Greenpoint Credit, L.L.C. v. Reynolds

• Decision Date: 09 November 2004
• Docket Number: No. 26134.,26134.
• Citation: 151 S.W.3d 868
• Parties: GREENPOINT CREDIT, L.L.C., Appellant, v. Vernon REYNOLDS and Mary Nations, Respondents.
• Court: Missouri Court of Appeals

151 S.W.3d 868

GREENPOINT CREDIT, L.L.C., Appellant, v. Vernon REYNOLDS and Mary Nations, Respondents.

No. 26134.

Missouri Court of Appeals, Southern District, Division Two.

November 9, 2004.

Motion for Rehearing or Transfer to Supreme Court Denied November 30, 2004.

Application for Transfer Denied January 25, 2005.

David G. Wasinger, James S. Cole, Murphy Wasinger, L.C., St. Louis, John Holstein, Shughart Thompson & Kilroy, P.C., Springfield, for appellant.

Jeffrey L. Dull, Christopher S. Hite, Matthew D. Lowe, Dull, Hite & Lowe, L.L.C., Clinton, for respondents.

JOHN E. PARRISH, Presiding Judge.

GreenPoint Credit, L.L.C. (GreenPoint) appeals a judgment and order denying a motion to compel arbitration. See § 435.440.1(1).¹ This court affirms in part, reverses in part, and remands with directions.

In December 1999, GreenPoint and Vernon Reynolds entered into a contract by which Reynolds purchased a manufactured home.² The contract provided that Reynolds would pay GreenPoint $360.95 per month for a period of 240 months, beginning January 20, 2000. The contract granted GreenPoint a security interest in the property. GreenPoint was given the right to repossess the property if Reynolds defaulted. The contract provided that "default" included failure to make any payment when due. GreenPoint perfected its security interest in the property by recording it on the certificate of title to the manufactured home.

On October 11, 2002, GreenPoint filed a petition for replevin of the manufactured home in the Circuit Court of Hickory County, the county in which the manufactured home was located. The petition named Vernon Reynolds and Mary Nations as defendants. It alleged that Mary Nations was in possession of the property GreenPoint sought to replevy. A replevin bond was filed and approved by the trial court and an order of replevin entered.

Reynolds and Nations answered and counterclaimed. They denied Reynolds had defaulted in making payments under the terms of the contract. They alleged various affirmative defenses and asserted six counterclaims. Reynolds filed counterclaims for "wrongful replevin and conversion" (Count I), "fraud and fraudulent misrepresentations" (Count II), "abuse of process" (Count III), and "defamation" (Count VI). Nations filed counterclaims for "wrongful replevin and conversion" (Count IV) and "invasion of privacy" (Count V).

GreenPoint filed a motion to compel arbitration based on a provision in its contract with Reynolds that provided:

a. Arbitration. You and I agree to arbitrate any and all (1) disputes, torts, counterclaims, or any other matter in question between you and I arising out of, in connection with, or in any way relating to this Agreement ("Claims") (including whether a Claim must be arbitrated) and (2) any Claims arising out of, in connection with, or relating to a transaction involving you and I and one or more third parties who have not signed this Agreement which a third party elects to arbitrate ("Third Party Claims"). However, neither you or I can require the other to arbitrate (1) any proceeding in which a lien holder may acquire or convey title to or possession of any property which is security under this Agreement, or (2) an application by or on behalf of me for relief under the federal bankruptcy laws or any other similar laws of general application for the relief of debtors. Enforcement of this exception to arbitration at any time will not waive the right to arbitrate any other Claim or Third Party Claim, including those asserted as a counterclaim in a lawsuit under this exception to arbitration.

The trial court denied the motion finding:

First, the contract is a preprinted contract that is adhesive in nature. Second, the contract lacks mutuality in that it allows [GreenPoint] to pursue certain state court remedies, but precludes [Reynolds and Nations] from pursuing their claims in state court. Finally, by bringing this replevin in state court, [GreenPoint] is estopped from asserting the arbitration provision against [Reynolds and Nations].

GreenPoint's Brief

GreenPoint raises one point on appeal. It states:

The circuit court erred in denying [GreenPoint's] motion to compel arbitration, because arbitration of [Reynolds' and Nations'] counterclaims was mandated in that (1) the Federal Arbitration Act governs, and (2) on the record presented, the arbitration agreement is valid and enforceable.

Rule 84.04(d)(1) states requirements for points on appeal directed to decisions of trial courts. A point relied on must (1) identify the trial court ruling being challenged; (2) state concise legal reasons for the claim of error; and (3) explain in summary fashion, in the context of the case, what supports the legal reasons stated. GreenPoint's point complies with requirements (1) and (2); however, it fails to provide the information required by (3), viz., in what manner, in the context of the case, the record before the trial court failed to support the legal reasons GreenPoint claims resulted in error.

