Case Title: Harris v. David Stanley Chevrolet, Inc.

Citation: 

Docket Number: 109146

State: oklahoma

Court: Oklahoma Supreme Court

Date: 2012-02-07T00:00:00Z

Document:
HARRIS v. DAVID STANLEY CHEVROLET, INC.2012 OK 9Case Number: 109146Decided: 02/07/2012THE SUPREME COURT OF THE STATE OF OKLAHOMA
NOTICE: THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION IN 
THE PERMANENT LAW REPORTS. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR 
WITHDRAWAL. 

MARLENE HARRIS, Plaintiff/Appellee,v.DAVID STANLEY 
CHEVROLET, INC., Defendant/Appellant,andHARTFORD INSURANCE COMPANY and 
SAFE-GUARD PRODUCTS INTERNATIONAL, L.L.C., Defendants.
ON CERTIORARI TO THE COURT OF CIVIL APPEALSDIVISION 
II
¶0 Marlene Harris (Harris) requests review of the opinion of the Oklahoma 
Court of Civil Appeals which overruled the trial court's Motion to Compel 
Arbitration, Stay of Proceeding and Request for Evidentiary Hearing and 
Supporting Brief. This matter involved the purchase of "GAP" insurance from the 
Safe-Guard Products International, L.L.C., sold to Harris by an employee of car 
dealership three days after the purchase of the vehicle. Dealership claimed the 
issue fell within the arbitration clause in purchase agreement. 
CERTIORARI PREVIOUSLY GRANTED;COURT OF CIVIL APPEALS OPINION 
VACATED;RULING OF THE TRIAL COURT AFFIRMED.
Mickey Walsh, Jerry Fraley, Derek Fransen, BEELER, WALSH & WALSH, 
P.L.L.C., Vanessa R. Bentwood, MUSSER KOURI BENTWOOD & GRANT, Oklahoma City, 
Oklahoma, for Plaintiff/AppelleeJames L. Gibbs, II, GOOLSBY, PROCTER, 
HEEFNER & GIBBS, P.C., Oklahoma City, Oklahoma, for 
Defendant/Appellant.
COMBS, J.
¶1 Marlene Harris (Harris) requests review of the opinion of the 
Oklahoma Court of Civil Appeals which overruled the trial court's "Motion to 
Compel Arbitration, Stay of Proceeding and Request for Evidentiary Hearing and 
Supporting Brief." We find the Court of Civil Appeals misinterpreted the 
standard of review and thus erred in reversing and remanding this matter for 
further proceedings.
FACTUAL AND PROCEDURAL HISTORY
¶2 On August 20, 2005, Harris purchased a 2005 Chevrolet Monte Carlo from 
David Stanley Chevrolet, Inc. (David Stanley). The purchase agreement contained 
an arbitration provision that applied to any "controversy, claim or dispute 
between the Purchaser and the Dealer arising out of, or related to this sale or 
transaction, including but not limited to, any and all issues or disputes 
arising as a result of this sale or transaction whether said issues arise prior 
to, during or subsequent to the sale or attempted sale of a vehicle." On August 
23, 2005, Harris entered into a GAP Insurance contract1 with Safe-Guard Products 
International, L.L.C. (Safe-Guard) sold to her by an employee of David Stanley 
acting as an agent for Safe-Guard. On August 26, 2009, the vehicle suffered a 
total loss. Safe-Guard refused to pay the total difference between the insurance 
proceeds and the amount owed on the car. 
¶3 Harris maintained that the purchase of the vehicle and the purchase of the 
policy were separate transactions. Harris argued, since they were separate 
transactions, the arbitration clause of the purchase contract was inapplicable 
to the underpayment of coverage (GAP coverage). Harris argued no claim was 
brought against Safe-Guard which was related to the sale or financing of the 
vehicle, conceding the arbitration clause would apply to claims related to the 
sale or financing issues. Harris argues the vehicle valuation utilized by 
Hartford, and the underpayment of the claim by Safe-Guard, was inapplicable to 
the arbitration clause of the purchase contract. After reviewing the motions of 
the parties, the trial court denied David Stanley's Motion to Compel arbitration 
without an evidentiary hearing.
¶4 The Court of Civil Appeals reversed the trial court finding Oklahoma 
policy favors the use of arbitration to resolve disputes. The Court of Civil 
Appeals also held, under Rule 4(c) of the Rules for District Courts, 
12 
O.S. Supp. 2010, Ch. 2, App., a hearing would be preferred as they 
accepted David Stanley's argument that controverted facts existed as to whether 
the arbitration agreement extended to the GAP policy. 
STANDARD OF REVIEW
¶5 The trial court's decision to grant an evidentiary hearing on a motion to 
compel arbitration is within the discretion of the trial court. In 
