Curtis Green & Clay Green, Inc. v. Frazier

• Court: Kentucky Court of Appeals
• Writing for the Court: JONES, JUDGE
• Decision Date: 09 July 2021
• Docket Number: NO. 2020-CA-0781-MR,2020-CA-0781-MR
• Citation: Curtis Green & Clay Green, Inc. v. Frazier, NO. 2020-CA-0781-MR (Ky. Ct. App. Jul 09, 2021)
• Parties: CURTIS GREEN AND CLAY GREEN, INC., d/b/a GREEN'S TOYOTA OF LEXINGTON; AND JOHN HICKS APPELLANTS v. PHILLIP FRAZIER APPELLEE

CURTIS GREEN AND CLAY GREEN, INC., d/b/a GREEN'S TOYOTA OFLEXINGTON; AND JOHN HICKS APPELLANTS v. PHILLIP FRAZIER APPELLEE

NO. 2020-CA-0781-MR

Commonwealth of Kentucky Court of Appeals

JULY 9, 2021

TO BE PUBLISHED

APPEAL FROM POWELL CIRCUIT COURT

HONORABLE KENNETH R. PROFITT, JUDGE

ACTION NO. 19-CI-00246

OPINION

AFFIRMING

** ** ** ** **

BEFORE: JONES, MAZE, AND TAYLOR, JUDGES.

JONES, JUDGE: Curtis Green and Clay Green, Inc., d/b/a Green's Toyota of Lexington and its sales agent, John Hicks, (collectively referred to herein as "Green's Toyota") bring this interlocutory appeal pursuant to KRS¹ 417.220(1)(a)seeking review of the Powell Circuit Court's denial of their motion to compel arbitration of claims filed against them by the Appellee, Phillip Frazier. Having reviewed the record and being otherwise sufficiently advised, we affirm the Powell Circuit Court as set forth below.

I. BACKGROUND

On or about June 6, 2018, Frazier, who resides in Powell County, visited Green's Toyota in Lexington, Kentucky, where he purchased a 2018 Toyota Tundra pickup truck. John Hicks was the sales agent who sold the truck to Frazier. Frazier alleges that Hicks represented that the truck was a "new" vehicle with no prior damage. The truck's odometer showed it had been driven only 276 miles at the time of sale. Frazier agreed to purchase the truck for $46,205.38 plus fees and taxes for a total cash delivered price of $49,310.62. As part of the purchase, Frazier signed a one-page, motor vehicle purchase contract ("Purchase Contract"); a two-page "Applicable Contingency and Arbitration Agreement" ("Addendum"); and an acknowledgement of terms of sale form ("Acknowledgement").

The first paragraph of the Purchase Contract provides:

The undersigned purchaser(s) . . . agrees to purchase the following described vehicle (the "Vehicle") from Green's Toyota of Lexington (the "Dealer") on the following terms and conditions and on the additional terms and conditions set forth on the reverse side of this contract, (the "Contract") which by this reference are incorporated herein.

Record ("R.") at 25. The next section of the Purchase Contract described the vehicle by condition (new); year (2018); make (Toyota Truck); Model (Tundra); body style (Tundra Crew Max); color (super white); serial number (5TFDW5F16JX732459); stock number (181873); and mileage (276). The next section of the Purchase Contract contained a breakdown of the total cash delivered price; in this section, the vehicle price and the different fees and taxes were itemized separately and then totaled. R. at 25.

The following paragraph is contained on the first page of the Purchase Contract, two paragraphs above the signature line:

Purchaser has read and agreed to the terms on the reverse side, including the ARBITRATION AGREEMENT provided for in Paragraph 17. Purchaser represents and warrants to Dealer that Purchaser is 18 years of age or older and has full authority to make and enter into this contract; and hereby acknowledges receipt of a copy of this contract.

R. at 25 (emphasis in original).

The backside of the Purchase Contract contains separate numbered paragraphs. Paragraph 17 states:²

Any claim or dispute by Purchaser with Dealer arising out of or in any way relating to this Contract, any installment sale contract for the Vehicle, and any other agreements related to or provided herein, the Vehicle, thenegotiation and financing, and the sale by Dealer to Purchaser of the Vehicle, including, without limitation any claims involving fraud or misrepresentation, personal injuries, products liability, state or federal laws or regulations, affecting or establishing the rights of consumers (without limitation truth in lending laws or regulations or consumer protection laws acts and regulations) shall be resolved by binding arbitration administered by Better Business Bureau Serving Eastern and Central Kentucky, Inc., in accordance with its rules. Dealer and/or its assignee and Purchaser shall [illegible] and deliver all agreements reasonably necessary in connection with said arbitration. All arbitration proceedings shall be held in Lexington, Fayette County, Kentucky. The decision of the arbitrator(s) shall be final, conclusive, and binding on the parties to the arbitration, and neither shall institute any suit with regard to any such claim or dispute except to compel arbitration or enforce the arbitration or enforce the arbitration decision. Venue for any action to enforce this arbitration agreement or any arbitration decision shall be in Fayette County, Lexington, Kentucky, provided Dealer or its assignee may at its option bring or institute litigation in any state or federal court, against Purchaser and the Purchaser hereby consents to the jurisdictions of any such courts and by entry of a judgment of any such court against Purchaser in favor of Dealer seeking specific performance of Purchaser's obligations hereunder, for any violation of the Purchaser's representations and warranties provided for in paragraphs 3, 10, and 11 herein and/or any [illegible] sale contract for the vehicle between Dealer and its assignee and Purchaser.³

