Bertocci v. Thoroughbred Ford, Inc., WD 80151

CourtCourt of Appeal of Missouri (US)
Writing for the CourtVICTOR C. HOWARD, JUDGE
Citation530 S.W.3d 543
Docket NumberWD 80151
Decision Date26 September 2017
Parties Darlene BERTOCCI, Respondent, v. THOROUGHBRED FORD, INC., and Ryan Brehm, Appellants.

530 S.W.3d 543

Darlene BERTOCCI, Respondent,
v.
THOROUGHBRED FORD, INC., and Ryan Brehm, Appellants.

WD 80151

Missouri Court of Appeals, Western District.

Opinion filed: September 26, 2017


Tiffannie M. Kennedy, for Respondent.

Arnold R. Day, Jr., Kansas City, for Appellants.

Before Division Four: Mark D. Pfeiffer, Presiding Judge, Victor C. Howard, Judge and Lisa White Hardwick, Judge

VICTOR C. HOWARD, JUDGE

Thoroughbred Ford, Inc. and Ryan Brehm appeal from the trial court's order denying their motion to stay proceedings and compel arbitration. The order is reversed, and the case is remanded.

Factual and Procedural Background

On December 15, 2014, Darlene Bertocci signed a Retail/Lease Buyer's Order to purchase a 2014 Ford Edge from Thoroughbred Ford. The Buyer's Order, a one-page, two-sided form contract, contained the following provision in bold print at the bottom of the front page next to Ms. Bertocci's signature, "THIS CONTRACT CONTAINS A BINDING ARBITRATION

530 S.W.3d 549

PROVISION WHICH MAY BE ENFORCED BY THE PARTIES." On the back of the agreement, the following provision was set out, in pertinent part:

ARBITRATION

The parties shall first seek to resolve any controversy between them by promptly negotiating with each other in good faith and if such negotiations are unsuccessful then any and all claims or disputes arising between the parties to this Agreement (but excluding controversies between Customer and third parties arising out of any retail installment contract, promissory note or instrument securing performance thereof, all collection claims by Thoroughbred Ford and also excluding Customer's warranty disputes with third parties) shall be settled by binding arbitration and the award of an arbitration shall be final and binding and there shall be no appeal therefrom; and a judgment upon such award may be entered in the US. District Court, Western District of Missouri, if that court has jurisdiction to enter the award, and if not, then in the Circuit Court of Platte County, Missouri.

* * *

If the parties cannot agree on one arbitrator within 15 days from the demand for arbitration then each party shall select one arbitrator within 30 days after the demand for arbitration and the two parties as so selected shall within 15 days after they are selected select a third arbitrator. If either party fails to select their arbitrator within 30 days of the demand for arbitration or if the two arbitrators as selected under the preceding sentence fail to select a third arbitrator within 15 days of their selection then the respective arbitrator shall be selected by a Circuit Court Judge serving Platte County, Missouri. All arbitrators shall be selected from the membership of the Clay County, Missouri and/or Platte County, Missouri Bar Associations.

* * *

The arbitration shall be governed by the American Arbitration Association's Commercial Arbitration Rules unless otherwise expressly agreed by the parties. All issues of arbitration, including but not limited to this Agreement and its arbitration provisions, shall be governed by the Federal Arbitration Act ( 9 U.S.C. § 1, et seq. ). Any doubt concerning the scope of arbitrable issues shall be resolved in favor of arbitration. The parties further agree and acknowledge that the vehicles and/or parts and materials contained and/or included therein have been transported, assembled, fabricated and/or created in states other than the State of Missouri and therefore the subject matter of this contract involves and concerns interstate commerce.

On March 2, 2016, Ms. Bertocci filed a petition against Thoroughbred Ford and Ryan Brehm, an employee of the dealership, (collectively Defendants) asserting claims for fraud, negligence, negligent misrepresentation, and violations of the Missouri Merchandising Practices Act (MMPA) arising out of her purchase of the vehicle. She alleged that Defendants made several misrepresentations to her and on her credit application regarding her financing of the car for her daughter-in-law. Specifically, she alleged that Defendants misrepresented to her that she would never be financially responsible for the vehicle, her daughter-in-law would not be able to cease making monthly payments and would be the new owner in twelve months, and her credit profile was strong enough to afford the vehicle. She alleged that she reasonably relied on such misrepresentations in making the purchase and that, as a

530 S.W.3d 550

result of such misrepresentations, she suffered damages including the loss of use of the car, damage to her credit score and credit worthiness, an outstanding balance due on the repossessed vehicle, embarrassment, humiliation, frustration, destruction of family relations, and mental and emotional pain and suffering.

