Tucker v. Ford Motor Co.

72 Va. Cir. 420, 2007 Va. Cir. LEXIS 24
CourtFairfax County Circuit Court
DecidedFebruary 1, 2007
DocketCase No. CL-2006-2827
StatusPublished
Cited by1 cases

This text of 72 Va. Cir. 420 (Tucker v. Ford Motor Co.) is published on Counsel Stack Legal Research, covering Fairfax County Circuit Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tucker v. Ford Motor Co., 72 Va. Cir. 420, 2007 Va. Cir. LEXIS 24 (Va. Super. Ct. 2007).

Opinion

By Judge Kathleen H. MacKay

Plaintiff Lloyd J. Tucker purchased a used 2001 S-Type Jaguar1 from Defendant Geneva Enterprises, Inc., d/b/a Rosenthal Jaguar/Land Rover, on August 30, 2003, for $36,016.95. At the time of sale, Plaintiff signed a Buyer’s Order. The Buyer’s Order conspicuously stated:

Customer Arbitration: If a dispute occurs between the customer and the dealer regarding the sale or service of this vehicle, and the statute of limitations for filing a claim has not [421]*421yet expired, the dispute shall be submitted to the American Arbitration Association for FINAL BINDING ARBITRATION (See # 11 on reverse side).

On the reverse side of the Buyer’s Order, #11 states in pertinent part that “Dealer Makes No Warranty ... Except If Dealer Enters into a Warranty/Service Contract.” Plaintiff and Defendant Geneva Enterprises, Inc., entered into a “Warranty/Service Contract” at the time of sale. Defendant denied entering into a service contract or warranty with Plaintiff. (¶ 4 of Defendant’s Answer to Plaintiff’s Amended Complaint.) Despite this denial, multiple repair bills indicate that substantial portions of Plaintiff s repair costs were covered under a warranty. Between September 19,2003, and August 31, 2005, Plaintiff took the vehicle back to Defendant for service on over thirteen occasions. Among Plaintiffs more serious complaints were that the vehicle leaked; the alignment, steering, and balance caused the vehicle to vibrate and drive poorly; a window was stuck in the “down” position; and the CD player failed to function. Plaintiff provided Defendant with a sufficient opportunity to cure the vehicle’s defects by repairing or replacing the same.

Plaintiffs initial Complaint was filed on March 6, 2006. Defendant filed an Answer and Grounds of Defense on April 26,2006. In that pleading, Defendant cited the relevant arbitration language of the Buyer’s Order and asked the court to dismiss the suit pending arbitration. Defendant filed a Motion to Stay Proceedings and Compel Arbitration on August 10, 2006. Plaintiff filed a Motion for Leave to Amend Complaint on August 28, 2006, followed by a response to Defendant’s Motion to Stay Proceedings on September 18, 2006. On September 29, 2006, the court heard Plaintiffs Motion for leave to file an Amended Complaint and Defendant’s Motion to Stay Proceedings.2 A September 29,2006, court order granted Plaintiff leave and deemed Plaintiffs previously submitted Amended Complaint as filed of that date. The amended complaint asserts nine counts: (Count 1) Breach of Express Warranty under the Virginia Uniform Commercial Code (“VUCC”), (Count 2) Breach of Implied Warranty of Merchantability under the VUCC, (Count 3) Breach of Written Warranty under Magnusson-Moss Warranty Act, (Count 4) Breach of Implied Warranty under Magnusson-Moss Warranty Act, (Count 5) Violation of the Virginia Consumer Protection Act, Va. Code [422]*422§ 59.1-196 et seq., (Count 6) Violation of the Virginia Motor Vehicle Warranty Enforcement Act, Va. Code § 59.1-207 et seq., (Count 7) Revocation of Acceptance, (Count 8) Actual Fraud, and (Count 9) Constructive Fraud.

