Wofford v. M. J. Edwards & Sons Funeral Home Inc.

• Decision Date: 23 November 2015
• Docket Number: No. W2015-00092-COA-R3-CV,W2015-00092-COA-R3-CV
• Court: Court of Appeals of Tennessee
• Parties: AKILAH LOUISE WOFFORD, ET AL. v. M. J. EDWARDS & SONS FUNERAL HOME INC, ET AL.

AKILAH LOUISE WOFFORD, ET AL.
v.
M. J. EDWARDS & SONS FUNERAL HOME INC, ET AL.

No. W2015-00092-COA-R3-CV

COURT OF APPEALS OF TENNESSEE AT JACKSON

October 27, 2015 Session
November 23, 2015

Appeal from the Chancery Court for Shelby County
No. CH140197
Jim Kyle, Chancellor

This appeal concerns the enforceability of an agreement to arbitrate a dispute between a consumer and funeral home. The trial court refused to compel arbitration, finding no meeting of the minds as to the arbitration agreement. On appeal, the funeral home argues that this Court should consider not only the signed agreement, but also another document allegedly incorporated by reference into the parties' contract in compelling arbitration. We hold: (1) the additional document providing details regarding arbitration was not incorporated by reference into the parties' contract; and (2) the arbitration provision actually contained in the parties' contract is unenforceable because it is beyond the expectations of an ordinary person. Affirmed and remanded.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed and Remanded

J. STEVEN STAFFORD, P.J., W.S., delivered the opinion of the Court, in which ARNOLD B. GOLDIN, J., and BRANDON O. GIBSON, J., joined.

John R. Branson, Jacob A. Dickerson, and Austin K. Purvis, Memphis, Tennessee, for the appellants, M.J. Edwards & Sons Funeral Home, Inc.

Kathryn E. Barnett, Nashville, Tennessee, for the appellee, Akilah Louise Wofford.

OPINION

Background

Page 2

Plaintiff/Appellee Akilah Wofford's father, L.C. Wofford, died on June 10, 2013 after suffering a heart attack in his yard. Ms. Wofford, who graduated from high school in 2008, was a college student at the time of her father's death. She was raised by her father. When her father passed away, her aunt assisted her with making the funeral arrangements. The family contacted Defendant/Appellant M.J. Edwards & Sons Funeral Home, Inc. ("Edwards") to arrange the funeral services.¹

Edwards took possession of Mr. Wofford's body on June 10, 2013. Edwards subsequently began the process of securing life insurance proceeds to cover the cost of services. By June 11, 2013, Edwards had embalmed the body, worked with the family to publish an obituary, and procured a death certificate. It appears that most of the planning decisions regarding the services and burial had been made by June 11, 2013. Indeed, Edwards placed an internal order for the casket on that day. Also on June 11, 2013, Ms. Wofford and Edwards entered into certain discussions regarding the services and agreed to a document entitled "Statement of Funeral Goods and Services." There is no dispute that this document does not contain an arbitration provision. Moreover, no one from Edwards discussed arbitration with Ms. Wofford on June 11, 2013.

On June 12, 2013, Edwards asked Ms. Wofford to return to complete the final paperwork. On this day, Ms. Wofford signed a purchase agreement ("Contract"). The Contract contained the prices for each service that Edwards provided. On the bottom of the second page of the Contract, directly above Ms. Wofford's signature, is the following language in bold type:

NOTICES TO PURCHASER/CO-PURCHASER

SEE PART THREE FOR TERMS AND CONDITIONS THAT ARE PART OF THIS AGREEMENT. DO NOT SIGN THIS AGREEMENT BEFORE YOU READ IT OR IF IT CONTAINS ANY BLANK SPACES. YOU ACKNOWLEDGE RECIEPT OF AN EXACT COPY OF THIS AGREEMENT.

BY SIGNING THIS AGREEMENT, YOU ARE AGREEING THAT ANY CLAIM YOU MAY HAVE AGAINST THE SELLER SHALL BE RESOLVED BY ARBITRATION AND

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YOU ARE GIVING UP YOUR RIGHT TO A COURT OR JURY TRIAL, AS WELL AS YOUR RIGHT OF APPEAL.

It is undisputed for purposes of this appeal that Ms. Wofford was not provided a copy of Part 3 of the Contract.² Part 3 of the Contract, however, provides:

ARBITRATION: YOU AGREE THAT ANY CLAIM YOU MAY HAVE RELATING TO THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT (INCLUDING ANY CLAIM OR CONTROVERSY REGARDING THE INTERPRETATION OF THIS ARBITRATION CLAUSE) SHALL BE SUBMITTED TO AND FINALLY RESOLVED BY MANDATORY AND BINDING ARBITRATION IN ACCORDANCE WITH THE APPLICABLE RULES OF THE AMERICAN ARBITRATION ASSOCIATION ("AAA"); PROVIDED, HOWEVER, THAT THE FOREGOING REFERENCE TO THE AAA RULES SHALL BE DEEMED TO REQUIRE ANY FILING WITH THAT ORGANIZATION, NOR ANY DIRECT INVOLVEMENT WITH THAT ORGANIZATION. THE ARBITRATOR SHALL BE SELECTED BY MUTUAL AGREEMENT OF THE PARTIES. IF THE PARTIES FAIL TO OR UNABLE TO AGREE ON THE SELECTION OF AN APPROPRIATE ARBITRATOR, THE AAA SHALL SELECT THE ARBITRATOR PURSUANT TO ITS RULES AND PROCEDURES UPON THE APPLICATION OF ONE OR BOTH PARTIES. . . .

