IN THE COURT OF APPEALS OF NORTH CAROLINA

No. COA15-9

Filed: 15 December 2015

Wake County, No. 14 CVS 4465

RICARDO L. BAILEY, Plaintiff,

v.

FORD MOTOR COMPANY, FORD MOTOR CREDIT COMPANY, LLC, and 

KATHLEEN BURNS, individually, Defendants.

Appeal by defendant from order entered on 20 August 2014 by Judge Elaine 

M. Bushfan in Superior Court, Wake County. Heard in the Court of Appeals on 4 

June 2015.

Sharpless & Stavola, P.A., by Pamela S. Duffy, for plaintiff-appellee.

Kilpatrick Townsend & Stockton LLP, by Adam H. Charnes and Chris W. Haaf, 

and Williams Mullen, by M. Keith Kapp, for defendant-appellant.

STROUD, Judge.

Ford Motor Company (“defendant”) appeals from an order denying its motion 

to compel arbitration and dismiss. Defendant specifically argues that the trial court 

erred in concluding that (1) the Federal Arbitration Act (“FAA”) did not apply to this 

dispute; (2) the parties had agreed that a court, instead of an arbitrator, would decide 

the arbitrability of plaintiff’s claims; and (3) that plaintiff’s claims were not 

arbitrable. We reverse. 

I. Background
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Opinion of the Court

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In February 2003, Ricardo L. Bailey (“plaintiff’), an employee of defendant, 

moved to Sanford to operate and invest in a car dealership. Plaintiff and defendant 

executed a Stock Redemption Plan Dealer Development Agreement (“the Dealer 

Development Agreement”) in which plaintiff invested $180,000 in exchange for 1,800 

shares of common stock in the dealership and defendant invested $1,080,000 in 

exchange for 10,800 shares of preferred stock in the dealership. Under the 

agreement, defendant also loaned $540,000 to the dealership.

Under article 10 of the Dealer Development Agreement, plaintiff and 

defendant agreed to arbitrate any dispute “arising out of or relating to” the 

agreement:

10.01. Resolution of Disputes. If a dispute arises 

between [plaintiff] and [defendant] arising out of or 

relating to this Agreement, the following procedures shall 

be implemented in lieu of any judicial or administrative 

process:

(a) Any protest, controversy, or claim by 

[plaintiff] (whether for damages, stay of action or 

otherwise) with respect to any termination of this 

Agreement, or with respect to any other dispute 

between [plaintiff] and [defendant] arising out of or 

relating to this Agreement shall be appealed by 

[plaintiff] to the Ford Motor Company Dealer Policy 

Board (the “Policy Board”) within fifteen (15) days 

after [plaintiff’s] receipt of notice of termination, or 

within 60 days after the occurrence of any event 

giving rise to any other claim by [plaintiff] arising 

out of or relating to this Agreement. Appeal to the 

Policy Board within the foregoing time periods shall 

be a condition precedent to the right of [plaintiff] to 
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Opinion of the Court

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pursue any other remedy available under this 

Agreement or otherwise available under law. 

[Defendant], but not [plaintiff], shall be bound by the 

decision of the Policy Board. 

(b) If appeal to the Policy Board fails to resolve 

any dispute covered by this Article 10 within 180 

days after it was submitted to the Policy Board, or if 

[plaintiff] shall be dissatisfied with the decision of 

the Policy Board, the dispute shall be finally settled 

by arbitration in accordance with the rules of the 

CPR Institute for Dispute Resolution (the “CPR”) for 

Non-Administered Arbitration for Business 

Disputes, by a sole arbitrator, but no arbitration 

proceeding may consider a matter designated by this 

Agreement to be within the sole discretion of one 

party (including without limitation, a decision by 

such party to make an additional investment in or 

loan or contribution to [the dealership]), and the 

arbitration proceeding may not revoke or revise any 

provisions of this Agreement. Arbitration shall be 

the sole and exclusive remedy between the parties 

with respect to any dispute, protest, controversy or 

claim arising out of or relating to this Agreement.

