Seyfried v. O'Brien
| Decision Date | 26 January 2017 |
| Docket Number | No. 104212.,104212. |
| Citation | 2017 Ohio 286,81 N.E.3d 961 |
| Parties | James SEYFRIED, Plaintiff–Appellant v. Patrick O'BRIEN, Jr., Chevrolet, Inc., et al., Defendants–Appellees. |
| Court | Ohio Court of Appeals |
Rosemary Taft–Milby, Michael Berler, Ronald I. Frederick, James Wertheim, Frederick & Berler L.L.C., Cleveland, OH, for appellant.
Christopher A. Tipping, Harry A. Tipping, Harold M. Schwarz, III, Stark & Knoll Co. L.P.A., Akron, OH, for appellee.
Before: McCORMACK, P.J., STEWART, J., and BOYLE, J.
{¶ 1} James Seyfried's estate ("appellant" hereafter) appeals from a judgment of the Cuyahoga County Court of Common Pleas that granted a motion to stay pending arbitration in a consumer complaint. The trial court found James Seyfried signed a valid and enforceable arbitration agreement regarding his purchase of a Chevrolet Cobalt. We affirm.
{¶ 2} Seven years ago, on June 11, 2009, Seyfried went to a Chevrolet dealership to purchase a used automobile. With the help of a salesman, James Stewart, he selected a used 2009 Chevrolet Cobalt. Stewart prepared a handwritten "Buyer's Order" for the Cobalt, which Seyfried signed. To be allowed to take immediate possession of the vehicle before he secured financing, Seyfried also signed a "Conditional Delivery Agreement." That agreement allowed him to cancel his purchase if third-party financing could not be obtained within three days. Seyfried also signed a Used Vehicle Customer Satisfaction Guarantee, which allowed him to cancel the deal within three days or 150 miles, if he was dissatisfied with the vehicle for any reason.
{¶ 3} The next day, on June 12, 2009, Seyfried executed several more documents in connection with his purchase of the Cobalt. He signed an Agreement to Binding Arbitration ("the arbitration agreement"). The agreement stated that Before the signature line, there was a bolded warning in a larger font and in capital letters:
{¶ 4} Raymond Cieslak, the dealership's finance representative, testified that he reviewed the arbitration agreement with Seyfried and explained that if there was any dispute between him and the dealership, the dispute would go through a third-party arbitrator as opposed to the courts. Seyfried gave no indication he did not understand the arbitration agreement, expressed no objection, and signed the agreement voluntarily.
{¶ 5} Seyfried then signed a purchase contract for the Cobalt.1 Paragraph 14 of the purchase contract stated:
{¶ 6} There was a two-sentence clause regarding arbitration in the purchase contract and below the clause was a separate signature line. The sentence stated, The signature line was left blank in the purchase contract (and in subsequent purchase contracts signed by Seyfried relating to his purchase of the Cobalt).
{¶ 7} On June 12, 2009, Seyfried also signed a loan agreement with Firefighters Community Credit Union to finance the purchase of the vehicle. Seyfried, however, failed to be approved for financing from the credit union. He did not cancel the transaction within three days, but instead kept the vehicle. To help him obtain financing from First Merit, Chevrolet's financing company, Chevrolet increased the value for his trade-in vehicle to $1,950 (but also increased the "GAP" care fees) and reduced the total unpaid balance, and Seyfried signed another purchase contract on June 26, 2009, with the reduced balance.2
{¶ 8} On April 13, 2011, Seyfried filed the instant class action complaint. The complaint named as defendants four Patrick O'Brien Chevrolet entities (Patrick O'Brien Jr. Chevrolet, Inc., Patrick O'Brien, Jr. Chevrolet II, Inc., Patrick O'Brien, Jr. Chevrolet III, Inc., Patrick O'Brien, Jr. Chevrolet IV, Inc.), Patrick O'Brien, Jr., and Patrick O'Brien Sr. (collectively as "Chevrolet" hereafter), and First Merit (who was subsequently dismissed from the lawsuit). The complaint alleged the defendants failed to disclose to buyers of a used vehicle that the vehicle had been used as a rental vehicle, in violation of the Consumer Sales Practices Act, R.C. 1345.02. Seyfried passed away in 2012, and his estate was substituted as plaintiff. Apparently, the only asset in the estate is an interest in the instant lawsuit.
