Brown et al v. David Stanley Cheverolet Inc et al

Filing 10

ORDER denying 3 Motion to Dismiss or in the Alternative to Compel Arbitration. This action is stayed and administratively closed pending the outcome of the arbitration proceedings. The parties shall jointly notify the Court within 14 days of the completion of arbitration proceedings. If a party seeks to reopen this action a motion to reopen must be filed no later than 7 days after the filing of the notice to the Court. Signed by Honorable Timothy D. DeGiusti on 11/17/2017. (mb)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA
MALISSA BROWN and
JAMES KNIGHT,

)
)
)
Plaintiffs,
)
v.
)
)
DAVID STANLEY CHEVROLET, INC., and )
BBVA COMPASS FINANCIAL CORP.,
)
)
Defendants.
)

Case No. CIV-17-190-D

ORDER
Before the Court is Defendants’ motion [Doc. No. 3] to dismiss this action1 or, in
the alternative, to compel arbitration. Plaintiffs timely responded in opposition [Doc. No.
8], and Defendants filed a reply [Doc. No. 9].
BACKGROUND
On February 1, 2016, Plaintiffs purchased a 2008 Cadillac STS-V from David
Stanley Chevrolet [Doc. No. 1-1 at ¶ 5]. As part of the purchase, Plaintiffs signed a
Purchase Agreement, which contained a Dispute Resolution Clause [Doc. No. 3-1].2 The
Dispute Resolution Clause provides in pertinent part:
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
1

Defendants move for dismissal under FED. R. CIV. P. 12(b)(1) and 12(b)(6), but assert no
specific arguments in support of dismissal on such grounds. The true focus of Defendants’
motion is a request to compel arbitration.
2

Plaintiffs also separately signed the Dispute Resolution Clause. It appeared conspicuously
on the front of the Purchase Agreement in red typeface. See Defs.’ Mot. to Dismiss, Ex.1
[Doc. No. 3-1 at 1].

as a result of this sale or transaction, whether said issues arise prior to, during
or subsequent to the sale or 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.
[Doc. No. 3-1 at 1]. Additionally, as part of the sale, Plaintiffs executed a Retail Installment
Sale Contract (“RISC”) [Doc. No. 3-2 at 10], which David Stanley Chevrolet later assigned
to Compass Bank3. Plaintiffs allege that about one month after the sale, David Stanley
Chevrolet demanded an additional payment of $1,500.00 [Doc. No. 1-1 at ¶ 13]. Plaintiffs
also allege that David Stanley Chevrolet failed to pay off the loan on the trade-in vehicle
and sold it to a third party [Doc. No 1-1 at ¶ 16]. Compass Bank allegedly repossessed the
trade-in vehicle, sold it and demanded Plaintiffs pay the deficiency balance [Doc. No. 1-1
at ¶ 21].
On February 1, 2017, Plaintiffs filed the instant action in the District Court of
Oklahoma County [Doc. 1-1], asserting 13 causes of action. On February 22, 2017,
Defendants removed this action to federal court [Doc. No. 1]. Defendants now move the

3

Defendants assert in their motion that the correct entity name for Defendant BBVA
Compass Financial Corporation is Compass Bank. Thus, the Court refers to it in that way.
2

Court to enter an order compelling arbitration pursuant to the Federal Arbitration Act
(FAA) and the Dispute Resolution Clause in the Purchase Agreement [Doc. No. 3].
DISCUSSION
Defendants assert that Plaintiffs entered into a valid and enforceable agreement to
arbitrate all claims arising from their purchase of the Cadillac STS-V. Plaintiffs, however,
contend that arbitration is not appropriate. Specifically, Plaintiffs assert: (1) the RISC is
the only contract between the parties as a result of the merger doctrine, and it does not
contain an arbitration clause; (2) there is no valid arbitration agreement as there was no
meeting of the minds and the two arbitration clauses conflict; (3) Compass Bank’s Dealer
Agreement precludes David Stanley Chevrolet from adding or altering the RISC, even to
include an arbitration clause; and (4) David Stanley Chevrolet’s agent fraudulently induced
Plaintiffs into signing the Dispute Resolution Clause by falsely representing the contents
of the Purchase Agreement, including the arbitration clause.
A. Whether the Dispute Resolution Clause in the Purchase Agreement is
included in the parties’ final contract
Plaintiffs contend that the Dispute Resolution Clause is unenforceable because the
RISC contains a merger clause. Defendants assert that since the Purchase Agreement and
the RISC were executed as one transaction, they must be construed together.4 “It is the

