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McFadden v. Van Chevrolet-Cadillac, LLC

United States District Court, W.D. Missouri, Western Division

August 3, 2018

EDWARD MCFADDEN, Plaintiff,
v.
VAN CHEVROLET-CADILLAC, LLC, Defendant.

          ORDER AND OPINION DENYING DEFENDANT'S MOTION TO STAY PROCEEDINGS AND COMPEL ARBITRATION

          BETH PHILLIPS, JUDGE.

         Plaintiff Edward McFadden (“Plaintiff”) filed this suit for age discrimination against his former employer, Defendant Van Chevrolet-Cadillac, LLC (“Defendant”). Now pending is Defendant's Motion to Stay Proceedings and Compel Arbitration, (Doc. 9), which argues that the parties contractually agreed to arbitrate this dispute. As further explained below, the Court finds that mutual assent is lacking because Defendant did not sign the agreement or otherwise establish its assent. Consequently, the Motion is DENIED.

         I. BACKGROUND

         Defendant owns and operates a car dealership in Kansas City, Missouri. On November 28, 2016, Defendant hired Plaintiff on an at-will basis as sales director. At that time, Defendant presented Plaintiff with a document titled Mutual Agreement to Arbitrate Claims (“Agreement”). In relevant part, the Agreement provides that “[b]y agreeing to arbitrate, the Dealership and its Employees give up their right to sue in court, as well as the right to trial by jury. The Dealership and Employees agree, instead, that any legal claim that either may have against the other will be submitted to a private, impartial arbitrator . . . for a final and binding decision[.]” (Doc. 10-1, p. 5, § 1.) (emphasis omitted.)[1]

         The Agreement specifies that the parties agree to “resolve by arbitration all statutory, contractual and common law claims or controversies, past, present or future, that arise out of or relate to the Employee's hiring, employment, or termination . . . including . . . claims of discrimination . . . under any federal, state or local statute or ordinance[.]” (Id., p. 5, § 2.) The Agreement states that it “shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1-16” (the “FAA”) (Id., p. 10, § 22.)

         The Agreement concludes with a page titled “KNOWING AND VOLUNTARY AGREEMENT.” (Id., p. 12.) This page states, in part, “I understand that by signing this agreement I am giving up my right to a jury trial.” (Id.) A designated signature and date line is provided for both the “Employee” and for Defendant's “Authorized Dealership Representative.” Plaintiff signed and dated the Agreement “11-28-16.” (Id.) The signature and date lines for Defendant are blank. Defendant states that it “could not locate a copy of the Agreement signed by [Defendant].” (Doc. 10, p. 6, n.1.)

         On April 1, 2017, Defendant terminated Plaintiff's employment and replaced him with a younger individual. Plaintiff responded by filing a one-count Petition in state court. The Petition alleges that Defendant discriminated against Plaintiff on the basis of age in violation of the Missouri Human Rights Act. See Mo. Rev. Stat. §§ 213.010(1), 213.055.1(1)(a). Defendant removed the case to this Court on the basis of diversity jurisdiction, (Doc. 1), and now moves to compel arbitration pursuant to the Agreement, (Doc. 9).

         II. DISCUSSION

         Under the FAA, arbitration agreements are “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. When presented with a motion to compel arbitration, “we ask only (1) whether there is a valid arbitration agreement and (2) whether the particular dispute falls within the terms of that agreement.” Robinson v. EOR-ARK, LLC, 841 F.3d 781, 783-84 (8th Cir. 2016) (citations and quotations omitted). Arbitration must be ordered if both inquiries are answered in the affirmative. Id.

         Validity turns on the application of state contract law.[2] Torres v. Simpatico, Inc., 781 F.3d 963, 968 (8th Cir. 2015). “The elements required to form a valid contract in Missouri are offer, acceptance, and bargained for consideration.” Frye v. Speedway Chevrolet Cadillac, 321 S.W.3d 429, 436 (Mo.Ct.App. 2010) (citations and quotations omitted). The party moving to compel arbitration bears the burden of proving these elements. Clemmons v. Kansas City Chiefs Football Club, Inc., 397 S.W.3d 503, 506 (Mo.Ct.App. 2013).

         Here, Plaintiff contends the Agreement is not valid for several reasons, including that the parties did not mutually assent. Defendant argues the Agreement is valid, and further argues that the Agreement's delegation clause requires that contract formation and enforceability issues be submitted to the arbitrator. The Court addresses these arguments below.

         A. Mutual Assent

         “Offer and acceptance requires a mutual agreement.” Baier v. Darden Rests., 420 S.W.3d 733, 738 (Mo.Ct.App. 2014). “A mutual agreement is reached when the minds of the contracting parties meet upon and assent to the same thing in the same sense at the same time.” Youngs v. Conley, 505 S.W.3d 305, 314 (Mo.Ct.App. 2016) (citations, quotations, and alterations omitted). “A meeting of the minds occurs when there is a definite offer and an unequivocal acceptance.” Id. (citations and quotations omitted) (emphasis in original). Under Missouri law, a “party's signature on a contract remains the common, though not exclusive, method of demonstrating agreement.” Baier, 420 S.W.3d at 738 (citations and quotations omitted). “Assent can be shown in other ways, such as by the parties' conduct.” Heritage Roofing, LLC v. Fischer, 164 S.W.3d 128, 134 (Mo.Ct.App. 2005).

         Whether mutual assent exists “depends upon the intentions of the parties.” Baier, 420 S.W.3d at 738. “Seldom are the intentions of parties capable of direct proof and, ordinarily, such intentions are determinable only through logical deduction from proven facts.” Id. (citations and quotations omitted). The Court must find whether the facts establish a party's intent to be bound. Id. at 738-39; see also Int'l Ass'n of Bridge, Structural, Ornamental, & Reinforcing Ironworkers, Shopman's Local 493 v. EFCO Corp. & Constr. Prods., Inc., 359 F.3d 954, 956 (8th ...


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