Chatman v. Jimmy Gray Chevrolet, Inc.

• Decision Date: 12 September 2016
• Docket Number: CIVIL ACTION NO. 3:16-cv-00008-GHD-SAA
• Parties: DANIELLE CHATMAN PLAINTIFF v. JIMMY GRAY CHEVROLET, INC. and JOHN DOES 1-10 DEFENDANTS
• Court: U.S. District Court — Northern District of Mississippi

DANIELLE CHATMAN PLAINTIFF v. JIMMY GRAY CHEVROLET, INC. and JOHN DOES 1-10 DEFENDANTS

CIVIL ACTION NO. 3:16-cv-00008-GHD-SAA

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF MISSISSIPPI OXFORD DIVISION

September 12, 2016

MEMORANDUM OPINION GRANTING DEFENDANT'S MOTION TO COMPEL ARBITRATION

Presently before the Court is Defendant Jimmy Gray Chevrolet, Inc.'s motion to compel arbitration [7]. Upon due consideration, the Court finds that the motion should be granted.

I. Factual and Procedural Background

On January 8, 2016, Plaintiff Danielle Chatman ("Plaintiff") filed this suit against Defendant Jimmy Gray Chevrolet, Inc. ("Defendant") and ten fictitious defendants. The following facts are not in dispute: Defendant is an automobile dealership in Southaven, Mississippi. Pl.'s Compl. [1] ¶ 5; Def.'s Answer [4] ¶ 5. On a visit, Plaintiff decided to purchase a 2015 Chevrolet Camaro (the "Camaro") from Defendant. Pl.'s Compl. ¶ 9; Def.'s Answer [4] ¶ 9. Several days later, Plaintiff returned to Defendant to finalize the purchase of the Camaro. Pl.'s Compl. [1] ¶ 10; Def.'s Answer [4] ¶ 10. Plaintiff's mother was present as co-signor. Pl.'s Compl. [1] ¶ 12; Def.'s Answer [4] ¶ 12. A salesman of Defendant, James M. Colson III, took information on Plaintiff's and her mother's proof of employment and residence. Pl.'s Compl. [1] ¶ 13; Def.'s Answer [4] ¶ 13. Plaintiff and her mother signed a finance or purchase application for the Camaro. Pl.'s Compl. [1] ¶ 17; Def.'s Answer [4] ¶ 17. Defendant and Plaintiff entered into a civil contractual agreement to purchase the Camaro. Pl.'s Compl. [1] ¶¶ 76, 120; Def.'s Answer [4] ¶¶ 76, 120. This document was entitled "Retail Installment Sale Contract - Simple Finance Charge (With Arbitration Provision)" and will be hereinafter referred to as the "Sales Agreement." Defendant accepted Plaintiff's down payment of Five Thousand Five Hundred Dollars ($5,500). Pl.'s Compl. [1] ¶¶ 77, 121; Def.'s Answer [4] ¶¶ 77, 121. Colson gave Plaintiff and her mother copies of the paperwork and the keys to the Camaro. Pl.'s Compl. [1] ¶¶ 19, 121; Def.'s Answer [4] ¶¶ 19, 121. Several days later, Defendant contacted Plaintiff and requested that she bring in another form of proof of residence; she did; Defendant subsequently contacted her to request that she bring in an additional form of proof of residence; she returned with another form of proof of residence. Pl.'s Compl. [1] ¶¶ 21-26; Def.'s Answer [4] ¶ 21-26. Defendant informed Plaintiff that the phone number given for Plaintiff's mother's employer was incorrect. Pl.'s Compl. [1] ¶ 32; Def.'s Answer [4] ¶ 32. Upon Plaintiff's departure in the Camaro, Defendant contacted the Southaven Police Department. Pl.'s Compl. [1] ¶ 41; Def.'s Answer [4] ¶ 41. Subsequently, Kevin Smith, an employee of Defendant, spoke with Detective Seth Kern of the Southaven Police Department. Pl.'s Compl. [1] ¶ 46; Def.'s Answer [4] ¶ 46. Smith filed a police report against Plaintiff which included Smith's affidavit. Pl.'s Compl. [1] ¶¶ 80, 124; Def.'s Answer [4] ¶¶ 80, 124. The Southaven Police Department retrieved the Camaro from Plaintiff and returned it to Defendant. Pl.'s Compl. [1] ¶ 65; Def.'s Answer [4] ¶ 65. The Desoto County grand jury returned a single-count indictment against Plaintiff for the unlawful taking of a motor vehicle. Pl.'s Compl. [1] ¶¶ 83, 127; Def.'s Answer [4] ¶¶ 83, 127. These charges were later dropped. Pl.'s Compl. [1] ¶¶ 71-72; Def.'s Answer [4] ¶ 72.

Plaintiff alleges that Defendant issued false statements to the Southaven Police Department and falsely instituted criminal proceedings against Plaintiff on the charge of automobile theft dueto Defendant's failure to thoroughly verify Plaintiff's mother's employment or provide ample time to give additional proof of residence and employment. Pl.'s Compl. ¶ 73. Plaintiff avers that as a result of the charges brought by Defendant against her, she was arrested by the Memphis Police Department and was incarcerated for five days in the Desoto County Jail until she could obtain money for bail. Id. ¶¶ 66-68. Plaintiff further avers that the prosecuting attorney ultimately dismissed the charges due to insufficient evidence. Id. ¶ 72.

