ST. LOUIS — A Missouri appellate court has affirmed the denial of a motion to compel arbitration filed by Autohaus LLC and Auto Services Company Inc., ruling that the companies waived their right to arbitrate by substantially participating in the litigation process.
The case stems from a dispute between Autohaus and Marla Housley, who purchased a truck from the company in September 2021, according to an order filed March 17 in the Missouri Court of Appeals.
Housley also bought a vehicle protection plan from Auto Services Company, which included an arbitration clause requiring disputes to be settled through mediation and, if necessary, arbitration.
When the truck experienced mechanical issues, Housley and her husband, Heath Housley, filed a repair claim that was ultimately denied.
After attempts to resolve the dispute through mediation with the Missouri Attorney General’s Office failed, the Housleys filed a lawsuit against Autohaus and Auto Services Company in June 2023.
Despite the arbitration clause in the agreement, the companies proceeded with the litigation for nearly a year before invoking their right to arbitration.
Throughout the legal proceedings, Autohaus and Auto Services Company filed multiple motions to dismiss and strike, responded to discovery requests, attended hearings, and agreed to a scheduling order setting a jury trial for February 2025.
During this period, the companies did not request arbitration or raise the arbitration clause as a defense, the court document noted.
On May 8, 2024, nearly a year after the lawsuit was initiated, the companies filed a motion to compel arbitration. The trial court denied the motion, finding that their significant participation in the litigation was inconsistent with the right to arbitrate.
In its ruling, the appellate court cited previous Missouri case law, emphasizing that parties may waive their right to arbitration by engaging in substantial litigation conduct.
The court determined that Autohaus and Auto Services Company acted inconsistently with their right to arbitrate by failing to assert the arbitration clause in a timely manner.
“A party who fails to follow the procedural steps in an arbitration agreement and proceeds in a judicial forum acts inconsistently with the right to arbitrate,” the court stated, referencing the companies’ prolonged litigation efforts before seeking arbitration.
The companies argued that their right to arbitrate did not arise until after mediation had been requested, a position the court rejected.
The judges pointed out that, as the drafters of the agreement, Autohaus and Auto Services Company had knowledge of the arbitration clause and could have initiated the process at any time.
Ultimately, the appellate court upheld the trial court’s decision, concluding that the companies’ conduct constituted a waiver of their arbitration rights.
"Because Appellants’ conduct was inconsistent with their right to arbitrate, Appellants have waived such right," the judges found. "Because our holding that Appellants waived their right to arbitrate is dispositive, we need not address any of the other arguments raised in the briefing."
Judges Matthew P. Hamner, Don E. Burrell, and Becky J. West unanimously concurred.
Autohaus and Auto Services Company did not respond to requests for comment in the case.
Missouri Court of Appeals case number: SD38561