(c) Arbitration shall take place in the City of 

Dearborn, Michigan unless otherwise agreed by the 

parties. The substantive and procedural law of the 

State of Michigan shall apply to the proceedings. 

Equitable remedies shall be available in any 

arbitration. Punitive damages shall not be awarded. 

This Section 10.01(c) is subject to the Federal 

Arbitration Act, 9 U.S.C.A. § 1 et seq., and any 

judgment upon the award rendered by the arbitrator 

may be entered by any court having jurisdiction 

thereof.

(d) Any arbitration decision or award shall be 

final and binding on all parties and shall deal with 

the question of costs of arbitration, including 
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Opinion of the Court

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without limitation, legal fees, which shall be borne 

by the losing party to the arbitration proceeding, and 

all matters related thereto.

(Portion of original in bold.)

On 17 April 2009, defendant sent a letter (“Dollar Buyout Offer”) to plaintiff in 

which it offered to “waive the repayment of the outstanding balance of preferred stock 

and note associated with” the Dealer Development Agreement in exchange for one 

dollar, provided plaintiff satisfied all of the offer’s conditions by 30 September 2009. 

Plaintiff attempted to satisfy all of the conditions necessary to effectuate his 

acceptance, but the parties dispute whether plaintiff was successful. 

On 10 April 2014, plaintiff sued defendant for breach of contract, breach of the 

implied covenant of good faith and fair dealing, and unjust enrichment, as well as 

Ford Motor Credit Company, LLC (“FMCC”) and Kathleen Burns, an employee of 

FMCC, for related claims. Plaintiff alleged that one of the conditions of the Dollar 

Buyout Offer was that he obtain a standby letter of credit for $300,000 and that he 

successfully obtained such a letter from Branch Banking & Trust Company (“BB&T”). 

Plaintiff also alleged that he satisfied all of the offer’s conditions but that defendant 

later changed the offer’s conditions to require that his standby letter of credit “be 

converted to cash[.]” Plaintiff further alleged that he spoke with Burns about this 

new condition, that she agreed to contact BB&T, but that she never in fact contacted 

BB&T, which prevented plaintiff from satisfying the new condition by the offer’s 
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Opinion of the Court

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deadline. Plaintiff alleged that as a result, he was “immediately terminated” and 

“lost his home to foreclosure.” 

On 19 May 2014, defendant answered and moved to compel arbitration and 

dismiss plaintiff’s claims against it. After holding a hearing on 22 July 2014, the trial 

court denied the motion on 20 August 2014. On 4 September 2014, defendant gave 

timely notice of appeal. 

II. Appellate Jurisdiction

Although the trial court’s order is interlocutory, defendant contends that the 

order is immediately appealable because it affects a substantial right. “[T]he right to 

arbitrate a claim is a substantial right which may be lost if review is delayed, and an 

order denying arbitration is therefore immediately appealable.” Hobbs Staffing 

Servs., Inc. v. Lumbermens Mut. Cas. Co., 168 N.C. App. 223, 225, 606 S.E.2d 708, 

710 (2005) (brackets omitted). Accordingly, we hold that this appeal is properly 

before us.

III. Motion to Compel Arbitration and Dismiss

Defendant contends that the trial court erred when it denied its motion to 

compel arbitration and dismiss. Defendant specifically argues that the trial court 

erred in concluding that (1) the FAA did not apply to this dispute; (2) the parties had 

agreed that a court, instead of an arbitrator, would decide the arbitrability of 
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Opinion of the Court

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plaintiff’s claims; and (3) plaintiff’s claims were not arbitrable. Because we agree 

with defendant on issue (2), we do not reach issue (3).

