Rickard v. Teynor's Homes, Inc.

279 F. Supp. 2d 910, 2003 U.S. Dist. LEXIS 15419, 2003 WL 22060320
CourtDistrict Court, N.D. Ohio
DecidedAugust 25, 2003
Docket3:03CV7018
StatusPublished
Cited by19 cases

This text of 279 F. Supp. 2d 910 (Rickard v. Teynor's Homes, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rickard v. Teynor's Homes, Inc., 279 F. Supp. 2d 910, 2003 U.S. Dist. LEXIS 15419, 2003 WL 22060320 (N.D. Ohio 2003).

Opinion

ORDER

CARR, District Judge.

This suit arises from the sale of a manufactured home by defendant Teynor’s Homes, Inc. (“Teynor’s”) to plaintiff Edith M. Rickard. Plaintiff has also sued Fair-mont Homes, Inc. (“Fairmont”), the home’s manufacturer, and American Modem Home Insurance Company. Pending is Teynor’s motion to dismiss or stay litigation and compel arbitration. This court has jurisdiction pursuant to 28 U.S.C. § § 1331 and 1367. For the following reasons, Teynor’s motion to stay shall be denied.

BACKGROUND

In October, 1997, plaintiff and her late husband, Norman E. Rickard, entered into a contract to purchase a Fairmont modular home from Teynor’s. In February, 1998, Teynor’s delivered the home to plaintiffs place of residence in Cygnet, Ohio.

Plaintiff claims the house was negligently installed, and, after set up, the home began to “substantially deteriorate.” First Amended Complt. at ¶ ¶ 22, 26. According to plaintiff, the problems with the house, “as designed and constructed, pose a structural danger to the house and further danger to the occupants of the house.” Id. at 38. Plaintiff also claims that defendants conspired to breach their warranty obli *912 gations “through unlawful denials of claims, and fraudulent misrepresentations as to the terms and conditions of the warranties.” Id. at 39.

Plaintiffs First Amended Complaint asserts eight causes of action, including breach of express and implied warranties, failure to warn of a defective product, breach of contract, civil conspiracy, fraud, unconscionability, and violations of the Ohio Consumer Sales Practices Act, O.R.C. § 1345.01 et seq. and the Magnuson-Moss Warranty Act (“MMWA”), 15 U.S.C. § 2301 et seq. Id. at ¶¶ 30-52.

Teynor’s moves to dismiss or, in the alternative, to stay litigation and compel arbitration in reliance on the “Addendum to Sales Agreement/Consent to Binding Arbitration” (“Addendum”), signed by the Rickards. Under the terms of the Addendum, the Rickards voluntarily waived their ability to bring any cause of action in any court arising out of the sales transaction.

Plaintiff claims that the arbitration agreement is unenforceable because:

(1) there is no meeting of the minds or voluntary and mutual assent between the Rickards and Teynor to create a valid arbitration agreement; (2) the making of the Addendum to Sales Agreement/Consent to Binding Arbitration is unconscionable due to adhesion and unequal bargaining power between the parties; (3) the terms of the Addendum, regarding the rules of arbitration are unconscionable and inherently unfair to Mrs. Rickard and do not prove an adequate or accessible forum for her to redress her grievances; (4) the Magnu-son-Moss Warranty Act provides that consumers retain full and unfettered access to the courts for resolution of their warranty disputes. And, the Addendum violates and destroys the purpose and intent of the Magnuson-Moss Warranty Act.

Doc. 23 at 10.

DISCUSSION

I. Federal Arbitration Policy

Through the Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq., Congress has declared a national policy favoring arbitration. Southland Corp. v. Keating, 465 U.S. 1, 10, 104 S.Ct. 852, 79 L.Ed.2d 1 (1984). The FAA’s purpose is “to reverse the longstanding judicial hostility to arbitration agreements ... and to place arbitration agreements upon the same footing as other contracts.” Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991). Accordingly, “the [FAA] establishes that, as a matter of Federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration .... ” Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983).

Notwithstanding this policy, “arbitration is a matter of contract and a party cannot be required to submit to arbitration [in] any dispute which he has not agreed so to submit.” AT&T Techs. v. Communications Workers of America, 475 U.S. 643, 648, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986). Under § 2 of the FAA, an arbitration agreement is “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 considering a motion to stay proceedings and compel arbitration under the Act, a court has four tasks:

first, it must determine whether the parties agreed to arbitrate; second, it must determine the scope of that agreement; third, if federal statutory claims are asserted, it must consider whether *913 Congress intended those claims to be nonarbitrable; and fourth, if the court concludes that some, but not all, of the claims in the action are subject to arbitration, it must determine whether to stay the remainder of the proceedings pending arbitration.

Stout v. J.D. Byrider, 228 F.3d 709, 714 (6th Cir.2000).

“In determining whether the parties have made a valid arbitration agreement, ‘state law may be applied if that law arose to govern issues concerning the validity, revocability, and enforceability’ of contracts generally, although the FAA preempts ‘state laws applicable to only arbitration provisions.’ ” Great Earth Cos. v. Simons, 288 F.3d 878, 889 (6th Cir.2002) (quoting Doctor’s Assocs., Inc. v. Casarotto, 517 U.S. 681, 686-87, 116 S.Ct. 1652, 134 L.Ed.2d 902 (1996)). Thus, “[s]tate law governs ‘generally applicable contract defenses [to an arbitration clause], such as fraud, duress, or uneonseionability.” ’ Id. at 889 (quoting Casarotto, 517 U.S. at 687, 116 S.Ct. 1652).

In this case, the question whether the Addendum is an enforceable arbitration agreement is resolved by basic, generally applicable precepts of Ohio contract law. However, the federal policy favoring arbitration is taken into consideration even in applying ordinary state law. Inland Bulk Transfer Co. v. Cummins Engine Co.,

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Bluebook (online)
279 F. Supp. 2d 910, 2003 U.S. Dist. LEXIS 15419, 2003 WL 22060320, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rickard-v-teynors-homes-inc-ohnd-2003.