Sawyers v. Herrin-Gear Chevrolet Co., Inc.
| Docket Number: | 2008-IA-01370-SCT Linked Case(s): 2008-IA-01370-SCT |
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| Supreme Court: | Opinion Link Opinion Date: 01-07-2010 Opinion Author: Carlson, P.J. Holding: Affirmed. |
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| Additional Case Information: |
Topic: Contract - Arbitration agreement - M.R.A.P. 3 - M.R.A.P. 4 - Substantive unconscionability - Illegal enterprise - Non-signatory Judge(s) Concurring: Waller, C.J., Randolph, Lamar and Pierce, JJ. Non Participating Judge(s): Dickinson, J. Dissenting Author : Kitchens, J., with separate written opinion. Dissent Joined By : Graves, P.J. Dissenting Author : Chandler, J. with separate written opinion. Procedural History: Motion to Compel Arbitration Nature of the Case: CIVIL - CONTRACT |
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| Trial Court: |
Date of Trial Judgment: 07-30-2008 Appealed from: WAYNE COUNTY CIRCUIT COURT Judge: Robert Bailey Disposition: The circuit court granted Herrin-Gear's motion to compel arbitration. Case Number: CV-2008-66-B |
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| Party Name: | Attorney Name: | Brief(s) Available: | ||
| Appellant: | ANDRIA SAWYERS |
TIMOTHY J. MATUSHESKI |
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| Appellee: | HERRIN-GEAR CHEVROLET COMPANY, INC. AND AMERICAN BANKERS INSURANCE COMPANY OF FLORIDA | BRENDA B. BETHANY, C. MICHAEL ELLINGBURG, ROSEMARY GWIN DURFEY, WALTER D. WILLSON, KEVIN ALAN ROGERS | ||
Synopsis provided by:  If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals hand downs please contact Tammy Upton in the MLI Press office. |
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| Topic: | Contract - Arbitration agreement - M.R.A.P. 3 - M.R.A.P. 4 - Substantive unconscionability - Illegal enterprise - Non-signatory |
| Summary of the Facts: | Andria Sawyers filed suit against Herrin-Gear Chevrolet Company, Inc. and American Bankers Insurance Company of Florida, alleging fraud, breach of contract, and bad faith. Herrin-Gear filed its Motion to Compel Arbitration, joined by American, which the trial court granted. Sawyers with a petition for interlocutory appeal, which the Supreme Court granted. |
| Summary of Opinion Analysis: | Issue 1: Jurisdiction Herrin-Gear and American argue that the trial court’s order was not final, and that the Supreme Court, in Banks v. City Finance Co., 825 So. 2d 642 (Miss. 2002), found the appellate courts do not have jurisdiction to entertain appeals of interlocutory orders granting motions to compel arbitration. On the other hand, when a trial court order disposes of an entire case on the merits, that order is final, and thus appealable. Notwithstanding the Court’s decision in Banks, in subsequent cases, the Court has reviewed and considered the issue of arbitration from parties who were aggrieved by the trial court’s entry of an order granting a motion to compel arbitration. In Tupelo Auto Sales v. Scott, 844 So. 2d 1167, 1169-70 (Miss. 2003), the Court held that a direct appeal may be taken from a trial-court order denying a motion to compel arbitration. This case presently before the Court will establish one procedure for review of a trial court’s grant or denial of a motion to compel arbitration, and that one procedure shall be via a direct appeal pursuant to the provisions of M.R.A.P. 3 & 4. When binding arbitration is compelled, there is nothing left for the court to do but enforce the award. It is inconsequential whether an appeal is titled as interlocutory when the court only has to supervise compliance with an arbitration order or enforce an arbitration award. It is on this issue that Banks and any other prior decisions are overruled to the extent they hold otherwise. An order compelling arbitration which disposes of all the issues before the trial court or orders the entire controversy to be arbitrated is a final decision, and therefore, immediately appealable. Further, any final decision with respect to arbitration is appealable pursuant to M.R.A.P. 3 and 4. The trial court order in the present case compelled arbitration of the entire controversy as to all parties. As such, the Court has appellate jurisdiction over the present matter. Issue 2: Substantive unconscionability Sawyers argues that the trial court erred in enforcing the arbitration agreement because it is substantively unconscionable. Substantive unconscionability is