### IN THE COURT OF APP EALS OF TENNESS EE AT KNOXVI LLE Se pte m be r 16, 200 5 S es sio n
LUCY R. CHAPMAN v. H & R BLOCK MO RTGAGE CORPORATI ON, ET AL 

### . Appeal f romthe Chancer y Court for Ham ilton Coun ty No. 02-0186 Howell N. Pe oples, Chan cellor

No. E2005-00082-COA- R3-CV - F ILED NOVEMBER 28, 2005

This appea l presents the issue of the enf orce ability

of an a rbitration ag ree ment. The plaintiff e ntere d into a loan transa ction with the defe ndant mortg ag e corporation to obtain funds on behalf of her d au gh t er . The loan w as sec ured by a mortg ag e on plaintiff’ s home. Plaintiff’s daug hter subsequently

discontinued making pay ments on the l oan, and plaintiff filed a petition to rescind the loan, asserting that plaintiff w as caused to sign the loan by defe ndant l ender ’s fra

ud. Severa l months afte r the c ase ha d been pending
, lender demande d that the ca se be submitted to arbitration pursuant to an ag ree m en t signe d by plaintiff when the loan was c losed. The tria l court g rante d lender ’s motion compelling ar

bitration. Plaintiff a

ppeals, arg uing that the arbitra tion a g ree ment she ente red into is unenf

orce able be cause it is an adhesion contra ct and is unconsc ionable and unr easona ble. Pla int if f f urthe r a rg ue s that le nd e r w a ive d it s r ig ht t o c omp e l arb itr a tio n u nd e r the c ir c ums ta nc e s in this case. We hold that the ar bitration ag ree ment is e nforc eable , and we aff irm the judg ment of the tr ia l c ou rt

.

Te nn. R . A pp. P . 3 App e al a s o f Rig ht ; J udgm e nt of t he Cha nc e r y C our t A ffirm e d; Ca use Rem anded

S HAR ON G. LEE , J. , d e li v e r e d th e o p in io n o f th e c o u r t, in which C H A RLES D. S US ANO , J R ., and D. M I CH A EL S WI NEY , J J ., joined.

Whit ney Dura nd, Chattanoog a, Te nnessee , for the A ppellant, L ucy R. Chapman.

Wins ton S. Evans, N ashville, Tenne ssee, for the Appellee s, H & R Block Mortg ag e Corporation and Option One Mortg ag e Corporation.-2- OP IN ION

I . Ba ckg round

I n De ce m b er of

1999, the Plaintiff/Appellant, L ucy R. Chapman, was a

pproac hed by

her daug hte r, Yv on ne Danie ls, w ho reques te d th a t Ms . Ch apma n’ s r e sid e nc e be pr e se nte d a s se c ur ity for a mortg ag e loan on beh al f o f M s. Daniels. Ms. Chapman a nd Ms. Daniels had se vera l discussions reg arding thi s r e qu e st d ur ing th e spri ng a ndsu mme r o f 2 00 0, a nde ve ntu a lly Ms. C h ap m a n c o n s e n t e d
, w i t h t h e u n d e r s t a n d i n g t h a t t h e l o a n w o u l d b e i n t h e n a m e o f Lu c yR. Chapman. Ther eaf

ter, Ms. Da niels contac ted the De fenda nt/Appellee, H & R Blo ck (“ Bl o ck”) , a national mortg ag e c orporation, through the internet a nd commence d application for the loan. Dur ing the application process, Ms. Daniels presented herself to Block a s Lucy R. Chapman and conduc ted all communications with Bloc k. Ms. Chapman did not participa te i n these communications and had no knowledg e of the m.

The loan c losing took plac e at Ms. Chapman’ s home on Septemb er 20, 2000. Present at closin g we re Yvonne Da niels, Lucy Chapman, and a

repr esenta tive of the loan c losing a g ent. At closing , Ms. Chapman signe d the loan application for a loan in the amount of $49,500, a promissory

no te , a de e d o f t ru st, a nda no tic e of ri g ht to ca nc e l. At that time , Ms. Cha pma n a sk e d M s. Da nie ls how long she (Ms. Chapman) ha d to canc el the loan tra nsaction, and Ms. Da niels advised her that she had thre e day s within which to canc el. Shortly afte r closing , the not i ce o f rig ht to cance l was also r e a d to M s

. Ch ap ma n b y a f r ie n d

. T h e n o ti c e s tate s a c a n c e ll a ti o n d e a d li n e o f mi dnight on September 23, 2000.
At closing , Ms. Chapman also sig ned a two pa g e docume nt entitled “AGREEMEN T FO R THE ARB I TRATI ON OF DI SPUTES,” an identical copy of which is attac hed to this opinion as Ap pe nd ix A. I n g e ne ra l, t

h i s a rb itr a tio n a g re e me nt p ro vid e s th a t no n- e xce pte d d isp ute s b e tw e e n M s. Ch ap ma n a n d B lo c k
, r e late d to th e lo a n a n d n o t s u b je c t to in f o r ma l r e s o lu ti o n , s h a ll b e s ettled by arbitration at the option of either Ms. Chapman or Bloc k. The ag ree ment further provides that such

arb itr a tio n s ha ll be a dmi nis te re d b y the Am e ri c a n A rb itr a tio n A sso c ia tio n p ur su a nt t o it s Commercial Ar

bitration Rules and g overne d by the Fe dera l Arbitration Act.
Ms. Chapman did not resc ind the contract wit hin the three -day period provide d in the notice of rig ht to cance l and, upon expiration of that period, B lock distributed the loan proc eeds to Ge nera l Americ a Corporation (“GAC”) , the entity acting as s ettlement ag ent in the transa ction. GAC satisfied Ms. Chapman’s f irst mortga g e by

direc t pay ment and forwar ded checks to her in the total amount of $43,667.06. One of t hese chec ks was pay able to Ms. Chapman individually in the amount of $1 5, 92 8. 06 , a ndthe re ma ind e r w e re pay abl e to cre dit or s. Up on re c e ipt of the c he c ks , M s. Chapman conta cted B lock and inquire d as to whethe r she could still canc el the loan; howeve r, she

was a dvised that her prior mortg ag e had been paid in f ull, a nd it wa s too la te to c ance l. T here afte r, Ms. Cha pma n c a sh e d th e $1 5, 92 8. 06 c he c k ma de ou t to he rs e lf a ndtr a ns mit te d th e oth e r c he c ks to Ms. Da nie ls w ho fo rw ard e d th e m to he r ( Ms. Danie ls’ ) c re dit or s.-3-

Wit hin a y ear

of closing
, Yvonne Daniels cea sed making pay ments on the loan. On F ebrua ry 19, 2002, Ms. Chapman filed a pe tition aga inst Block to r escind the loa n and set a side the dee d of t rust , alleg ing that Block “ eng ag ed in ac tiviti es, which it knew or should have know n wer e
u n co n s ci o n ab l e, fa l s e, an d fr au d u l en t an d wh i ch h ad th e p u rp o s e o f ca u s i n g M rs

. C h ap m an t o s i gn [t he] mortg ag e loan.” In te r a lia
, the petit ion seeks damag es pursua nt to the Tennesse e Consumer Pr ote c tio n A c t ( “ TCP A” ). I n ad dit ion to B loc k, the pe tit ion na me s a s d e fe nd a nts Yv on ne Da nie ls; Bloc k’s sister cor

poration, Option One Mortga g e; GAC; and Da na M. Wiseman, an employ ee of GA C. T he re a ft e r, the tr ia l c ou rt e nte re d a te mpo ra ry re str a ini ng or de r e njo ini ng fo re c los ur e on Ms. Chapman’s home.