Rogers v. Dell Computer Corp., 2005 OK 51, ¶17, 138 P.3d 826, 830, we stated with regard to a 
request for a hearing on a motion to arbitrate:
Either party may request a hearing. The decision to grant a hearing will be 
in the discretion of the district court. However, if the existence of an 
agreement to arbitrate is controverted, then the better procedure is for the 
district court to conduct an evidentiary hearing before entering an order. 
(citations omitted)
The trial court's ruling thereon will not be disturbed on appeal absent an 
abuse of discretion. Oklahoma Oncology & Hematology P.C. v. US Oncology, 
Inc., 2007 OK 
12, ¶19, 160 P.3d 936, 944.
OKLAHOMA PRINCIPLES OF ARBITRATION
¶6 Arbitration is designed "to preclude court intervention into the merits of 
disputes when arbitration has been provided for contractually." Voss v. City 
of Oklahoma City, 1980 OK 148, ¶5, 618 P.2d 925, 928. A person seeking to compel 
arbitration "must present a statement of law and facts showing an enforceable 
agreement to arbitrate the issues present in the petition." Rogers v. Dell 
Computer Corp., 2005 OK 51, ¶16, 138 P.3d 826, 830. A court should permit 
arbitration "unless the court can say with 'positive assurance' the dispute is 
not covered by the arbitration clause." City of Muskogee v. Martin, 
1990 OK 
70, ¶8, 796 P.2d 337, 340.
¶7 In the present matter, it must be shown that the arbitration clause 
applies to the issue of underpayment of insurance coverage in the policy. If 
this cannot be shown, the Court will not impose arbitration upon the parties. 
See, Oklahoma Oncology and Hematology P.C. v. U.S. Oncology, Inc., 
2007 OK 
12, ¶22, 160 P.3d 936, 944, citing Volt Info. Sciences, Inc. v. 
Board of Trustees of Leland Stanford Junior Univ., 489 U.S. 468, 479, 109 S. Ct. 1248, 103 L. Ed. 2d 488 (1989), which held that 
"arbitration is a matter of consent, not coercion." Additionally, "[a]rbitration 
is not a forum to rewrite the contract terms for the benefit of another party." 
Oklahoma Oncology and Hematology P.C. v. U.S. Oncology, Inc., 
2007 OK 
12, ¶30, 160 P.3d 936, 942.
¶8 The arbitration clause at issue herein provided that it would be 
arbitrated in accordance with the Federal Arbitration Act (FAA).2 Under the FAA, an 
arbitration provision in a contract "shall be valid, irrevocable, and 
enforceable, save upon such grounds as exist in law or in equity for the 
revocation of any contract." 9 U.S.C., § 2. The United State Supreme Court has 
held "the first task of a court asked to compel arbitration of a dispute is to 
determine whether the parties agreed to arbitrate that dispute." Mitsubishi 
Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626, 105 S. Ct. 3346, 3353, 87 L. Ed. 2d 444 (1985), through the use 
of "general state-law principles of contract interpretation." Volt Info. 
Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ., 
489 U.S. 468, 475, 109 S. Ct. 1248, 103 L. Ed. 2d 488 (1989). 
¶9 The trial court, viewing the purchase agreement and the insurance contract 
executed three days after the purchase of the car, determined there was no 
continuity of contract. The contract for the sale of the vehicle refers to "this 
sale or transaction, including but not limited to any and all issues or disputes 
arising as a result of this sale or transaction." There is nothing in this 
language indicating the future purchase of "GAP" insurance. It is uncontroverted 
that the two contracts involve two separate subjects, executed on different 
dates, and the arbitration clause in the purchase agreement does not mention or 
reference GAP insurance or any relationship between the two contracts. The trial 
court did not abuse its discretion in denying the evidentiary hearing and ruling 
that the arbitration clause did not apply as a matter of law. 
CERTIORARI PREVIOUSLY GRANTED;COURT OF CIVIL APPEALS 
OPINION VACATED;RULING OF THE TRIAL COURT AFFIRMED.
¶10 CONCUR: TAYLOR, C.J., COLBERT, V.C.J., KAUGER, WATT, REIF, COMBS, 
GURICH, JJ.
¶11 DISSENT: WINCHESTER, EDMONDSON, JJ.
FOOTNOTES
1 GAP insurance is 
generally described as that type of coverage which will pay or waive the 
difference between the unpaid net balance of the debt less the actual cash value 
of the vehicle in the event of a total loss. 
2 Neither party suggests that strict adherence to the FAA 
is necessary. In fact, David Stanley noted that the FAA and the Oklahoma Uniform 
Arbitration Act (OUAA) stand for the same principles at issue.