Defendants filed a motion to stay proceedings and compel arbitration. They asserted that Ms. Bertocci agreed to be bound by an arbitration provision contained in the Buyer's Order attached to their motion.

Ms. Bertocci filed suggestions and supplemental suggestions opposing Defendants' motion to compel asserting six different reasons why the arbitration clause in the Buyer's Order was unenforceable. She argued that (1) the arbitration clause lacked mutuality of consideration and the promise to arbitrate was illusory; (2) the arbitration provision was void because she was fraudulently induced into signing the Buyer's Order; (3) the arbitration provision was unconscionable; (4) her claims did not fall within the scope of the arbitration provision; (5) Defendants waived their right to arbitrate; and (6) she did not knowingly and voluntarily waive her right to a jury trial.

Following a hearing, the trial court denied Defendant's motion to stay proceedings and compel arbitration without explanation. This appeal by Defendants followed.

Defendants contend that the trial court erred in denying their motion to compel arbitration because the legal grounds asserted by Ms. Bertocci for finding the arbitration provision unenforceable did not apply. They assert that the arbitration agreement was valid and enforceable, all of her claims were within its scope, and they did not waive their right to arbitrate.

The judgment of the trial court will be affirmed on appeal unless there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law. Eaton v. CMH Homes, Inc., 461 S.W.3d 426, 431 (Mo. banc 2015). Whether the trial court should have granted a motion to compel arbitration is a question of law that is reviewed de novo. Id. When faced with a motion to compel arbitration, the court determines whether a valid arbitration agreement exists and, if so, whether the specific dispute falls within the scope of the agreement. Ellis v. JF Enters., LLC, 482 S.W.3d 417, 419 (Mo. banc 2016). This opinion will address the defenses raised by Ms. Bertocci in the context of determining whether the arbitration agreement was valid and enforceable under applicable laws.

Validity of Arbitration Agreement

Ms. Bertocci raised several issues concerning the existence and validity of the arbitration agreement. The arbitration clause in the Buyer's Order stated that it is subject to the Federal Arbitration Act (FAA).1 "[T]he FAA ... governs what courts may consider in determining whether an agreement to arbitrate is enforceable." Id. Under the FAA, an arbitration agreement is severable and must be considered separate and apart from the rest of the contract. Id. An arbitration provision's validity is subject to initial court determination while the validity of the contract as a whole (if the arbitration provision

530 S.W.3d 551

is valid) is for the arbitrator to decide. Id. at 420-423 (citing Nitro-Lift Techs., L.L.C. v. Howard, 568 U.S. 17, 21, 133 S.Ct. 500, 184 L.Ed.2d 328 (2012) ; Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 70-71, 130 S.Ct. 2772, 177 L.Ed.2d 403 (2010) ; Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 445, 126 S.Ct. 1204, 163 L.Ed.2d 1038 (2006) ; Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 403-404, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967) ).

Under the FAA, arbitration agreements are "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 (2009). "[T]his provision allows arbitration agreements ‘to be invalidated by generally applicable contract defenses, such as fraud, duress, or unconscionability, but not by defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.’ " Eaton, 461 S.W.3d at 432 (quoting AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 131 S.Ct. 1740, 179 L.Ed.2d 742 (2011) ). " ‘As such, arbitration agreements are tested through a lens of ordinary state-law principles that govern contracts [.]’ " Id. (quoting Robinson v. Title Lenders, Inc., 364 S.W.3d 505, 515 (Mo. banc 2012) ). Thus, "a Missouri court can declare an arbitration agreement ‘unenforceable if a generally applicable contract defense, such as fraud, duress, or unconscionability, applie[s] to concerns raised about the agreement.’ " Id. (quoting Robinson, 364 S.W.3d at 515 ).