A. Standard of Review

“The trial court’s conclusion as to whether a particular dispute is subject to 

arbitration is a conclusion of law, reviewable de novo by the appellate court.” Sloan 

Fin. Grp., Inc. v. Beckett, 159 N.C. App. 470, 478, 583 S.E.2d 325, 330 (2003), aff’d 

per curiam, 358 N.C. 146, 593 S.E.2d 583 (2004). “[Q]uestions of contract 

interpretation are reviewed as a matter of law and the standard of review is de novo.” 

Price & Price Mech. of N.C., Inc. v. Miken Corp., 191 N.C. App. 177, 179, 661 S.E.2d 

775, 777 (2008).

B. Choice of Law

We preliminarily note that the trial court’s order suggests that it based its 

conclusion that the FAA did not apply to this dispute on its previous conclusion that 

the parties had not agreed to arbitrate disputes arising from the Dollar Buyout Offer. 

But the trial court should have addressed the issue of choice of law before addressing 

any other legal issue. See King v. Bryant, 225 N.C. App. 340, 344, 737 S.E.2d 802, 

806 (2013) (“[I]t is incumbent upon a trial court when considering a motion to compel 

arbitration to address whether the Federal Arbitration Act (‘FAA’) or the North 

Carolina Revised Uniform Arbitration Act (‘NCRUAA’) applies to any agreement to 

arbitrate.” (emphasis added and quotation marks and brackets omitted)). It is 
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undisputed that the parties agreed to arbitrate disputes “arising out of or relating to”

the Dealer Development Agreement. Accordingly, we must first address whether the 

FAA applies to the Dealer Development Agreement. See id. at 344, 737 S.E.2d at 

806.

If the parties affirmatively chose the FAA to govern an agreement to arbitrate, 

then the FAA will apply to that agreement. Id. at 345, 737 S.E.2d at 806-07; see also

9 U.S.C.A. ch. 1 (2009). Here, the parties affirmatively chose the FAA to govern the 

Dealer Development Agreement: “This Section 10.01(c) is subject to the Federal 

Arbitration Act, 9 U.S.C.A. § 1 et seq., and any judgment upon the award rendered by 

the arbitrator may be entered by any court having jurisdiction thereof.” Accordingly, 

we hold that the FAA applies to any dispute arising from the Dealer Development 

Agreement. See King, 225 N.C. App. at 345, 737 S.E.2d at 806-07.

C. Arbitrability

Defendant next argues that the trial court erred in concluding that the parties 

had agreed that a court, instead of an arbitrator, would decide the arbitrability of 

plaintiff’s claims. 

i. Substantive Arbitrability vs. Procedural Arbitrability

“The twin pillars of consent and intent are the touchstones of arbitrability 

analysis. Arbitration is a matter of contract and a party cannot be required to submit 

to arbitration any dispute which he has not agreed so to submit.” Peabody Holding 
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v. United Mine Workers of America, 665 F.3d 96, 103 (4th Cir. 2012) (quotation marks 

omitted).

Where ordinary contracts are at issue, it is up to the 

parties to determine whether a particular matter is 

primarily for arbitrators or for courts to decide. If the 

contract is silent on the matter of who primarily is to decide 

“threshold” questions about arbitration, courts determine 

the parties’ intent with the help of presumptions. 

On the one hand, courts presume that the parties 

intend courts, not arbitrators, to decide what we have 

called disputes about “arbitrability.” These include 

questions such as “whether the parties are bound by a 

given arbitration clause,” or “whether an arbitration clause 

in a concededly binding contract applies to a particular 

type of controversy.”

On the other hand, courts presume that the parties 

intend arbitrators, not courts, to decide disputes about the 

meaning and application of particular procedural 

preconditions for the use of arbitration. These procedural 

matters include claims of waiver, delay, or a like defense to 

arbitrability. And they include the satisfaction of 

prerequisites such as time limits, notice, laches, estoppel, 

and other conditions precedent to an obligation to 

arbitrate.

