138 P.3d 826 (Okla. 2005), 99991, Rogers v. Dell Computer Corp.

Docket Nº99991
Citation138 P.3d 826, 2005 OK 51
Opinion JudgeTAYLOR, J.
Party NameRogers v. Dell Computer Corp.
AttorneyJ. David Cawthon, Bradley C. West, Terry W. West, The West Law Firm, Shawnee, OK, for the plaintiffs., John N. Hermes, McAfee & Taft, Oklahoma City, OK, for the defendant on the Reply in Support of the Petition for Writ of Certiorari., James L. Kincaid, Gerald L. Jackson, Crowe & Dunlevy, Oklahom...
Case DateJune 28, 2005
CourtSupreme Court of Oklahoma

Page 826

138 P.3d 826 (Okla. 2005)

2005 OK 51

Donna J. ROGERS and Paul Palmer d/b/a Fab Seal Industrial Liners, Inc., Plaintiffs/Appellees,

v.

DELL COMPUTER CORPORATION, Defendant/Appellant.

No. 99,991.

Supreme Court of Oklahoma

June 28, 2005

Rehearing Denied Nov. 14, 2005.

As Corrected Nov. 16 and 29, 2005.

Page 827

On Certiorari to the Court of Civil Appeals, Division II.

¶ 0 Plaintiffs, computer purchasers, filed suit against defendant, seller, seeking certification of a class action and alleging violations of the Oklahoma Consumer Protection Act, 15 O.S.2001, §§ 751-763, negligence, and breach of contract. The defendant filed a motion to dismiss or, alternatively, to compel arbitration. The district court denied defendant's motion. The defendant appealed only the denial of the application to compel. The Court of Civil Appeals affirmed. This Court granted the petition for certiorari.

J. David Cawthon, Bradley C. West, Terry W. West, The West Law Firm, Shawnee, OK, for the plaintiffs.

John N. Hermes, McAfee & Taft, Oklahoma City, OK, for the defendant on the Reply in Support of the Petition for Writ of Certiorari.

James L. Kincaid, Gerald L. Jackson, Crowe & Dunlevy, Oklahoma City, OK, for the defendant before the Court of Civil Appeals and on the Petition for Writ of Certiorari.

TAYLOR, J.

¶ 1 The issues in this case are: (1) the jurisdiction of this Court and of the district court, (2) the proper procedures in the district court on application to compel arbitration, and (3) the existence and force of an arbitration provision allegedly sent with an invoice and acknowledgment and with the purchased computer. We find this Court has jurisdiction over this appeal and the district court had jurisdiction of the issues below as framed by the plaintiffs. Because the proper procedures were not followed in the district court, we cannot say whether the district court's denial of the application to compel arbitration was proper and whether the arbitration provision attached to the application is enforceable against the plaintiffs. Therefore, we remand the case with instructions to follow the procedures set out in this opinion.

I. BACKGROUND AND PROCEDURAL ISSUES

¶ 2 Paul Palmer, doing business as Fab Seal Industrial Liners, Inc., and Donna Rogers (collectively plaintiffs) filed suit against Dell Computer Corporation, later renamed Dell, Inc., (Dell) asking for certification as a class action and alleging violations of the Oklahoma Consumer Protection Act, 15 O.S.2001, §§ 751-763, negligence, and breach of contract. Dell filed a motion to dismiss for lack of jurisdiction and failure to state a claim or, alternatively, to compel arbitration. The district court denied Dell's motion. Dell appealed the part of the order denying the application to compel arbitration invoking appellate jurisdiction pursuant to section 817(A) of the Oklahoma Uniform Arbitration Act, 15 O.S.2001, § 801-18 (OUAA). 1 The Court of Civil Appeals affirmed the district court's

Page 828

denial of the application to compel arbitration. 2

II. JURISDICTION

A. Oklahoma Uniform Arbitration Act

¶ 3 It is the duty of this Court to inquire into its own jurisdiction and the jurisdiction of the court below. City of Lawton v. International Union of Police Ass'n, 2002 OK 1, ¶ 10, 41 P.3d 371, 376. Oklahoma Supreme Court Rule 1.60(i), 12 O.S.2001, ch. 12, app. (OSCR), provides that appeals made under the provisions of section 817 of the OUAA are appealable by right. Section 817 allows appeals from an order denying an application to compel arbitration made pursuant to section 803 of the OUAA. With limited exceptions, the OUAA applies to a written agreement or a provision in a written contract to submit controversies between the parties to arbitration. § 802(A) of the OUAA. Because Dell's application to compel arbitration alleged a written agreement to arbitrate claims against it, the dispute before this Court comes within the OUAA's purview as well as the Federal Arbitration Act, 9 U.S.C. §§ 1-16 (1994 & Supp.2001) (FAA), as discussed in part IV below. The application of the OUAA and FAA are not mutually exclusive. See Volt v. Board of Trustees of the Leland Stanford Jr. Univ., 489 U.S. 468, 477, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989).

