Parkerson v. Smith, No. 2000-CA-00549-SCT.

• Decision Date: 07 March 2002
• Docket Number: No. 2000-CA-00549-SCT.
• Citation: 817 So.2d 529
• Parties: Apryl L. PARKERSON v. Wayne SMITH, Verda Pearl Smith, Town and Country Builders, Inc. d/b/a Town and Country Mobile Homes and Champion Home Builders Co., Inc.
• Court: Mississippi Supreme Court

817 So.2d 529

Apryl L. PARKERSON v. Wayne SMITH, Verda Pearl Smith, Town and Country Builders, Inc. d/b/a Town and Country Mobile Homes and Champion Home Builders Co., Inc.

No. 2000-CA-00549-SCT.

Supreme Court of Mississippi.

March 7, 2002.

Rehearing Denied June 6, 2002.

Edward A. Williamson, Philadelphia, Attorney for Appellant.

Sandra S. Mohler, David M. Ott, Hattiesburg, Dale Gibson Russell, Ridgeland, Michael O. Gwin, Jackson, William Bennett Carter, Meridian, Attorneys for Appellees.

EN BANC.

McRAE, P.J., for the Court.

¶ 1. Apryl L. Parkerson filed a complaint on May 17, 1999, against Champion Home Builders Co., Inc., and Wayne and Verda Pearl Smith, owners of Town & Country Builders, Inc., d/b/a Town & Country Mobile Homes. The complaint alleged defective manufacture and negligent set-up of Parkerson's mobile home. The defendants made a motion to have the case dismissed and to compel arbitration. Parkerson subsequently filed an amended complaint wherein she alleged that Champion issued an express warranty covering the mobile home; that Verda Pearl Smith had extended certain implied and express warranties to her as a part of the sale and purchase of the mobile home; that by extending Champion's warranties to the plaintiff, Town & Country was acting as Champion's agent; and that the defendants had failed to comply with express and implied warranties arising under Mississippi law and the Magnuson-Moss Warranty Act.

¶ 2. Even though Champion, the manufacturer, was never a signatory to the finance contract between Parkerson and Town & County concerning the arbitration, the Circuit Court of Neshoba County dismissed the case and compelled arbitration by order dated March 23, 2000. Parkerson timely perfected this appeal. We find that the circuit court erred in dismissing Parkerson's case and requiring her to submit her claims to arbitration as the Magnuson-Moss Warranty Act precluded the Federal Arbitration Act. We further find that Champion, the manufacturer, never had an agreement to arbitrate; and therefore, it cannot compel arbitration. Therefore, we reverse and remand to the Neshoba County Circuit Court for a trial on the merits.

FACTS

¶ 3. On July 1, 1998, Apryl L. Parkerson purchased a Gateway/Advantage Shamrock II mobile home from Town & Country Mobile Homes, Inc., for $61,466.13. As part of this transaction, Parkerson and Verda Pearl Smith of Town & Country signed a contract entitled "Retail Installment Contract, Security Agreement, Waiver of Trial by Jury and Agreement to Arbitration or Reference or Trial by Judge Alone." That agreement provided in pertinent part as follows:

ARBITRATION OF DISPUTES AND WAIVER OF JURY TRIAL:

a. Dispute Resolution. Any controversy or claim between or among you and me or our assignees arising out of or relating to this Contract or any agreements or instruments relating to or delivered in connection with this Contract, including any claim based on or arising from an alleged tort, shall, if requested by either you or me, be determined by arbitration, reference, or trial by a judge as provided below. A controversy involving only a single claimant, or claimants who are related or asserting claims arising from a single transaction, shall be determined by arbitration as described below. Any other controversy shall be determined by judicial reference of the controversy to a referee appointed by the court or, if the court where the controversy is venued lacks the power to appoint a referee, by trial by a judge without a jury, as described below. YOU AND I AGREE AND UNDERSTAND THAT WE ARE GIVING UP THE RIGHT TO A TRIAL BY JURY, AND THERE SHALL BE NO JURY WHETHER THE CONTROVERSY OR CLAIM IS DECIDED BY ARBITRATION, BY JUDICIAL REFERENCE, OR BY TRIAL BY A JUDGE.

b. Arbitration. Since this Contract touches and concerns interstate commerce, an arbitration under this Contract shall be conducted in accordance with the United States Arbitration Act (Title 9, United States Code), notwithstanding any choice of law provision in this Contract. The Commercial Rules of the American Arbitration Association ("AAA") also shall apply. ...

(emphasis added).

¶ 4. Verda Pearl Smith and Parkerson signed another document entitled "Manufactured Home Set-Up and Warranty." Champion was not a signatory to this document or the retail installment contract. However, Town & Country also provided Parkerson with a document from Champion entitled "Manufacturer's One Year Manufactured Home Limited Warranty." Parkerson asserts that Wayne and Verda Pearl Smith assured her that they would personally see that all promises and warranties were kept and that Parkerson would be treated fairly.

¶ 5. Parkerson alleges that her mobile home was delivered and set up in a grossly defective condition. She contends that the Smiths failed to keep their promises of personal attention and that Town & Country and Champion failed to honor their express and implied warranties.