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4 practice notes
  • Brown, v. Chipotle Servs., WD84613
    • United States
    • Court of Appeal of Missouri (US)
    • March 8, 2022
    ...Miller, 581 S.W.3d at 729 (quoting Nitro Distrib., Inc. v. Dunn, 194 S.W.3d 339, 345 (Mo. 2006)); Bertocci v. Thoroughbred Ford, Inc., 530 S.W.3d 543, 550 (Mo. App. W.D. 2017). "The party seeking to compel arbitration has the burden of proving the existence of a valid and enforceable arbitr......
  • Abdiana Props., Inc. v. Bengtson, WD 81817
    • United States
    • Court of Appeal of Missouri (US)
    • May 14, 2019
    ...attached to motions filed with the trial court are not evidence and are not self-proving." Bertocci v. Thoroughbred Ford, Inc. , 530 S.W.3d 543, 551 (Mo. App. W.D. 2017) (quoting Ryan v. Raytown Dodge Co. , 296 S.W.3d 471, 473 (Mo. App. W.D. 2009) ). Here the B.S.H.N. Defendants did not req......
  • Ramirez-Leon v. GGNSC, LLC, WD 80990
    • United States
    • Court of Appeal of Missouri (US)
    • March 27, 2018
    ...that it is governed by the FAA. The Missouri Act covers matters that are not preempted by the FAA. Bertocci v. Thoroughbred Ford, Inc., 530 S.W.3d 543 n. 1 (Mo. App. W.D. 2017). Neither party raised any argument that the Arbitration Agreement should not have been subject to the provisions o......
  • Ford Motor Credit Co. v. Jones, WD 80809
    • United States
    • Court of Appeal of Missouri (US)
    • March 20, 2018
    ...it, it is against the weight of the evidence, or it erroneously declares or applies the law." Bertocci v. Thoroughbred Ford, Inc. , 530 S.W.3d 543, 550 (Mo. App. W.D. 2017). "Whether the trial court should have granted a motion to compel arbitration is a question of law that is reviewed de ......
4 cases
  • Brown, v. Chipotle Servs., WD84613
    • United States
    • Court of Appeal of Missouri (US)
    • March 8, 2022
    ...Miller, 581 S.W.3d at 729 (quoting Nitro Distrib., Inc. v. Dunn, 194 S.W.3d 339, 345 (Mo. 2006)); Bertocci v. Thoroughbred Ford, Inc., 530 S.W.3d 543, 550 (Mo. App. W.D. 2017). "The party seeking to compel arbitration has the burden of proving the existence of a valid and enforceable arbitr......
  • Abdiana Props., Inc. v. Bengtson, WD 81817
    • United States
    • Court of Appeal of Missouri (US)
    • May 14, 2019
    ...attached to motions filed with the trial court are not evidence and are not self-proving." Bertocci v. Thoroughbred Ford, Inc. , 530 S.W.3d 543, 551 (Mo. App. W.D. 2017) (quoting Ryan v. Raytown Dodge Co. , 296 S.W.3d 471, 473 (Mo. App. W.D. 2009) ). Here the B.S.H.N. Defendants did not req......
  • Ramirez-Leon v. GGNSC, LLC, WD 80990
    • United States
    • Court of Appeal of Missouri (US)
    • March 27, 2018
    ...that it is governed by the FAA. The Missouri Act covers matters that are not preempted by the FAA. Bertocci v. Thoroughbred Ford, Inc., 530 S.W.3d 543 n. 1 (Mo. App. W.D. 2017). Neither party raised any argument that the Arbitration Agreement should not have been subject to the provisions o......
  • Ford Motor Credit Co. v. Jones, WD 80809
    • United States
    • Court of Appeal of Missouri (US)
    • March 20, 2018
    ...it, it is against the weight of the evidence, or it erroneously declares or applies the law." Bertocci v. Thoroughbred Ford, Inc. , 530 S.W.3d 543, 550 (Mo. App. W.D. 2017). "Whether the trial court should have granted a motion to compel arbitration is a question of law that is reviewed de ......

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