¶ 4 The OUAA does not apply to "collective bargaining agreements or contracts with reference to insurance except for those contracts between insurance companies." § 802 of the OUAA. The FAA does not except these two contracts from its application. Therefore these two types of agreements come under the FAA but not the OUAA. The denial of an application to compel arbitration under these type of contracts would not be appealable to this Court by right. See rule 1.60(i) of the OSCR. Here both the OUAA and the FAA are applicable. Because the OUAA is applicable here, the order denying Dell's application to compel arbitration is appealable by right under rule 1.60. Thus, this Court has jurisdiction of the appeal.

B. Oklahoma Uniform Tax Procedures Act

¶ 5 As to the district court's jurisdiction, the district court denied Dell's motion to dismiss for lack of jurisdiction. The crux of Dell's motion was that the plaintiffs' claims are a transparent attempt to generate a class action suit when in reality the plaintiffs are seeking a tax refund which must first be addressed by the Oklahoma Tax Commission. Dell submitted that the district court should have dismissed the petition because the plaintiffs failed to exhaust their administrative remedies.

¶ 6 Section 227 of title 68 of the Oklahoma Statutes provides a mechanism for a refund of taxes erroneously paid. Section 225 provides the means for appeals for denial of a refund. Section 202 defines a taxpayer as any person liable to pay any state tax. If the plaintiffs' claims are for a refund of the sales tax collected either by mistake of fact, error in computation or misinterpretation of law, the plaintiffs would have to first seek relief with the Oklahoma Tax Commission pursuant to these sections. See Stallings v. Oklahoma Tax Comm'n, 1994 OK 99, 880 P.2d 912.

¶ 7 The plaintiffs protested Dell's characterization of their claims. The plaintiffs emphasized that their position was Dell "charges and collects from Oklahoma residents monies falsely characterized as a sales tax on the purchase of optional service contracts, and/or on transportation charges (i.e., shipping and handling charges) for the delivery of computers and computer products." We confine our review to the issues based on plaintiffs characterization of the claims.

Page 829

Thus, proof that the "sales taxes" were remitted to the Oklahoma Tax Commission as Dell alleges would be a defense to the plaintiffs' claims as the plaintiffs have limited them.

III. FACTS

¶ 8 For reasons discussed below, our statement of the facts are those to which the parties admit either in the district court or in this appeal. Dell, a Texas-based company, sells computers through direct marketing. Customers place orders directly with Dell. Dell ships the purchased computers from Texas and Tennessee. In addition to the computers, Dell markets service contracts.

¶ 9 Dell attached what it alleges are the Rogers invoice and the Fab Seal acknowledgment to its motion to dismiss or compel arbitration. Dell also attached a document taken from one of its internet pages and entitled "Terms and Conditions of Sale." 3 Dell did not attest to the accuracy of any of these attachments or to the alleged fact that these documents were sent to plaintiffs. Further, there is nothing in the record about how the plaintiffs ordered the computers, whether over the internet, by mail, or by phone. Likewise, there is nothing in the record about the processes and conversations between Dell and the plaintiffs when they placed their orders or whether the plaintiffs were required to consent to the "Terms and Conditions of Sale" when placing the orders.

¶ 10 We assume for purposes of discussion only that the plaintiffs received the representative "Terms and Conditions of Sale" document either with the invoice and acknowledgment, with the shipment of the computer, or both. The arbitration provision included in the "Terms and Conditions of Sale" document, if received and if enforceable, would require the plaintiffs to submit their claims against Dell or its affiliates to binding arbitration.

IV. APPLICABLE LAW

¶ 11 The FAA applies to contracts affecting interstate commerce. 9 U.S.C. § 1 (2000); Allied-Bruce Terminix Co. v. Dobson, 513 U.S. 265, 269, 115 S.Ct. 834, 130 L.Ed.2d 753 (1995). Under section 2 of the FAA, a written agreement to submit an issue to arbitration is "valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." Suits brought upon issues falling within section 2 must be stayed until after "arbitration has been had in accordance with the terms of the agreement." 9 U.S.C. § 3 (2000). A stay is also required by the OUAA, 15 O.S.2001, § 803(D). 4

¶ 12 The FAA does not preempt state law unless the state law frustrates the Congressional purposes and objectives embodied in the FAA. Volt, 489 U.S. at 477, 109 S.Ct. 1248. The FAA was enacted "to overrule the judiciary's long-standing refusal to enforce agreements to arbitrate", Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 219-220, 105 S.Ct. 1238, 84 L.Ed.2d 158, and to put arbitration agreements on an equal footing with other contracts. Volt, 489 U.S. at 478, 109 S.Ct. 1248.

