Opinion
Case Number: 115522 Case Number: 115513 Case Number: 115515 Case Number: 115565 Case Number: 115581 Case Number: 115819 Case Number: 115922
10-25-2017
JORGE ANTONIO CARDENAS NAJERA, Plaintiff/Appellee, v. DAVID STANLEY CHEVROLET, INC., Defendant/Appellant.
R. Scott Adams, Robert W. Gray, ADAMS & ASSOCIATES, P.C., Oklahoma City, Oklahoma, for Plaintiff/Appellee Bart Jay Robey, CHUBBUCK DUNCAN & ROBEY, P.C., Oklahoma City, Oklahoma, for Defendant/Appellant
APPEAL FROM THE DISTRICT COURT OF
OKLAHOMA COUNTY, OKLAHOMA
HONORABLE PATRICIA G. PARRISH, TRIAL JUDGE
REVERSED AND REMANDED FOR FURTHER PROCEEDINGS
R. Scott Adams, Robert W. Gray, ADAMS & ASSOCIATES, P.C., Oklahoma City, Oklahoma, for Plaintiff/Appellee
Bart Jay Robey, CHUBBUCK DUNCAN & ROBEY, P.C., Oklahoma City, Oklahoma, for Defendant/Appellant
DEBORAH B. BARNES, PRESIDING JUDGE:
¶1 David Stanley Chevrolet, Inc. (DSC) appeals from the trial court's Order denying its motion to compel arbitration. Based on our review, we reverse and remand for further proceedings.
BACKGROUND
¶2 In 2014, Jorge Antonio Cardenas Najera purchased three Chevrolet trucks from DSC, the first on January 13, the second on February 3, and the third on October 1. In July 2015, DSC repossessed the three trucks on the purported basis that Najera provided an incorrect Social Security Number. However, in Najera's petition he alleges that because he is in the process of establishing citizenship he provided "his individual taxpayer identification number" on the appropriate documents, received title to the vehicles, and timely made every installment payment. He alleges, among other things, that "[DSC] or its assign(s) . . . wrongfully affixed the false Social Security Number to the forms[.]" Various theories are set forth in his petition against DSC, including breach of contract, conversion, and fraud.
¶3 DSC filed a motion to compel arbitration, pointing out that, "in the course of purchasing" each vehicle, "[Najera] signed and agreed to several documents," including a Purchase Agreement "contain[ing] a Dispute Resolution Clause requiring [Najera] and [DSC] to submit disputes . . . to binding arbitration pursuant to the Federal Arbitration Act." DSC attached copies of the Purchase Agreements to its motion. The parties signed these agreements on the dates of the three sales, respectively. The dispute resolution clause is in red ink on the first page of each Purchase Agreement, is specifically signed by Najera and DSC, and provides, in part, as follows:
This Dispute Resolution Clause applies to any controversy, claim or dispute between the Purchaser and the Dealer arising out of, or related to this sale or transaction, including, but not limited to any and all issues or disputes arising as a result of this sale or transaction, whether said issues arise prior to, during or subsequent to the sale or attempted sale of a vehicle and whether said sale or attempted sale is a cash sale or is based upon financing or extended credit, or arises as a result of any financing contract, agreement or sales document related to the sale or attempted sale of a vehicle. The Purchaser and Dealer agree that all matters addressed within this Clause shall be submitted to binding arbitration, with an Arbitration Service or Arbitrator of the parties' choosing, pursuant to the Federal Arbitration Act, Title 9 U.S.C. § 1, et seq.
¶4 However, in Najera's response to the motion to compel, he asserts that "there was no assent by [Najera] to an arbitration clause," that his signature was fraudulently induced, that the arbitration agreement is unconscionable, and that there was no "meeting of the minds" as to arbitration.
¶5 In addition, in Najera's supplemental response, he asserts he executed a Retail Installment Sale Contract (RISC) at the time he purchased each vehicle. He asserts that the RISCs, which do not contain an arbitration clause, constitute the complete contract of the parties for each transaction because the RISCs each contain the following clause, which Najera refers to as a "merger clause":
HOW THIS CONTRACT CAN BE CHANGED. This contract contains the entire agreement between you and us relating to this contract. Any change to this contract must be in writing and we must sign it. No oral changes are binding.Najera further relies on the following language also contained in the RISCs:
You, the Buyer . . . may buy the vehicle below for cash or on credit. By signing this contract, you choose to buy the vehicle on credit under the agreements on the front and back of this contract. You agree to pay the Seller . . . the Amount Financed and Finance Charge in U.S. funds according to the payment schedule below.
¶6 Najera specifically focuses on the following language from the above-quoted clauses of the RISCs: "This contract contains the entire agreement" between the parties and, "[b]y signing this contract, you choose to buy the vehicle on credit under the agreements on the front and back of this contract." Based on this language in the RISCs, Najera asserts "[t]he clear and unambiguous language of the RISC establishes the intent of the parties to purchase and sell [each] vehicle exclusively under the terms of the RISC, and not to proceed under the terms of the purchase agreement."
¶7 A hearing was subsequently held in the proceedings below on the issue of whether the RISCs constitute the entire and exclusive agreement of the parties. At the end of this hearing the trial court explained from the bench that, based on the above-quoted language in the RISCs, the RISCs do constitute the only contracts in this case. Because the RISCs do not contain an arbitration clause, the trial court denied the motion to compel arbitration and stated that the case then proceeds in the trial court. The court also explained that it was not addressing any other basis for denying the motion to compel, such as unconscionability, but was "basing [the denial] simply on this legal position that I'm taking."
¶8 The trial court's decision denying DSC's motion to compel arbitration was memorialized in an Order filed in October 2016. DSC appeals.
