ST. LOUIS — The Eastern District of the Missouri Court of Appeals ruled in two separate cases involving Hyundai Motor America and arbitration claims.
In both cases, the court had to navigate the intricacies of arbitration agreements and determine whether the procedural failures of the dealerships allowed the consumers to pursue their claims in court.
While Suntrup successfully compelled arbitration on appeal, the Martin v. HW Automotive case illustrates the challenges that can arise when arbitration agreements are not properly registered or administered, the judges found.
In two separate cases involving consumer disputes against car dealerships, the central issue was the enforcement of arbitration agreements.
The cases involved allegations that dealerships failed to install adequate anti-theft devices in vehicles sold to consumers, leading to thefts and damages.
The dealerships in both cases attempted to compel arbitration based on agreements signed by the consumers but faced legal challenges that were resolved differently.
In one case, Kiara Standifer and Quentina Tate, purchased Hyundai vehicles from a Suntrup Hyundai dealership and subsequently experienced vehicle thefts. They filed a lawsuit against Suntrup and Hyundai, claiming a violation of the Missouri Merchandising Practices Act due to the alleged failure to install proper anti-theft devices.
Suntrup sought to compel arbitration, citing the arbitration agreements signed by both consumers, which stipulated that disputes should be resolved through arbitration rather than in court.
The consumers acknowledged signing the arbitration agreements but argued that Suntrup's failure to register these agreements with the American Arbitration Association (AAA) allowed them to pursue their claims in court.
Suntrup countered that the agreements allowed for a choice of arbitrators and asserted that they had indeed registered with the AAA.
The circuit court denied Suntrup’s motion to compel arbitration, prompting an appeal. The appellate court conducted a de novo review since there was no dispute about the existence of the arbitration agreements.
The court concluded that the consumers’ reliance on the Martin case was unfounded because they had not attempted to initiate arbitration, nor had they shown that their claims would be rejected by an arbitrator.
The court also found that Suntrup had not waived its right to compel arbitration, as its actions demonstrated a consistent effort to enforce arbitration rather than engage in litigation.
Ultimately, the appellate court vacated the circuit court’s decision and remanded the case, instructing the circuit court to issue an order compelling arbitration. The court determined that the arbitration agreements were enforceable and that the consumers had not fulfilled their obligation to submit their claims to arbitration.
In the Martin case, several consumers, including Angela Martin, sued HW Automotive and related dealers, claiming violations of the Missouri Merchandising Practices Act. They alleged that the dealerships failed to install adequate anti-theft devices in their vehicles, leading to thefts and damages.
The dealers argued that the consumers had signed valid arbitration agreements requiring disputes to be resolved through arbitration. Initially, the consumers conceded that their claims were subject to arbitration and initiated proceedings with the AAA.
However, the AAA declined to administer the claims because the dealers had failed to register their arbitration clauses with the AAA, as required by its Consumer Arbitration Rules. The AAA's letter stated that either party could take their disputes to court if AAA declined arbitration.
Following the AAA's refusal, the consumers notified the circuit court of their attempt to arbitrate and the AAA's declination.
"The circuit court's order overruling Dealers' motion to compel arbitration is vacated," Judge John P. Torbitzky wrote. "The case is remanded to the circuit court with instructions to enter an order compelling arbitration."
Mary Anne Mellow represented the appellants.
Ashlea G. Schwartz and Jason D. Sapp represented the respondents.
Attorneys did not respond to requests for comment.
Missouri Court of Appeals, Eastern District case numbers: ED112165, ED112162