Tortoriello v. Gerald Nissan

• Decision Date: 11 January 2008
• Docket Number: No. 2-07-0322.,2-07-0322.
• Citation: 882 N.E.2d 157,379 Ill.App.3d 214
• Parties: Nicole TORTORIELLO, Plaintiff-Appellee, v. GERALD NISSAN OF NORTH AURORA, INC., and J.P. Morgan Chase Bank, Defendants-Appellants.
• Court: United States Appellate Court of Illinois

882 N.E.2d 157

379 Ill.App.3d 214

Nicole TORTORIELLO, Plaintiff-Appellee, v. GERALD NISSAN OF NORTH AURORA, INC., and J.P. Morgan Chase Bank, Defendants-Appellants.

No. 2-07-0322.

Appellate Court of Illinois, Second District.

January 11, 2008.

Brian W. Lewis, David M. Oppenheim, Wildman, Harrold, Allen & Dixon LLP, Chicago, for Gerald Nissan of North Aurora, Inc. and J.P. Morgan Chase Bank.

Norman H. Lehrer, Norman H. Lehrer, P.C., Wheaton, for Nicole Tortoriello.

Justice O'MALLEY delivered the opinion of the court:

Defendants, Gerald Nissan of North Aurora (Gerald Nissan) and J.P. Morgan Chase Bank (J.P. Morgan), appeal the judgment of the trial court denying their motions to stay court proceedings and compel arbitration pursuant to an arbitration clause in an automobile purchase agreement signed by Gerald Nissan and plaintiff, Nicole Tortoriello. The trial court denied defendants' motions because it found the arbitration clause unconscionable. We view the clause differently and so reverse and remand for further proceedings.

In June 2006, plaintiff sued defendants, seeking to rescind her purchase of a preowned Nissan automobile from Gerald Nissan, a transaction financed by J.P. Morgan. Plaintiff alleged common-law fraud and violations of the Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (815 LLCS 505/1 et seq. (West 2004)). Plaintiff attached to her complaint two documents, each entitled "Used Car Retail Buyers Order" and signed by plaintiff and Gerald Nissan. Both documents consist of the same two-sided preprinted form but contain different figures in the spaces provided for the contract terms. One document is dated October 22, 2005 (First Buyers Order), and the other October 28, 2005 (Second Buyers Order). Plaintiff alleged that, several days after she signed the First Buyers Order, Gerald Nissan informed her that her financing for the purchase was not approved. According to plaintiff, Gerald Nissan "falsely misrepresented that [she] had no option" but to sign a second contract, the Second Buyers Order, whose terms were less favorable to her than the First Buyers Order.

Both defendants filed motions to stay court proceedings and compel arbitration. They relied on an arbitration clause that appears on the reverse side of the Second Buyers Order. At the top of the reverse side is the heading "Terms and Conditions," followed by a series of single-spaced paragraphs written in very fine print. The density of text is relieved somewhat by a single blank line that separates each paragraph. The paragraphs are numbered and each is prefaced with an underlined subject description. The final paragraph, number 17, contains the arbitration provision. We reproduce it here in actual size and in context, to give an impression of the overall appearance of the page:

NOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE

Enlarged for better readability, the arbitration provision states:

"17. Arbitration Any controversy, claim, cause of action, or other dispute arising out of or relating to this contract, or the breach, termination or invalidity thereof, whether in tort, contract, consumer fraud or otherwise, except a cause of action or claim by Dealer to recover full payment of the purchase price, or claim involving the breach of any retail installment contract as set forth below, shall be resolved by binding arbitration before a sole arbitrator in DuPage County, Illinois in accordance with the Commercial Rules of the American Arbitration Association, and judgment upon any award rendered by the arbitrator may be entered in any court of competent jurisdiction. The arbitrator shall determine the rights and obligations of the parties according to the substantive laws of the State of Illinois and the express terms of this contract. The official language of the arbitration shall be English. The arbitrator shall not be empowered to grant exemplary, punitive, or consequential damages or any damages in excess of those damages permitted under the express terms of this contract. The party prevailing on substantially all of its claims shall be entitled to recover its costs, including attorney's fees, for the arbitration proceedings, as well as any ancillary proceeding, including a proceeding to compel or enjoin arbitration, to request interim measures or to confirm or set aside an award. Claims, causes of action and other disputes against Buyer arising out of or related to the breach by Buyer of any retail installment contract executed in connection with this contract are not subject to arbitration under this paragraph."