4

The parties do not address the fact that the Spot Delivery Agreement, also signed by the
parties at the same time, incorporates by reference the RISC, the Purchase Agreement and
the Agreement to Arbitrate contained therein. See [Doc. No. 8-3]. The Spot Delivery
Agreement specifically states, “This Spot Delivery Agreement and all written contracts
relating to this transaction, including, but not limited to, the Purchase Agreement,
Agreement to Arbitrate therein, and the Retail Installment Sales Contract, are between the
same parties, and made as part of substantially the same transaction and shall be taken
3

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.”
Mid-Continent 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 widelyaccepted 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.”).
Moreover, it is not necessary that the instruments refer in express terms to one another, if
they are part of a single transaction. Morgan v. Griffith Realty Co., 192 F.2d 597, 599 (10th
Cir. 1951).
David Stanley Chevrolet and Plaintiffs executed the Purchase Agreement, the Spot
Delivery Agreement and the RISC at the same time as part of one transaction – Plaintiffs’
purchase of the Cadillac STS-V on February 1, 2016. The Purchase Agreement contained
the terms of the sale, including the Dispute Resolution Clause, while the RISC contained
the credit terms. Further, the Dispute Resolution Clause specifically provides that it applies
to disputes concerning sales “based upon financing or extended credit” or disputes that
arise “as a result of any financing contract, agreement or sales document related to the sale

together and read as one document setting forth the terms of the parties[’] agreement.”
[Doc. No. 8-3]. A court “must interpret a contract so as to give effect to the intent of the
parties at the time the contract was formed.” Mercury Inv. Co. v. F.W. Woolworth Co., 706
P.2d 523, 529 (Okla. 1985); see also Scungio v. Scungio, 291 P.3d 616, 623 (Okla. 2012)
(“A contract must be so interpreted as to give effect to the mutual intention of the parties,
as it existed at the time of contracting, so far as the same is ascertainable and lawful.”).
The Court finds that the language of the Spot Delivery Agreement lends credence to
Defendants’ arguments.
4

or attempted sale of the vehicle.” [Doc. No. 3-1]. The Spot Delivery Agreement provides
that it is “executed as a prelude to an exchange of ownership of the vehicle[] described
herein; subject to Dealer finding a lending institution willing to purchase the Retail
Installment Sales Contract executed between the parties hereto on the same terms and
conditions as those set forth more particularly in the Purchase Agreement and Retail
Installment Sales Contract.” [Doc. No. 8-3].
Plaintiffs do not dispute that they signed all three documents at the same time.
Plaintiffs also do not dispute the fact that the Purchase Agreement itself explicitly
incorporates the RISC.5 Rather, Plaintiffs contend that the RISC must incorporate the
Purchase Agreement pursuant to the Oklahoma Supreme Court’s ruling in Walker. See
Walker v. BuildDirect.Com Technologies, Inc., 349 P.3d 549 (Okla. 2015). Walker, which
is factually distinguishable, concerned incorporation “of an extrinsic document

5

Page 1 of the Purchase Agreement provides that “if financing is arranged through Dealer,
this Purchase is subject to … any Retail Installment Sales Contract executed herewith by
a qualified lender or other financial institution.” [Doc. No. 3-1 at 1] (emphasis added).
Moreover, Paragraph 12 of the Purchase Agreement provides:
This Purchase Agreement and all written contracts relating to the same
transaction as evidenced on the front of this Purchase Agreement, between
the same parties, and made as part of substantially the same transaction as
evidenced on the front of this Purchase Agreement shall be taken together
and read as one document setting forth the terms of the parties[’] agreement.
To the extent that any of the terms among the various documents are
inconsistent, the financing agreement shall supersede any directly conflicting
rights, language or terms.
[Doc. No. 3-1 at 2, ¶ 12].

