Gregory Meridian Acquisition, LLC v. McFarland
| Docket Number | 2022-CA-00580-COA |
| Decision Date | 07 November 2023 |
| Parties | GREGORY MERIDIAN ACQUISITION, LLC D/B/A BMW OF MERIDIAN AND BABS HAIRSTON APPELLANTS v. FRANCES McFARLAND APPELLEE |
| Court | Mississippi Court of Appeals |
1
GREGORY MERIDIAN ACQUISITION, LLC D/B/A BMW OF MERIDIAN AND BABS HAIRSTON APPELLANTS
v.
FRANCES McFARLAND APPELLEE
No. 2022-CA-00580-COA
Court of Appeals of Mississippi
November 7, 2023
DATE OF JUDGMENT: 03/29/2022
CLARKE COUNTY CIRCUIT COURT HON. CHARLES W. WRIGHT, JR. TRIAL JUDGE
ATTORNEYS FOR APPELLANTS: J. RICHARD BARRY, GEORGE ELLIS ABDO, III ROBERT WILLIAM ARLEDGE, MARK C. CARROLL, RIMEN BRAR SINGH
ATTORNEYS FOR APPELLEE: WILLIAM C. HAMMACK, CHRISTOPHER MICHAEL FALGOUT, KATE SPRABERY DAVIS
BEFORE CARLTON, P.J., GREENLEE AND LAWRENCE, JJ.
LAWRENCE, J.
¶1. The instant case involves an alleged contract formed between Frances McFarland and Gregory Meridian Acquisition LLC ("BMW") with its employee Babs Hairston, acting as its sales agent, for the sale of a vehicle. In 2021, McFarland filed suit against both BMW and Hairston after making payments on a vehicle she never received. BMW filed a motion to dismiss or, alternatively, to compel arbitration. Hairston joined in the motion. The trial court entered an order denying this motion. BMW then filed a motion for reconsideration, which
was also denied. BMW appeals. Upon review, we affirm and remand.
FACTUAL BACKGROUND
¶2. Frances McFarland of Quitman, Mississippi, was interested in purchasing a vehicle in the fall of 2019. Following a referral from a friend, McFarland contacted salesperson Babs Hairston with BMW of Meridian. Hairston soon found a used Mercedes-Benz and brought the vehicle to McFarland's home on September 5, 2019. After a ride around town, McFarland indicated to Hairston that she wanted to purchase the vehicle. McFarland also informed Hairston that she was scheduled to depart Mississippi in the coming days for a surgery and an extended rehabilitation scheduled in Alabama.
¶3. On the following day, Hairston brought documents to McFarland's home requesting her signature. McFarland stated that "Hairston presented the documents . . . without explanation and showed [her] where to sign. [Hairston] said there were other documents which she could take care of handling." Hairston also told McFarland "not to include [her] middle initial" when signing and "did not give [McFarland] copies of the documents[.]" McFarland, in her sworn statement, stated that she does not know which documents Hairston presented for her to sign that day. The documents were allegedly signed by BMW through a now-deceased dealership representative with whom McFarland never made any direct contact. The dealership did not contact McFarland to verify that she actually signed the documents.
¶4. Initially, the vehicle was not delivered to McFarland. Hairston advised that it was
being serviced in Jackson and would be retained by BMW of Meridian until McFarland returned from her surgery. McFarland's stay in Alabama lasted approximately one month. When she returned to her home, the vehicle still had not been delivered. McFarland continued making monthly payments on the vehicle until January 2020 when she ceased all payments and contacted the offices of both the Attorney General and the Clarke County Sheriff. Following McFarland's complaints, the sheriff's office conducted an investigation and discovered the vehicle was at Hairston's residence.
PROCEDURAL HISTORY
¶5. On September 2, 2021, McFarland filed suit against BMW and Hairston in the Clarke County Circuit Court.[1] BMW filed a motion to dismiss or, alternatively, to compel arbitration or stay the proceedings on October 6, 2021. Hairston joined that motion in January 2022, additionally requesting that the court stay proceedings because she had been indicted and arraigned for motor vehicle theft due to her actions in the instant set of facts. McFarland responded to BMW and Hairston's motion asserting that she did not sign an arbitration agreement, and thus arbitration could not be compelled. She attached a sworn affidavit to her response, stating that upon reviewing documents released to her attorney from BMW, she was "convinced" that multiple documents "were not signed by [her]."