I n A pr il, 20 02 , B loc k f

ile d it s a ns we r t o th e pe tit ion , a lon g wi th a c ros s-c la im a g a ins t Yvonne Da niels and a c ounterc laim ag ainst Ms. C h ap m an for br eac h of contra ct. The f ollowing month, Ms. C hapman f

iled a motion for def

ault judgme nt ag ainst GAC, and Yvonne Daniels filed her a nswers to Ms. Chapman’s petiti on and B lock’s cr oss-claim. L ater in the month, the trial court enter ed a de fault judg ment ag ainst GAC.

On J uly 9, 2002, Ms. Cha

pman amende d her pe tition t o add Wells Far g o Ba nk Minnesota, N.A. (“Wells Fa

rg o”) as an additional defe ndant in the ca se, upon informa tion that W ells Fa rg o was the owner , as trustee , of the mortg ag e upon her home. On J uly 15, 2002, the t rial court entere d an order enjoining Wells Fa

rg o from for eclosing on Ms. Chapman’s re sidence

.
On or abo ut A ug us t 23 , 2 00 2, B loc k f ile d its de ma nd fo r ar

bit ratio n of i ts d isp ute wi th M s. Cha pma n w ith the Am e ri c a n A rb itr a tio n A sso c ia tio n. On Oc tob e r 2, 200 2, B loc k fil e d a mo tio n to compel Ms. Chapman t o submit her claim ag ainst Block to a rbitration pursuant to the a rbitration ag ree ment, wh i ch al l o ws either pa rty there to to request that a dispute be submitt ed to ar bitration either be fore a l aw suit has been se rved or “ with in 60 d

ay s a fte r a complaint, an a nswer, a counter claim or an am e nd me nt to a c om

pla int ha s be e n se rv e d. ” (empha sis added). A hearing on this mot ion was held on Oc tober 14, 2002, a nd on November 19, 2 0 0 2 , t he trial c ourt enter ed an order compelling arbitration pursuant to the Fe dera l A rbitration Act. The trial court fur ther orde red that Bloc k bear

all fee s and costs assoc iated with the ar bitration proce ss.

Arbitration of the claim s b etwee n Ms. Chapman and Bloc k took place on A ug ust 2 and 3, 2004. The a

rbitrator de termined that a ll claims fi l ed b y M s . Chapman ag ainst Block should be denied a nd that the loan docume nts signed by Ms. Chapman wer e valid and e nforc eable ag ainst her. Ms. Chapman then filed a motion requesting that the trial court rec on s i d er i ts decision to compel arbitration; howe ver, this motion was de nied by memorandum opinion and orde r ente red D ece mber 13, 2004, and the pr esent a ppeal f ollowed.

I I . I ssu e s

We a dd re ss t wo iss ue s in thi s a pp e a l:
1) Was the ar

bitration ag ree ment enter ed into by the parties unconscionable ?-4-

2) Did B lock waive its right to compel a rbitration under

the circ umstances of

this case?

I I I . Standard of Re view

Ou r s ta nd ardof

re vie w i n th is n on -j ury c a se is de novo u p o n t h e r ec o rd o f t h e p ro ce ed i n gs below, and there is no presumption of correc tness with respe ct t o the t rial court’s conclusions of law

. Campbell v. Florida Steel Corp.
, 919 S.W .2d 26, 35 (Tenn. 1996) and Te nn. R. App. P. 13(d). The t ri al co u rt 's fa ct u al fi n d i n gs ar e, h o we v er , p re s u m ed t o b e co rr ec t , an d we m u s t af fi rm s u ch fi n d i n gs absent evidence preponde rating to the contra ry

. Union Carbide Corp. v. Huddleston , 854 S.W .2d 87, 91 (Tenn. 1993)

.
I V. An a ly sis

A.

The fir st issue we must resolve is whether the arbitration ag ree ment betwee n Ms. Chapman and B lock is unenfor cea

ble upon g rounds that it is unreasona ble and unc onscionable.

I n Buraczynsk i v. Eyring , 919 S.W .2d 314 (Tenn. 1996) , the Supreme Court was pre sented with the question of whethe r an a rbitration ag ree ment betwee n a phy sician and a patient was enfor cea ble in a medica l malprac tice ac tion. I n that case , the Cou rt acknow ledg ed a g ener al leg islative policy favoring e nforc ement of a g ree ments to arbitrate . Howeve r, the Court stated that

a n a rb itr a tio n a g re e me nt wi ll no t be e nf or c e d if it c on sti tut e s a

c on tr a c t of

a dh e sio n a nd“ c on ta in[s ] such unconsc ionable or oppr essive ter ms as to rende r [it] unenfor cea ble.” Id. at 320.
The Court adopte d the def inition of “adhesion contra ct” set forth in B lack’ s L aw Dic tionary 40 (6 ed. 1990) a s “a standa rdized contract form off

ere d to consumers of g oods and ser vices on th

e sse nti a lly

a ‘t ake it o r l e a ve it’ ba sis , w ith ou t a ff or din g the c on su me r a

re a lis ti c oppo rtun ity

to bar g a in a n d u n d e r s u c h c o n d it io n s th a t th e c o n s u me r c a n n o t o b ta in th e d e s ir e d p r o d u c t or ser vice

e xce pt b y a c qu ie sc ing to the fo rm of the c on tr a c t.” Th e Cou rt no te d, ho we ve r, that th e fa c t th a t a contra ct is one of a dhesion is not d et er minative of the c ontrac t’s enfor cea bility . The Court stated that “Courts will not enfor ce adhesion contra cts which are oppressive to the wea ker party or which

se rv e to lim it the ob lig a tio ns a nd lia bil ity of the str on g e r pa

rt y ” a ndthat “ [e]n fo rc e abil ity g e ne ra lly dep en d s u p o n whether

the terms of the contra ct ar e beyond the reasonable ex pectations of an

or din ar y pe rso n, or op

pre ssi v e or

un c on sc ion ab le .” (e mphasis added) Id. at 320. Se e als o , Taylor v. Butler , 142 S.W .3d 277, 286 (Tenn. 2004)

. Although the parties i n t h e instant matter disag ree as to whethe r the a rbitration ag ree ment constitutes an adhe sion contrac t, we nee d not resolve that dispute should we det ermine tha t the arbitration ag ree ment is not “bey ond the r e a s o n a b le e xp e ctations of an or dinary person, or

oppressive

or un c on sc ion able .” F or

e ve n if the arb itr a tio n ag re e me nt is fou nd to be a n a dh e sio n c on tr a c t, i t is still enfor cea

ble if it i s re asonable and not unconsciona ble or oppre ssive. Ms. Chapman makes-5-

va ri ou s a rg ume nts in su pp ort of

he r a sse rt ion that th e arb itr a tio n a g re e me nt s he e nte re d in to w ith Bloc k “is both proce durally and substantively

unconsciona

ble.”