5

warehoused in cyberspace” that did not contain the parties’ signature. Id. at 553. Limiting
its holding to the particular facts of that case, the court in Walker found that no reasonable
person under those circumstances would have thought the online “Terms of Sale” were part
of the parties’ agreement. Id. at 554.
Although the facts are different, the rationale in Walker supports Defendants’
argument of incorporation. In Walker, the plaintiffs purchased hardwood flooring from the
defendant. The defendant e-mailed a two-page written contract, which the plaintiffs
signed, dated and returned to the defendant. Id. at 551. The contract described the type,
amount, and price of the flooring purchased by the Walkers and included 14 bullet points
setting forth additional terms. Id. The sixth bullet point provided that “All orders are
subject to [defendant’s] ‘Terms of Sale.’” Id. The “Terms of Sale” was a document on the
defendant’s website, which contained 15 numbered paragraphs, including an arbitration
clause. Id. at 552.
BuildDirect filed a motion in district court seeking to compel arbitration pursuant
to the arbitration clause in the “Terms of Sale.” The Walkers responded that they were
unaware of the online document and that it was not adequately referenced in the contract
they signed. Id. The district court initially denied BuildDirect’s motion, explaining that
the contract was ambiguous and that it could not say as a matter of law that the contract
incorporated the “Terms of Sale.” Id. BuildDirect filed an interlocutory appeal, and the
Tenth Circuit certified a question6 to the Oklahoma Supreme Court. Id.

6

Certified question: Does a written consumer contract for the sale of goods incorporate by
reference a separate document entitled “Terms of Sale” available on the seller’s website,
6

In analyzing this question, the Oklahoma Supreme Court reviewed Oklahoma
contract law concerning the doctrine of incorporation. The court noted that a “chief
consideration of incorporation is whether the party to be bound had reasonable notice of
and assented to the terms to be incorporated.” Id. at 553 (citing One Beacon Ins. Co. v.
Crowley Marine Services, Inc., 648 F.3d 258, 268 (5th Cir. 2011). Notice of incorporated
terms is reasonable when a “reasonably prudent person should have seen them.” Walker,
349 P.3d at 553. “A party’s failure to read duly incorporated terms will not excuse the
obligation to be bound.” Id. (citing McDonald v. McKinney Nursery Co., 143 P. 191 (Okla.
1914). “Neither physical attachment nor magic words are necessary.” Walker, 349 P.3d
at 553. Applying these principles, the court concluded the “Terms of Sale” were not
properly incorporated into the parties’ contract because the Walkers “neither assented to
nor had notice of the additional online terms.” Id. at 554.
Unlike the Walkers, the arbitration clause in the Purchase Agreement was available
to Plaintiffs on the date they signed the Purchase Agreement and was presented on the date
of execution. In fact, it appeared conspicuously on the front of the Purchase Agreement in
red typeface. [Doc. No. 3-1 at 1]. No terms of Plaintiffs’ agreement with Defendants were
contained on a website. Rather, Plaintiffs admittedly signed the Dispute Resolution Clause
in the middle of the Purchase Agreement. Pls.’ Resp. [Doc. No. 8 at ¶¶ 5, 18]. Accordingly,
Walker does not preclude enforcement of Plaintiffs’ agreement to arbitrate here.

when the contract states that it is “subject to” the seller’s “Terms of Sale” but does not
specifically reference the website? Walker, 349 P.3d at 551.
7