BG Group plc v. Republic of Arg., ___ U.S. ___, ___, 188 L. Ed. 2d 220, 228-29 (2014) 

(citations and quotation marks omitted).

Both sections 3 and 4 [of the FAA] call for an 

expeditious and summary hearing, with only restricted 

inquiry into factual issues. Hence, whether granting an 

order to arbitrate under section 3 or section 4, the district 

court must first determine if the issues in dispute meet the 

standards of either “substantive arbitrability” or 

“procedural arbitrability.” A substantive arbitrability 

inquiry confines the district court to considering only those 

issues relating to the arbitrability of the issue in dispute 
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Opinion of the Court

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and the making and performance of the arbitration 

agreement. . . . [T]he first duty of the district court when 

reviewing an arbitration proceeding under section 4 of the 

Act is to conduct a substantive arbitrability inquiry—

meaning the court engages in a limited review to ensure 

that the dispute is arbitrable—i.e., that a valid agreement 

to arbitrate exists between the parties and that the specific 

dispute falls within the substantive scope of that 

agreement. If the court determines that an agreement 

exists and that the dispute falls within the scope of the 

agreement, it then must refer the matter to arbitration 

without considering the merits of the dispute. All other 

issues raised before the court not relating to these two 

determinations fall within the ambit of “procedural 

arbitrability.”

. . . .

It is clear from these decisions, which represent over 

thirty years of Supreme Court and federal circuit court 

precedent that issues of “substantive arbitrability” are for 

the court to decide, and questions of “procedural 

arbitrability[]” . . . are for the arbitrator to decide.

Glass v. Kidder Peabody & Co., Inc., 114 F.3d 446, 453-54 (4th Cir. 1997) (citations, 

quotation marks, brackets, and footnotes omitted); see also 9 U.S.C.A. §§ 3, 4.

Here, defendant argues that the trial court erred in concluding that plaintiff’s 

claims did not fall within the scope of the arbitration clause of the Dealer 

Development Agreement. This issue is a question of substantive arbitrability. Glass, 

114 F.3d at 453; BG Group, ___ U.S. at ___, 188 L. Ed. 2d at 228. Therefore, as an 

initial matter, we presume that the parties intended that the trial court decide this 

issue of substantive arbitrability. Glass, 114 F.3d at 454; BG Group, ___ U.S. at ___, 

188 L. Ed. 2d at 228.
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Opinion of the Court

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ii. Clear and Unmistakable Intent

A party can overcome this presumption if it shows that the parties “clearly and 

unmistakably” intended for an arbitrator, instead of a court, to decide issues of 

substantive arbitrability. See AT&T Technologies v. Communications Workers, 475 

U.S. 643, 649, 89 L. Ed. 2d 648, 656 (1986); Peabody Holding, 665 F.3d at 102.

Those who wish to let an arbitrator decide which issues are 

arbitrable need only state that “all disputes concerning the 

arbitrability of particular disputes under this contract are 

hereby committed to arbitration,” or words to that clear 

effect. Absent such clarity, we are compelled to find that 

disputes over the arbitrability of claims are for judicial 

resolution.

Carson v. Giant Food, Inc., 175 F.3d 325, 330-31 (4th Cir. 1999).

At least eight federal appellate courts have held that the parties’ express 

adoption of an arbitral body’s rules in their agreement, which delegate questions of 

substantive arbitrability to the arbitrator, presents clear and unmistakable evidence 

that the parties intended to arbitrate questions of substantive arbitrability. See 

Petrofac, Inc. v. DynMcDermott Petroleum, 687 F.3d 671, 675 (5th Cir. 2012) (holding 

that the parties’ express adoption of the American Arbitration Association rules in 

their agreement constituted clear and unmistakable evidence); Fallo v. High-Tech 

Institute, 559 F.3d 874, 878 (8th Cir. 2009) (same); Qualcomm Inc. v. Nokia Corp., 