{¶ 9} Chevrolet moved to stay the proceeding pending arbitration pursuant to R.C. 2711.02. The trial court granted plaintiff's request for discovery regarding the validity of the arbitration agreement. On November 17, 2015, the trial court held a hearing on Chevrolet's motion. James Stewart, the sales person involved in the subject transaction, Raymond Cieslak, the finance representative, and Debbie Kidwell, Seyfried's former fiancée, testified at the hearing. After the hearing, appellant submitted a brief opposing the motion to stay, advancing two arguments: (1) the purchase contract was fully integrated and it did not incorporate the arbitration agreement, and (2) the arbitration agreement was substantively and procedurally unconscionable.
{¶ 10} The trial court found, as a factual matter, that Seyfried signed a binding arbitration agreement and it granted Chevrolet's motion to stay pending arbitration. The court's judgment entry stated:
The parties conducted discovery on the issue of whether a valid arbitration agreement exists between the parties and on 11/17/2015 a hearing was held. The court has duly considered the evidence admitted at the hearing as well as the arguments and post hearing briefs submitted by the parties. As a factual matter, the court finds that on 6/12/2009 plaintiff James Seyfried signed an agreement to binding arbitration. The court further finds that agreement entered to be valid and enforceable.
{¶ 11} Appellant raises one assignment of error, which states:
The trial court erred in finding the stand-alone arbitration agreement valid and enforceable in light of Ohio law requiring that all terms of a motor vehicle contract to be contained in one writing, in light of Ohio contract law that a separate agreement is unenforceable when a contract is a fully self-integrated document with a merger clause and its own unsigned arbitration provision, and where the purported arbitration agreement is unconscionable.
{¶ 12} Appellant argues, for the first time on appeal, that the June 12, 2009 arbitration agreement was not valid because R.C. 4517.26 requires a sale of a motor vehicle "be preceded by a written instrument or contract that shall contain all of the agreements of the parties and shall be signed by the buyer and the seller." Appellant claims that, under the statute, the arbitration agreement must be part of a single document in order to be enforceable.
{¶ 13} "A party may not change its theory of the case and present new arguments for the first time on appeal." Tokles v. Black Swamp Customs, L.L.C., 6th Dist. Lucas No. L–14–1105, 2015-Ohio-1870, 2015 WL 2329244, citing State ex rel. Gutierrez v. Trumbull Cty. Bd. of Elections, 65 Ohio St.3d 175, 177, 602 N.E.2d 622 (1992). "[A]rguments raised for the first time on appeal will not be considered by an appellate court." Gardi v. Bd. of Edn., 8th Dist. Cuyahoga No. 99414, 2013-Ohio-3436, 2013 WL 4033707, ¶ 27, citing State ex rel. Quarto Mining Co. v. Foreman, 79 Ohio St.3d 78, 81, 679 N.E.2d 706 (1997).
{¶ 14} Appellant had ample opportunity to raise the argument based on R.C. 4517.26 before the trial court, but it did not. We decline to review an issue raised for the first time on appeal.
{¶ 15} Rather, the main question we answer in this appeal is whether, as the trial court found, Seyfried consented to arbitration regarding his purchase of the Cobalt. Although it is undisputed that Seyfried signed an arbitration agreement, appellant argues the executed arbitration agreement had no legal effect.
{¶ 16} As in all appeals concerning arbitration, we begin our review with the recognition that both the Ohio General Assembly and the courts have expressed a strong public policy favoring arbitration. Hayes v. Oakridge Home, 122 Ohio St.3d 63, 2009-Ohio-2054, 908 N.E.2d 408, ¶ 15. Arbitration is favored because it provides the parties "with a relatively expeditious and economical means of resolving a dispute." Schaefer v. Allstate Ins. Co., 63 Ohio St.3d 708, 712, 590 N.E.2d 1242 (1992).
{¶ 17} Under R.C. 2711.02, a court may stay trial of an action upon application of a party "if (1) the action is brought upon any issue referable to arbitration under a written agreement for arbitration, and (2) the court is satisfied the issue is referable to arbitration under the written agreement." Austin v. Squire, 118 Ohio App.3d 35, 37, 691 N.E.2d 1085 (9th Dist.1997), citing Jones v. Honchell, 14 Ohio App.3d 120, 122, 470 N.E.2d 219 (12th Dist.1984).
{¶ 18} Varying standards of review have been applied in arbitration matters. As this court observed, " ‘[w]hen addressing whether...
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