F ir s t, M s

. Ch ap ma n ar g u e s th a t th e ar b it r a ti o n a g r e e me n t is u n c o n s c io n ab le b e c a u s e , she alleg es, the a g ree ment “wa s inconspicuously place d among the loan docume nts.” She asserts that “[t] he loan doc uments were 36 in number and 61 pa g es in leng th, and ca lled for th e sig nature or initials of Mrs. Chapman in 39 places.”
We do not ag ree that the ar bitration ag ree ment in this case wa s inconspicuous. The

a g re e me nt i s n ot b ur ie d o r h idd e n in a c on tr a c t amo ng te rm s unr e la te d to ar bit ratio n. Ra the r, it i s a st and-a lone t wo-pa g e document and is entitled “AGREEMEN T FOR THE ARBI TRATI ON OF DI SPUTES” in capital letters. The terms of the a g ree ment are clea rly set forth in ten short para g raphs p re s en t i ng straig htforwa rd explanations of matters re lating to a rbitration. I n addition, the sec ond para g raph of

the ag ree ment ends with the italicized se ntence , “ If y ou ha v e an

y qu e sti on s, y ou sh ou ld c on su lt y ou r o wn l awy e r b efore y ou sig n th is A gre e me nt. ” And, dire ctly above the borrowe r’s sig nature line the ag ree ment s t at es i n capital letter s “THI S CONTRACT CONTAI NS A BI NDING ARBI TRATI ON PROVI SI ON WHI CH MAY B E ENF ORCED BY T HE PARTI ES.”

Ms. Chapman contends that our decisions in Howell v. NHC/Healthcare- Fort Sanders, Inc.
, 109 S.W .3d 731 (Tenn. Ct. App. 2003) a nd Ra ite ri v. NHC Healthcare /Knoxville, Inc., No. E2003- 00068-COA-R9-CV, 2003 WL 23094413 (Tenn. Ct. App. E.S., filed De c. 30, 2003) s u pport her arg ument that the ar

bit ra t i o n agr ee m en ti n t h i s ca s e w as i n co n s p i cu o u s an d t h er ef o re u n co n scionable. We respec tfully

disag ree . I n Ho we ll
, we sp e c if ic a lly no te d th a t th e arb itr a tio n a g re e me nt f ou ndto b e u n co n s ci o n ab l e w as n o ta s t an d -a l o n e d o cu m en t , b u ti n s t ea d wa s “b u ri ed ” o n t h e n ex tt o l as tp age
o f a l ar g e r a g r e e m e n ta n d w a s p r i n t e d i n t h e s a m e s i z e f o n t a s t h e r e s to f

t h e a g r e e m e n t

. S i m i l ar l y, the dispute resolution proce dures found to be unenfor cea ble in Ra iti e ri wer e not set forth in a standalone doc ument, but were set forth in an e leven- pag e contr act dealing with many issues. I n the latter

case , we a lso acknowle dg ed as sig nificant the fac t that the provisions at issue did not include short

e xpla na tio ns e nc ou ra g ing pa tie nts to a sk qu e sti on s a ndwe re “ bu ri e d” a ndno t c le arl y la id o ut.

Ne xt, Ms . Ch apma n c on te nd s that th e arb itr a tio n a g re e me nt w a s u nc on sc ion able be c a us e it compelled he r to waive constitutiona l ri gh t s in a unlawful manne r. I n this reg ard, Ms. Chapman state s a s f oll ow s: Mrs. Chapman did not waive the constitutional rights to a judicial hearing a nd a jury trial in a voluntary , knowing , and willing ma nner. How could she have done so when he r ey esig ht was so poor that she couldn’t re ad the doc uments, and her daug hter ha d to g uide her hand to the place s for her signature? No one in he r prese nce at the closing (which took plac e in th e unconventional se tting of he r home) w as
ac t i n g i n her inter est rathe r than their ow n. Both Mrs. Chapma n’s daug hter a nd the closing ag ent re ceive d, direc tly or indirec tly , money-6- from the loan pr ocee ds. No attorney or attorney -in-fa ct advised her

or act e d f or he r. No on e bo the re d to re a d o r e xpla in the do c ume nts to her.

I n s upport of her

statement that her

ey esig ht was so poor she c ouldn’t rea d the loan documents at closing, Ms. Chapman refer ence s nothing other than her own petition of Fe bruary

13, 2002, whe re i n s he alleg ed that at the time of closing she had c atar acts that pre vented he r fr om
rea ding the documents. F urther, Ms. Chapma n does not r efute evidenc e introduce d at the ar bitration he ari ng wh ic h ind ic a te s that app ro xima te ly on e mon th a ft e r sh e sig ne d the loa n do c ume nts in this

case and befor e she had any surg ery to corre ct her

vision, she rea d and complete d medical history f o r ms th a t a

p p ar e n tl y w e r e p r in te d in f

o n t n o la r g e r th a n th a t c o n tain e d in th e lo a n d o c u me n ts

. We also note that Ms. Chapman has stipulated that she did not ask any one to re ad any o f t he loan documents to her at closing, nor does she as s er t that she asked that any of the doc uments be explained to her and w as re fused.
Any assertion by Ms. Chapman that she did not re ad the loan doc uments befor e sig ning the m does not, in any event, a

bsolve her f

rom comply ing w ith the matters ag ree d to or justify a conc lusion t h a th e r a g r e e m e n t , i n c l u d i n g t h e a g r e e m e n tt o s u b m i tt o ar b i t r a t i o n , w a s m a d e u n k n o w i n g l y

. In Giles v. Allstate Ins. Co., Inc. , 8 7 1 S

. W.2d 154, 157 (Tenn. Ct. App. 1993), we r ecog nized the following g ener al rule in this reg ard:

‘To permit a party , when sue d on a written contrac t, to admit that he sig ne d it bu t to de ny

that it e xpre sse s th e a g re e me nt h e ma de or to
a llo w h im t o a dmi t th a t he sig ne d it bu t di d n ot r e a d it or kn ow its stipulations would absolut ely destroythe value of

all contra ct.’ 12 Am. J ur., 629. ‘I n this connection it has bee n said that one is under

a d u t y t o l e ar n t h e c o n t e n t s o f a w r i t t e n c o n t r a c t b e f o r e h e s ig ns it, and that if, without being the victim of fraud, h e fa ils to read the

c on tr a c t or

oth e rw ise to learn its c on te nts , h e sig ns the sa me a t hi s pe ri l, a ndis e sto pp e d to den y his ob lig a tio n, wi ll b e c on c lus ive ly presumed to know the con t en ts of the contra ct, and must suffe r the conseque nces of

his own neg l i gen ce

. ’ 17 C.J .S., Cont rac ts, § 137, pag es 489,490.

