Arbitration Update - Tuesday, July 17, 2012 9:27 - 0 Comments

Hope For Consumers Seeking To Avoid Arbitration

A recent decision in a case pending in a Mobile County Circuit Court resulted in a favorable development for consumers seeking to avoid arbitration. This was a case involving the purchase of an automobile. The decision by Circuit Judge Sarah Stewart in the case, Lucille Hope v. Dean McCrary Imports, was based on the fact that the dealer’s boilerplate language in sales documents did not use the same business name on the purchase order, the separate arbitration clause, and the bill of sale. The bill of sale referred to Victoria Enterprises as the seller, but Victoria Enterprises was not named in the arbitration agreement. The elderly Plaintiff in this case also presented a triable issue of fraud in the factum.

The trial court applied Sec. 3 of the Federal Arbitration Act, which allows a timely request for trial by jury to determine whether there was a meeting of the minds, and whether fraud in the factum voided the agreement to arbitrate. Recent U.S. Supreme Court precedent was persuasive that an arbitration clause is not binding on a nonparty to the agreement. The High Court ruled in EEOC v. Waffle House, 534 U.S. 279 (2002), that this is an issue governed by state law. Alabama law clearly limits the application of arbitration to “the signing parties.” See Jim Burke Automotive v. McGrue, 826 So. 2d 122 (2002).

The Plaintiffs were represented by Mobile lawyers Greg McAtee and Greg Buffalow. The case is scheduled for a jury trial in August. The jury is to first determine which of the Defendants in the case can take advantage of the arbitration clause. I appreciate very much these lawyers sending this information to be included in this case. They did a very good job in keeping a path toward justice open for and available to their client.