466 F.3d 1366, 1373 (Fed. Cir. 2006) (same); Terminix Intern. v. Palmer Ranch Ltd. 

Partnership, 432 F.3d 1327, 1332-33 (11th Cir. 2005) (same); Contec Corp. v. Remote 
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Solution, Co., Ltd., 398 F.3d 205, 208 (2d Cir. 2005) (same); Chevron Corp. v. Ecuador, 

795 F.3d 200, 207-08 (D.C. Cir. 2015) (same result under the United Nations 

Commission on International Trade Law rules); Oracle America, Inc. v. Myriad Group

A.G., 724 F.3d 1069, 1074-75 (9th Cir. 2013) (same); Apollo Computer, Inc. v. Berg, 

886 F.2d 469, 473-74 (1st Cir. 1989) (same result under International Chamber of 

Commerce rules). 

We note that three federal appellate courts have held that the parties had not 

delegated issues of substantive arbitrability to the arbitrator despite their express 

adoption of an arbitral body’s rules in their agreement. See Quilloin v. Tenet 

HealthSystem Philadelphia, Inc., 673 F.3d 221, 225-26, 229-30 (3rd Cir. 2012); Oblix, 

Inc. v. Winiecki, 374 F.3d 488, 490 (7th Cir. 2004); Riley Mfg. Co. v. Anchor Glass 

Container Corp., 157 F.3d 775, 777 n.1, 780-81 (10th Cir. 1998). But in each of these 

cases, the court did not specifically address whether the parties’ express adoption of 

these rules constituted clear and unmistakable evidence that they intended to 

arbitrate questions of substantive arbitrability, nor did the court examine the rules 

to determine if they delegated questions of substantive arbitrability to the arbitrator. 

Quilloin, 673 F.3d at 229-30; Oblix, 374 F.3d at 490; Riley, 157 F.3d at 780-81. 

Accordingly, we hold that Quilloin, Oblix, and Riley are inapposite.

Plaintiff argues that while the Fourth Circuit Court of Appeals “has not ruled 

explicitly” on this issue, two cases from that Court suggest that parties’ express 
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adoption of an arbitral body’s rules does not constitute “clear and unmistakable” 

evidence that the parties intended to arbitrate questions of substantive arbitrability. 

See Cathcart Properties, Inc. v. Terradon Corp., 364 F. App’x 17, 18 (4th Cir. Feb. 4, 

2010) (per curiam) (unpublished); Central West Virginia Energy v. Bayer Cropscience, 

645 F.3d 267, 273-74 (4th Cir. 2011). But neither case stands for this proposition or 

even addresses this issue.

In Cathcart Properties, the Fourth Circuit held that the parties did not “clearly 

and unmistakably” agree to arbitrate questions of substantive arbitrability, 

“[b]ecause there was no contract provision that expressly stated that the parties 

agreed to arbitrate the arbitrability of a claim[.]” Cathcart Properties, 364 F. App’x

at 18. The Court did not address or even mention the issue of whether parties can 

delegate questions of substantive arbitrability to the arbitrator by expressly adopting 

an arbitral body’s rules. Plaintiff points out that in the relevant arbitration provision, 

the parties identified the arbitral body that would decide any arbitration claims: 

“[T]he parties agree that any dispute or controversy arising from this Contract which 

would otherwise require or allow resort to any court or other governmental dispute 

resolution forum, shall be submitted for determination by binding arbitration under 

the Construction Industry Dispute Resolution of the America[n] Arbitration 

Association.” Cathcart Properties, Inc. v. Terradon Corp., Civil Action No. 3:08-0298, 

slip op. at 2 (S.D. W. Va. Feb. 6, 2009) (unpublished), aff’d per curiam, 364 F. App’x
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17 (4th Cir. Feb. 4, 2010) (unpublished). But the parties did not expressly adopt the 

rules of an arbitral body; rather, they merely identified the arbitral body. 

