Houchins v. King Motor Co.

Decision Date06 July 2005
Docket NumberNo. 4D04-670.,4D04-670.
Citation906 So.2d 325
PartiesRonald Wayne HOUCHINS and Martha Romero-Huertas, Appellants, v. KING MOTOR COMPANY OF FORT LAUDERDALE, INC., Appellee.
CourtFlorida District Court of Appeals

Jerard C. Heller, Fort Lauderdale, for appellants.

Ricardo A. Reyes of Tobin & Reyes, P.A., Boca Raton, and Nancy W. Gregoire of Bunnell, Woulfe, Kirschbaum, Keller, McIntyre & Gregoire, P.A., Fort Lauderdale, for appellee.

WARNER, J.

Appellants challenge a non-final order granting King Motor Company's motion to compel arbitration. They raise several issues but the essential issues involve: first, whether King waived its right to arbitrate by filing a motion to dismiss for failure to state a cause of action prior to filing the demand for arbitration; and second, whether they were entitled to an evidentiary hearing to determine whether a valid arbitration agreement existed. We affirm on the first issue, finding that the filing of the motion to dismiss did not constitute a waiver of arbitration and the allegations in appellants' complaint show that they entered into an arbitration agreement. We reverse on the second issue finding that there was a dispute as to the validity of the arbitration agreement that King relied on in its motion to compel arbitration.

According to the allegations of the complaint, Ronald Houchins and his wife, Martha Romero-Huertas, went to King Motor Company to buy a new car. After finding the car they wanted, the salesman presented Houchins and Romero-Huertas with a "Buyer's Order," which listed them both as buyers. The front of the Buyer's Order, which is signed by Romero-Huertas as the "Buyer," Houchins as the "Co-Buyer," and one of King's managers, states in part:

This Buyer's Order, along with all documents in the "Delivery Package" shall set forth the entire agreement between the parties and shall supersede all other agreements between the parties (collectively, the Buyer's Order). . . . On a credit transaction the purchaser(s) offer is not accepted until (A) signed by a sales manager, (B) signed and acceptable by a Bank Lease Company or Finance Company, and (C) purchaser(s) and dealer have signed an installment sales contract. Further in a credit transaction the parties acknowledge and agree that all terms of said Installment sales contract along with any addendum or attachments thereto, shall be and hereby are, incorporated into this Buyer's Order by this reference.

Additionally, the back of the Buyer's Order contains several provisions, including paragraph eleven, which states, in part, "All disputes or claims between the parties shall be resolved by arbitration pursuant to the Arbitration Agreement executed by the parties."

In addition to signing the Buyer's Order, Houchins and Romero-Huertas executed an Installment Contract. The contract covered the balance of the amount due after application of the value of their used car trade-in. It reflected an annual percentage rate of interest of 5.9%.

Simultaneous with these documents, Romero-Huertas signed a "Delivery Package." At the bottom of the delivery package is an Arbitration Agreement that states, in part:

Buyer/lessee and dealer agree that all claims, demands, disputes or controversies of every kind or nature between them arising from, concerning or relating to any of the negotiations involved in the sale/lease, or financing of the vehicle, the terms and provision of the sale, lease, or financing agreements, the arrangement for financing, the purchase of insurance, extended warranties, service contracts or other products purchased as incident to the sale, lease or financing of the vehicle, the performance or condition of the vehicle, or any other aspects of the vehicle and its sale, lease, or financing shall be settled by binding arbitration, conducted pursuant to the provisions of the Federal Arbitration Act, 9 U.S.C. Section 1 et. seq. and according to the Commercial Arbitration Rules of the American Arbitration Association. . . . BUYER/LESSEE AND DEALER UNDERSTAND THAT THEY ARE AGREEING TO RESOLVE THE DISPUTES BETWEEN THEM DESCRIBED ABOVE BY BINDING ARBITRATION, RATHER THAN BY LITIGATION IN ANY COURT.

King informed Houchins and Romero-Huertas that they had been approved for the 5.9% APR financing. In reliance on this statement, Houchins and Romero-Huertas tendered their used car to King and accepted delivery of the new vehicle.

Three weeks later, King called the couple and told them that they needed to return to King's premises to sign additional paperwork. Upon arriving at King's dealership, King informed them that they were disapproved for financing at the 5.9% APR, but that they would be approved at 15.5% APR. Houchins and Romero-Huertas declined this offer and demanded their trade-in be returned to them in exchange for their new vehicle. King told them that their trade-in had been sold and failed to offer Houchins and Romero-Huertas any compensation for their sold trade-in. King also informed Houchins and Romero-Huertas that their new 2002 car would be repossessed unless they signed a new Buyer's Order, with a reduced balance of $20,955.10. As they alleged in their complaint, having no alternative, they signed a new Buyer's Order and Installment Contract. Displeased with the predicament that King had placed them in, they filed a complaint against King for violation of the Florida Deceptive and Unfair Trade Practices Act, breach of contract, violation of the Credit Services Organization Act, fraud in the inducement, and violations of the Motor Vehicle Retail Sales Finance Act.

King filed a motion to dismiss the complaint for failure to state a cause of action, on which the court scheduled a hearing. On the same day as the hearing, King also served a motion to compel arbitration. The court held the hearing and granted the motion to dismiss on several of the counts, some with leave to amend, and denied others. While the period to amend the complaint was pending, King scheduled a hearing on its motion to compel arbitration.

At the hearing on December 23, King asserted that the "Arbitration Agreement" was valid and its motion to dismiss did not waive its right to arbitrate. Houchins and Romero-Huertas countered that arbitration had been waived because of King's motion to dismiss. Additionally, they argued that there was no complaint pending because they had not filed their new complaint, and therefore this...

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