Masters v. KOL, Inc.
| Decision Date | 22 July 2020 |
| Docket Number | Opinion No. 5746,Appellate Case No. 2017-002259 |
| Parties | Casey MASTERS, Respondent, v. KOL, INC. d/b/a Kia of Greenville, Appellant. |
| Court | South Carolina Court of Appeals |
Bradford Neal Martin and Laura Wilcox Howle Teer, of Bradford Neal Martin & Associates, PA, of Greenville, for Appellant.
Jason James Andrighetti, of Culbertson Andrighetti, LLC, of Greenville, for Respondent.
In this breach of contract action, Appellant KOL, Inc. (Dealer) seeks review of the circuit court's order denying its motion to compel arbitration. Dealer argues the circuit court erred by declining to compel arbitration on the ground that Dealer's execution of certain contracts with Respondent Casey Masters (Purchaser) after Purchaser filed this action rendered the parties' April 10, 2017 arbitration agreement moot and unenforceable. We reverse and remand for an order compelling arbitration.1
On April 10, 2017, Purchaser and Dealer entered into an agreement for the purchase of a new 2017 Kia Forte at a price of $21,049. The parties' agreement included Purchaser's $500 down payment and a $5,149 trade-in allowance for Purchaser's 2002 Chevrolet Cavalier. The purchase order, which was signed by both parties, included a provision allowing the Dealer to cancel the agreement if Dealer was unable to assign any accompanying retail installment sales contract (RISC) to a third-party lender. This provision also included Purchaser's acknowledgement that (1) Dealer was permitting Purchaser to take "conditional delivery and possession" of the vehicle, i.e., Purchaser's possession of the vehicle was conditioned on Dealer's ability to sell or assign any existing RISC to a third-party lender; (2) any material misrepresentation in Purchaser's credit application would allow Dealer to declare the entire balance under the purchase order immediately due and payable; and (3) "no one at the dealership" coerced Purchaser to provide false information.
The last sentence in the Purchase Order states, "[Purchaser] hereby acknowledges that he/she has thoroughly read this Purchase Order[ and] understands and agrees with its terms, including the fact [that] this agreement is subject to binding arbitration.
[Purchaser] has received a completely filled in copy of this order and agreement."
The parties also signed a separate document entitled "Arbitration Agreement," which sets forth the scope of arbitrable claims, the method of selecting an arbitrator, the right to self-help remedies, the location and costs of arbitration, and conditions for seeking a new arbitration. The following language sets forth the scope of arbitrable claims:
Any claim, counterclaim, third party claim, cross-claim, dispute or controversy between Dealer and [Purchaser], as well as between [Purchaser] and Dealer's employees, agents, affiliate companies or persons, successors and assigns, whether in contract, tort or otherwise, which arise out of or relate to [Purchaser's] credit application, purchase, lease, financing, condition of the vehicle, or any resulting transaction or relationship (including any such relationship with third parties who do not sign your purchase or finance contract), or the validity, enforceability, or scope of this Agreement , shall be resolved by neutral, binding arbitration.
(emphases added). The agreement also includes the following statements: The agreement also provided that it would "survive the termination of any and all of [Purchaser's] business with Dealer."
According to Purchaser, the parties executed a RISC to finance the purchase, and Dealer attempted to assign its interest in the RISC to Crescent Bank (Crescent). According to Richard Canova, Dealer's Finance and Insurance Manager, Purchaser was aware that completion of the purchase was contingent on "approval of financing." Subsequently, Dealer declined to finance the purchase because Dealer's attempt to assign its interest in the RISC to Crescent failed.
On May 25, 2017, Purchaser filed this action, alleging that Dealer misrepresented her income to Crescent, Crescent would not purchase the RISC, and Dealer breached the RISC. Purchaser also alleged that (1) an employee of Dealer lied to her about a recall of the 2017 Kia Forte; (2) approximately one week later, Dealer refused to return the car to Purchaser when she took it to Dealer for servicing; (3) Dealer rebuffed her demand for the return of her down payment and her trade-in vehicle; (4) Dealer offered Purchaser a loaner vehicle and required her to sign a test drive agreement; and (5) Dealer kept the personal belongings Purchaser had placed in the Kia Forte, including her copy of the RISC, and later returned all of the items except her copy of the RISC.