Accordingly, we distinguish Cathcart Properties. We also note that as an unpublished 

opinion, Cathcart Properties is not binding precedent in the Fourth Circuit. Cathcart 

Properties, 364 F. App’x at 18.

Plaintiff next points out that in Central West Virginia Energy, the Fourth 

Circuit held that the parties’ dispute was “not a matter of arbitrability that 

necessitates resolution by a court” and that “delineating an issue as either one of 

arbitrability or one of procedure serves the goal of preserving the former for judicial 

resolution.” Central West Virginia Energy, 645 F.3d at 273-74. But the Court also

qualified this distinction in accordance with U.S. Supreme Court precedent and 

quoted Howsam v. Dean Witter Reynolds, Inc.: “[T]he question whether the parties 

have submitted a particular dispute to arbitration, i.e., the question of arbitrability, 

is an issue for judicial determination unless the parties clearly and unmistakably 

provide otherwise.” Id. at 273 (emphasis added and brackets omitted) (quoting 

Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83, 154 L. Ed. 2d 491, 497 (2002)).

As the Fourth Circuit has not yet addressed the issue of whether parties’

express adoption of an arbitral body’s rules, which delegate questions of substantive 

arbitrability to the arbitrator, constitutes “clear and unmistakable” evidence that the 
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Opinion of the Court

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parties intended to arbitrate questions of substantive arbitrability, we will follow the 

majority rule.

We recognize that this Court has held that the parties’ adoption of an arbitral 

body’s rules was clear and unmistakable evidence that the parties intended for an 

arbitrator to decide a question of procedural arbitrability. See Smith Barney, Inc. v. 

Bardolph, 131 N.C. App. 810, 817, 509 S.E.2d 255, 259-60 (1998). There, the 

defendant argued that an arbitrator should decide the question of whether his claims 

were barred as untimely under the National Association of Securities Dealers 

(“NASD”) arbitration rules. Id. at 813, 509 S.E.2d at 257. This Court held: “The 

parties’ adoption of [the NASD rules] is a ‘clear and unmistakable’ expression of their 

intent to leave the question of arbitrability to the arbitrators. In no uncertain terms, 

Section 10324 [of the NASD rules] commits interpretation of all provisions of the 

NASD Code to the arbitrators.” Id. at 817, 509 S.E.2d at 259 (brackets omitted). 

Following the majority rule among the federal appellate courts, we extend this 

holding to the context of substantive arbitrability.

In article 10.01(b) of the Dealer Development Agreement, the parties expressly 

adopted the CPR Institute for Dispute Resolution (“CPR”) rules:

If appeal to the Policy Board fails to resolve any dispute 

covered by this Article 10 within 180 days after it was 

submitted to the Policy Board, or if [plaintiff] shall be 

dissatisfied with the decision of the Policy Board, the 

dispute shall be finally settled by arbitration in accordance 

with the rules of the CPR Institute for Dispute Resolution 
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(the “CPR”) for Non-Administered Arbitration for Business 

Disputes, by a sole arbitrator, but no arbitration proceeding 

may consider a matter designated by this Agreement to be 

within the sole discretion of one party (including without 

limitation, a decision by such party to make an additional 

investment in or loan or contribution to [the dealership]), 

and the arbitration proceeding may not revoke or revise 

any provisions of this Agreement. Arbitration shall be the 

sole and exclusive remedy between the parties with respect 

to any dispute, protest, controversy or claim arising out of 

or relating to this Agreement.

(Emphasis added.) Rule 8.1 of the CPR rules provides: “The Tribunal shall have the 

power to hear and determine challenges to its jurisdiction, including any objections 

with respect to the existence, scope or validity of the arbitration agreement.” 

