Iappini v. Silverleaf Resorts, Inc.
Decision Date | 20 July 2015 |
Docket Number | No. 4:15 CV 695 RWS.,4:15 CV 695 RWS. |
Citation | 116 F.Supp.3d 932 |
Parties | Robert IAPPINI, et al., Plaintiffs, v. SILVERLEAF RESORTS, INC., Defendant. |
Court | U.S. District Court — Eastern District of Missouri |
Eric F. Kayira, Kayira Law, LLC, Clayton, MO, for Plaintiff.
Andrew P. Speicher, Timothy A. Daniels, Figari And Davenport, L.L.P., Dallas, TX, Charles W. Hatfield, John W. Moticka, Stinson And Leonard LLP, St. Louis, MO, for Defendant.
This Missouri Merchandising Practices Act (MMPA) class action is before me on defendantSilverleaf Resorts, Inc.(Silverleaf)'s motion to compel arbitrations and dismiss without prejudice, or alternatively to stay the action pending arbitration.Plaintiffs Robert and Lilly Iappini brought suit individually and on behalf of a purported class of consumers who purchased time-share units located in Missouri from Silverleaf after January 1, 2010.Plaintiffs allege that Silverleaf used deceptive and misleading tactics to induce them to purchase timeshare units and that they attempted but were unable to timely cancel their time-share purchases because Silverleaf "clogged" their right to cancel by not answering their phones during the contractual cancellation period.Plaintiffs seek damages under the MMPA as well as the rescission of their time-share contracts.
The written contracts between Plaintiffs and Silverleaf include an Arbitration Addendum governed by the Federal Arbitration Act (FAA),9 U.S.C. §§ 1 et seq.The Arbitration Addendum appears to compel binding arbitration for any disputes arising out of or relating to the contracts or the parties' relationships.The Arbitration Addendum also contains what appears to be a class action waiver, requiring all claims to be arbitrated on an individual basis.
Silverleaf now moves to compel individual arbitration of all of Plaintiffs' claims.Plaintiffs oppose the motion, arguing that 1) the class action waiver is ambiguous, 2) the class action waiver is unenforceable because it is substantively and procedurally unconscionable, and 3) Plaintiff's claims fall under the FAA's savings clause and should not be subject to arbitration.For the reasons that follow, I find that the arbitration agreements are unambiguous, enforceable, and applicable to all of Plaintiffs' claims.As a result, I will compel individual arbitrations and will dismiss this suit without prejudice.
The Federal Arbitration Act (FAA),9 U.S.C. §§ 1 et seq.,"establishes a liberal federal policy favoring arbitration."Torres v. Simpatico, Inc.,781 F.3d 963, 968(8th Cir.2015)(quotingAT & T Mobility LLC v. Concepcion,563 U.S. 333, 131 S.Ct. 1740, 1748, 179 L.Ed.2d 742(2011) )."[T]he FAA limits a district court's initial role in any challenge to an arbitration agreement to deciding whether 'the making of the agreement for arbitration or the failure to comply therewith' is at issue."MedCam, Inc. v. MCNC,414 F.3d 972, 974(8th Cir.2005)(quoting9 U.S.C. § 4 )."[The United States Court of Appeals for the Eighth Circuit] has refined this inquiry to asking 1) whether the agreement for arbitration was validly made and 2) whether the arbitration agreement applies to the dispute at hand, i.e., whether the dispute falls within the scope of the arbitration agreement."Id.(emphasis in original);see alsoTorres,781 F.3d at 968–69.
An arbitration agreement's scope is interpreted literally, with any doubts resolved in favor of arbitration.MedCam,414 F.3d at 975.A district court should compel arbitration "unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute."Id.(internal quotations omitted).