‘I t w il l n o t d o f

o r a ma n to e n te r in to a c o n tr a c t, a n d
, w hen ca lled upon to respond to its oblig ations, to say that he did not rea d it when he si gned it, or did not know what it containe d. I f this were permitted, contra cts would not be worth the pa per on w hich they

are written. B ut such is not the law.’
(interna l citations omit ted). Se e als o Pyburn v. Bill Heard Chevrolet
, 63 S.W .3d 351, 359 (Tenn. Ct. App. 2001).-7-

I n Fl an ar y v . Ca rl G re go ry Do dg e of J oh ns on City, LLC , No. E2004-00620- COA-R3CV, 2005 WL 12777850 (Tenn. Ct. App. E.S., filed May 31, 2005), the plaintiff f iled suit ag ainst an

a uto mob ile de a le rs hip , a sse rt ing va ri ou s c la ims de sc ri be d a s “ vio la tio n o f the TCP A, e ng a g in g in the unauthorized business of law, ‘uniform’ i ntentional misrepre sentation, fraud in the inducement of contra ct, and c ommon law claims for m o n ey h ad and rec eived, a nd unjust enrichment.” T he plaintiff had sig ned an a g ree ment with the defe ndant providing that such cla ims would be subject to settlement by

arbitration at the demand of either pa rty ; however , the plaintiff ar g ued that that

a g r e e me n t “ c o n s ti tu te [d ] a n u n k n o w in g w a iv e r o f h is s tatu to r y

a n d c o n s ti tu tional r ig h ts

. ” We dis a g re e d, statin g a s f

oll ow s:
[P l ai n t iff] contends that the Ag ree ment constitutes an unknowing waiver of his statutory

and constit utional rig hts. This self-proc laimed pu bli c po lic y

arg ume nt c enter s a

ro un d tw o b e lie fs : ( 1) “ that a statut ory c la im, be c a us e of

the thi rdpa

rt y a ndpu bli c int e re sts i n v o l v e d
, i s n o ts u i t ab l e f o r ar b i t r a t i o n a n d s h o u l d b e d e c i d e d b y a court, not an a

rbitrator,” and (2) “that the arbitration process is not capa ble of res o l v i n g these disputes in ac corda nce w ith the law or protec ting the inter ests of the c onsumer.”

Wit h respe ct to the ar g ument that a st atutory claim is not suitable for

arb itr a tio n, we ha ve pr e vio us ly qu ote d a t le ng th f ro m Pyburn a s to why a statutory

cla i m u n d er the TCPA is sui table for arbitra tion. Fu rth e rm ore , a s to t he c lai m t ha t ar bit ra tio n c an no t ad

e qu ate ly resolve disputes suc h as [Plainti ff’s] in ac cordance with the law or in accordanc e with the consumer’ s rights, w e know of no reason why such claims cannot be fairly arbitrated.
Flanary at *8 (e mphasis added)

.
We find no basis for d i s t inguishing Ms. Chapman’s re linquishm ent of rig hts in favor of arbitration from the Fl an ar y pla int if f’ s r e lin qu ish me nt o f tho se sa me ri g hts
, inc lud ing the ri g ht t o
a ju d ic ia l f

o ru m a n d tria l b y ju r y

. A n d
, in th is c a se as in Flan ar y , we know of

no rea son why

the dis pu te d ma tte rs c ou ld no t be fa ir ly arb itr a te d in a c c or da nc e wi th the la w a ndthe c on su me r’ s r ig hts

.
Ne xt, Ms . Ch apma n a

rg ue s th a t the te rm s o f the arb itr a tio n a g re e me nt a re op pr e ssi ve be c a us e they g ive B lock the following judicial reme dies that are not available to Ms. Chapman:

• J udicial or non-judicia l forec losure, • Repossession of collater al without court proc eeding s or by the reple vin of it through litig ation, • T he app oin tme nt o f a

re c e ive r b y

a c ou rt , • Se tti ng of

f a ndoth e r s e lf

-h e lp r e me die s, • I njunctive re lief, which of course involves liti g ation,-8- • Sequestration, pre sumably meaning a writ issued by a court
a u t h o r i z i n g t h e s e i z u r e o f p r o p e r t y, • Attachment, whic h typ i ca l l y occur s after

a judg ment has bee n obtained, and • Garnishment, meaning t h at a judg ment in a collec tion action for a defic iency

must first have bee n obtained.
Ms. Chapman contends that the a ppear ance of mutuality in the ag ree ment is ill usory and that the tr ia l c ou rt

e rr e d in fin din g that “th e a c c e ss to a judi c ia l for um is the sa me fo r b oth pa rt ie s. ” Ms. Cha pma n c ite s Taylor v. Butler
, 142 S.W .3d 277 (Tenn. 2004) in support of her arg ument that the

ar b i t r a t i o n a g r e e m e n ti s u n c o n s c i o n ab l e d u e t o l a c k o f m u t u a l i t y.

I n Taylor , the parties entere d into a cont ra ct fo r t h e purc hase of a used automobile. The contra ct containe d a provision that all claims and disputes betwe en the pur chase r and the deale r arising from the sale of the vehicle would be settled by binding a rbitration except the dea ler re serve d the rig ht to pursue re covery of the ve hicle under

the Tenne ssee Uniform Commercia l Code and collection of de bt by

state court action. The pur chase r made a down payment to t he deale r and signe d a pro missory

note for the balanc e of the sale pric e. Upon de livery of the ve hicle, the purcha ser a lso signed a n agr ee m en t that if she was una ble to obtain proper

financ ing w ithin three da y s, the de a le r wa s a llo we d to re sc ind the sa le a ndre po sse ss the ve hic le . T he pu rc ha se r w a s u na ble to obtain financing , and the de aler reposse ssed the vehic le which i t reta ined along with personal ite ms b e lon g ing to the pu rc ha se r tha t w e re in the ve hic le wh e n it wa s r e po sse sse d. Th e de a le r a lso reta ined the down pa y ment. The purc haser then filed s u i t aga inst the dealer under the Tenne ssee Consumer Protection Ac t ch ar ging, int e r a lia , that the dea ler improper ly obtained her

persona l property and the down pay ment monies by using dece ptive prac tices. Upon motion of th e d eale r, the trial court dismi s sed the purc haser ’s complaint and he ld that the purcha ser wa s bound by the arbitration provision in the contract of purcha se. On appe al, the Te nnessee Supreme Court foc used up on la ng ua g e in the arb itr a tio n p ro vis ion that allo we d the de a le r to p ur su e re c ov e ry of the ve hic le and collec tion of debt by state court action. The Court he ld that the arbitration prov ision was

un c on sc ion able a ndvo id b e c a us e it p ro vid e d th e de a le r w ith “a jud ic ia l f or um f or pr a c tic a lly

a ll claims it could have a g ainst [t he purcha ser]” while re quiring the purc haser to arbitrate any

claim she might have ag ainst the dea ler.

