Jackson Mac Haik CDJR, Ltd. v. Hester
| Citation | 291 So.3d 333 |
| Decision Date | 27 February 2020 |
| Docket Number | NO. 2019-CA-00340-SCT,2019-CA-00340-SCT |
| Parties | JACKSON MAC HAIK CDJR, LTD. v. Brenda HESTER |
| Court | United States State Supreme Court of Mississippi |
ATTORNEY FOR APPELLANT: CHADWICK MITCHELL WELCH
ATTORNEY FOR APPELLEE: RAYMOND PATRICK TULLOS, RALEIGH
EN BANC.
BEAM, JUSTICE, FOR THE COURT:
¶1. Mac Haik appeals the circuit court's denial of its motion to compel arbitration. Because this Court finds that the claims fall within the scope of the valid arbitration provision and that no defenses exist to bar arbitration, we reverse the circuit court's order denying Mac Haik's motion to compel arbitration and order the claims to arbitration.
FACTS AND PROCEDURAL HISTORY
¶2. On March 23, 2016, plaintiff Brenda Hester purchased a used 2014 Dodge Ram from Jackson Mac Haik CDJR, Ltd. (Mac Haik). Hester executed a retail-installment sale contract with Mac Haik for the purchase of the vehicle. The contract contained an arbitration provision.
¶3. On July 25, 2017, Hester filed a complaint in the Smith County Circuit Court against Mac Haik, American Financial Warranty Corporation (American Warranty), Randy Miggins d/b/a M&S Towing, and Randy Miggins, alleging that the vehicle she bought from Mac Haik "was defective in materials and workmanship from and after the date of purchase" and "that said defects have existed since the Plaintiff started using said vehicle." She alleged further that American Warranty issued her a warranty but failed to repair her truck. Hester never served American Warranty with a summons and copy of her complaint.
¶4. Hester alleged that Mac Haik took possession of her vehicle to make warranted repairs and later allowed it to be towed. Mac Haik, finding that all of Hester's claims, which sound in tort or contract and relate to her purchase or condition of the vehicle at issue, argued that the claims were subject to arbitration. On October 3, 2017, Mac Haik filed a motion to compel arbitration to which Hester did not respond. Mac Haik argued that Hester's claims were within the scope of the arbitration clause and that no external constraints applied to bar its enforcement.
¶6. On February 6, 2019, the circuit judge entered an order denying Mac Haik's motion to compel. On February 11, 2019, Mac Haik timely filed its notice of appeal.
LAW AND ANALYSIS
I. Whether the circuit court erred by denying the motion to compel arbitration.
¶7. "This Court reviews the grant or denial of a motion to compel arbitration de novo." Sawyers v. Herrin-Gear Chevrolet Co., Inc. , 26 So. 3d 1026, 1034 (Miss. 2010) (citing E. Ford, Inc. v. Taylor , 826 So. 2d 709, 713 (Miss. 2002) ). Under the Federal Arbitration Act, arbitration agreements "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." Rogers-Dabbs Chevrolet-Hummer, Inc. v. Blakeney , 950 So. 2d 170, 173 (Miss. 2007) (internal quotation marks omitted) (quoting 9 U.S.C. § 2 (1947) ). Mississippi will "liberally construe agreements with a presumption in favor of arbitration." Qualcomm Inc. v. Am. Wireless License Grp., LLC , 980 So. 2d 261, 269 (Miss. 2007) (citing Terminix Int'l, Inc. v. Rice , 904 So. 2d 1051, 1054 (Miss. 2004) ).
¶8. Mississippi courts generally conduct a two-pronged inquiry in which the first prong takes two considerations into account, so ultimately the three questions to determine the validity of a motion to compel arbitration are as follows: (1) whether the parties agreed to arbitrate, (2) whether the parties' dispute is within the scope of arbitration, and (3) whether any defenses to the validity of the contract exist that would bar arbitration. Rogers-Dabbs , 950 So. 2d at 173 (citing E. Ford , 826 So. 2d at 713 ).
¶9. This Court first considers whether the parties agreed to arbitrate. Hester's complaint did not allege an invalid contract, rather she alleged that the vehicle was defective. Even after Mac Haik filed its motion to compel arbitration, she did not allege that she did not agree to arbitrate. In fact, she did not even respond to Mac Haik's motion. On appeal, she maintains that her claims fall outside the scope of arbitration, acknowledging her agreement to arbitrate.
(Emphasis added.)
¶11. Hester signed underneath the bold-type font disclosing to her that what she was doing was subject to an arbitration clause:
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 provision on the reverse side, before signing below. You confirm that you received a completely filled-in copy of these documents when you signed them.
¶12. It is not disputed that Hester signed the contract and took possession of the vehicle. Hester's signature confirmed that Mac Haik provided her a "dispute resolution agreement," that she was "free to take them and review them," and that she "read both sides of this contract." Therefore, this Court finds sufficient evidence to show that the parties agreed to arbitrate the dispute.
¶13. Second, this Court considers whether Hester's claims fall within the scope of the arbitration provision.1 Mac Haik contends that the arbitration provision covers "any dispute between you and us related to purchase or condition of this vehicle." Hester's complaint states that the vehicle was defective from the date of purchase. We agree with Mac Haik that the arbitration provision covers such dispute; therefore, Hester's claims are subject to arbitration. The judge erred by ruling that her claims are not subject to arbitration.
¶14. The third consideration for the Court is whether any defenses to the contract exist to bar the applicability of the arbitration agreement. Greater Canton Ford Mercury, Inc. v. Ables , 948 So. 2d 417, 423 (Miss. 2007) (citing E. Ford , 826 So. 2d at 713-14 ).
¶15. Again, Hester did not respond to the motion to compel, nor did she assert any defenses to the contract. It was only after the judge sua sponte engaged in an exchange with Mac Haik's counsel at the hearing in which he introduced defenses of procedural unconscionability and duress that Hester presented this argument. Hester contends on appeal that she was the weaker party with zero participation in the drafting of the contract and that she was presented with a take-it-or-leave-it contract. This Court does not find that either duress or procedural unconscionability were pleaded or supported by the evidence; therefore, no external constraints bar the applicability of the arbitration agreement.
CONCLUSION
¶16. The parties entered into a valid arbitration agreement that covers the scope of Hester's claims. Hester did not present any defenses to the contract that would bar the applicability of the arbitration agreement. We reverse and render the circuit court's order denying Mac Haik's motion to compel arbitration.
¶17. REVERSED AND RENDERED.
¶18. I would affirm in part and reverse in part the trial court's decision that Brenda Hester's claims are outside the scope of the arbitration agreement.
¶19. Hester's complaint alleged that she purchased a 2014 Dodge Ram vehicle from the Mac Haik dealership on March 23, 2016. Hester averred that, in February 2017, the vehicle "broke down and ceased to operate on Highway 503 in Smith County, Mississippi." She claimed that the warranty company, American Financial Warranty Corporation, and another company, Mastertech, had agreed to repair or replace the vehicle were it found defective. Hester alleged that, shortly after the vehicle failed, she had requested that Mac Haik and the warranty corporation repair the vehicle, but they refused to do so. She averred that she had left the vehicle in Mac Haik's possession for repairs but that Mac Haik had caused it to be towed and stored at a towing company, resulting in a $2,113.25 storage...
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