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Brown v. BOB Moore Auto Group, LLC

United States District Court, W.D. Oklahoma

August 22, 2019

(1) LESLIE BROWN, individually; (2) LESLIE BROWN, parent and next friend of H.B., a minor child; and (3) LESLIE BROWN, on behalf of all other putative plaintiffs, similarly situated, Plaintiffs,
(1) BOB MOORE AUTO GROUP, L.L.C., a domestic limited liability company; (2) BMAG LUXURY 1, L.L.C., a domestic limited liability company; (3) JOZEF DAREN DABROWSKI; (4) TONY G. GRISSOM, individually and acting in his official capacity as an agent of Bob Moore Auto Group, L.L.C. and BMAG Luxury 1, L.L.C.; (5) JOHN DOE TOWING SERVICES; (6) JOHN DOE TOW TRUCK DRIVER #1; and (7) JOHN DOE TOW TRUCK DRIVER #2, Defendants.



         Before this Court is the Motion to Stay and Compel Arbitration filed by Defendants Bob Moore Auto Group, L.L.C. (“BMAG”); BMAG Luxury 1, L.L.C. (“BMAG Luxury”); and Jozef Daren Dabrowski (collectively, “Defendants” or “Bob Moore Defendants”). See Doc. 7. Defendants move to stay this action and compel all claims asserted by Plaintiffs[1]against them to bilateral arbitration. See id. at 1-2. The matter is fully briefed and at issue. See Docs. 7, 9-10. Having considered the parties' filings, the Court finds as follows.

         I. Background

         This dispute began with a car sale. Plaintiff Leslie Brown alleges that she purchased a 2010 Audi Q5 SUV for her minor daughter, H.B., from a Bob Moore auto dealership on or about September 27, 2018. See Doc. 1, at 4; Doc. 7, at 2, 4. According to Ms. Brown, she signed paperwork effectuating the vehicle's purchase; left $7, 000 in cash as a down payment with Defendant Dabrowski, a dealership employee; and drove the vehicle home to give to her daughter. See Doc. 1, at 4. The Bob Moore Defendants recall events differently: in their telling, Ms. Brown feigned forgetting her checkbook, assured Mr. Dabrowski that she would return the next morning with down payment money, and left with the vehicle. See Doc. 7, at 2-3. The next day, a back-and-forth between Ms. Brown and the dealership ensued over whether she had, in fact, paid the down payment. See Doc. 1, at 4-5; Doc. 7, at 2-3. Eventually, on November 1, 2018, Ms. Brown returned the vehicle to the dealership-though not before Defendants unsuccessfully attempted to repossess it. See Doc. 1, at 6-7; see also Doc. 7, at 3 & n.2. Based on these events, Plaintiffs filed this suit on May 3, 2019, asserting claims for conversion, embezzlement, fraud, conspiracy to commit fraud, theft, breach of the peace, false imprisonment, intentional infliction of emotional distress, and violations of the Fair Debt Collection Practices Act and the Oklahoma Consumer Protection Act. See id. at 7-18.

         At issue now is whether this Court is the appropriate forum in which to adjudicate Plaintiffs' claims. Defendants argue that, as part of the vehicle sale, Leslie Brown signed an Agreement to Arbitrate. See Doc. 7, at 4-5; see also Docs. 7-1, 7-2.[2] This arbitration agreement states, in relevant part:

By entering into this Agreement to Arbitrate . . ., Customer(s) and Dealership, including any Assignee (collectively referred to as “The Parties”) agree, except as otherwise provided in this Agreement, to settle by binding arbitration any dispute between them regarding: (1) the purchase/lease by Customer(s) of the above-referenced Vehicle; (2) any products and services purchased in conjunction with the Vehicle; (3) any financing obtained in connection with the transaction; and/or (4) any dispute with respect to the existence, scope or validity of this Agreement. Matters that the Parties agree to arbitrate include, but are not limited to, disputes related to the Retail Purchase/Retail Lease Agreement and any documents incorporated therein by reference (whether such reference is made in the Agreement or in the document itself), the application for and terms of financing for the transaction, the Finance/Lease Contract, any alleged promises, representations and/or warranties made to or relied upon by the Parties, and any alleged unfair, deceptive, or unconscionable acts or practices.

         Doc. 7-2, at 1. The agreement also states that “the Parties agree that by entering into this Agreement, they are waiving their right to a jury trial and their right to bring or participate in any class action or multi-plaintiff action in court or through arbitration.” Id. Based on this agreement, Defendants contend that all of Plaintiffs' claims are subject to arbitration. See generally Docs. 7, 10. Ms. Brown, unsurprisingly, disagrees, launching myriad attacks on the arbitration agreement and Defendants' power to enforce it. See generally Doc. 9.

