Greater Canton Ford Mercury, Inc. v. Ables

948 So. 2d 417, 2007 WL 273502
CourtMississippi Supreme Court
DecidedFebruary 1, 2007
Docket2005-CA-01316-SCT
StatusPublished
Cited by22 cases

This text of 948 So. 2d 417 (Greater Canton Ford Mercury, Inc. v. Ables) is published on Counsel Stack Legal Research, covering Mississippi Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Greater Canton Ford Mercury, Inc. v. Ables, 948 So. 2d 417, 2007 WL 273502 (Mich. 2007).

Opinion

948 So.2d 417 (2007)

GREATER CANTON FORD MERCURY, INC., Keith Clark, Ford Motor Company, Ray L. Fayne and Katrina Fayne
v.
Wallace ABLES, Mary Bennett and John Williams.

No. 2005-CA-01316-SCT.

Supreme Court of Mississippi.

February 1, 2007.

*419 Michael David Tapscott, Tupelo, Thomas Wicker, Dara Steele—Belkin, John H. Fleming, Daniel H. Schlueter, Phil B. Abernethy, Jackson, Arnold Datron Lee, Gary E. Friedman, Latoya Cheree Merritt, Jackson, attorneys for appellants.

J. Douglas Minor, Jr., Jackson, attorney for appellees.

EN BANC.

SMITH, Chief Justice, for the Court.

FACTS AND PROCEEDINGS BELOW

¶ 1. Plaintiffs Wallace Ables, Mary Bennett and John H. Williams (Plaintiffs) purchased pre-owned vehicles from Greater Canton Ford Mercury, Inc. (GCFM). Plaintiffs allege that Defendants, GCFM and its employees, Keith Clark, Ray L. Fayne, and Katrina Fayne, along with Ford Motor Company (Ford), committed fraud by selling them "certified, pre-owned vehicles" when, in fact, the vehicles were either not eligible for this program or had not undergone an inspection and maintenance program required of "certified, pre-owned vehicles." Defendants filed a Motion to Stay Litigation and Compel Arbitration. The circuit court denied the motion, and consequently, Defendants appeal. Separately, Ford appeals the applicability of the circuit court judgment to it, particularly, whether as a non-signatory it may compel arbitration.

¶ 2. In 2002, the three plaintiffs[1] each purchased a vehicle from GCFM, a Ford dealership located in Canton, Mississippi. *420 In August 2003, the plaintiffs filed suit against GCFM, three of its employees, and Ford in the Holmes County Circuit Court alleging that due to Defendants' misrepresentations, they purchased vehicles under the belief that the vehicles were certified pre-owned when the vehicles had, in fact, not undergone the certification process required by Ford in order to qualify as "certified pre-owned." Each plaintiff claims to have purchased one of the fraudulently identified vehicles, in reliance on Defendants' alleged misrepresentations, at an increased price based on a false value. After the circuit court granted an extension of time for Defendants' responses, four answers were filed. Ford answered in October 2003. Ray and Katrina Fayne responded jointly in the same month. GCFM answered in November 2003, and Keith Clark filed his answer in December 2003. Each party listed the right to arbitrate the dispute as a defense.

¶ 3. On February 27, 2004, Ford alone filed a Motion to Compel Arbitration and Stay Litigation in the United States District Court for the Southern District of Mississippi in Jackson, Mississippi. The district court denied the motion on March 31, 2005, citing Ford's non-signatory status and finding that the claims brought against Ford "seemingly fall outside the arbitration agreement." Ford Motor Co. v. Ables, No. 3:04-CV-00152 (S.D.Miss. March 31, 2005). Ford appealed, and the United States Court of Appeals for the Fifth Circuit reversed the district court, holding that Ford could compel arbitration as a non-signatory.[2]

¶ 4. In June 2004, Plaintiffs filed a Motion for Partial Summary Judgment and Declaratory Judgment requesting the circuit court to decide the arbitrability of their claims. Plaintiffs contended that the arbitration clauses in the retail installment contracts executed by Plaintiffs did not cover claims asserted by Plaintiffs in their complaint. GCFM and Ford responded in the same month by filing in circuit court a Joint Motion to Stay Resolution of Plaintiffs' Motion for Partial Summary Judgment. On October 26, 2004, the circuit court partially granted Defendants' motion, staying resolution until November 26, 2004.

¶ 5. On November 29, 2004, still awaiting a decision from the circuit court on Plaintiffs' motion regarding arbitrability of the claims, GCFM and Keith Clark filed a Motion to Stay Litigation and Compel Arbitration in the circuit court, which all of the other Defendants subsequently joined. The circuit court entered an Order on March 10, 2005, staying its ruling on Plaintiffs' Motion for Partial Summary Judgment until the federal district court ruled on Ford's Motion to Compel. Following the federal district court's denial of Ford's Motion to Compel on March 31, 2005, the circuit court entered an Order on June 13, 2005, granting Plaintiffs' Motion for Partial Summary Judgment and Declaratory Judgment. Explicitly relying on the federal district court opinion, the circuit court reached the same conclusion and found that Plaintiffs had no duty to submit to arbitration of their claims. The circuit court subsequently, on July 12, 2005, denied Defendants' Motion to Stay Litigation and Compel Arbitration.

¶ 6. GCFM and Keith Clark appealed jointly on July 5, 2005, with Ford filing its appeal separately on the same day. Ray and Katrina Fayne filed a Notice of Appeal on July 8, 2005. Defendants each *421 claim the decision by the Holmes County Circuit Court was in error regarding arbitrability of Plaintiffs' claims. They raise one issue, whether the trial court properly refused to stay litigation and compel arbitration of those claims presented by Plaintiffs who executed arbitration agreements. Ford claims the court erred in finding it incapable of compelling arbitration as a non-signatory. Ford adopts the arguments presented by the other Defendants and further presents two legal issues, specifically in relation to Ford. Ford raises two issues: (1) whether Ford has a right compel arbitration as a non-signatory to the retail installment contract and (2) whether the circuit court should have granted Defendants' motion to stay litigation as to Ford until resolution of the arbitrability of Plaintiffs' claims.

DISCUSSION

I. WHETHER THE TRIAL COURT ERRED IN DENYING DEFENDANTS' MOTION TO COMPEL ARBITRATION AND STAY LITIGATION

¶ 7. A lower court's grant or denial of a motion to compel arbitration is reviewed de novo. East Ford, Inc. v. Taylor, 826 So.2d 709, 713 (Miss.2002).

¶ 8. The fraudulent actions alleged by Plaintiffs resulted in the purchase of vehicles, a transaction involving commerce. Written agreements to arbitrate contained in contracts evidencing a transaction involving commerce are subject to the Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq., and in determining whether to grant a motion to compel arbitration of a dispute subject to the FAA, there are two prongs of inquiry. Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626-28, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985); East Ford, 826 So.2d at 713. The first prong the Court must examine is whether the parties agreed to arbitrate the dispute. Id. Second, the Court must determine whether legal constraints external to the parties' agreement bar arbitration of the claims. Id.

Prong 1: Whether the parties agreed to arbitrate the dispute

¶ 9. The first prong is two-fold in that the court considers whether there is a valid arbitration agreement and then whether the parties' dispute is within the scope of the arbitration agreement. East Ford, 826 So.2d at 713.

A. Whether there is a valid arbitration agreement

¶ 10. Plaintiffs do not dispute the validity of the arbitration agreement.

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Bluebook (online)
948 So. 2d 417, 2007 WL 273502, Counsel Stack Legal Research, https://law.counselstack.com/opinion/greater-canton-ford-mercury-inc-v-ables-miss-2007.