Mostella v. N & N MOTORS

• Decision Date: 12 July 2002
• Citation: 840 So.2d 877
• Parties: Deborah MOSTELLA v. N & N MOTORS and Shane Nunn.
• Court: Alabama Supreme Court

840 So.2d 877

Deborah MOSTELLA v. N & N MOTORS and Shane Nunn.

1010121.

Supreme Court of Alabama.

July 12, 2002.

Charles E. Robinson, Jr., of The Robinson Law Firm, P.C., Ashville, for appellant.

Edward Cunningham, Gadsden, for appellees.

LYONS, Justice.

Deborah Mostella appeals from a final judgment dismissing her action against N & N Motors¹ and Shane Nunn. The trial court dismissed the action with prejudice because it concluded that Mostella's claims were subject to arbitration. We reverse and remand.

In October 2000, Mostella visited N & N Motors in Rainbow City to purchase a used vehicle. Shane Nunn, described by Mostella as a "salesperson and partner" at N & N Motors, assisted Mostella in her purchase. Mostella ultimately decided to purchase a used 1989 Nissan Maxima automobile that Nunn showed her; she was using a 1987 Cadillac DeVille automobile that she owned as a trade-in. At the time of her purchase, the odometer on the Maxima showed that the car had been driven 108,000 miles. Mostella says that she told Nunn she needed a low-mileage vehicle, and she asked whether the odometer on the Maxima was accurate. She states that Nunn assured her that the mileage shown on the odometer was correct. Mostella purchased the Maxima for $5,995. She received $700 credit toward that purchase for the Cadillac and paid $1,000 in cash. She financed the remainder of the purchase price with N & N Motors.

Among the sale documents relating to Mostella's purchase of the Maxima is a document entitled "Alternative Dispute Resolution Agreement By Binding Arbitration." The agreement states:

"In connection with the Customer(s) [sic] acquisition of the above described motor vehicle on or about the day and date shown above, the Customer(s) and the Dealer mutually covenant, stipulate and agree, in connection with the resolution of any dispute arising out of the contract(s) entered into by the parties of and concerning the within described motor vehicle as follows: That the vehicle described within was manufactured outside of Alabama; has operated and will continue to operate on interstate highways; and has been traveling in interstate commerce; the manufacture, transportation, sale and use thereof has been and will continue to be regulated by the laws of the United States of America; and, that the contract(s) entered into by the parties concerning said motor vehicle evidence transactions involving and affecting commerce. The undersigned agree that all disputes not barred by applicable statutes of limitations or otherwise barred by law, resulting from or arising out of the sale transaction entered into, (including but not limited to: the terms of this agreement and all clauses herein contained, their breadth and scope, and any term of any agreement contemporaneously entered into by the parties concerning any goods or services acquired by the purchaser(s); the condition of the motor vehicle; the conformity of the motor vehicle sold to the contract of sale; the representations, promises, undertakings, warranties or covenants made by Dealer in connection with the sale of the motor vehicle, or otherwise dealing with the motor vehicle; the terms of financing in connection therewith; any terms or provisions of any credit life and/or disability insurance purchased simultaneously herewith, or any terms or provisions of any extended service contract purchased simultaneously herewith); that Dealer and the purchaser(s) agree to submit such dispute(s) to BINDING ARBITRATION, pursuant to the Arbitration Association then existing in the County where the dealer maintains its principal place of business, except as follows: (1) The arbitrators impaneled to arbitrate this matter shall be selected by the parties to this agreement as follows—The Dealer shall select one arbitrator. The Customer(s) shall collectively select one arbitrator. The two arbitrators so selected shall select a third arbitrator, who shall be a certified A.S.E. Master Mechanic; (2) The prepaid arbitration filing fees and all other prepaid costs of the arbitration proceeding shall be paid by the party seeking affirmative relief. THIS ARBITRATION SHALL BE IN LIEU OF ANY CIVIL LITIGATION IN ANY COURT, AND IN LIEU OF ANY TRIAL BY JURY."

(Capitalization in original.)

Shortly after purchasing the Maxima, Mostella took it to an Express Oil Change franchise in Gadsden. She discovered that the previous owner of the Maxima had brought it to that Express Oil Change location for servicing in July and in August 2000, and that the mileage noted on those occasions was 172,578 and 177,148 miles, respectively. Mostella then sued N & N Motors and Nunn, alleging fraudulent misrepresentation and fraudulent suppression concerning the actual mileage of the vehicle.

N & N Motors and Nunn filed a motion to dismiss the action on the sole ground that, based on the arbitration agreement, Mostella's claims should be submitted to binding arbitration. Other than the arbitration agreement, they submitted no evidence in support of their motion. Mostella opposed the motion to dismiss, arguing that her purchase of the Maxima did not substantially affect interstate commerce and that the arbitration clause was unconscionable. She submitted her affidavit and other evidence in opposition to the motion to dismiss. The trial court held a hearing on the motion to dismiss; both Nunn and Mostella testified at the hearing. Nunn testified that the Maxima had been manufactured in Japan, but that N & N Motors had acquired it from an Alabama resident as a trade-in vehicle. Nunn also testified that N & N Motors sold the Cadillac automobile Mostella had traded in at an auction held in Attalla, but he did not know who purchased the Cadillac. Mostella testified that she resides in Ashville, that after she purchased the Maxima she made one trip to Mississippi in it, and that she has driven it several times on Interstate Highway 65 ("I-65") within Alabama. She also testified that she can no longer drive the Maxima because of mechanical problems that have developed, but that she continues to make monthly payments to N & N Motors at its Gadsden location.

We first address the procedural posture of this appeal. Effective October 1, 2001, Rule 4(d), Ala. R.App. P., provides:

"An order granting or denying a

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