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Rutledge v. Asbury Automotive Group, Inc.

United States District Court, E.D. Tennessee, Knoxville

December 12, 2017




         This case is before the undersigned pursuant to 28 U.S.C. § 636(c), Rule 73(b) of the Federal Rules of Civil Procedure, and the consent of the parties, for all further proceedings, including entry of judgment [Doc. 9].

         Now before the Court is the Defendant's Motion to Dismiss Action and Compel Arbitration [Doc. 5]. The Plaintiff filed a Response [Doc. 10], objecting to the Motion, and the Defendant filed a Reply [Doc. 12]. The parties appeared before the Court on September 7, 2017, for a hearing on the Motion. Attorney Mark Brown appeared on behalf of the Plaintiff. Attorney Ted Raynor appeared on behalf of the Defendant. Accordingly, for the reasons explained below, the Court finds the Motion [Doc. 5] well-taken, and it is GRANTED.

         I. BACKGROUND

         The following facts are taken from the Amended Complaint, unless otherwise noted. The Amended Complaint alleges that on October 1, 2015, the Plaintiff purchased a 2015 Infiniti Q50 vehicle (“Vehicle”) from the Defendant's store. [Doc. 11 at ¶ 5]. The Defendant drove the Vehicle to Knoxville, Tennessee, where the Plaintiff signed the paperwork to complete the purchase of the Vehicle. [Id.]. The total purchase price of the Vehicle was $31, 198.23. [Id. at ¶ 6]. The Plaintiff paid $1, 800.00 down with the balance of the purchase financed through Navy Federal Credit Union. [Id.]. The Defendant certified the Vehicle as “Certified Pre-Owned.” [Id. at ¶ 7].

         The Amended Complaint continues that on February 28, 2017, the Plaintiff's wife was driving the Vehicle when she was rear-ended in a car accident causing damage to the passenger side of the Vehicle. [Id. at ¶ 9]. The Plaintiff worked through his insurance company, as well as the insurance company of the at-fault driver, to have the damage to the Vehicle repaired. [Id. at ¶ 10]. The Plaintiff took the Vehicle to Harper Auto Square in Knoxville, an Infiniti dealer, for repairs. [Id. at ¶ 11]. While there, the technicians discovered that the Vehicle had been in a previous accident and suffered damage to the driver's side of the Vehicle, which was not part of the February 28, 2017 accident. [Id.]. The technicians also discovered that the area where the previous damage had occurred was beginning to rust. [Id.].

         The Amended Complaint states that the Plaintiff was not told during the process of purchasing the Vehicle about a previous accident or damage, nor was the Plaintiff told that the Vehicle had been previously repaired. [Id. at ¶ 12]. The Amended Complaint alleges that the insurance company will not pay for the previous damage to the Vehicle, forcing the Plaintiff to pay out-of-pocket. [Id. at ¶ 13]. The Amended Complaint continues that the Plaintiff is left with a Vehicle that was not as represented and has diminished value. [Id. at ¶ 13]. The Amended Complaint alleges breach of contract, fraud, negligent misrepresentation, and violations of the Tennessee Consumer Protection Act. [Id. at ¶¶ 15-23]. Finally, the Amended Complaint states that the arbitration provision contained in the contract is not enforceable. [Id. at ¶¶ 29-32].


         The Defendant moves the Court for an order compelling arbitration and dismissing the Complaint. In the alternative, the Defendant requests that the Court compel arbitration and stay the proceedings. The Defendant asserts that the Federal Arbitration Act mandates that the Court grant its Motion to Compel Arbitration. Specifically, the Defendant states that the parties have agreed to arbitrate disputes regarding the sale of the Vehicle and that there are no legal constraints foreclosing arbitration. Further, the Defendant argues that despite the Plaintiff's failure to seek arbitration, it may seek to enforce the agreement to arbitrate. Finally, the Defendant states that an order dismissing this case and compelling arbitration is warranted.

         The Plaintiff responds [Doc. 10] that the Defendant's arbitration provision is unenforceable. The Plaintiff states that the arbitration provision is not supported by consideration. The Plaintiff explains that the arbitration provision unilaterally allows the Plaintiff or the Defendant to choose arbitration and that the Plaintiff has not and will not willingly choose arbitration. The Plaintiff further asserts that the arbitration provision at issue is an adhesion contract. The Plaintiff explains that he had to agree on the terms on the contract to get that particular Vehicle, which was unavailable elsewhere.

         The Defendant replies [Doc. 12] that the parties' arbitration agreement is clearly supported by adequate consideration. In addition, the Defendant asserts that the parties' arbitration agreement is not an unconscionable adhesion contract.


         The Federal Arbitration Act (“FAA”) “expresses a strong public policy favoring arbitration in a broad range of disputes.” Cooper v. MRM, Inc., 367 F.3d 493, 498 (6th Cir. 2004). Specifically, it provides that agreements to arbitrate “shall be 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. It is well established that federal law creates “a general presumption of arbitrability, and any doubts are to be resolved in favor of arbitration ‘unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.'” Highlands Wellmont Health Network Inc. v. John Deere Health Plan, Inc., 350 F.3d 568, 576-77 (6th Cir. 2003) (quoting AT&T Techs., Inc. v. Commc'n Workers of Am., 475 U.S. 643, 650 (1986)).

         “Before compelling an unwilling party to arbitrate, the court must engage in a limited review to determine whether the dispute is arbitrable; meaning that a valid agreement to arbitrate exists between the parties and that the specific dispute falls within the substantive scope of that agreement.” Javitch v. First Union Sec., Inc., 315 F.3d 619, 624 (6th Cir. 2003). The party opposing arbitration has the burden to show that the agreement is not enforceable. Mounts v. Midland Funding, LLC, 237 F.Supp.3d 930 (E.D. Tenn. 2017) (citing Green Tree Fin. Corp., -Ala. v. Randolph, 531 U.S. 79, 91-92 (2000)). “In order to meet this burden, ‘the party opposing arbitration must show a genuine issue of material fact as ...

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