Greater Canton Ford Mercury, Inc. v. Wallace Ables

CourtMississippi Supreme Court
DecidedJuly 18, 2005
Docket2005-CA-01316-SCT
StatusPublished

This text of Greater Canton Ford Mercury, Inc. v. Wallace Ables (Greater Canton Ford Mercury, Inc. v. Wallace 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. Wallace Ables, (Mich. 2005).

Opinion

IN THE SUPREME COURT OF MISSISSIPPI

NO. 2005-CA-01316-SCT

GREATER CANTON FORD MERCURY, INC., KEITH CLARK, FORD MOTOR COMPANY, RAY L. FAYNE AND KATRINA FAYNE

v.

WALLACE ABLES, MARY BENNETT AND JOHN WILLIAMS

DATE OF JUDGMENT: 07/18/2005 TRIAL JUDGE: HON. JANNIE M. LEWIS COURT FROM WHICH APPEALED: HOLMES COUNTY CIRCUIT COURT ATTORNEYS FOR APPELLANTS: MICHAEL DAVID TAPSCOTT THOMAS WICKER DARA STEELE-BELKIN JOHN H. FLEMING DANIEL H. SCHLUETER PHIL B. ABERNETHY ARNOLD DATRON LEE GARY E. FRIEDMAN LATOYA CHEREE MERRITT ATTORNEY FOR APPELLEES: J. DOUGLAS MINOR, JR. NATURE OF THE CASE: CIVIL - CONTRACT DISPOSITION: VACATED IN PART AND REVERSED AND REMANDED IN PART - 02/01/2007 MOTION FOR REHEARING FILED: MANDATE ISSUED:

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 plaintiffs1 each purchased a vehicle from GCFM, a Ford dealership

located in Canton, Mississippi. 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.

1 The three plaintiffs were joined by forty-one others at the initial filing of the suit in the Holmes County Circuit Court. The claims of the thirty-eight who were not residents of Holmes County were later severed and transferred to the proper jurisdictions on October 26, 2004. Six plaintiffs remained, but only the three before this Court signed retail installment contracts, the contract containing the arbitration provision in dispute, with GCFM and, thus, might be subject to arbitration of their claims.

2 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

2 Ford Motor Co. v. Ables, No. 05-60391, 2006 U.S. App. LEXIS 29347 (5th Cir. Nov. 29, 2006).

3 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 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.

4 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.

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