Th e pr ov isi on in the arb itr a tio n a g re e me nt c omp la ine d o f b y Ms. Cha pma n s ta te s a s f

oll ow s:

Exce pt ion s: T h e f

o l l o w i n g ar e n o t d i s p u t e s s u b j e c t t o th is Ag ree ment: (1) any

judicial or non-judicial f orec losure proc eeding ag ainst any

rea l or persona l property that serve s as collateral for the loan, whethe r by

the exercise of

any power of sale unde r any

deed of trust, mortga g e, or othe r sec urity ag ree ment or instrument or under applicable law, (2) the exercise of any self-he lp remedie s (including reposse ssion an d setoff rights) a nd (3) pr ovisional or ancillary
reme dies with respe ct t o t h e loan or a ny collater al for the loan such-9- as injunctive re lief, seque stration
, at tachment, r eplevin or g arn ish me nt, the e nf

or c e me nt of a ny a ssi g nme nt o f r e nts pr ov isi on in

a ny loa n do c ume nts , the ob ta ini ng of po sse ssi on of a ny re a l pr op e rt y collater al for the loan by an ac tion fo r u n l aw ful reta iner or the appointment of a rec eiver by a court having jurisdiction. This means th at no thi ng in this Ag re e me nt s ha ll l imi t y ou r rig ht o r o ur ri g ht t o take a ny of these a ctions. The instit ution and/or maintenanc e of a ny action or r emedy

described in this parag ra p h shall not constitute a

wa ive r o f y ou r rig ht o r ou r ri g ht to arb itr a te a ny dis pu te su bje c t to thi s Ag re e me nt.

We are compelled to disag ree with Ms. Chapman that t h i s p ar ag raph of the ag ree ment pr ov ide s B loc k w ith a

dis pr op ortio na te sh are of re me dia l r ig hts . U nd e r t hi s pa ra g ra ph , M s. Cha pma n is a llo we d to se e k in jun c tiv e re lie f, wh ic h s he didin this c a se . F urthe r, sh e is a llo we d to raise de fense s in a judicial forum with re spect to ea ch of the excepted matters. And, even w ere we to f in d th a t th e “ E xc e p ti o n s ” p ar a g r ap h p r o v id e s B lo c k w ith a d is p r o p o r ti o n a te s h ar e o f reme dial ri g hts , we do no t a g re e that th is f ind ing wo uldre qu ir e that w e vo id the arb itr a tio n a g re e me nt in toto in light of the f

act that the a g ree ment also contains the f ollowing se vera

bilityclause :
Severability: I f any

provision of this Agr eeme nt or the application of any provision of this Agr eeme nt to any person, plac e or c ircumstance shall be dete rmined to be invalid, unenf orceab l e o r voi d, the

rema inder of this Ag ree ment, and the rema inder of those provisions of th is A g r e e me n t a s ap p li e d to o th e r p e r s o n s , p la ces a nd

c ir c ums ta nc e s, sh a ll r e ma in i n f ull fo rc e a nde ff

e c t.

I n the eve nt that a provision of an arbitra tion ag ree ment is found to be invalid, that provision may be dele ted from the ag ree ment, and otherwise the ag ree ment may be g iven full eff ect c onsistent with the gene ral poli cy of favoring the enforce ment of arbitration ag ree ments. Knaffl v. The Douglas Company , 03A01-9901-CH- 00006, 1999 WL 894203, (Tenn. Ct. App.filed O ct. 15, 1999).

Ms. Cha pma n a lso arg ue s th a t the arb itr a tio n ag re e me nt is unc on sc ion able be c a us e it r e su lts in the imposit ion of excessiv e fe es an d ex penses. Ms. Chapman a sserts that, althoug h the intitial filing fee require d in a

rbitration is only $750, under the applicable rules of the Americ an Ar bitration Association (“ AAA” ) a borrowe r is subjec t to the imposit ion of substantially more fee s and expenses if he or she should fail to pr evail in the ar bitration of a dispute. Ms. Chapman e stimates that the total expenses and fe es a bor

rowe r mig ht fac e for

a two-da y

arbit ra t i o n h earing could ea silyexceed $2,800.00.
We find Ms. Chapman ’s arg ument reg arding potential costs to be without merit for two

re a so ns . F ir st, a s we ha ve no te d, the tr ia l cou rt de c re e d tha t a ll f e e s a nde xpe ns e s o f a

rb itr a tio n in this case would be paid by Bloc k. I n Pyburn v. B ill Heard Chevrolet
, 63 S.W .3d 351, 363 (Tenn. Ct. App. 2001), we state d that “[w]hen ‘a party seeks to invalidate an ar

bitration ag ree ment on the-10-

g round that ar

bitration would be prohibitively expensive, that party

bear s the burden of

showing the l i k el i h o o d o f i n cu rr i n g s u ch co s t s

. ’ ” (c i t i n g Gree n Tree Financial Corp.-Alabama v. Randolph, 531 U.S. 79 (2000))

. Having been absolved of any responsibility for the costs and expenses of w hich she complains, Ms. Chapman has not met this burden. Sec ond, in Pyburn we a lso specifica lly reje cted the ar g ument that costs of ar bitration are potentially

prohibitive for some plaintiffs a nd stated as fo llo ws :