An insufficient point on appeal preserves nothing for appellate review. Tidball v. A.G. Service Center, L.C., 75 S.W.3d 850, 853 (Mo.App.2002). However, "[w]hether to dismiss an appeal for deficiencies in an appellant's brief is discretionary." Keeney v. Missouri Highway and Transp. Com'n., 70 S.W.3d 597, 598 n. 1 (Mo.App.2002). "That discretion is generally not exercised unless the deficiency impedes disposition on the merits." Id."A brief impedes disposition on the merits where it is so deficient that it fails to give notice to [the court] and to the other parties as to the issue presented on appeal." Wilkerson v. Prelutsky, 943 S.W.2d 643, 647 (Mo. banc 1997). Having considered the argument portion of GreenPoint's appellant's brief and having received no objection from respondents, this court concludes the deficiency does not prevent the court or the other parties from identifying the issue presented; that it is appropriate to address GreenPoint's allegation of error on the merits.

Enforceability of Arbitration Agreements

GreenPoint argues the trial court applied Missouri law; that it did not apply the Federal Arbitration Act. The only reference to applicable law in the order that has been appealed appears in the last sentence of the last paragraph. The printed text of the paragraph (which appears to be a proposed order provided by GreenPoint) states, before editing by the trial court, "This Court hereby orders [GreenPoint's] Motion to Compel Arbitration is [sic] denied. Pursuant to R.S.Mo § 435.440 and 9 U.S.C. § 16, this constitutes an appealable order." The trial court modified the proposed order by delineation, drawing a line through the words "and 9 U.S.C. § 16." GreenPoint seems to suggest that this is a determination by the trial court that the Federal Arbitration Act does not apply.³

The Federal Arbitration Act applies to contracts involving interstate commerce. Triarch Industries, Inc. v. Paul A. Crabtree d/b/a Crabtree Painting, Inc., ___ S.W.3d ___, No. 61578, p. 3, 2004 WL 941218 (Mo.App.W.D. filed May 4, 2004). "[I]nvolving [interstate] commerce" is the functional equivalent of "affecting commerce." Id. The contract in this case specifies that arbitration will be governed by the Federal Arbitration Act. Further, the title to the manufactured home identifies GreenPoint's address as San Diego, California. Antonio Siso, legal department manager for GreenPoint, according to his affidavit in support of replevin, resides in Georgia. The contract was assigned to Bank One National Association. Clearly, the contract that GreenPoint entered into with Reynolds affects interstate commerce.

Before a court may compel arbitration pursuant to the Federal Arbitration Act, it must determine whether a valid agreement to arbitrate exists between the parties and whether the substance of the disputes are issues of the type required to be arbitrated. Dunn Indus. Group, Inc. v. City of Sugar Creek, 112 S.W.3d 421, 427-28 (Mo. banc 2003). "A court must compel arbitration if it determines that the parties agreed to arbitrate the dispute." Id. at 428, citing Houlihan v. Offerman & Co., Inc., 31 F.3d 692, 695 (8th Cir.1994). The issue, therefore, becomes whether the disputes between the parties to this action are within the parameters of the arbitration provision of the contract. Whether a dispute is covered by an arbitration provision is a question of law. Dunn, supra. "An appellate court's review of the arbitrability of a dispute is de novo." Id.

Who Was Bound by the Contract?

The parties to the contract that contains the arbitration clause are Vernon Reynolds and GreenPoint. Reynolds is identified in the contract as "borrower." GreenPoint is identified as "lender." Mary Nations is not a party to the agreement.

Arbitration is a matter of contract and absent an agreement to arbitrate, a person cannot be compelled to do so. Dunn, supra, at 435. See also Greenwood v. Sherfield, 895 S.W.2d 169, 174 (Mo.App.1995). A non-signatory party to an arbitration agreement can, however, be bound by the agreement if he or she is an agent of a signing party or is a third-party beneficiary of the contract. See Byrd v. Sprint Comm. Co., L.P., 931 S.W.2d 810 813-15 (Mo.App.1996). There is no contention that Mary Nations was an agent of a signing party. GreenPoint contends, however, that it was apparent that acquisition of the manufactured home was for Ms. Nations; that, therefore, she was an intended beneficiary of the contract.

The problem with GreenPoint's assertion is that "[i]n determining whether [a party] was a third-party beneficiary to the contract, `the question of intent is paramount ... [and] is to be gleaned from the four corners of the contract [.]' "Wilson v. General Mortgage Co., 638 S.W.2d 821, 823 (Mo.App.1982) (emphasis added), quoting Laclede Inv. Corp. v. Kaiser, 596 S.W.2d 36, 41 (Mo.App.1980). The contract expressed no intent to benefit Ms. Nations individually or...