“Moreover, under Oklahoma law, the RISC can’t be read in a vacuum.”
Mooneyham v. BRSI, LLC, 682 Fed. Appx. 655, 660 (10th Cir. 2017) (unpublished).7
“Several contracts relating to the same matters, between the same parties, and made as parts
of substantially one transaction, are to be taken together.” Id. (quoting OKLA. STAT. tit.
15, § 158). “[W]here two written instruments refer to the same subject matter and on their
face show that each was executed as a means of carrying out the intent of the other, both
should be construed as one contract.” Strickland v. Am. Bakery and Confectionery Workers
Union and Indus. Nat’l Welfare Fund, 527 P.2d 10, 13 (Okla. 1974).
By its terms, the Spot Delivery Agreement “plainly operates alongside the RISC.”
Mooneyham, 682 Fed. Appx. at 660; see also [Doc. No. 8-3]. It incorporates by reference
the RISC, the Purchase Agreement and the Agreement to Arbitrate therein. See Id.
“Although the RISC doesn’t reciprocate this reference, that omission doesn’t override the
intent that [the parties] clearly expressed by executing the agreements together.”
Mooneyham, 682 Fed. Appx. at 660-663 (distinguishing Walker because the plaintiff had
notice of the arbitration agreement since he signed it and concluding that the arbitration
agreement applied to the plaintiff’s claims). Accordingly, the Court finds that the Purchase
Agreement, the RISC and the Spot Delivery Agreement should all be construed together
and that the Dispute Resolution Clause is not superseded by the RISC.

7

Unpublished opinion cited pursuant to FED. R. APP. P. 32.1(a) and 10TH CIR. R. 32.1.
8

B.

Whether the parties entered into a valid arbitration agreement

The FAA provides that “an agreement in writing to submit to arbitration an existing
controversy arising out of such a contract, transaction … 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 “reflects the fundamental principle that arbitration is a
matter of contract.” Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 67 (2010). Before
the FAA can be invoked, the existence of an agreement to arbitrate must be established.
Avedon Engineering, Inc. v. Seatex, 126 F.3d 1279, 1287 (10th Cir. 1997). When deciding
whether the parties agreed to arbitrate a matter, “courts generally … should apply ordinary
state-law principles that govern the formation of contracts.” First Options of Chicago, Inc.
v. Kaplan, 514 U.S. 938, 944 (1995); see also Avedon Engineering, Inc., 126 F.3d at 1287
(federal courts “look to state law principles of contract formation to tell us whether an
agreement to arbitrate has been reached”).
Plaintiffs contend that conflicting arbitration provisions in the Purchase Agreement
and the Spot Delivery Agreement render the obligation to arbitrate unenforceable.
Defendants maintain that the non-mandatory arbitration clause in the Spot Delivery
Agreement is inapplicable and that the two clauses are consistent. “The primary goal of
contract interpretation is to determine and give effect to the intention of the parties at the
time the contract was made.” May v. Mid-Century Ins. Co., 151 P.3d 132, 140 (Okla.
2006). “A contract should receive a construction that makes it reasonable, lawful, definite
and capable of being carried into effect if it can be done without violating the intent of the
parties.” Id. See also OKLA. STAT. tit. 15, § 159.
9