R. at 26.

As part of the sale, Frazier also signed the Addendum. The first paragraph of the Addendum states:

This Addendum is made a part of the Purchase Order dated this date between Green's Toyota of Lexington as Seller, and Phillip Frazier as Buyer/Lessor.

1. The Sales agreement of the parties for the Buyer's purchase/lease of the motor vehicle described herein is expressly contingent and conditional upon the occurrence of the following:

. . .

The Seller's successful arrangement of financing for the Buyer's/Lessor's acceptance of all the terms and conditions of the financing so arranged. The Seller's agreement of the Retail Installment Contract and acceptance by a lender making supervised consumer loans/leases.

R. at 14.

The next section of the Addendum states as follows:

II. Arbitration Agreement

Any claims or dispute arising out of or in any way relating to this Agreement, the negotiations, the financing, sale or lease of the vehicle which is the subject of the Agreement, including any claim involving fraud or misrepresentation, must be resolved by binding arbitration administered by the Better Business Bureau of Central and Eastern Kentucky, Inc., in accordance with its rules. All arbitration proceedings shall be held in Lexington, Kentucky. The decision of the arbitrator(s) will be final, conclusive and binding on the parties to the arbitration and no party shall institute any suit with regard to the claim or dispute except to enforce theaward. Each party shall advance its pro rata share of the costs and expenses of said arbitration proceedings and each shall separately pay its own attorney's fees and expenses. No party to this Agreement shall have the right to recover in any proceeding nor shall the arbitrators have the authority to award any party consequential or punitive damages.

R. at 14.

Lastly, Frazier signed a one-page, untitled document wherein he confirmed the terms and conditions of the sale. We refer to this document as the "Acknowledgement." The Acknowledgement's opening paragraph states:

IT IS OUR SINCERE DESIRE TO GIVE OUR CUSTOMERS THE FINEST POSSIBLE SERVICE. IT IS ALSO OUR DESIRE TO HAVE NO MISUNDERSTANDING REGARDING ANY PART OF THIS TRANSACTION. WE THEREFORE REQUEST THAT YOU THE CUSTOMER FILL OUT THE FOLLOWING QUESTIONS BEFORE TAKING DELIVERY OF THIS AUTOMOBILE.

R. at 15 (emphasis in original).

A series of statements, numbered one through twelve, follows this introductory paragraph. The last statement, number twelve, states:

12. ARBITRATION. Any claim or dispute arising out of or in any way relating to this contract, the negotiations, financing, sale or lease of the vehicle which is the subject of this contract, including any clam involving fraud or misrepresentation, must be resolved by binding arbitration administered by the Better Business Bureau of Central or [sic] Eastern Kentucky, Inc., in accordance with its rules. All arbitration proceedings shall be held in Lexington, Kentucky. Thedecision of the arbitrator(s) will be final, conclusive and binding on the parties to the arbitration and no party shall institute any suit with regards to any claim or dispute except to enforce the arbitration decision. Venue for any action to enforce this arbitration decision shall be in Fayette County Court, Lexington, Kentucky.

R. at 15.

After the parties completed the sales process, Frazier took delivery of the 2018 Tundra truck. On or about September 24, 2019, Frazier took the truck to Green's Toyota for routine maintenance. While there, Frazier saw another vehicle on the lot that piqued his interest. A salesman on the lot asked Frazier if he was interested in purchasing the new vehicle. Frazier indicated that he might be interested in it, and the two discussed the possibility that Frazier could trade in the 2018 Tundra truck for part of the purchase price of the other vehicle. The salesman proceeded to evaluate the 2018 Tundra truck for the purpose of determining its trade-in value.

Green's Toyota reported to Frazier that it could only offer him $31,000.00 for the trade-in despite the fact that Frazier had purchased it "new" the year prior for $49,310.62. The sales representative then told Frazier that the CARFAX report he ran revealed the 2018 Tundra truck had been wrecked prior to it being sold to Frazier, which depreciated its value. After further investigation, Frazier learned from Green's Toyota's general manager that employees at Green's Toyota had wrecked the 2018 Tundra truck on the lot before it was sold to Frazier.Green's Toyota repaired the damage but failed to disclose this fact to Frazier instead warranting to him that the vehicle was "new."

On December 15, 2019, Frazier filed a civil complaint against Green's Toyota and Hicks in Powell Circuit Court where Frazier resides. In his complaint, Frazier alleged: (1) Green's Toyota breached its contract...