Whil e a n in iti a l f ili ng fe e may hav e to b e a dv a nc e d b y a pla int if f i n a cla im involvi ng a smal l consum er tra nsaction, Rule R-45 of the Com me rc ia l Ru le s [of

the AA A] a llo ws the arb itr a tor to a sse ss f e e s, expenses, and compe nsation of the ar bitrator in a ma nner de emed

app ro pr ia te by

the arb itr a tor . A su c c e ssf ul pla int if f, the re fo re , c ou ld ha ve a ll of the “ po te nti a lly pr oh ibi tiv e ” c os ts s hif te d to the de fe nd a nt. Rule R-45 al s o p ermit s the arbitrator to awa rd attorne y ’s fe es to a
succe ssful plaintiff who ar bitrates a T CPA claim be cause an aw ard of attorney ’s fe es is authorized by law. See T.C.A. § 47-18-109( e)( 1). The a rbitrator c an also a ssess costs as he or she sees fit for e x penses of the arbitration, including the a rbitrator a nd witnesses. Rule R-52. For all prac tical purposes, an award of costs, expenses, and attorne y ’s fee s are on the same f

ooting in this case reg ardles s o f wh ether the parties a rbitrate the claim or proc eed in a court of law. Even if the Commercial Rules of the AAA spe cifica lly did not allow a succ essful pl aint iff to re cover

costs, etc., these items could nevertheless be

re c ov e re d by Pla int if

f in arb itr a tio n be c a us e the y are part of his statutory claim pursuant to the TCPA. See T.C.A. § 47-18-109( e)( 1) (authorizing a n awa

rd of c osts and attorney ’s fe es to a succ essful plaintiff).
Pyburn, 63 S.W .3d at 363.
Ms. Chapman next contends that the arbitration ag ree ment is oppressive because it provides that “ [t]he arb itr a tio n may no t a dd re ss a ny

dis pu te on a

‘c la ss a c tio n’ ba sis .” She ma int a ins that th is pr ov isi on “ is o ne -s ide d b e c a us e le nd e rs a lmo st n e ve r b ri ng c la ss a c tio ns .” F or thi s r e a so n, Ms. C h ap m a n ar g u e s t h a tt h e a g r e e m e n tv i o l a t e s t h e p r i n c i p l e o f m u t u a l i t y o f

r e m e d y.

As Bloc k corr ectly

observe s in its response to this arg u me n t, Ms. Chapma n “has ne ver soug ht

or eve n alleg ed cla ss action status i n t h i s ca s e.” I n Pyburn, as in the pre sent matter, the pla intiff arg ued that the arbitration agr eeme nt it had enter ed into was une nforc eable beca use it did not provide fo r c la ss a c tio n r e lie f. I n arrivi ng a t ou r c on c lus ion that th e arb itr a tio n a g re e me nt w a s e nf or c e able in that c ase even though the plaintiff could not pursue c lass action ther eunder , we de termined that the plaintiff could e ffe ctively prosec ute hi s TCPA claims throug h arbitration without recourse to a
c la ss a c tio n. We a lso no te d th a t, a s in the ins ta nt m a tte r, the tr ia l cou rt ha d n ot c e rt if

ie d a ny c la ss. “At most, Plainti ff ha d only a possi bility of l itigating a class action with no g uara nty that the Trial-11-

Court ever would certify

a cla ss in this lawsuit.” Id. at pag e 365

. I n acc ordanc e with Pyburn, we a re compelled to disag ree with Ms. Chapman’s contention t hat t he ar bitration ag ree ment should not be

e nf or c e d u po n g ro un ds that it pr oh ibi ts c la ss a c tio n la ws uit s.
Next, Ms. C hapman ref

ere nces that lang uag e in the arbitra tion ag ree ment which states that

“ [o]nl y dis pu te s in vo lvi ng [Ms. Cha pma n] a nd[B loc k] ma y

be a dd re sse d in the arb itr a tio n. ” Ms. Cha pma n c on te nd s th a t th is l imi ta tio n p re c lud e s h e r fr om ar bit ratin g dis pu te s with a ny

de fe nd a nts oth e r tha n B loc k, a ndthe re fo re s he has been r e qu ir e d to arb itr a te he r d isp ute wi th B loc k w hil e simult aneously

litigating her dispute with other defe ndants in the ca se. Ms. Chapman conte nds that such terms are oppressive in lig ht of the possibili ty of inconsistent r esults in lit igation and arbitration and th e additional ex penses r equire d to simul taneously pursue he r cla ims in bot h litigation and arbitration.

Ev e n s ho uld we a g re e that disp ute s with the oth e r de fe nd a nts in thi s ca se are no t su bje c t to arbitration under the a g ree ment, it does not f ollow that the arbitra tion a g ree ment is, f or that re ason,
un c on sc i o n ab l e a n d u n e n f o r c e ab l e

. M s

. C h ap m a n p r e s e n t s n o l e g a l a u t h o r i t y i n s u p p o r t o f thi s
arg ume nt, a ndthe Un itedSta te s Su pr e me Cou rt ha s in dic a te d th a t a n a g re e me nt t o a rb itr a te is

e nf or c e able “ e ve n wh e re the re su lt wo uld be the po ssi bly ine ff ic ie nt ma int e na nc e of s e pa rate proce eding s in differe nt forums.” Dean W itter Reynolds, Inc . v. By rd, 470 U.S. 213, 217 (1985).

Fin all y , Ms. Cha

pma n a rg ue s th a t th e arb itr a tio n a g re e me nt i s u nc on sc ion able be c a us e it provides that ar

bitration is t o b e conducted pursua nt to the Comm erc ial Arbitration Rules of the AA A. Ms. Cha

pma n c on te nd s th a t th e se ru le s a re “ on e -s ide d. ” As g ro un ds fo r this arg ume nt, Ms. Chapman spec ifically

asserts that unde r the a

pplicable r

ules, 1) the a

rbitrator is not re quired to g ive

a re asoned e x planation of his decision; 2) t he arbitrator is not require d to follow either the Tenne ssee
or F e de ra l Ru le s o f E vid e nc e ; 3) app e a ls f ro m th e de c isi on of th e arbi tra tor are se ve re ly

c ir c umscrib ed; and 4) in h is o r h e r d isc re tio n, the arb itr a tor ma y de c lin e a bo rr ow e r’ s r e qu e st t o
en gage i n d i s co v er y

b ef o re t h e h ea ri n g.

We are unable to find merit in this arg ument. Wit h respe ct to the first three of the above four

assertions offere d in support of her arg ument that the applica ble rules of

arbitration are “ one-sided,” Ms. Cha pma n p re se nts no e xpla na tio n a s to ho w the de fi c ie nc y sh e a lle g e s ha nd ic aps on ly on e pa rt y to the arbitra tion. Assumi n g t h e matters describe d do constitute deficie ncies in the a rbitration pr oc ess , it wou ld a

pp e ar t o u s th a t th e se a lle g e d d e fi c ie nc ie s a ff e c t bo th p art ie s e qu a lly . M s. Cha pma n c omp la ins that th e ru le s d o n ot r e qu ir e the arb itr a tor to al low “ a bo rr ow e r” to e ng a g e in dis c ov e ry be fo re a he ari ng , bu t we are c omp e lle d to po int ou t that the arb itr a tor ’s dis c re tio n in this reg ard is likewise not limited to borrowe rs alone. In this reg ard, Commerc ial Rule R-23 states as fo llo ws :

a. At the reque st of any party or at the discretion of th e a rb i trator,

consistent with the expedited nature of arbitration, the arbitrator may dir e c t ( i) the pr od uc tio n of do c ume nts a ndoth e r i nf or ma tio n, a nd(i i) the identifica tion of any

witnesses to be c alled.-12-

Ms. Chapman indicates that this rule primarily handica ps the consumer

beca use “e x tensive discovery is the single most important part of a c onsumer’s c ase,” and she speculates tha t “[t] he p o s s ibilit y

of an a rbitrator a llowing e x tensive discovery would seem to be r emote in most cases.” Ho we ve r, Ms. Cha

pma n d oe s n ot a sse rt

that sh e wa s de nie d a ny re qu e st re la te d to dis c ov e ry in this

case , and she doe s not maintain that she was pre judiced by

this rule in a ny

way whatsoeve r nor doe s sh e pr e se nt a ny

e vid e nc e to tha t e ff

e c t.