¶6. The circuit court held a hearing on the matter and entered an order detailing its
findings on March 29, 2022. In short, the court found that BMW and Hairston had failed to prove that an arbitration agreement existed with McFarland and denied their motion. BMW filed a motion to reconsider with the trial court. Another hearing was held, and the motion was denied on May 25, 2022.
ANALYSIS
¶7. BMW and Hairston now appeal, alleging that the issue of whether an arbitration agreement existed is not for the trial court to decide and that their motion for reconsideration requesting limited discovery should have been granted.[2]
I. Motion to Dismiss or Compel Arbitration
¶8. As for BMW's first argument, whether a party is bound by an arbitration agreement is generally considered an issue for the courts, not the arbitrator, "[u]nless the parties clearly and unmistakably provide otherwise." Greater Canton Ford Mercury Inc. v. Ables, 948 So.2d 417, 422 (¶12) (Miss. 2007) (quoting AT&T Techs. v. Commc'ns Workers of Am., 475 U.S. 643, 649 (1986)). This exception requires that the parties "explicitly agree[] that the question of arbitrability is to be decided by an arbitrator rather than the court." Id. BMW contends that its arbitration agreement with McFarland did just that, stating that "any claim
or dispute . . . including the arbitrability of the claim of dispute . . . shall, at your or our election, be resolved by neutral, binding arbitration and not by a court action."[3] However, McFarland asserts that her signature was forged on the contract and the arbitration agreement. "Under Mississippi law, to determine whether a valid arbitration agreement exists when a party objects to arbitration of a claim because it has not signed an agreement to arbitrate, the threshold question a court must consider is whether that party entered into a contractual agreement to arbitrate." JP&G LLC v. Voss, 331 So.3d 569, 579 (¶20) (Miss. Ct. App. 2021) (quoting Hancock Mech. LLC v. McClain Contracting, No. 1:17cv54-HSO-JCG, 2018 WL 702687, at *3 (S.D.Miss. Feb. 2, 2018)). We must first address whether an agreement to arbitrate existed.
¶9. Generally, we apply a two-prong inquiry to determine whether a party is bound to arbitration. Belhaven Senior Care LLC v. Smith, 359 So.3d 612, 616 (¶10) (Miss. 2023) (citing E. Ford Inc. v. Taylor, 826 So.2d 709, 713 (Miss. 2002)). The first prong asks two questions: whether there is a valid arbitration agreement, and whether the parties' dispute is
in the scope of that agreement. Id. If both questions are answered in the affirmative, we progress to the second prong and ask "whether legal constraints external to the parties' agreement foreclosed arbitration of those claims." Id.
¶10. In determining whether a valid arbitration agreement between parties exists, this Court applies the law of contracts. Adams Cmty. Care Ctr. LLC v. Reed, 37 So.3d 1155, 1158 (¶7) (Miss. 2010) (citing Grenada Living Ctr. LLC v. Coleman, 961 So.2d 33, 36-37 (Miss. 2007)). The elements necessary to form a contract are the following: "(1) two or more contracting parties, (2) consideration, (3) an agreement that is sufficiently definite, (4) parties with legal capacity to make a contract, (5) mutual assent, and (6) no legal prohibition precluding contract formation." Coleman, 961 So.2d at 37 (¶9) (citing Rotenberry v. Hooker, 864 So.2d 266, 270 (Miss. 2003)).
¶11. McFarland contends that she did not assent to the contract or arbitration agreement. Her initial complaint alleged that she "believe[d] that her signature [was] forged[.]" BMW and Hairston's motion to dismiss or compel arbitration contained nothing denying or refuting this allegation. In fact, the motion did not mention the assertion at all, instead only vaguely referring to McFarland's complaint "alleging fraud."[4] The motion concluded that McFarland
had "signed a valid agreement to arbitrate" and "clearly and unmistakably agreed to delegate any questions of arbitrability to the arbitrator."
¶12. McFarland responded to the motion to compel arbitration, arguing that she could not be bound to the terms of an agreement that she did not sign. She additionally submitted, under penalty of perjury, a signed and sworn affidavit stating that after reviewing the documents, she was "convinced that among other documents, the Retail Installment Contract - Simple Finance Charge (with Arbitration Provision) and the separate Arbitration Agreement . . . were not signed by [her]."[5] BMW largely argued in response that the question of whether McFarland was bound to arbitration should be reserved for the arbitrator. The response did not contain any evidence to contradict McFarland's affidavit.
¶13. The trial court explained in its...
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