Wilder v. John Youngblood Motors, Inc.

• Decision Date: 27 November 2017
• Docket Number: No. SD 35037,SD 35037
• Citation: 534 S.W.3d 902
• Parties: Stephanie WILDER, Plaintiff-Respondent, v. JOHN YOUNGBLOOD MOTORS, INC., d/b/a Youngblood Nissan, Defendant-Appellant.
• Court: Missouri Court of Appeals

534 S.W.3d 902

Stephanie WILDER, Plaintiff-Respondent,

v.JOHN YOUNGBLOOD MOTORS, INC., d/b/a Youngblood Nissan, Defendant-Appellant.

No. SD 35037

Missouri Court of Appeals, Southern District, Division Two.

Filed: November 27, 2017

Appellant's Attorneys: Michael A. Childs, of Overland Park, KS and Craig R. Oliver, of Springfield, MO.

Respondent's Attorneys: Craig R. Heidemann and Donald M. Brown, of Bolivar, MO and Nickolas W. Allen, of Thayer, MO.

WILLIAM W. FRANCIS, JR., J.

John Youngblood Motors, Inc., d/b/a Youngblood Nissan ("Youngblood") challenges an Order denying its motion to compel arbitration. In two points on appeal, Youngblood argues that the trial court erred in denying its motion to compel arbitration because: (1) the arbitration agreement was supported by sufficient consideration, and (2) federal law and arbitration policy require the enforcement of the arbitration agreement. Finding no merit to either point, we affirm the judgment of the trial court.

Factual and Procedural History

Stephanie Wilder ("Wilder") was hired by Youngblood on January 29, 2015, with her first day of work being February 2, 2015. On February 2, 2015, Wilder and a representative of Youngblood signed an "Agreement for Binding Arbitration" ("Arbitration Agreement").

The Arbitration Agreement states, in relevant part, that:

This Agreement to submit matters to binding arbitration is a condition of [Wilder]'s at-will employment with [Youngblood], [Youngblood]'s employment of [Wilder], [Wilder]'s receipt of the compensation now and hereafter paid to [Wilder] by [Youngblood], [Wilder], [Youngblood] and Co-Employee (collectively "Parties") agree:

The Parties agree pursuant to this Agreement that final and binding arbitration is the sole and exclusive means to resolve any and or all claims or disputes between each other, and they each waive the right to resolve any claim or dispute by filing a lawsuit or other civil action or proceeding against each other, including waiving the right to a jury trial or court trial unless otherwise provided herein.

....

This Agreement does not cover [Wilder]'s claims, rights or causes of action for unemployment benefits, workers' compensation benefits, and [Youngblood]'s claims for breach of trust violations, use or dissemination of confidential information, unfair competition, disclosure or use of trade secrets for which [Youngblood] may seek all appropriate relief (including, but not limited to injunctive or equitable relief) from a court of competent jurisdiction.

The Arbitration Agreement then describes the claims to be submitted to binding and final arbitration.

Wilder held various positions during her employment, one being the Nissan Owner Loyalty Manager. Youngblood terminated Wilder on September 20, 2016.

On February 14, 2017, Wilder filed a "Petition" asserting a claim for wrongful termination, in violation of Missouri's public policy, for reporting what was alleged to be wire fraud by Youngblood.

Thereafter, Youngblood filed an "Answer and Motion to Compel Arbitration" asserting that matters covered by the Arbitration Agreement included wrongful termination, wrongful demotion, and whistle blowing. On March 22, 2017,¹ Youngblood filed a "Demand for Arbitration" with the American Arbitration Association on the claims asserted by Wilder.

Wilder filed suggestions in opposition to Youngblood's motion to compel arbitration arguing that the Arbitration Agreement "is unsupported by any consideration, and is, therefore, invalid because [Wilder]'s employment relationship with [Youngblood] was ‘at-will’, and the agreement lacks mutuality of obligation." Wilder also argued that the Arbitration Agreement was "unconscionable" because she was pressured to sign the Arbitration Agreement without sufficient time to fully read and understand the terms of the Arbitration Agreement.² Youngblood filed a response to Wilder's suggestions in opposition to the motion to compel arbitration, with Wilder then filing a sur-reply.

On June 8, 2017, a hearing was held on Youngblood's motion to compel arbitration. The trial court took the matter under advisement and issued its Order on June 21, 2017. In its Order, the trial court found that "at-will employment, in and of itself, does not provide consideration for this arbitration agreement." In addition, the trial court found that Youngblood was:

exempt from arbitrating certain claims where Wilder would be required to arbitrate those same claims. This exception allows Youngblood to avoid arbitrating the claims it is most likely to bring against Wilder. At the same time, Wilder would be required to arbitrate all legally arbitrable claims she may have against Youngblood. Therefore, the arbitration agreement lacks a mutuality of promise and is devoid of consideration.

The trial court concluded that Youngblood "failed to meet its burden of proving the existence of a validly formed arbitration agreement[,]" and overruled Youngblood's motion to compel arbitration. This appeal followed.