The Spot Delivery Agreement contains a non-mandatory dispute resolution
provision, which states, “any disputes about this agreement may be brought to the
appropriate Motor Vehicle Commission under their respective complaint and/or arbitration
procedures.” [Doc. No. 8-3] (emphasis added). Oklahoma’s Used Motor Vehicle and Parts
Commission (“UMVC”) regulates the sale of used motor vehicles in Oklahoma. OKLA.
STAT. tit. 47, § 582(E)(2)(a). The UMVC is authorized “to serve as a dispute resolution
panel for binding arbitration … in contract controversies between licensed used motor
vehicle dealers … and their consumers when, by mutual written agreement executed after
the dispute between the parties has arisen, both parties have agreed to use the Commission
as their arbitration panel for contract disputes.” OKLA. STAT. tit. 47, § 582(E)(2)(f)
(emphasis added). Thus, the UMVC is authorized to arbitrate disputes related to the sale
of used motor vehicles, but only if both parties enter into a written agreement to submit the
dispute to the UMVC after a dispute has arisen. Id. The parties in this case did not enter
into any such agreement; thus, the dispute resolution clause in the Spot Delivery
Agreement is inapplicable.
Further, the two clauses do not conflict. The Dispute Resolution Clause in the
Purchase Agreement mandates that all disputes be submitted to binding arbitration, with
certain exceptions. The clause in the Spot Delivery Agreement merely provides a specific
forum for binding arbitration before the UMVC, if the parties elect in writing to use the
UMVC after a dispute arises. There is nothing in the statutes or regulations governing the
sale of used motor vehicles that prevents the parties from entering into an agreement to
submit disputes regarding the sale to binding arbitration, as the parties did in this case.
10

Additionally, the Spot Delivery Agreement incorporates by reference the Purchase
Agreement and the Agreement to Arbitrate therein, which Plaintiffs separately signed.
[Doc. Nos. 3-1, 8-3].
Plaintiffs’ reliance on Bellman is misplaced. Pls.’ Resp. [Doc. No. 8 at 10-11]; see
also Bellman v. i3Carbon, LLC, 563 Fed. Appx. 608 (10th Cir. 2014) (unpublished).8 In
relation to their possible investment in i3Carbon, the defendants provided Mr. Bellman and
Mr. Samuelson with an Investment Binder that contained about 200 pages of documents,
including an unsigned Operating Agreement. Bellman, 563 Fed. Appx. at 609. The
Operating Agreement contained an arbitration clause. Id. at 610. Also included in the
Investment Binder was a Subscription Agreement, which contained a forum selection
provision. The parties signed the Subscription Agreement. Id. Bellman and Samuelson
later filed a securities fraud suit in the United States District Court for the District of
Colorado based upon alleged misstatements and omissions made at the time of their
investment. Id. at 609-610. The defendants moved to compel arbitration based on the
arbitration clause in the unsigned Operating Agreement. Id. at 611. The district court
denied the defendants’ motion, and the defendants timely appealed. Id.
Applying Colorado state law principles of contract, the Tenth Circuit concluded that
the defendants “failed to show that the ‘conduct of the parties … evidence[d] a mutual
intention to contract with each other.’” Id. at 613. The defendants argued that Bellman
and Samuelson manifested their acceptance of the Operating Agreement and the arbitration

8

Unpublished opinion cited pursuant to FED. R. APP. P. 32.1(a) and 10TH CIR. R. 32.1.
11

provision when they invested in i3Carbon following receipt of the 200-page Investment
Binder. Id. at 614. The court disagreed, finding that “the Operating Agreement included
in the Investment Binder did not have Plaintiffs’ names on it and did not indicate that
Plaintiffs were expected to sign it.” Id. The court also concluded that Bellman and
Samuelson had submitted “uncontroverted evidence” that the defendants never requested
that they sign the Operating Agreement or agree to its provisions, and that Bellman and
Samuelson, in fact, did not sign the Operating Agreement. Id. “While the Operating
Agreement provided for arbitration, the Subscription Agreement did not. In our view, the
documents in the Investment Binder do not demonstrate a meeting of the minds regarding
arbitration.” Id.
Here, however, it is undisputed that Plaintiffs signed all three documents – the
Purchase Agreement, the Spot Delivery Agreement and the RISC. Moreover, Plaintiffs
separately executed the red-typeface Dispute Resolution Clause contained in the Purchase
Agreement. The language in the Spot Delivery Agreement that all three documents “shall
be taken together and read as one document setting forth the terms of the parties[’]
agreement” evidences the parties’ intent was to construe all three documents together.
[Doc. No. 8-3]. Accordingly, the Court finds that there was a valid agreement to arbitrate.
C. Whether Compass Bank’s Dealer Agreement with David Stanley Chevrolet
precludes arbitration
Plaintiffs contend that under the terms of Compass Bank’s Dealer Agreement,
David Stanley Chevrolet cannot alter or add additional terms from those in the RISC.
Defendants, on the other hand, assert that the Compass Bank Dealer Agreement does not
12