Plaintiff asserts numerous state law causes of action against Defendant, including malicious prosecution, negligence, gross negligence, intentional infliction of emotional distress, defamation, civil conspiracy, civil assault and battery, false arrest/false imprisonment, abuse of process, and breach of contract. She brings her case in federal court on the basis of diversity jurisdiction, alleging that she is a citizen of Tennessee and Defendant is a citizen of Mississippi, being a Mississippi corporation with its principal place of business in Mississippi.

On February 10, 2016, Defendant filed an answer [4] to the complaint [1]. Subsequently, on February 29, 2016, Defendant filed the present motion to compel arbitration [7]. Plaintiff filed a response in opposition [13], and Defendant filed a reply [16]. The matter is now ripe for review.

II. Analysis and Discussion

Defendant moves the Court to compel arbitration under 9 U.S.C. § 4 of the Federal Arbitration act (the "FAA") based on an arbitration agreement contained in the Sales Agreement, and specifically argues, inter alia, that the arbitration agreement contains a delegation clause that requires that an arbitrator decide gateway issues including whether the claims at issue are arbitrable under the terms of the arbitration agreement. Defendant further moves the Court to enter a final judgment of dismissal terminating this litigation and enjoining Plaintiff fromattempting to judicially prosecute any claims against Defendant until the arbitration is concluded and confirmed.

Plaintiff argues that the Court should deny the motion to compel arbitration and specifically argues that Defendant waived its right to arbitration and further that the delegation clause in the arbitration agreement is unconscionable. Plaintiff alternatively argues that the Court should hold an evidentiary hearing or allow discovery prior to ruling on the motion. Upon consideration of the issues presented in the motion, the Court is of the opinion that an evidentiary hearing or discovery would be superfluous; the issues presented can be answered upon review of the motion papers, pleadings, attachments, and relevant authorities, as indicated below.

In 1925, Congress enacted the FAA in response to the longstanding, widespread judicial hostility to arbitration agreements that existed at English common law and was adopted by American courts. See, e.g., Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24, 111 S. Ct. 1647, 114 L. Ed. 2d 26 (1991); Am. Bankers Ins. Co. of Fla. v. Inman, 436 F.3d 490, 492-93 (5th Cir. 2006).¹ "The FAA provides that a 'written provision in . . . a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.' " Marmet Health Care Cir., Inc. v. Brown, — U.S. —, —, 132 S. Ct. 1201, 1203, 182 L. Ed. 2d 42 (Feb. 21, 2012) (quoting 9 U.S.C. § 2). The FAA reflects an "emphatic federal policy in favor of arbitral dispute resolution." Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 631, 105 S. Ct. 3346, 87 L. Ed. 2d 444 (1985). However, the FAA

does not mandate the arbitration of all claims, but merely the enforcement—-upon the motion of one of the parties—of privately negotiated arbitration agreements. The House Report accompanying the [FAA] makes clear that its purpose was to place an arbitration agreement 'upon the same footing as other contracts, where it belongs,' H.R. Rep. No. 96, 68th Cong., 1st Sess., 1 (1924), and to overrule the judiciary's longstanding refusal to enforce agreements to arbitrate.

Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 219-20, 105 S. Ct. 1238, 84 L. Ed. 2d 158 (1985). Because " 'arbitration is a matter of contract,' " courts must " 'rigorously enforce arbitration agreements according to their terms.' " Hendricks v. UBS Fin. Servs., Inc., 546 F. App'x 514, 517 (5th Cir. 2013) (per curiam) (quoting Am. Express Co. v. Italian Colors Rest., — U.S. —, —, 133 S. Ct. 2304, 2309, 186 L. Ed. 2d 417 (2013) (citation and internal quotation marks omitted)). Thus, arbitration may be compelled only if the parties agreed to arbitrate the dispute in question. See 9 U.S.C. § 4; Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 67-68, 130 S. Ct. 2772, 177 L. Ed. 2d 403 (2010); VT Halter Marine, Inc. v. Wartsila N. Am., Inc., 511 F. App'x 358, 360 (5th Cir. 2013) (per curiam) (citing Pennzoil Expl. & Prod. Co. v. Ramco Energy Ltd., 139 F.3d 1061, 1064 (5th Cir. 1998) (citing AT&T Techs., Inc. v. Commc'ns Workers of Am., 475 U.S. 643, 648, 106 S. Ct. 1415, 89 L. Ed. 2d 648 (1986))).

The Court now turns to the merits of the motion to compel arbitration and whether the parties have agreed to arbitrate this particular claim. In the case sub judice, the Court must determine "first, whether the parties entered into a valid agreement to arbitrate some set of claims; and second, whether that agreement . . . contain[s] a delegation clause that requires that this claim go to arbitration for gateway rulings on threshold arbitrability issues." See Kubala v. Supreme Prod. Servs., Inc., No. 15-41507, --- F.3d ---, ---, 2016 WL 3923866, at *2 (5th Cir. July 20, 2016); see Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444, 452, 123 S. Ct. 2402, 156 L. Ed. 2d 414 (2003).In deciding these issues, the Court applies "generally-applicable rules of contract interpretation and enforcement." See Baldwin v. Cavett, 502 F. App'x 350, 353 (5th Cir. 2012) (per curiam); see also 9 U.S.C. § 2; First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944, 115 S. Ct. 1920, 131 L. Ed. 2d 985 (1995). Altho...