds that the Dispute Resolution Clause is not unconscionable on this basis.
III.

Conclusion
Accordingly, for the reasons set forth above, the Court GRANTS Metro Ford’s Motion to

Compel Arbitration and for Evidentiary Hearing and Stay of Proceedings [docket no. 4], COMPELS
arbitration of plaintiff’s claims, and STAYS further proceedings as to plaintiff’s claims pending
arbitration.
IT IS SO ORDERED this 13th day of February, 2017.

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