(Emphasis added.) Given the parties’ adoption of the CPR rules, which includes CPR 

Rule 8.1., we hold that the parties clearly and unmistakably intended that an 

arbitrator would decide questions of substantive arbitrability, like the one at issue 

here. See Petrofac, 687 F.3d at 675; Fallo, 559 F.3d at 878; Qualcomm, 466 F.3d at 

1373.

iii. “Wholly Groundless” Exception

Plaintiff responds that even if the parties intended to arbitrate issues of 

substantive arbitrability, the trial court did not err in denying defendant’s motion to 

compel arbitration because defendant’s motion was “wholly groundless.” If a party’s 

claim of arbitrability is “wholly groundless,” the trial court must deny the party’s 

motion to compel arbitration even if the parties have agreed that an arbitrator should 
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decide questions of substantive arbitrability. See Local No. 358, Bakery & Confec., 

etc. v. Nolde Bros., 530 F.2d 548, 553 (4th Cir. 1975) (“[T]he arbitrability of a dispute 

may itself be subject to arbitration if the parties have clearly so provided in the 

agreement. Of course, the court must decide the threshold question whether the 

parties have in fact conferred this power on the arbitrator. If they have, the court 

should stay proceedings pending the arbitrator’s determination of his own 

jurisdiction, unless it is clear that the claim of arbitrability is wholly groundless.”) 

(emphasis added), aff’d, 430 U.S. 243, 51 L. Ed. 2d 300 (1977). The purpose of this 

inquiry is to “prevent[] a party from asserting any claim at all, no matter how divorced 

from the parties’ agreement, to force an arbitration.” Qualcomm, 466 F.3d at 1373 

n.5. 

Because the wholly groundless inquiry is supposed to be 

limited, a court performing the inquiry may simply 

conclude that there is a legitimate argument that the 

arbitration clause covers the present dispute, and, on the 

other hand, that it does not[,] and, on that basis, leave the 

resolution of those plausible arguments for the arbitrator. 

Nevertheless, the wholly groundless inquiry necessarily 

requires the courts to examine and, to a limited extent, 

construe the underlying agreement.

Douglas v. Regions Bank, 757 F.3d 460, 463 (5th Cir. 2014) (quotation marks, 

brackets, and ellipsis omitted).

Here, the scope of the parties’ arbitration agreement is broad and covers “any 

dispute, protest, controversy or claim arising out of or relating to” the Dealer 
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Development Agreement. See American Recovery v. Computerized Thermal Imaging, 

96 F.3d 88, 93 (4th Cir. 1996) (holding that substantively identical language in an 

arbitration provision was “capable of an expansive reach” and “embraced every 

dispute between the parties having a significant relationship to the contract 

regardless of the label attached to the dispute” (brackets omitted)). All of plaintiff’s 

claims against defendant arise from his allegation that after he satisfied all of the 

conditions necessary to effectuate his acceptance of the Dollar Buyout Offer, 

defendant unilaterally changed one of the offer’s conditions, which plaintiff then was 

unable to satisfy. Under the Dollar Buyout Offer, defendant offered to “waive the 

repayment of the outstanding balance of preferred stock and note associated with” 

the Dealer Development Agreement in exchange for one dollar, provided plaintiff 

satisfied all of the offer’s conditions. Given the broad scope of the parties’ arbitration 

clause in the Dealer Development Agreement and the fact that the Dollar Buyout 

Offer directly relates to the Dealer Development Agreement, we hold that it is 

plausible that plaintiff’s claims are arbitrable and thus defendant’s motion to compel 

arbitration is not “wholly groundless.” See Douglas, 757 F.3d at 463. Accordingly, 

we hold that the trial court erred in concluding that the parties had agreed that a 

court, instead of an arbitrator, would decide the arbitrability of plaintiff’s claims.

IV. Conclusion
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For the foregoing reasons, we reverse the trial court’s order denying 

defendant’s motion to compel arbitration and dismiss.

REVERSED.

Judges McCULLOUGH and INMAN concur.