Ms. Wofford admits that she only read the portion of the Contract containing the prices to ensure they were correct. According to Ms. Wofford, she signed the second page of the Contract without reading all its terms, including the reference to Part 3 of the Contract or the provision regarding arbitration. The arrangements for Ms. Wofford's father were carried out by Edwards as planned, and the family was apparently satisfied with the services provided by Edwards. Ms. Wofford's father's body was interred at Galilee Memorial Gardens cemetery.

Eventually, allegations came to light that Galilee Memorial Gardens was improperly handling and disposing of human remains. Accordingly, on February 9, 2014, Ms. Wofford, along with three other named plaintiffs and all similarly situated persons, filed a Class Action

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Complaint in the Chancery Court of Shelby County against Edwards, Galilee Memorial Gardens and related entities (collectively, "Galilee Memorial Gardens"),³ and a number of other unrelated funeral homes.⁴ The complaint was subsequently amended on March 3, 2014. Specifically with regard to the defendant-funeral homes, the amended complaint alleged that the defendant-funeral homes breached a duty to the plaintiff-customers in failing to supervise burials and ensure that the burials of those entrusted to their care was "accomplished in a proper fashion." Only the allegations against Edwards are at issue in this appeal.

On March 19, 2014, Edwards filed a motion to compel arbitration and to stay proceedings pending the outcome of arbitration. On the same day, Edwards also filed its answer, which preserved its right to compel arbitration. Ms. Wofford and the other plaintiffs filed a Second Amended Complaint on April 25, 2014.⁵ Edwards similarly responded to this complaint. Ms. Wofford and Edwards agreed to limit discovery at this juncture to the issue of arbitration. The parties took the depositions of both Ms. Wofford and Cedric Collins, the funeral director and manager of Edwards. Both depositions were filed in the trial court on December 4, 2014.

On December 8, 2014, the trial court heard oral argument on the motion to compel arbitration. At the conclusion of the hearing, the trial court ruled that there was not sufficient notice to Ms. Wofford that she was agreeing to arbitrate her claims against Edwards. According to the trial court:

What I do find interesting in this whole proposition is the contract. And on Page 2 of the contract, Ms. Wofford signs. Generally speaking, most folks sign contracts at the end of the

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contract. But this isn't the end of the contract. There is another page of the contract, a page which we don't have. We know what it would say if it was added. There's no proof to the contrary that Ms. Wofford that those pages are missing. Three and four are missing.

Generally speaking, I would say that y'all can correct me but most folks have an expectation that when you sign the document, that that's the document to which you are being bound by. Now, Page 2 does say, Part Three is on the way; you need to pay attention to what's on Part Three. And by signing this agreement, you are subject to arbitration. That's right above their signature, well below the price.

And that is what is in my mind the determining factor as to the set of the facts as to whether or not this contract was enforceable based upon the ability of the parties to understand that which they were agreeing to. If there had not been a Page 3 at all and it simply had that simple sentence that says, you have to be in arbitration, I'm not really sure that the law would say that that is sufficient notice of the rights one has under arbitration.

Consequently, I'm going to deny the motion for arbitration, and we will proceed with the litigation accordingly.

On December 16, 2014, the trial court entered a written order denying the motion to compel arbitration, incorporating by reference its oral ruling.

On December 19, 2014, Edwards filed a motion to stay litigation pending the outcome of Edwards's appeal of the decision on the arbitration issue. On January 9, 2015, the parties argued the motion for a stay before the trial court. At the conclusion of the hearing, the trial court denied the motion and reiterated its decision regarding the denial of the motion to compel arbitration. Specifically, the trial court stated:

This Court's authority to rule on this matter comes from the Constitution as ratified by the people. Yet, there are other ways to resolve disputes. And arbitration is one of the ways. It is a favored way. But whether a party participates in arbitration or not is where a party consented to participate in arbitration through a contract that says that we have a dispute; we will resolve that dispute, not through the court system, but through arbitration.

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It's been long held in the state in Davidson versus Martin Marietta Energy at 797 Fed. Supplement 613 that arbitration is a matter of contract, and a party cannot be required to arbitrate any dispute which he has not agreed to submit. Also, in French versus First Union Securities, federal case Fed. Supplement 818: Since arbitration agreements are creatures of contract, a party cannot be required to submit to arbitration unless he or she has agreed to do so.

The Court's ruling -- and perhaps the Court wasn't clear in previous

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