On September 29, 2006, pursuant to an order, the court took Defendant’s Motion to Stay Proceedings under advisement and further requested that the parties brief the “fraud in the inducement” issue which arose at the hearing. Since the hearing, I have taken the parties’ briefs and arguments into account.

I. Fraud in the Inducement

Plaintiff alleges Defendant fraudulently induced Plaintiffs agreement to the Buyer’s Order. A contract, the consideration for which is fraudulently induced, is voidable and unenforceable. Wilson v. Hundley, 96 Va. 96, 100-01 (1898). Where parties have agreed to arbitrate,3 however, an allegation of fraud in the inducement is a claim which the parties must arbitrate unless the alleged fraudulent conduct induced the acceptance of the contract’s arbitration provision specifically. Prima Paint Corp. v. Flood & Conlkin Mfg. Co., 388 U.S. 395, 403-04 (1967). Virginia Courts have found the federal courts’ consideration of the Federal Arbitration Act, 9 U.S.C. § 1 et seq., to be instructive when interpreting the Virginia Uniform Arbitration Act, Va. Code § 8.01-581.01 et seq. McMullin v. Union Land & Management Co., 242 Va. 337, 341 (1991). “[I]f the claim is fraud in the inducement of the arbitration clause itself ... the ... court may proceed to adjudicate it. But the statutory language does not permit the ... court to consider claims of fraud in the inducement of the contract generally.” Prima Paint, 388 U.S. at 403-04. Thus, allegations that the contract generally was procured by fraud do not eliminate the parties’ obligation to arbitrate pursuant to the arbitration provision. Plaintiff has not alleged that the arbitration clause was specifically procured by fraud.

[423]*423Plaintiff attempts to limit Prima Painfs reach by subscribing its application to only “broad” arbitration clauses. A proper application of Prima Painfs reasoning requires the court to determine whether the arbitration provision in the Buyer’s Order is sufficiently broad to include non-breach controversies, including alleged deficiencies in the contract’s formation. The arbitration clause in Prima Paint was broad, requiring arbitration of “[a]ny controversy or claim arising out of or relating to [the] Agreement.” Prima Paint, 388 U.S. at 398. An arbitration clause containing the language “arising out of and relating to this agreement or breach hereof’ is a broad arbitration clauses that encompasses disputes on and off the contract. See McMullin v. Union Land & Management Co., 242 Va. 337, 341 (1991). The Buyer’s Order arbitration provision requires arbitration of all controversies “regarding the sale or service of [the] vehicle.” The phrase “regarding the sale” is equivalent to the phrase “relating to ... the Agreement” found in the Prima Paint provision. The arbitration provision in Prima Paint also includes the phrase “arising out of.” Prima Paint, 388 U.S. at 398. Plaintiff contends that phrases such as “arising out of’ and “arising hereunder” are narrow clauses, citing Mediterranean Enterprises, Inc. v. Ssabyong Corp., 708 F.2d 1458, 1456 (9th Cir. 1983). The inclusion of the language “arising out of’ and “arising hereunder” is insufficient to convert a broad provision to a narrow provision, because Prima Painfs provision contained this language but was held to be a broad arbitration clause. Thus in Prima Paint, the inclusion of the phase “relating to’’’’ provided the sufficient breadth to overcome the narrowing “arising under” language. The Buyer’s Order arbitration clause contains only the broad “regarding the sale” language, indicating that a broad reading of its scope is proper.

Allegations of fraudulent acts regarding contract formation sufficiently “regard[] the sale” of the vehicle to bring Plaintiffs allegation with the ambit of Prima Paint. Accordingly, whether Defendant fraudulently induced Plaintiff to enter the contract is a question that must be arbitrated unless Plaintiff specifically alleged fraudulent inducement of the arbitration provision itself.

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Bluebook (online)
72 Va. Cir. 420, 2007 Va. Cir. LEXIS 24, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tucker-v-ford-motor-co-vaccfairfax-2007.