Tupelo Auto Sales, Ltd. v. Gary P. Scott ( 2001 )

IN THE SUPREME COURT OF MISSISSIPPI
NO. 2001-CA-01979-SCT
TUPELO AUTO SALES, LTD.
v.
GARY P. SCOTT
DATE OF JUDGMENT: 12/20/2001
TRIAL JUDGE: HON. RICHARD D. BOWEN
COURT FROM WHICH APPEALED: LEE COUNTY CIRCUIT COURT
ATTORNEYS FOR APPELLANT: SHELBY KIRK MILAM
PAUL NATHAN JENKINS
S. DUKE GOZA
ROGER M. TUBBS
ATTORNEY FOR APPELLEE: GREGORY W. HARBISON
NATURE OF THE CASE: CIVIL - OTHER
DISPOSITION: AFFIRMED AND REMANDED - 05/08/2003
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
BEFORE PITTMAN, C.J., WALLER AND CARLSON, JJ.
PITTMAN, CHIEF JUSTICE, FOR THE COURT:
¶1. In response to a complaint filed by Gary P. Scott alleging that it breached various implied and
statutory warranties, Tupelo Auto Sales, Ltd. (“TAS”) filed a Motion to Compel Arbitration and Dismiss
the Complaint with prejudice. The circuit court entered an order denying the motion, and from this order
TAS appeals.
FACTS
¶2. On December 2, 1999 Tupelo Auto Sales sold Gary P. Scott a used 1997 Chrysler Sebring
convertible. In August of 2001, Scott filed a complaint alleging that TAS breached its implied warranty
of merchantability and certain provisions of the Mississippi Motor Vehicle Warranty Enforcement Act.
Scott claims that shortly after purchasing the vehicle, he noticed that one of the headlights was out and a
noise coming from the power steering system. He took the car in for repairs and discovered several other
general defects ranging from worn brakes to a temperamental passenger window switch.
¶3. In its answer, TAS asserted that any claims that Scott may have are covered by the Arbitration
Agreement signed by Scott contemporaneously with his purchase of the convertible. This agreement was
printed in full in a separate document apart from the contract to purchase the car and the financing
agreement. It is titled "Arbitration Agreement." After filing its answer to the complaint, TAS filed a motion
to Compel Arbitration and Dismiss the Claims with prejudice. In his response to TAS’s motion, Scott
claimed that he requested arbitration from TAS but received no response. He claimed that this failure to
respond rendered the contract voidable, and he stated that in his response that he "elected to void" the
arbitration provisions in the contract. Neither the record nor the parties’ briefs provide specifics regarding
TAS’s alleged failure to respond to Scott’s request for arbitration.
¶4. On December 20, 2001, the trial court entered an order denying the motion to compel arbitration.
No explanation for this ruling is found in the order, which summarily denies the motion.1
STANDARD OF REVIEW
¶5. The grant or denial of a motion to compel arbitration is reviewed de novo. East Ford, Inc. v.
Taylor, 826 So. 2d 709, 713 (Miss. 2002) (citing Webb v. Investacorp, Inc., 89 F.3d 252, 256 (5th
Cir. 1996)).
STATEMENT OF APPELLATE JURISDICTION
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This was apparently done after a hearing; however, there is no transcript of the hearing in the
record.
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¶6. Initially, the trial court's order appears to be interlocutory and thus insulated from review by this
Court. Scott seeks relief on state law grounds in his complaint, alleging breach of implied warranties of
merchantability and fitness as codified in Miss. Code Ann. §§ 75-2-314(2)(c) & 75-2-608(1)(a) as well
as breach of express warranties found in the Mississippi Motor Vehicle Warranty Enforcement Act as
codified in Miss. Code Ann. § 63-17-151 and following. The trial court's order denying the motion to
compel arbitration leaves the state claims for breach of warranty intact and pending resolution at the trial
level.
¶7. However, the Federal Arbitration Act provides that an appeal can be taken from an order denying
a motion to compel arbitration, 9 U.S.C. § 16(a)(1)(C) (2002), and the Fifth Circuit allows such an
appeal. See, e.g., Walton v. Rose Mobile Homes, LLC, 298 F.3d 470 (5th Cir. 2002). Some state
courts have also held that an appeal from an order denying a motion to compel arbitration is the appropriate
avenue of review. See A.G. Edwards & Sons, Inc. v. Clark, 558 So. 2d 358, 360 (Ala. 1990);
Walton v. Lewis, 987 S.W.2d 262, 264 (Ark. 1999); Dakota Wesleyan Univ. v. HPG Intern.,
Inc., 560 N.W.2d 921, 922-23 (S.D. 1997).