Paragraph 16, which is also implicated in this appeal, reads in relevant part:

"16. Limitation of Dealer's Liability Dealer's entire liability to Buyer, if any, for any claim, demands or causes of action, whether in tort, contract, consumer fraud, fraud or otherwise, is limited solely to the amount set forth as the purchase price of this contract."

The top two-thirds of the front side of the Second Buyers Order contains a series of blanks for such terms as the make, model, and year of the purchased car, as well as the selling price, sales tax, and fees. This section of the front side also contains several paragraphs of preprinted terms, including a paragraph entitled "Warranty Disclaimer," which reads in relevant part (not in actual size):

"Dealer expressly disclaims any liability to buyer for any consequential damages, damages for loss of use, loss of profits or income, loss of time or inconvenience, or any other incidental or consequential damages arising out of this contract or the operation of the vehicle purchased hereunder."

The bottom third of the page is set off by a solid line, immediately below which is a heading that is bolded and centered on the page. The heading reads in actual size:

"SUBJECT TO TERMS & CONDITIONS ON REVERSE SIDE AND THIRD PARTY FINANCE APPROVAL"

The font for the immediately surrounding lines is considerably smaller and not bolded. The font for the heading is, in fact, the largest on the page but for the main page title, which reads: "USED CAR RETAIL BUYERS ORDER." At the very bottom of the front side of the Second Buyers Order are spaces for the buyer's personal information and signature.

In her response to the motions to compel arbitration, plaintiff argued that the arbitration clause was both procedurally and substantively unconscionable. Plaintiff asserted that she "never saw the [arbitration clause], [she] was not told to read the [clause]," and "no one never [sic] referred to the [clause]." Plaintiff also argued that the clause was "one-sided, without consideration[,] and inconspicious."

The trial court held a hearing on defendants' motions. Plaintiff testified on her own behalf. She stated that, on October 22, 2005, she purchased a preowned Nissan at Gerald Nissan and traded in her Chevrolet Monte Carlo. The terms of the agreement were contained in the First Buyers Order, which plaintiff signed in the presence of a financing employee whom she did not name. Plaintiff testified that she had no objection to the terms of the First Buyers Order as she understood them. Plaintiff acknowledged that the reverse side of the First Buyers Order contains an arbitration clause identical to the provision in the Second Buyers Order. Plaintiff testified that when she signed it she was unaware of the arbitration clause in the First Buyers Order. Plaintiff explained that no one at Gerald Nissan advised her to read the back of the document or informed her that there were any terms on the back. Plaintiff did not read the back of the First Buyers Order on her own initiative before she signed the contract, because she "didn't get an opportunity." Plaintiff testified that Gerald Nissan gave her copies of the First Buyers Order and the related paperwork she signed on October 22. When asked if she read the back of the First Buyers Order between October 22 and October 28, the day she returned to Gerald Nissan, plaintiff said: "Everything was a done deal at that point, so I didn't feel that I had to sit down and analyze the contracts that were already provided to me the first time."

Plaintiff testified that, on October 26, 2005, she received a phone call from Tamer Shams, Gerald Nissan's finance manager. In that conversation, Shams asked plaintiff to return to Gerald Nissan to discuss "two options" with him. Shams also stated that plaintiff needed to re-sign her paperwork. When plaintiff told Shams that she did not wish to sign any more paperwork, Shams replied that she was required "by law" to do so and that her credit could be negatively affected if she refused.

Plaintiff testified that she went to Gerald Nissan on October 28 and met with Shams, who presented plaintiff with the Second Buyers Order. Plaintiff testified that Shams said nothing about her financing for the sale reflected in the First Buyers Order and that he did not allude to any problem with the transaction. Plaintiff noticed that the Second Buyers Order reflected the purchase of the same preowned Nissan shown in the First Buyers Order but indicated an increase of $1,700 for her service contract. Plaintiff told Shams that she did not want to sign the Second Buyers Order and asked that Gerald Nissan return her trade-in. Shams refused and said that Gerald Nissan would sue plaintiff if she did not sign the document. Plaintiff, believing that she had "no option to walk away," signed the Second Buyers Order and the related paperwork. Plaintiff testified that neither Shams nor anyone else at Gerald Nissan informed her that day of an arbitration clause in the Second Buyers Order. Plaintiff did not read the back of Second Buyers Order on her own initiative before she signed it, because she was "rushed" through the process. Plaintiff admitted, however, that she never requested time to read the contract in full before she signed it. She also did not read the back of the Second Buyers Order...