Ba sed upon our c are ful revie w of the r ecor d and re levant l aw , it is our conclusion that the arbitration ag ree ment betwee n Ms. Chapman and B lock is rea sonable a nd is not unconscionable.

B.

The sec ond issue addre ssed in this appeal is wh ether Block w as pre cluded f rom invoking the ar bitration ag ree ment beca

use i t waived its rig ht to do so under the c ircumstance s in this case.

The a rbitration ag ree ment provides as f o l l o ws reg arding the time at which a party may compel ar bitration:

Ei the r y ou or we c a n r e qu e st that a dis pu te be su bmi tte d to

arb itr a tio n. Ei the r y ou or we c a n d o th is b e for e a l a ws uit (w hic h is usually initiated by t h e fi l i ng of a “ complaint”) ha s been se rved or within 6 0 d ay s after

a complaint, an a nswer, a counter claim or a n amendment to a c omplaint has been se rved.

I n this case, B lock demande d arbitration of the dispute betwee n itself and Ms. Chapman on

o r a b o u tAu gu s t2 3 , 2 0 0 2

. On J u l y 9 , 2 0 0 2 , M s

. C h ap m an am en d ed h erp et i t i o n t o ad d W el l s Fa rgo as a de fenda nt in t h e ca s e upon informa tion assertedly rec eived by

her ide ntify ing Wells Fa

rg o as the owner of the mortg ag e on her

home which she p re v i o u s l y believed w as held by

Option One, B loc k’ s a ff

ili a te . B e c a use Bloc k’ s d e ma ndfo r a rb itr a tio n w a s ma de wi thi n s ixty da y s o f this amendment, it is bey ond dispute t h at t he dema nd for a rbitration was timely

under the letter of the ag ree ment, which allows a reque st for arbitra tion to be made within 60 day s of an a mendment to a complaint. Neve rtheless, Ms. Cha pman arg ues that Bloc k should not ha ve bee n allowed to invoke the ar bitration ag ree ment when it did.
Ms. Chapman contends that the w o rd “a m endment” as used in the ar bitration ag ree ment “connote s a re quest for a dditional relief a g ainst the opposing party .” Ms. Chapman a sserts that the amendment she filed on Jul y 9, 2002, adds Wells Far g o as a de fenda nt be cause appar ently Bloc k had transfe rre d Ms. Chapman’s mortg ag e loa n to Wells Fa rg o. Ms. Chapman maintains that the amendment doe s not connote a r equest for any additional relief ag ainst Block a nd does not alter the

na tur e of the dis pu te be tw e e n h e rs elf a ndB loc k. Ms. B loc k a rg ue s th a t th e wo rd“ a me nd me nt” should be construe d to mean an amendment that “envisions a ne w set of c ontentions and denials, a

new r equire ment of proof , or both.” Ms. Ch ap m an i n s i s ts that onlya “tortured interpr etation” of-13-

the clause in question would allow Block to invoke a rbitration within 60 day s of an amendment such as the one she filed on July9, 2002. Ms. Cha pman insists that such an interpr etation belies c ommon
sense a nd is bey ond the re asonable expectations of an or dinary person. We find no basis in the ag ree ment itself for a dopting the na rrow c onstructio n o f t h e wor d

“ a me nd me nt” ur g ed by Ms. Ch apma n. Th e a g re e me nt e xpre ssl y a llo ws e ith e r p art y

to r e qu e st arbitration within 60 d ay s after “an a mendment,” a nd no restric tions are state d with respec t to the

me a nin g of

“ a me nd me nt. ” F urthe rm or e , a c on str uc tio n s uc h a s th a t r e qu e ste d b y Ms. Cha pma n is inconsistent with the overriding policy we r ecog nized in Pyburn v. B ill Heard Chevrolet at pag e 357:
When parties ag ree to arbitration, the F AA ensur es enf orce ment of that ag ree ment and the States cannot require a judicial forum for the

re s olution of a claim that the pa rties ag ree d to arbitrate

. [ F r i z z e ll Construction C ompany, I nc., v. G atlinburg, L.L. C. , 9 S.W .3d 79, 84 (T en n

. 1 9 9 9 )] “T h er ef

o re , the q uestion essentially become s ‘what the contra ct has to say

about the ar

bitrabilityof petitioner’ s claim ....’ ” Id. (q u o t i n g Mastrobuono v. Shearson Lehman H utton, Inc. , 5 14 U. S. 52, 58, 115 S. Ct . 1212, 1216, 131 L .Ed.2d 76 (1995))

. I f the parties ag ree to arbitrate a cla im then it mus t be submitted to arbitration eve n if Te nn e sse e la w w ou ld p ro hib it a rb itr a tio n o f tha t pa

rt ic ula r c laim. See Frizzell, 9 S.W .3d at 84. “ [A] s a matter of federal law, any doubts should be resolved in favor of arbitration .... To that end, ‘ the heavy presumption of arbitrability re quires that when the scope of the arbitrati on clause is ope n to question, a court must decide in favor of

ar b i t ration. ’ ” American R ecov ery Corp. v. Computerized Therm al I m a g in g , Inc. , 9 6 F.3d 88, 92 ( 4 Cir. 1996) (empha sis added) th (omissions in original).

Ms. Cha pma n a lso c on te nd s th a t B loc k w a ive d its ri g ht to c omp e l arb itr a tio n be c a us e it d id not invoke that rig ht until over six months after she filed her petition, and by

that time“the ca se wa s well und e r

w a y

. ” M s

. Ch ap ma n f

u r th e r a s s e r ts th a t s h e h a s b e e n p r e ju d ic e d b y

B lo c k ’ s d e lay ed reque st for arbitration because of the s ubstantial eff ort and ex penses she has experienc ed during the months prece ding e ntry

of the orde r compe lling ar bitration.