STANDARD OF REVIEW
¶9 As previously set forth by a separate division of this Court:
An order denying a motion to compel arbitration is an interlocutory order appealable by right, which we review de novo. See 12 O.S. [2011] § 1879(A)(1);see also Thompson v. Bar-S Foods Co., 2007 OK 75, ¶ 9, 174 P.3d 567, 572. "The interpretation of an arbitration agreement is governed by general state-law principles of contract interpretation." Bar-S Foods, ¶ 18 . . . .
In seeking to compel arbitration, a party "must present a statement of the law and facts showing an enforceable agreement to arbitrate the issues presented by the petition." Rogers v. Dell Computer Corp., 2005 OK 51, ¶ 16, 138 P.3d 826, 830. In determining whether "the parties have consented to arbitration, the courts will decide whether there is a valid enforceable arbitration agreement, whether the parties are bound by the arbitration agreement, and whether the parties agreed to submit the particular dispute to arbitration." Oklahoma Oncology & Hematology P. C. v. U. S. Oncology, Inc., 2007 OK 12, ¶ 22, 160 P.3d 936, 944-45. High Sierra Energy, L. P. v. Hull, 2010 OK CIV APP 96, ¶¶ 9-10, 241 P.3d 1139, cert. denied.
ANALYSIS
¶10 The parties do not dispute that, for each of the three vehicle purchases at issue in this case, the Purchase Agreement and RISC were executed on the same date as part of the same transaction. Moreover, the Purchase Agreements in the present case provide as follows:
12. This Purchase Agreement and all written contracts relating to the same transaction as evidenced on the front of this Purchase Agreement, between the same parties, and made as part of substantially the same transaction as evidenced on the front of this Purchase Agreement shall be taken together and read as one document setting forth the terms of the parties agreement. To the extent that any of the terms among the various documents are inconsistent, the financing agreement [i.e., the RISC] shall supersede any directly conflicting rights, language or terms.(Emphasis added.)
¶11 Najera acknowledges the existence of this language in the Purchase Agreement, but asserts that the last sentence of this clause means "that the RISC controls" because the "Purchase Agreement contains a material term contradicting DSC's extension of credit to Najera[.]" However, Najera misreads the above-quoted language. See 15 O.S. 2011 § 155 ("When a contract is reduced to writing, the intention of the parties is to be ascertained from the writing alone, if possible . . . ."). In providing in the last sentence of the above-quoted clause of the Purchase Agreement that, "[t]o the extent that any of the terms among the various documents are inconsistent, the financing agreement shall supersede any directly conflicting rights, language or terms," the only reasonable interpretation is that only inconsistent terms -- terms which directly conflict with rights, language or terms in the RISC -- are to be superseded by the RISC. However, the RISCs do not contain any terms regarding dispute resolution and, thus, the dispute resolution clause in the Purchase Agreement is not inconsistent or in conflict with any terms in the RISC.
¶12 By contrast, in Arizon Structures Worldwide, LLC v. Global Blue Technologies-Cameron, LLC, 481 S.W.3d 542 (Mo. Ct. App. 2015), the two documents in question executed by the buyers and sellers "contained contradictory and mutually exclusive provisions" regarding dispute resolution. The court explained,
A court cannot simultaneously give effect to an arbitration agreement stating that "any dispute . . . shall be . . . resolved by binding Arbitration" . . . and a contractual provision requiring "[a]ny controversy or claim . . . be settled exclusively in St. Louis County Missouri Circuit Court[.]"Id. at 548. The court further explained that the two documents were not signed contemporaneously; rather, thirteen days separated their execution.
¶13 For these reasons, among others, the Missouri Court of Appeals in Arizon Structures distinguished its facts from those confronted by the Supreme Court of Missouri in Johnson ex rel. Johnson v. JF Enterprises, LLC, 400 S.W.3d 763 (Mo. 2013) (en banc). In Johnson, despite the car buyer signing a financing agreement which contained a merger clause, the court concluded a separate arbitration agreement signed by the car buyer at the same time was enforceable. The Johnson Court reasoned that the agreements signed by the car buyer and dealer were not only signed contemporaneously, but could be readily harmonized. The court observed that the merger clause did not explicitly state that it functions to exclude contemporaneously signed documents that were part of the same transaction, and further observed that
[a]n arbitration agreement is not an agreement to loan money, extend credit or forbear from enforcing repayment or promise to extend or renew debt. It is a dispute resolution clause. . . . By its terms, the arbitration clause applies to disputes of all types, including those over financing. This does not make it a financing clause, but it does mean that disputes over financing must proceed to arbitration if the arbitration clause is enforceable.Id. at 768. The court then concluded as follows: "In this case, the intent of the parties is demonstrated by all the documents the parties signed contemporaneously. To protect the sanctity of the parties' written contract, all the provisions in the writings can and should be harmonized and given effect, including a valid arbitration agreement." Id. at 769 (citation omitted).
¶14 Unlike Arizon Structures, but similar to Johnson, the Purchase Agreements and RISCs in the present case do not contain contradictory or mutually exclusive provisions regarding dispute resolution, and the agreements were signed on the same date for each purchase. The Johnson Court explained that, in Missouri, "when several instruments relating to the same subject are executed at the same time," "the documents will be construed together, even in the absence of explicit incorporation, unless 'the realities of the situation' indicate that the parties did not so intend." 400 S.W.3d at 767 (citations omitted). Similarly, by statute in Oklahoma, "[s]everal contracts relating to the same matters, between the same parties, and made as parts of substantially one transaction, are to be taken together." 15 O.S. 2011 § 158. See also Sullivan v. Gray