¶8. Recently, this Court has reviewed two cases on interlocutory appeal, pursuant to M.R.A.P. 5,
where the trial judge denied a motion to compel arbitration. See Oakwood Homes Corp. v. Randall,
824 So. 2d 1292 (Miss. 2002); East Ford, 826 So. 2d at 711. We have also recently reviewed an order
granting a motion to compel arbitration and dismissed the appeal from that order as interlocutory. See
Banks v. City Fin. Co., 825 So. 2d 642 (Miss. 2002). Similarly, we have reviewed on the merits and
affirmed an order granting a motion to compel arbitration, but did not discuss this Court's jurisdiction as
the issue was not raised as it was in Banks. See Russell v. Performance Toyota, Inc., 826 So. 2d
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719 (Miss. 2002). Finally, we have affirmed an order denying a tardy motion to compel arbitration which
reached us on direct appeal after a jury trial. See Cox v. Howard, Weil, Labouisse, Friedrichs,
Inc., 619 So. 2d 908 (Miss. 1993).
¶9. The instant case was not granted interlocutory appeal per M.R.A.P. 5, nor is the order denying the
motion to compel arbitration certified as final judgment per Miss. R. Civ. P. 54(b). Although Mississippi
has a statute allowing for appeals from an order denying a motion to compel arbitration, this statute only
applies to construction contracts. See Miss. Code Ann. §§ 11-15-141 & 11-15-101(2). See also Miss.
Code Ann. §§ 11-15-1 to -37, which deals with arbitration, but has no such appeals provision. The statute
generally allowing for appeals from circuit court reads as follows:
An appeal may be taken to the Supreme Court from any final
judgment of a circuit or chancery court in a civil case, not being a
judgment by default, by any of the parties or legal representative of such
parties; and in no case shall such appeal be held to vacate the judgment
or decree.
Miss. Code Ann. § 11-51-3 (Rev. 2002).
¶10. Since it appears to us after examining our statutes and case law that there may be some confusion
as to the finality of an order denying a motion to compel arbitration and thus this Court's jurisdiction, we
find a bright-line rule must be established here. The lack of a final judgment or a grant of a petition for
interlocutory appeal notwithstanding, we find that we have jurisdiction over this appeal. Adopting the
procedure of the Federal Arbitration Act and following the lead of other jurisdictions, we find an appeal
may be taken from an order denying a motion to compel arbitration.
ANALYSIS
I. WHETHER THE TRIAL COURT COMMITTED A
REVERSIBLE ERROR BY DENYING TUPELO AUTO
SALE'S MOTION TO COMPEL ARBITRATION WHEN A
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CONTRACT TO ARBITRATE EXISTED BETWEEN
TUPELO AUTO SALES AND MR. SCOTT AND THE
DISPUTES AT BAR FALL WITHIN THE SCOPE OF THAT
AGREEMENT.
¶11. The main issue on appeal is whether the trial court properly denied Tupelo Auto Sales's Motion
to Compel Arbitration. TAS contends that the arbitration agreement covers the resolution of the claims
Scott asserts against it for the problems he has encountered with his convertible. Scott argues that the
arbitration agreement is unconscionable. He also argues that since his repeated efforts to arbitrate his
claims against TAS were ignored, the trial court was correct in denying the motion and retaining jurisdiction
as TAS waived its right to compel arbitration. TAS replies that the arbitration agreement is not
unconscionable, TAS did not waive its right to compel arbitration, and Scott is estopped from making this
argument because he first attempted arbitration and thus acknowledged its binding validity.
¶12. We find this case to be so similar to the recently decided case of Oakwood Homes Corp. v.
Randall, that its outcome determines the outcome here. There, this Court granted interlocutory appeal
to examine whether a trial court erred in denying a motion to stay litigation and compel arbitration. We
affirmed the trial court's decision because we found the record wholly inadequate for appellate review and
presumed the trial court's decision to be correct. 824 So. 2d at 1293-94. The appellant suffered the
sanction for failing in its duty to preserve the record for consideration and showing therein how the trial
court erred. Id. The order denying the motion to compel arbitration stated no grounds as to why the trial
court denied the motion. There existed no transcript of the recessed hearing on the motion, and the
appellee did not even respond to the motion. Id. at 1293, 1294.
¶13. The instant case is similar in that no transcript of the hearing on the motion to compel arbitration
exists in the record, and attempts by this Court to obtain one have been fruitless. The trial court's order,
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like the one in Oakwood Homes, summarily denies the motion without elaboration. While Scott did
respond to the motion to compel arbitration–framing the issues similarly before both the trial court and this
Court–we find this fact provides no greater weight to an argument that the trial court's ruling is in error
where the order and the record do not provide reversible grounds. Therefore, consistent with Oakwood
Homes, we find that the trial court's judgment should be affirmed and this case remanded.
CONCLUSION
¶14. Having found that we have jurisdiction to hear this appeal, we conclude that Tupelo Auto Sales has
wholly failed to demonstrate how the trial court erred in its arriving at its
judgment. Therefore, the trial court's judgment is affirmed, and this case is remanded for further
proceedings.
¶15. AFFIRMED AND REMANDED.
SMITH, P.J., WALLER, COBB, EASLEY, CARLSON AND GRAVES, JJ.,
CONCUR. McRAE, P.J., AND DIAZ, J., CONCUR IN RESULT ONLY.
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