"Because 'arbitration is a matter of contract,' whether an arbitration provision is valid is a matter of state contract law, and an arbitration provision may be 'invalidated by generally applicable contract defenses, such as fraud, duress, or unconscionability, but not by defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.' "Torres v. Simpatico, Inc.,781 F.3d 963, 968–69(8th Cir.2015)(quotingConcepcion,131 S.Ct. at 1745–46 )(internal quotations omitted).Under Missouri law, "arbitration agreements are tested through a lens of ordinary state-law principles that govern contracts, and consideration is given to whether the arbitration agreement is improper in light of generally applicable contract defenses .... such as fraud, duress, or unconscionability."Robinson v. Title Lenders, Inc.,364 S.W.3d 505, 515(Mo.2012)."If a valid and enforceable arbitration agreement exists under state-law contract principles, any dispute that falls within the scope of that agreement must be submitted to arbitration."Torres,781 F.3d at 968–69(citingFaber v. Menard,367 F.3d 1048, 1052(8th Cir.2004) )."[N]o state-law rule that is 'an obstacle to the accomplishment of the FAA's objectives' should be applied to invalidate an arbitration agreement."Robinson v. Title Lenders, Inc.,364 S.W.3d at 515(quotingConcepcion,131 S.Ct. at 1748 ).
Plaintiffs do not dispute that their claims falls within the scope of the Arbitration Addendum.Rather, Plaintiffs argue that the class action waiver in the Arbitration Addendum is invalid for unconscionability.
The Arbitration Addendum states, in relevant part:
Plaintiffs argue that the class action waiver in the Arbitration Addendum is ambiguous and should be interpreted in their favor.Specifically, Plaintiffs argue that the first sentence of paragraph 4 is ambiguous, which states, "You and we also agree that no Claim shall be arbitrated on a class action, private attorney general or other representative action basis."Despite arguing elsewhere in their brief that the class action waiver "effectively bans" their ability to bring a class action, Plaintiffs contend in the context of this argument that they"interpret this inconspicuously drafted provision to mean that class action litigation is not subject to arbitration."
Contract interpretation is a matter of law.Robbins v. McDonnell Douglas Corp.,27 S.W.3d 491, 496(Mo.Ct.App.2000).In interpreting a contract, a court must not "unreasonably distort the language of a policy or exercise inventive powers for the purpose of creating an ambiguity when none exists."Todd v. Mo. United Sch. Ins. Council,223 S.W.3d 156, 163(Mo.2007).Robbins v. McDonnell Douglas Corp.,27 S.W.3d 491, 496(Mo.Ct.App.2000)(citingChehval v. St. John's Mercy Med. Ctr.,958 S.W.2d 36, 39(Mo.Ct.App.1997) )."In determining the intent of the parties to a contract, we review the terms of a contract as a whole, not in isolation."Tuttle v. Muenks,21 S.W.3d 6, 11(Mo.Ct.App.2000).
Applying these principles, and after carefully reviewing the Arbitration Addendum as a whole, I find that the class action waiver is unambiguous.The sentence in paragraph 4 that Plaintiffs quote is not a model of clarity.However, when it is read together with the rest of the paragraph, its meaning is clear.The entirety of paragraph 4 provides:
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...that they are unconscionable under the circumstances existing when the parties made the contract."); Iappini v. Silverleaf Resorts, Inc., 116 F. Supp. 3d 932, 941-42 (E.D. Mo. 2015) (citing Eaton v. CMH Homes, Inc., 461 S.W.3d 426, 433 (Mo.2015) (quoting Aden v. Dalton, 341 Mo. 454, 107 S.W......
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...all the claims against all parties are subject to arbitration, dismissal of the action is proper." Iappini v. Silverleaf Resorts, Inc., 116 F. Supp. 3d 932, 943 (E.D. Mo. 2015) (citing Stifel, Nicolaus & Co. v. Freeman, 924 F.2d 157, 158 (8th Cir. 1991)). Therefore, I will grant DNCS' reque......
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...all the claims against all parties are subject to arbitration, dismissal of the action is proper." Iappini v. Silverleaf Resorts, Inc., 116 F. Supp. 3d 932, 943 (E.D. Mo. 2015) (citing Stifel, Nicolaus & Co. v. Freeman, 924 F.2d 157, 158 (8th Cir. 1991)). Therefore, the Court will grant Def......
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...it is clear that all issues are arbitrable here, I will dismiss Frazier's claims without prejudice. See Iappini v. Silverleaf Resorts, Inc., 116 F. Supp. 3d 932, 943 (E.D. Mo. 2015) ("[W]here all the claims against all parties are subject to arbitration, dismissal of the action is proper.")......