In her complaint, Purchaser asserted causes of action for breach of contract, breach of contract accompanied by a fraudulent act, fraud, conversion, trespass to chattel, violation of the South Carolina Regulation of Manufacturers, Distributors, and Dealers Act (Dealers Act), violation of the South Carolina Unfair Trade Practices Act, violation of the South Carolina Consumer Protection Code, promissory estoppel, violation of the Truth in Lending Act, violation of the Fair Credit Reporting Act, and violation of the Equal Credit Opportunity Act. According to counsel, Purchaser served Dealer with the complaint on June 1, 2017.
According to Dealer, it later found a second lender, Global Lending (Global), to assist in financing the car purchase. The parties executed a second purchase order, a second RISC, and a second arbitration agreement on June 2, 2017—the second purchase order reflects a lower price, $15,456, than that reflected in the first purchase order (a difference of $5,593), but it is otherwise virtually identical to the first purchase order. The second arbitration agreement is identical to the one executed by the parties on April 10, 2017, except for the new date. Although Purchaser has alleged that Dealer did not return the identical Kia Forte to her, the vehicle identification number on both purchase orders is identical.
On July 26, 2017, Dealer filed a motion to stay and to compel arbitration, and the circuit court conducted a hearing on Dealer's motion on August 23, 2017. On that same date, Purchaser filed an affidavit in which she asserted the following: (1) After she filed her complaint, Dealer's representatives told her (a) they would refund her down payment, pay off the loan on her trade-in vehicle, and finance a new car for her; (b) her "new monthly payments would be lower than [her] current monthly payment"; and (c) she had to return "the loaner vehicle" to Dealer; (2) On June 2, 2017, Purchaser returned the loaner to Dealer and "was taken to an office to sign new documents to finance a new vehicle, where [she] learned that [her] down payment would not be refunded that day" and her monthly payments would be "higher, not lower"; (3) She "was told that [she] had to sign the new contract if [she] wanted a car" and she "felt pressured to sign the documents they gave [her] because [she] had no way of getting home without a car[ ] and [her] children were with [her]"; (4) Over the next few days, Dealer's representatives notified her that they had given her "the incorrect documents on June 2," she "had to sign new documents," and her down payment refund was available; (5) She "was sick and distressed[ ] and went to the hospital on June 15 for hives and a severe rash" and her doctor was concerned about her stress level; (6) Dealer's representative continued to call her while she was at the hospital and told her they would return her down payment if she would "sign the new documents"; (7) After leaving the hospital, she signed "the new documents" while she was "under the influence of medicine that affected [her] ability to understand what [she] was doing"; (8) She did not know what she signed, and Dealer did not provide copies of the documents to her; and (9) She told Dealer's representatives that she wanted to speak with counsel first, "but they said they couldn't give [her] the refund check" if she wanted to speak with counsel.
On October 12, 2017, the circuit court filed an order denying Dealer's motion. In its order, the circuit court found that the parties "entered into a second contract for the purchase and financing of a car on or about June 2, 2017" and referenced an assertion that the parties "entered into a third contract regarding the disputes between the parties related to the first two contracts." The court concluded that the "execution of subsequent contracts, as alleged by [Dealer], renders the original agreement and its Arbitration Agreement[ ] moot and unenforceable." The circuit court later denied Dealer's motion to alter or amend the October 12, 2017 order. This appeal followed.
Did the circuit court err by declining to compel arbitration on the ground that the April 2017 arbitration agreement was moot and unenforceable?
"Determinations of arbitrability are subject to de novo review, but if any evidence reasonably supports the circuit court's factual findings, this court will not overrule those findings."...
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