¶ 13 Where a contract affecting interstate commerce contains an arbitration provision and does not provide otherwise, the FAA requires the question of the contract's validity as a whole to be submitted to arbitration. Prima Paint Corp. v. Flood & Conklin Mfg.Co., 388 U.S. 395, 404, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967). But cf. Shaffer v. Jeffery, 1996 OK 47, ¶ 26, 915 P.2d 910, 917-18 (under the OUAA, issues...

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57 practice notes
  • Feeney v. Dell Inc., 072215 MACA, 14-P-46
    • United States
    • Massachusetts Appeals Court of Massachusetts
    • July 22, 2015
    ...to show agreement, including conduct by which both parties recognize existence of contract). The case of Rogers v. Dell Computer Corp., 138 P.3d 826, 833 (Okla. 2005), cited by the plaintiffs, did not resolve the issue due to an insufficient record, and suggested that, under either Oklahoma......
  • 328 P.3d 1239 (Okla.Civ.App. 2014), 109314, House v. Vance ford-Lincoln-Mercury, Inc.
    • United States
    • Oklahoma Court of Appeals of Oklahoma Court of Civil Appeals of Oklahoma
    • March 31, 2014
    ...The Court then issued a May 9, 2011 Order memorializing the denial of the application and, citing Rogers v. Dell Computer Corporation, 2005 OK 51, 138 P.3d 826 and 12 O.S.Supp.2006 § 1857(C), Page 1243 stating the " April 14, 2011 stay order is dissolved." [¶9] An arbitration awar......
  • 87 Mass.App.Ct. 1137 (2015), 14-P-46, Feeney v. Dell Inc.
    • United States
    • Massachusetts Appeals Court of Massachusetts
    • July 22, 2015
    ...to show agreement, including conduct by which both parties recognize existence of contract). The case of Rogers v. Dell Computer Corp., 2005 OK 51, 138 P.3d 826, 833 (Okla. 2005), cited by the plaintiffs, did not resolve the issue due to an insufficient record, and suggested that, under eit......
  • 231 P.3d 767 (Okla.Civ.App. Div. 3 2010), 106,237, Willco Enterprises, LLC v. Woodruff
    • United States
    • Oklahoma Court of Appeals of Oklahoma Court of Civil Appeals of Oklahoma
    • January 22, 2010
    ...Warrior & Gulf Navigation Co., 363 U.S. 574, 583, 80 S.Ct. 1347, 1353, 4 L.Ed.2d 1409 (1960)); see also Rogers v. Dell Computer Corp., 2005 OK 51, ¶ 17, 138 P.3d 826, 830 (declaring " ambiguity falls on the side of the existence of an agreement to arbitrate." ). ¶ 15 The Supre......
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56 cases
  • Feeney v. Dell Inc., 072215 MACA, 14-P-46
    • United States
    • Massachusetts Appeals Court of Massachusetts
    • July 22, 2015
    ...to show agreement, including conduct by which both parties recognize existence of contract). The case of Rogers v. Dell Computer Corp., 138 P.3d 826, 833 (Okla. 2005), cited by the plaintiffs, did not resolve the issue due to an insufficient record, and suggested that, under either Oklahoma......
  • 328 P.3d 1239 (Okla.Civ.App. 2014), 109314, House v. Vance ford-Lincoln-Mercury, Inc.
    • United States
    • Oklahoma Court of Appeals of Oklahoma Court of Civil Appeals of Oklahoma
    • March 31, 2014
    ...The Court then issued a May 9, 2011 Order memorializing the denial of the application and, citing Rogers v. Dell Computer Corporation, 2005 OK 51, 138 P.3d 826 and 12 O.S.Supp.2006 § 1857(C), Page 1243 stating the " April 14, 2011 stay order is dissolved." [¶9] An arbitration awar......
  • 87 Mass.App.Ct. 1137 (2015), 14-P-46, Feeney v. Dell Inc.
    • United States
    • Massachusetts Appeals Court of Massachusetts
    • July 22, 2015
    ...to show agreement, including conduct by which both parties recognize existence of contract). The case of Rogers v. Dell Computer Corp., 2005 OK 51, 138 P.3d 826, 833 (Okla. 2005), cited by the plaintiffs, did not resolve the issue due to an insufficient record, and suggested that, under eit......
  • 231 P.3d 767 (Okla.Civ.App. Div. 3 2010), 106,237, Willco Enterprises, LLC v. Woodruff
    • United States
    • Oklahoma Court of Appeals of Oklahoma Court of Civil Appeals of Oklahoma
    • January 22, 2010
    ...Warrior & Gulf Navigation Co., 363 U.S. 574, 583, 80 S.Ct. 1347, 1353, 4 L.Ed.2d 1409 (1960)); see also Rogers v. Dell Computer Corp., 2005 OK 51, ¶ 17, 138 P.3d 826, 830 (declaring " ambiguity falls on the side of the existence of an agreement to arbitrate." ). ¶ 15 The Supre......
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