Locklear Auto. Grp., Inc. v. Hubbard

• Decision Date: 29 September 2017
• Docket Number: 1160335, 1160336, 1160337, 1160375, 1160435, 1160436 and 1160437
• Citation: 252 So.3d 67
• Parties: LOCKLEAR AUTOMOTIVE GROUP, INC. v. Brad HUBBARD Locklear Automotive Group, Inc. v. Jeremy Averette Locklear Automotive Group, Inc. v. Carol Fuller Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive Group, Inc. v. Anthony Hood Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive Group, Inc. v. Jeffery Lollar and Betsy Lollar Locklear Automotive Group, Inc. v. Elizabeth Montana Booth Locklear Automotive Group, Inc. v. Dorothea Williams
• Court: Alabama Supreme Court

252 So.3d 67

LOCKLEAR AUTOMOTIVE GROUP, INC.

v.Brad HUBBARD

Locklear Automotive Group, Inc.

v.Jeremy Averette

Locklear Automotive Group, Inc.

v.Carol Fuller

Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive Group, Inc.

v.Anthony Hood

Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive Group, Inc.

v.Jeffery Lollar and Betsy Lollar

Locklear Automotive Group, Inc.

v.Elizabeth Montana Booth

Locklear Automotive Group, Inc.

v.Dorothea Williams

1160335, 1160336, 1160337, 1160375, 1160435, 1160436 and 1160437

Supreme Court of Alabama.

September 29, 2017

John Martin Galese and Cassandra Harris Kalupa of Galese & Ingram, P.C., Birmingham, for appellants.

Silas G. Cross, Jr., and Justin L. Smith of Cross & Smith, LLC, Tuscaloosa; and Jeffrey T. Kelly of Lanier Ford Shaver & Payne, P.C., Huntsville, for appellees Brad Hubbard, Jeremy Averette, Carol Fuller, Elizabeth Montana Booth, and Dorothea Williams.

Christopher J. Zulanus, James W. Moss, and Ashley L. Crank of Friedman, Dazzio, Zulanas & Bowling, P.C., Birmingham, for appellees Jeffery Lollar, Betsy Lollar, and Anthony Hood.

MURDOCK, Justice.

Before us are appeals from denials of motions to compel arbitration filed by Locklear Chrysler Jeep Dodge, LLC ("Locklear CJD"), and Locklear Automotive Group, Inc. ("Locklear Group"), in actions filed by plaintiffs who alleged that they were victims of identity theft resulting from personal information they had provided Locklear CJD in order to explore the possibility of financing the purchase of a vehicle from Locklear CJD. In case no. 1160435, we affirm the order of the trial court denying the motion to compel arbitration; in the other appeals, we reverse the trial court's orders and remand the causes.

I. Facts

All the plaintiffs in these cases purchased vehicles from Locklear CJD. All the plaintiffs signed an arbitration agreement as part of their vehicle purchases; the operative language of those arbitration agreements is the same. And all the plaintiffs alleged that they were the victims of identity theft that resulted from providing personal information to Locklear CJD when they filled out credit applications for the vehicle purchases.

In addition to naming Locklear CJD as a defendant, the plaintiffs' complaints named multiple other defendants who they alleged played a part in the identity thefts. Among the other defendants named is Locklear Group. According to an affidavit from Christopher S. Locklear, Sr., vice president of Locklear CJD, Locklear Group "is the sole member of Locklear Chrysler Jeep Dodge, LLC."

The arbitration agreement signed by each plaintiff is titled "Binding Pre–Dispute Arbitration Agreement" ("the arbitration agreement"), and its operative language is as follows:

"In connection with the undersigned's acquisition or attempted acquisition of the below described vehicle, by lease, rental, purchase or otherwise, the undersigned and the dealer whose name appears below, stipulate and agree, in connection with the resolution of any dispute arising out of, or relating to, resulting from or concerning any contracts or agreements, or agreements or contracts to be entered into by the parties, all alleged representations, promises and covenants, issues concerning compliance with any state or federal law or regulation, and all relationships resulting therefrom, as follows: That the vehicle, services, and products (hereinafter ‘products’) involved in the acquisition or attempted acquisition are regulated by the laws of the United States of America; and/or, that the contract(s) and agreements entered into by the parties concerning said products evidence transactions and business enterprises substantially involving and affecting interstate commerce sufficiently to invoke the application of the Federal Arbitration Act, 9 U.S.C. § 1, et seq. The undersigned agree that all disputes not barred by applicable statutes of limitations, resulting from, arising out of, relating to or concerning the transaction entered into or sought to be entered into (including but not limited to: any matters taking place either before or after the parties entered into this agreement, including any prior agreements or negotiations between the parties; the terms of this agreement and all clauses herein contained, their breadth and scope, and any term of any agreement contemporaneously entered into by the parties; the past, present and future condition of any products at issue; the conformity of the products to any contract description; the representations, promises, undertakings, warranties or covenants made by the dealer, its agents, servants, employees, successors and assigns, or otherwise dealing with the products; any lease, sale or rental terms or the terms of credit and/or financing in connection therewith; or compliance with any state or federal laws; any terms or provisions of any insurance sought to be purchased or purchased simultaneously herewith; any terms or provisions of any extended service contract sought to be purchased or purchased simultaneously herewith) shall be submitted to BINDING ARBITRATION, pursuant to the provisions of 9 U.S.C. § 1, etseq. and according to the Commercial Dispute Resolution procedures and/or consumer protocol (depending on the amount in controversy) of the American Arbitration Association (the AAA) then existing in the county where the transaction was entered into or sought to be entered into, except as follows: (a) In all disputes in which the matter in controversy (including compensatory and punitive damages, fees and costs) is more than $10,000 but less than $75,000.00, one arbitrator shall be selected in accordance with the AAA's Consumer Protocol. In all disputes in which the matter in controversy (including compensatory and punitive damages and fees and costs) is $75,000.00 or more, the parties to this agreement shall select an arbitrator under the AAA's Commercial Rules and shall select one arbitrator from a list of at least 5 suitable arbitrators supplied by the AAA in accordance with and utilizing the AAA strike method. (b) An arbitrator so selected shall be empowered to enter an award of such damages, fees and costs, and grant such other relief, as is allowed by law. The arbitrator has no authority or jurisdiction to enter any award that is not in conformance with controlling law. Any party to this agreement who fails or refuses to arbitrate in accordance with the terms of this agreement may, in addition to any other relief awarded, be taxed by the arbitrator with the costs, including reasonable attorney's fees, of any other party who had to resort to judicial or other relief in compelling arbitration. In the event the dealer and the undersigned customer(s) have entered into more than one arbitration agreement concerning any of the matters identified herein, the undersigned customers and the dealer agree that the terms of this arbitration agreement shall control disputes between and among them. Any provision in this Agreement found to be in conflict with any procedure promulgated by the AAA which shall affect its administration of disputes hereunder, shall be considered severed herefrom. With respect to the process of arbitration under the AAA Commercial Rules or Consumer Protocol, the undersigned customer(s) and the dealer expressly recognize that the rules and protocol and the terms of this agreement adequately protect their abilities to fully and reasonably pursue their respective statutory and other legal rights. If for any reason the AAA fails or refuses to administer the arbitration of any dispute brought by any party to this agreement, the parties agree that all disputes will then be submitted to binding arbitration before the Better Business Bureau (the BBB) serving the community where the Dealer conducts business, under the BBB binding arbitration ruleS.... This agreement shall survive any termination, cancellation, fulfillment, including, but not limited to cancellation due to lack of acceptable financing or funding of any retail installment contract or lease. Further information about arbitration can be obtained directly from the AAA or from a review of AAA's Commercial Dispute Resolution Procedures and Consumer Protocol, and/or the BBB's Binding Arbitration Rules, copies of which are available without charge for review from the AAA and the BBB. THE UNDERSIGNED HAVE AGREED TO WAIVE THE UNDERSIGNED(S)' RIGHT TO A TRIAL BY JUDGE OR JURY IN ALL DISPUTES OVER $10,000.00 AND THAT ARBITRATION SHALL BE IN LIEU OF ANY CIVIL LITIGATION IN ANY COURT AND IN LIEU OF ANY TRIAL BY JUDGE OR JURY FOR ALL CLAIMS OVER $10,000.00. THE TERMS OF THIS AGREEMENT AFFECT LEGAL RIGHTS. IF YOU DO NOT UNDERSTAND ANY PROVISION OF THIS AGREEMENT OR THE COSTS, ADVANTAGES OR DISADVANTAGES OF ARBITRATION, SEEK INDEPENDENT ADVICE AND/OR REVIEW THE WRITTEN CONSUMER AND/OR COMMERCIAL DISPUTE RESOLUTION PROCEDURES AND PROTOCOLS AND/OR CONTACT THE AAA OR BBB BEFORE SIGNING. BY SIGNING YOU ACKNOWLEDGE THAT YOU HAVE READ, UNDERSTAND AND AGREE TO BE BOUND BY EACH OF THE PROVISIONS, COVENANTS, STIPULATIONS AND AGREEMENTS SET FORTH AND REFERENCED HEREIN ABOVE.

"DESCRIPTION OF PRODUCTS/SERVICES: _______________"

(Capitalization in original; emphasis omitted; and emphasis added.)

In the blank line following the "DESCRIPTION OF PRODUCTS/SERVICES" typically was printed the year and model of the vehicle to be purchased, as well as the vehicle-identification number ("VIN") of that vehicle. Below that were blank lines for the date to be filled in and lines for signatures of the customer and a dealer representative. In two of the cases before us—the complaints filed by Jeffery Lollar and Betsy Lollar and by Anthony Hood—there are allegations that the arbitration agreements were altered after the Lollars and Hood signed their agreements, allegations that will be explained in more detail when we discuss the facts of each case.

A. Case no. 1160435: Jeffery Lollar and Betsy Lollar

Jeffery Lollar and Betsy Lollar originally visited...