In two points on appeal, Youngblood asserts:

I. THE TRIAL COURT ERRED IN REFUSING TO GRANT APPELLANT'S MOTION TO COMPEL ARBITRATION OF THE DISPUTES BETWEEN APPELLANT YOUNGBLOOD AND RESPONDENT WILDER, BECAUSE THE TRIAL COURT WAS REQUIRED TO DO SO UNDER 9 U.S.C. § 3 , 9 U.S.C. § 4 , § 435.355. 1 AND § 435.355.4 , RSMO ., GIVEN THE AGREEMENT FOR BINDING ARBITRATION EXECUTED BY THE PARTIES COVERED WILDER'S CLAIMS AND IT WAS ENFORCEABLE, IN THAT THE AGREEMENT FOR BINDING ARBITRATION WAS SUPPORTED BY CONSIDERATION.

II. THE TRIAL COURT ERRED IN REFUSING TO GRANT APPELLANT'S MOTION TO COMPEL ARBITRATION OF THE DISPUTES BETWEEN APPELLANT YOUNGBLOOD AND RESPONDENT WILDER, BECAUSE THE TRIAL

COURT WAS REQUIRED TO DO SO UNDER FEDERAL POLICY EXPRESSED IN 9 U.S.C.2 et. seq., GIVEN THE AGREEMENT FOR BINDING ARBITRATION WAS ENFORCEABLE BASED UPON AT WILL EMPLOYMENT, IN THAT PROVIDING AT WILL EMPLOYMENT AS SUFFICIENT CONSIDERATION IN SOME EMPLOYMENT AGREEMENTS, BUT NOT FOR AN ARBITRATION AGREEMENT, VIOLATES FEDERAL POLICY BY IMPERMISSABLY [SIC] INTERFERRING [SIC] WITH ITS POLICY FAVORING ARBITRATION AGREEMENTS.

Standard of Review

Whether arbitration can be compelled under the terms of an employment agreement is a question of contract law that we review de novo. Generally, when faced with a motion to compel arbitration, we must consider three factors: first, whether a valid arbitration agreement exists; second, whether the specific dispute falls within the scope of the agreement; and third, whether the agreement is subject to revocation under applicable principles of contract law. The party seeking to compel arbitration has the burden of proving the existence of a valid and enforceable arbitration agreement.

Jimenez v. Cintas Corp. , 475 S.W.3d 679, 683 (Mo. App. E.D. 2015).

Analysis

Appealable Order

As a preliminary matter, we note that this appeal arises from an Order denying Youngblood's motion to compel arbitration. As a general rule, "a final judgment is a prerequisite to appellate review." Sanford v. CenturyTel of Missouri, LLC , 490 S.W.3d 717, 719 (Mo. banc 2016) (internal quotation and citation omitted). However, an exception to this rule is that "[a]n order denying a motion to compel arbitration is subject to immediate interlocutory appeal under § 435.440, RSMo."³ State ex rel. Alst v. Harrell , 528 S.W.3d 442, 445 (Mo. App. W.D. 2017) (emphasis in original). As such, we have authority to review the trial court's order denying Youngblood's motion to compel arbitration.

Point I: Lack of Mutual Consideration as to the Arbitration Agreement

In its first point, Youngblood argues that the trial court erred in denying its motion to compel arbitration because the Arbitration Agreement at issue was properly supported by mutual consideration.

The Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq. (2006) , governs the applicability and enforceability of arbitration agreements in all contracts involving interstate commerce. The Missouri Uniform Arbitration Act (MUAA), § 435.350 et seq. , governs those Missouri arbitration matters not preempted by the FAA. The MUAA was fashioned after the Federal Arbitration Act, and the FAA and Missouri's Arbitration Act are substantially similar.

In determining whether an arbitration agreement is valid under the FAA, this Court is guided by the United States Supreme Court's decision in AT & T Mobility LLC v. Concepcion , 563 U.S. 333, 131 S.Ct. 1740, 1746, 1750, 179 L.Ed.2d 742 (2011), as interpreted and applied by this Court in Brewer v. Missouri Title Loans , 364 S.W.3d 486 (Mo. banc 2012), and in Robinson v. Title Lenders, Inc. , 364 S.W.3d 505 (Mo. banc 2012).

In Concepcion the United States Supreme Court interpreted the provision of the FAA that makes arbitration agreements ‘valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract,’ 9 U.S.C. § 2 . Concepcion held that this provision allows arbitration agreements ‘to 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.’ Concepcion, 131 S.Ct. at 1746 (internal quotations omitted).

In Brewer and Robinson, this Court reaffirmed that Concepcion does not diminish a trial court's broad authority to evaluate the validity and enforceability of arbitration agreements when considering whether to grant or overrule a motion to compel arbitration. Rather, this Court held, Concepcion ‘permits state courts to apply state law defenses to the formation of the particular contract at issue.’ Brewer, 364 S.W.3d at 492.

‘As such, 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.’ Robinson , 364 S.W.3d at 515. This means that a Missouri court can

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