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Ellis v. JF Enterprises, LLC

Court of Appeals of Missouri, Western District, First Division

May 5, 2015

LASHIYA D. ELLIS, Respondent,
v.
JF ENTERPRISES, LLC D/B/A JEREMY FRANKLIN'S SUZUKI OF KANSAS CITY, Appellant.

Appeal from the Circuit Court of Jackson County, Missouri The Honorable Jack Richard Grate, Judge

Before James Edward Welsh, P.J., Thomas H. Newton, and Gary D. Witt, JJ.

James Edward Welsh, Presiding Judge

JF Enterprises, LLC, doing business as Jeremy Franklin's Suzuki of Kansas City (Jeremy Franklin's Suzuki), appeals from the circuit court's order denying its motion to compel arbitration and stay proceedings in an action filed against them by Lashiya Ellis. Jeremy Franklin's Suzuki contends that the circuit court erred in denying its motion because (1) the arbitration agreement was severable and separately enforceable from the underlying contract in this case and (2) pursuant to the delegation clause in the arbitration agreement, the arbitrability of Ellis's claims was for the arbitrator and not the court. We reverse the circuit court's decision and remand for the circuit court to enter an order compelling arbitration between Ellis and Jeremy Franklin's Suzuki and staying Ellis's suit against Jeremy Franklin's Suzuki pending a determination by the arbitrator concerning the arbitrability of Ellis's claims.

The parties agree that, on November 4, 2013, Ellis went to Jeremy Franklin's Suzuki for the purposes of purchasing a vehicle. On that date, Ellis signed a Retail Buyers Order and executed a Retail Installment Contract. According to those documents, Ellis agreed to purchase a 2012 Hyundai Sonata for $21, 104.95. Further, as part of the transaction, Ellis traded in a 2003 Chevrolet Tahoe when she purchased the Hyundai Sonata.

On July 11, 2014, Ellis filed a Petition for Damages with the circuit court alleging that Jeremy Franklin's Suzuki violated the Missouri Merchandising Practices Act and made fraudulent misrepresentations regarding the delivery of title to the Hyundai Sonata purchased by Ellis. Specifically, Ellis claimed that Jeremy Franklin's Suzuki failed to deliver title to the vehicle in violation of section 301.210, RSMo 2000, and that she was unable to register the vehicle without the title. Further, Ellis filed a claim for conversion against Jeremy Franklin's Suzuki alleging that Jeremy Franklin's Suzuki unlawfully and without justification converted to its own use Ellis's vehicle that Jeremy Franklin took as a trade. Ellis also filed suit against Condor Capital Corporation (Condor Capital), [1] the entity that Jeremy Franklin's Suzuki arranged to provide the financing for Ellis to purchase the vehicle. Ellis claimed that Condor Capital violated the Missouri Merchandising Practices Act and made fraudulent misrepresentations in requiring her to continue to make payments under a void Retail Installment Contract. In regard to her claims, Ellis asked the circuit court to declare the Retail Buyers Order and Retail Installment Contract to be void and to rescind the transaction. She also asked the court to award her damages, punitive damages, attorney's fees, and costs.

Jeremy Franklin's Suzuki filed with the circuit court an answer to Ellis's Petition for Damages on August 20, 2014. On that same date, Jeremy Franklin's Suzuki filed a Motion to Stay Proceedings and Compel Arbitration. In that motion and the suggestions in support, Jeremy Franklin's Suzuki asked the circuit court to enforce the arbitration agreement entered into by Ellis and Jeremy Franklin's Suzuki as part of the purchase transaction. The Arbitration Agreement[2] provided:

In this Arbitration Agreement, "you" refers to the buyer(s) signing below. "We, " "us, " and "our" refer to the Dealer signing below and anyone to whom the Dealer assigns this Arbitration Agreement.
Any claim or dispute, whether in contract, tort, statute or otherwise (including the interpretation and scope of this Arbitration Agreement, and the arbitrability of the claim or dispute), between you and us or our employees, agents, successors or assigns, which arises out of or relates to your credit application, purchase or condition of this vehicle, your purchase or financing contract or any resulting transaction or relationship (including any such relationship with third parties who do not sign your purchase or financing contract) shall, at your or our election, be resolved by neutral, binding arbitration and not by a court action. If federal law provides that a claim or dispute is not subject to binding arbitration, this Arbitration Agreement shall not apply to such claim or dispute. Any claim or dispute is to be arbitrated by a single arbitrator on an individual basis and not as a class action. You expressly waive any right you may have to arbitrate a class action. You may choose one of the following arbitration organizations and its applicable rules: the National Arbitration Forum, Box 50191, Minneapolis, MN 55405-0191 (www.arb-forum.com), the American Arbitration Association, 335 Madison Ave., Floor 10, New York, NY 10017-4605 (www.adr.org), or any other organization that you may choose subject to our approval. You may get a copy of the rules of these organizations by contacting the arbitration organization or visiting its website.

On October 21, 2014, the circuit court denied Jeremy Franklin's Suzuki's motion to stay proceedings and compel arbitration. The circuit court found that:

[N]o title to the 2012 Hyundai Sonata was provided to Plaintiff Lashiya D. Ellis at the time of the sale or since, and therefore, pursuant to Section 301.210 RSMo., the contract is fraudulent and void, and . . . the arbitration provision which is to be construed with the other contract documents is subject to [Lashiya D. Ellis's] contract defenses of fraud and lack of consideration and is void, and therefore, not enforceable.

Jeremy Franklin's Suzuki appeals from the circuit court's order denying its motion to stay proceedings and compel arbitration.[3]

"The question whether [Jeremy Franklin's Suzuki's] motion to compel arbitration should have been granted is one of law, to be decided by this Court de novo." Johnson ex rel. Johnson v. JF Enterprises, LLC, 400 S.W.3d 763, 766 (Mo. banc 2013). "'A motion to compel arbitration of a particular dispute should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.'" Kohner Props., Inc. v. SPCP Group VI, LLC, 408 S.W.3d 336, 346 (Mo. App. 2013) (citation omitted).

In its first point on appeal, Jeremy Franklin's Suzuki contends that the circuit court erred in denying its motion to stay proceedings and compel arbitration because the arbitration agreement was severable and separately ...


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