proven by oppressive contract terms such that there is a one-sided agreement whereby one party is deprived of all the benefits of the agreement or left without a remedy for another party's nonperformance or breach. Unconscionability has been defined also as an absence of meaningful choice on the part of one of the parties, together with contract terms which are unreasonably favorable to the other party. Sawyers argues that the arbitration agreement provides an avenue for Herrin-Gear to pursue its claims in a court of law, while requiring Sawyers to arbitrate all claims; the arbitration agreement requires the arbitration be held in the city where Herrin-Gear is located; the arbitrator cannot award Sawyers damages for attorney’s fees, lost wages, mental anguish, costs, interest, or punitive damages; and Sawyers is required to give up her right to a judge and jury, while Herrin-Gear is not. The arbitration agreement does permit Herrin-Gear to bring an action for possession and/or replevin of the vehicle purchased by Sawyers in a court of law rather than resolving the matter by binding arbitration. However, mutuality of obligation is not required for a contract to be enforceable. As such, the provision whereby a limited exception to arbitration is given only to Herrin-Gear to obtain possession of the subject vehicle by replevin in the event of Sawyer’s default under the terms of the sales contract does not render the arbitration agreement substantively unconscionable. Further, Sawyers’s contention that the arbitration agreement requires her to give up the right to a judge and jury while Herrin-Gear is not subject to the same requirement is without merit. The clause merely reinforces the previous notion of binding arbitration and thus emphasizes the point that the buyer(s)/lessee(s) understand the rights that they are relinquishing. If Sawyers was able to make the journey to Jackson to purchase her vehicle, the arbitration agreement is not one-sided as to deprive Sawyers of all its benefits simply because she has to drive approximately 150 miles from Waynesboro to Jackson. While the parties may be limited as to the amount of punitive damages which might be awarded, since such an award would have to be “measured by the prevailing party’s actual damages,” such limitation is by no means unreasonable. Thus, the trial court did not commit error in finding that the arbitration agreement was not substantially unconscionable. Issue 3: Illegal enterprise Sawyers argues that the arbitration agreement is “unenforceable because the principal purpose of the arbitration agreement is to directly furnish aid and protection to an illegal enterprise, namely, . . . American and Herrin’s agreement to sell and administrate unregistered insurance,” the GAP waiver. Nothing in the record indicates that the Mississippi Department of Insurance or the Legislature has made any ruling that GAP waiver products are insurance. This determination is best left to the Mississippi Insurance Department and the Mississippi Legislature. Issue 4: Arbitration agreement Sawyers argues that the arbitration agreement applies only to claims between Sawyers and Herrin-Gear; that the trial court erred in finding that Sawyers is equitably estopped from pursuing her claims against American in court; and that the trial court erred in enforcing the arbitration agreement as to American based on its finding that American is Herrin-Gear’s agent. A non-signatory may be able to enforce an arbitration agreement against a signatory where the non-signatory has a close legal relationship with a signatory of the agreement. Here, American was acting on Herrin-Gear’s behalf in administering the GAP waiver. Sawyers entered into the GAP waiver with Herrin-Gear and had no agreement with American; however, it is apparent from the parties’ actions that an agreement existed between Herrin Gear and American to the extent that American supervised payment to Sawyers under the GAP waiver. Also, American was listed on the GAP waiver as the administrator. Herrin-Gear and American unquestionably maintained a close legal relationship. Sawyers relied on her agreements with Herrin-Gear and the alleged representations of Herrin-Gear in filing suit against American. Because Sawyers relies on these agreements and alleged representations, she cannot deny American the benefit of the arbitration agreement which was an integral part of the transaction at issue. |
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