         II. Standard of Review

         The parties agree, and the contract evinces, that this dispute is governed by the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1-16. “The FAA applies to all arbitration agreements ‘involving commerce,' and creates a body of federal substantive law of arbitrability, applicable to any arbitration agreement within coverage of the Act.” Comanche Indian Tribe of Okla. v. 49, L.L.C., 391 F.3d 1129, 1131 (10th Cir. 2004) (internal quotation marks, citations, and brackets omitted). “[E]stablish[ing] a liberal federal policy favoring arbitration agreements, ” Epic Sys. Corp. v. Lewis, 138 S.Ct. 1612, 1621 (2018), the FAA “reflects the fundamental principle that arbitration is a matter of contract, ” “places arbitration agreements on an equal footing with other contacts, ” and “requires courts to enforce [such agreements] according to their terms.” Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 67-68 (2010) (citations omitted). Under the FAA, “[d]isputes are subject to arbitration when a valid and enforceable arbitration agreement exists, and when the dispute falls within the scope of . . . the arbitration agreement.” Frazier v. W. Union Co., 377 F.Supp.3d. 1248, 1257 (D. Colo. 2019).

         Section 2, “the primary substantive provision” of the FAA, Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983), provides in pertinent part that

[a] written provision in any . . . contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . 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. To “implement § 2's substantive rule . . . ., a party may apply to a federal court for a stay of the trial of an action ‘upon any issue referable to arbitration under an agreement in writing for such arbitration, '” and “a party ‘aggrieved' by the failure of another party ‘to arbitrate under a written agreement for arbitration' may petition a federal court ‘for an order directing that such arbitration proceed in the manner provided for in such agreement.'” Rent-A-Center, 561 U.S. at 68 (quoting 9 U.S.C. §§ 3-4); see also Belnap v. Iasis Healthcare, 844 F.3d 1272, 1280 (10th Cir. 2017). Once the Court is “satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, ” it “shall . . . order . . . the parties to proceed to arbitration in accordance with the terms of the agreement.” 9 U.S.C. § 4.

         While “the presence of an arbitration [agreement] generally creates a presumption in favor of arbitration, this presumption disappears when the parties dispute the existence of a valid arbitration agreement.” Bellman v. i3Carbon, LLC, 563 Fed.Appx. 608, 613 (10th Cir. 2014) (internal quotation marks and citations omitted); see also Riley Mfg. Co. v. Anchor Glass Container Corp., 157 F.3d 775, 779 (10th Cir. 1998) (“[W]hen the dispute is whether there is a valid and enforceable arbitration agreement in the first place, the presumption of arbitrability falls away.”). Thus, before a court may consider an arbitration agreement's terms, “a threshold matter . . . must be established”: the “existence of an agreement to arbitrate.” Avedon Eng'g, Inc. v. Seatex, 126 F.3d 1279, 1287 (10th Cir.1997). After all, if a party has not agreed to arbitrate a dispute, she cannot be forced to do so. See Dish Network, L.L.C. v. Ray, 900 F.3d 1240, 1243 (10th Cir. 2018). Section 4 of the FAA “requires judicial resolution of issues that go to the ‘making' of an agreement for arbitration, ” and the Court may “compel arbitration of a particular dispute” only when it is “satisfied that the ‘making' of the agreement to arbitrate is not at issue” Spahr v. Secco, 330 F.3d 1266, 1269-70 (10th Cir. 2003) (quoting Prima Paint Corp. v. Flood & Conklin Mfg., 388 U.S. 395, 403-04 (1967)). The Court looks to state law principles of contract formation to determine whether an agreement to arbitrate exists in the first place. See Howard v. Ferrellgas Partners, L.P., 748 F.3d 975, 979 (10th Cir. 2014).

         Once the Court finds that an arbitration agreement exists, it ordinarily must address the question of arbitrability, that is, “whether the parties have submitted a particular dispute to arbitration.” Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83 (2002). But just as parties may agree to arbitrate the merits of disputes, so too can they agree to delegate this arbitrability question. See Belnap, 844 F.3d at 1280 (citing First Options of Chi., Inc. v. Kaplan, 512 U.S. 938, 943 (1995)). Delegation clauses in arbitration agreements reflect the parties' agreement to “arbitrate threshold issues concerning the arbitration agreement” and “‘gateway' questions of ‘arbitrability,' such as whether the parties have agreed to arbitrate or whether their agreement covers a particular controversy.” Rent-A-Center, 561 U.S. at 68-69; see also Belnap, 844 F.3d at 1280 (“[W]hen parties agree that an arbitrator should decide arbitrability, they delegate to an arbitrator all threshold questions concerning arbitrability . . . ...

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