preclude arbitration. Having carefully reviewed the parties’ submissions, and particularly
the Dealer Agreement, the Court finds that Compass Bank’s Dealer Agreement does not
preclude arbitration either expressly or by implication. Further, the Court finds the Dispute
Resolution Clause in the Purchase Agreement does not contradict any terms of the RISC.
D. Whether David Stanley Chevrolet’s agent fraudulently induced Plaintiffs
into signing the Purchase Agreement and the Dispute Resolution Clause
Plaintiffs assert that they were fraudulently induced into signing the Dispute
Resolution Clause because David Stanley Chevrolet’s agent told them the purpose of the
Purchase Agreement was to verify the trade-in vehicle, the purchase vehicle, and the price
and did not tell them they were agreeing to arbitration by signing it. Defendants contend
that (1) they were not obligated under the law to explain an arbitration agreement and (2)
since Plaintiffs’ allegations of fraud relate to the contract as a whole, Plaintiffs’ fraudulent
inducement claim must be submitted to arbitration.
The FAA places arbitration agreements on equal ground with other contracts by
requiring courts to enforce them according to their terms. See Rent-A-Center, West, Inc.,
561 U.S. at 67. However, like other contracts, “they may be invalidated by ‘generally
applicable contract defenses, such as fraud, duress, or unconscionability.’” Id. at 68
(quoting Doctor’s Associates, Inc. v. Casarotto, 517 U.S. 681, 687 (1996)). There are two
types of validity challenges to arbitration agreements under Section 2 of the FAA. Buckeye
Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 444 (2006); see also Prima Paint Corp.
v. Flood & Conklin Mfg. Co, 388 U.S. 395, 403-404 (1967); Rent-A-Center, West, Inc.,
561 U.S. at 70. The first type challenges specifically the validity of the agreement to
13

arbitrate. See Id. The second “challenges the contract as a whole, either on a ground that
directly affects the entire agreement (e.g., the agreement was fraudulently induced), or on
the ground that the illegality of one of the contract’s provisions renders the whole contract
invalid.” Buckeye Check Cashing, Inc., 546 U.S. at 444. Under the FAA and the doctrine
of severability, “if the claim is fraud in the inducement of the arbitration clause itself – an
issue which goes to the ‘making’ of the agreement to arbitrate – the federal court may
proceed to adjudicate it.” See Prima Paint Corp., 388 U.S. at 403. However, where a party
claims fraud in the inducement of the contract as a whole, the issue is left for arbitration.
See Id. at 404; see also Buckeye Check Cashing, Inc., 546 U.S. at 445; Telum, Inc. v. E.F.
Hutton Credit Corp., 859 F.2d 835, 837-838 (10th Cir. 1988).
Again, there is no dispute that Plaintiffs signed the Purchase Agreement and the
Dispute Resolution Clause. Here, the Dispute Resolution Clause expressly provides that
“The Purchaser and Dealer agree that all matters addressed within this Clause shall be
submitted to binding arbitration … pursuant to the Federal Arbitration Act, Title 9 U.S.C.
§ 1 et seq.” [Doc. No. 3-1 at 1].
Despite Plaintiffs’ attempt to challenge the arbitration clause itself [Doc. No. 8], the
Court finds there are no allegations in the Petition challenging the validity or enforceability
of the arbitration clause itself on the grounds of fraud. [Doc. No. 1-1]. See Riley v.
Kingsley Underwriting Agencies, Ltd., et al., 969 F.2d 953, 960 (10th Cir. 1992) (A plaintiff
attempting to avoid an arbitration clause based on fraud must plead fraud with the
specificity required by FED. R. CIV. P. 9(b).). Plaintiffs have not asserted a claim for
rescission of the arbitration agreement. Moreover, Plaintiffs admit that the Dispute
14