¶ 6. Parkerson stated in an affidavit that she signed the retail installment contract without reading or understanding any of the language regarding waiver of trial by jury and agreement to arbitration. She asserts that she is not knowledgeable or sophisticated in contract dealings and that none of the preprinted language on the contract was explained to her. She further contends that when she signed the retail installment contract she was of the understanding that the contract was between herself and Bank America Housing Services. She stated that she "had no idea... that any of the language in that contract in any way related to the warranties and promises made by [the Smiths] ... or the warranties provided through [the Smiths] by Champion Home Builders."

STANDARD OF REVIEW

¶ 7. The primary issues raised in this appeal present questions of law. "Questions concerning the construction of contracts are questions of law that are committed to the court rather than questions of fact committed to the fact finder." Mississippi State Highway Comm'n v. Patterson Enterprises, Ltd., 627 So.2d 261, 263 (Miss.1993). The standard of review for questions of law is de novo. Starcher v. Byrne, 687 So.2d 737, 739 (Miss.1997).

DISCUSSION

¶ 8. The principal issue before this Court is whether the Magnuson-Moss Warranty Act supercedes the Federal Arbitration Act and, in turn, the arbitration clause of the subject contract, thereby preventing the defendants from invoking arbitration. Additionally, Parkerson asserts that the arbitration clause is unenforceable because it is ambiguous and unconscionable.

¶ 9. The question of whether the Magnuson-Moss Warranty Act renders binding arbitration clauses in consumer contracts unenforceable is an issue of federal law not yet definitively addressed by the United States Supreme Court. However, to date, nearly every federal court which has addressed the issue has ruled that the Magnuson-Moss Warranty Act prevails over the arbitration clause. Yeomans v. Homes of Legend, Inc., 2001 WL 237313 (M.D.Ala. 2001); Pitchford v. Oakwood Mobile Homes, Inc., 124 F.Supp.2d 958 (W.D.Va. 2000); Raesly v. Grand Housing, Inc., 105 F.Supp.2d 562 (S.D.Miss.2000); Wilson v. Waverlee Homes, Inc., 954 F.Supp. 1530 (M.D.Ala.1997), aff'd, 127 F.3d 40 (11th Cir.1997). See also Rhode v. E & T Investments, Inc., 6 F.Supp.2d 1322 (M.D.Ala.1998)

; Boyd v. Homes of Legend, 981 F.Supp. 1423 (M.D.Ala.1997).

¶ 10. While the Federal Arbitration Act (FAA) does in fact favor the enforcement of arbitration agreements, it appears that it has been superceded by the Magnuson-Moss Warranty Act. A federal statute overrides the FAA where the statute's text or history shows a clear congressional intent to do so, or where there is inherent conflict between compelling arbitration and the purposes of the statute. Shearson/Am. Exp., Inc. v. McMahon, 482 U.S. 220, 226-27, 107 S.Ct. 2332, 2338, 96 L.Ed.2d 185 (1987). In addition, where statutory provisions are in irreconcilable conflict, the more recently enacted and more specific statute controls over an earlier and more general statute. HCSC-Laundry v. United States, 450 U.S. 1, 6, 101 S.Ct. 836, 67 L.Ed.2d 1(1981). The Magnuson-Moss Warranty Act was enacted approximately 50 years after the FAA, and new legislation must be presumed to have been enacted in light of earlier enactments. United States v. Trident Seafoods Corp., 92 F.3d 855, 862 (9th Cir.1996).

¶ 11. The Magnuson-Moss Warranty Act is codified as 15 U.S.C. § 2310(d)(1) (2000), which states that any "consumer who is damaged by the failure of a supplier, warrantor, or service contractor to comply with any obligation under this chapter, or under a written warranty, implied warranty, or service contract, may bring suit for damages and other legal and equitable relief." The plain language of the statute indicates that it intends to preserve the right of any consumer to bring a lawsuit for breach of written or implied warranties.

¶ 12. In Raesly v. Grand Housing, Inc., 105 F.Supp.2d 562 (S.D.Miss.2000), the United States District Court for the Southern District of Mississippi held that the Magnuson-Moss Warranty Act precluded binding arbitration of the written warranties. Id. at 573. In so doing, the Court relied on, inter alia, federal regulations issued by the Federal Trade Commission. 40 Fed.Reg. 60211 (1975) (stating that reference within the written warranty to any binding, non-judicial remedy is prohibited by the Rule and the [Magnuson-Moss Warranty] Act). The Raesly court also relied on Wilson v. Waverlee Homes, Inc., 954 F.Supp. 1530 (M.D.Ala.1997), aff'd 127 F.3d 40 (11th Cir.1997), which has been affirmed by the United States Court of Appeals for the Eleventh Circuit.

¶ 13. We find the court's analysis in Wilson to be compelling. There, the court conducted a meticulous analysis of the history of the Magnuson-Moss Warranty Act, as well as the applicable regulations adopted by the Federal Trade Commission. Wilson, 954 F.Supp. at 1537-38. In holding...