Resolution Clause in the Purchase Agreement provides for binding arbitration pursuant to
the FAA. See Pls.’ Resp. at ¶ 3 [Doc. No. 8].
Here, Plaintiffs’ argument attacks the entire transaction, “rather than just the
arbitration provisions, because the argument is based on language outside those
provisions.” See e.g., In re Cox Enterprises, Inc. Set-Top Cable Television Box Antitrust
Litig. v. Cox Communications, Inc., 835 F.3d 1195, 1211 (10th Cir. 2016) (held that the
plaintiffs’ challenge was “to the entire agreement, because the arbitration provision would
be unenforceable only if the entire agreement is unenforceable.”). In particular, Plaintiffs
rely on a merger clause in the RISC and a separate arbitration clause in the Spot Delivery
Agreement. Citing to Croslin, Plaintiffs alternatively argue that David Stanley Chevrolet’s
agent was obligated to explain the terms of the Purchase Agreement, including the Dispute
Resolution Clause. Croslin v. Enerlex, Inc., 308 P.3d 1041 (Okla. 2013) (discusses actual
fraud and constructive fraud).
A review of the Petition and the Affidavit attached to Plaintiffs’ brief in opposition
of the instant motion further support the position that Plaintiffs’ arguments go to the
validity of their sales agreement as a whole, rather than the arbitration provisions
specifically. Plaintiffs contend that David Stanley Chevrolet’s agent kept his hand on each
document he presented them for signature and pointed where they should sign. See Ms.
Brown’s Aff. [Doc. No. 8-2 at ¶ 8]. Plaintiffs further contend that at no time did the agent
remove his hand from any of the documents as they were presented. Id. at ¶ 9. Plaintiffs
also contend that they were not given the opportunity to read any of the documents as they
were immediately withdrawn after they were signed. Id. at ¶ 10. Plaintiffs allege that there
15

were suggestive circumstances surrounding the signing of all three documents – the RISC,
the Purchase Agreement and the Spot Delivery Agreement. Such assertions present issues
for the arbitrator to decide.
Having reviewed the parties’ submissions, the Court finds Plaintiffs have not
asserted facts that suggest they were fraudulently induced into signing the Dispute
Resolution Clause in particular. Specifically, the Court finds that the Dispute Resolution
Clause was clearly visible to Plaintiffs on the front of the Purchase Agreement in red
typeface and that while they may not have chosen to read the clause, Plaintiffs signed it.
The record does not reflect that David Stanley Chevrolet’s agent made any specific
statements regarding the Dispute Resolution Clause. Although the agent stated what the
main purpose of the Purchase Agreement was, those statements were generally accurate
and, under the circumstances, did not give rise to any duty to speak regarding the Dispute
Resolution Clause. Nothing asserted by Plaintiffs creates a dispute regarding whether
assent to the Dispute Resolution Clause in particular was fraudulently induced.
Nonetheless, the Court finds that Plaintiffs’ arguments relate to fraud in the
inducement of the contract as a whole. Accordingly, an arbitrator and not the Court should
consider Plaintiffs’ claims of fraud.
CONCLUSION
For the foregoing reasons, Defendants’ motion to dismiss is DENIED. The motion
to compel arbitration and stay this action is GRANTED, and this action is stayed and will
be administratively closed pending the outcome of the arbitration proceedings. The parties
shall jointly notify the Court of the completion of the arbitration proceedings within 14
16

days thereof. If a party seeks to reopen this action for any appropriate purpose, a motion
to reopen must be filed no later than seven days after the filing of the notice to the Court.
IT IS SO ORDERED this 17th day of November 2017.

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