Consist ent with public policy in favor of

arbitration, there is a g ener ally rec og nized presumption ag ainst waiver

. J. W ise Smith and As s o ci a t es , In c. v. Nationwide Mut. Ins. Co., 925 F .Su pp .2 d 5 28 ,5 30 -5 31 (W. D. Te nn . 2 00 3) . A pa rt y se e kin g to p ro ve wa ive r o f a n a g re e me nt t o arbitrate bea

rs a he av y

burden, a s noted by

the Court in Ow ne r- Op e ra tor In de pe nd e nt D riv e rs Association, Inc. , 288 F.Supp.2d 1033,1034 (D. Ar i z o n a 2003), a c ase a rising out of

a contr act be tw e e n p la int if

f t ru c k d ri ve rs a ndde fe nd a nt m oto r c arrie rs :

Be cause waiver

of the rig ht to arbitra tion is disfavor ed, the plaintiffs bear a heavy burden of proof in establishing suc h a wa iver. Va n Ne ss-14- Townh o u s es v. Mar Industries Corp. , 862 F.2d 754, 758 ( 9th Cir. 1988); see also, C happel v. Laboratory Corp. Of America, 232 F.3d 719, 724 (9 Cir. 2000) (“We do not lig htly find waiver of the rig ht

th to a rb itr a te [.]” ) I n o rd e r t o p re va il o n th is p oin t, the pla int if fs mus t show that the def

endants kne w of their right to ar bitrate, a cted inconsistently

with that rig ht, and, in doing so, pr ej u d i ce d the plaintiffs by their a ct i o n s, Chappel, 232 F.3d at 724, and the Court must resolve any doubt as to whether a wa iver oc curr ed in fa vor of a finding of ar

bitrability

. Moses H

. C one Me morial Hospital v. Merc ury Construction Corp. , 460 U.S. 1, 24-25, 103 S.Ct. 927, 941, 74 L .E d. 2d76 5 ( 19 83 ) ( “ Th e Ar bit ratio n Act est abli sh e s th a t, a s a
ma tte r o f f

e de ra l law , an y do ub ts c on c e rn ing the sc op e of arb itr able issues should be resolved in f avor of ar bitration, whether

the problem at hand is the c onstruction of the c ontrac t lang u age i tself or a n alleg ation of wa iver, de lay , or like def ense to a rbitrability .”)
Ms. Chapman cites two ca ses involving Te nnessee law to support her arg ument that Bloc k waived its rig ht to demand ar bitration - J

. W ise Sm ith & As so c s. v . Na tio nwi de Mu t. I ns . Co
., su

pr a and Ba rd ’s Ap

pa re l M fg ., Inc. v. Bituminous Fire & Marine Ins. Co., 849 F.2d 245 ( 6 Cir. 1988). th Although e ach of these cases pertained to the rig ht of a de fenda nt to demand an a ppraisal r ather

than arbitration, in J

. W i s e Sm i th & As so c s. at pag e 530, the Court ac knowledg ed that the sa me law applies to appra isal clauses a nd arbitra tion clauses. B ased upon our revie w of these case s we c annot
a g re e that th e a c tiv ity

e ng a g e d in pr ior

to B loc k’ s d e ma ndfo r a rb itrati on was e ith e r s uf

fi c ie ntl y inconsistent w ith its demand for arbitra tion or sufficie ntly prejudicia l to Ms. Cha pman t o wa rra nt a finding of wa iver.

I n J . W ise Sm ith & As so c s. , t h e p l ai n t i ff i n s u r e d s u s t a i n ed d am age as the re sult of an ice storm and submitted its claim to t he defe ndant insurer

. The Court found that the de fenda nt had

wa ive d it s r ig ht t o c omp e l a n a pp ra isa l un de r the ins ur a nc e po lic y up on the fo llo wi ng fi nd ing s:

I n this case, de fenda nt made a w ritten demand f or appr aisal on plaintiff and moved the Court to compel appr aisal only afte r de fe nd a nt p a id p art

of pla int if f’ s c la im, pla int if

f i nit iate d th is s uit
, defe ndant removed the s uit to this Court, defe ndant fil ed an a nswer, the Cou rt he ld a sc he du lin g c on fe re nc e , a ndbo th p art ie s ma de the ir Fe d.R.Civ.P

. 26 disclosures. F urther, de fenda nt’s motion to compel appra isal was filed on the last day t o file pre trial motions, after the close of discovery

and only five we eks bef

ore the schedule d start of tr ia l.

J. W ise Smith & Assocs., 925 F.Supp.2d at 532.-15-

The sec ond case cited by Ms. Chapman, Bard’s Apparel Mfg., Inc
., involved a sui t by an ins ur e d a g a ins t it s in su re r t o r e c ov e r l os se s in c on se qu e nc e of da ma g e d p ro pe rt y

a nd int e rr up tio n to business. The Court found that insure r had wa i v ed i t s rig ht to compel an appr aisal under the fo llo wi ng c ir c ums ta nc e s:

Her e, the parties spent appr ox imately six months discussing an

a dju stm e nt o f the los s w ith ou t [in su re r] r e qu ir ing [ins ur e d] to su bmi t
a Swo rn Sta te me nt in Pr oo f o f L os s, a nd[ins ur e r] t wi c e a tte mpt e d to pay the loss without agr eeme nt by [i nsured]. I n t h e int erim, the insured prope rty

was disposed of s o that any appra isal would have proce eded without the pre sence of a subjec t matter. It was only afte r notice of [insured’s] intention to file suit that [ insurer] first attempted to inv ok e the app ra isa l pr ov isi on of the ins ur a nc e po lic y ; th e bu sin e ss interruption loss was not subject to appr aisal in any event.
Bard’s Apparel Mfg., Inc

. 849 F.2d a t 249.
Ms. Chapman describes the ac tivitythat took place in this cas e betwee n the time she filed he r p e tit ion a ndthe tim e that B loc k d e ma nd e d a rb itr a tio n a s f

oll ow s: Not only had B lock and a nother de fenda n t an s wered the orig inal Pe tit ion , b ut r e strai ni ng or de rs ha d b e e n e nte re d o n tw o s e pa rate
oc c a sio ns , d isc ov e ry

ha d co mme nc e d, B loc k h a d r e sp on de d to interrog atories, two motions had bee n filed and be en hea rd, and a default judgment had be en obtained ( though it was later se t aside)

a g a ins t st ill a no the r o f the de fe nd a nts

.
We d o n ot a g re e that th e a c tiv ity de sc ri be d b y

Ms. Cha pma n is c omp ara

ble to the act ivi ty described in the two ca ses cited. It is neither so inconsistent with arbitration as to s h o w an
aba nd on me nt o f tha t r ig ht, no r h a s it pr e jud ic e d M s. Cha

pma n to su ch a degree as to w arr a nt a fi nd ing of wa ive r. B loc k’ s a ns we r t o M s. Cha pma n’ s p e tit iona ndre sp on se to i nte rr og a torie s o nly

serve d to provide Ms. Chapman with information t hat s he li kely would have r equeste d whether the

case w a s ar

b it r a te d o r li ti g a te d

. M s

. Ch ap ma n a ls o p r e s e n ts n o ar g u me n t a s to h o w s h e was pr e jud ic e d b y

the fi lin g a ndhe ari ng of the tw o m ot io ns sh e a ve rs to o r b y the e ntry of a de fa ult jud g me nt a g a ins t on e of

the de fe nd a nts

.
For the re asons stated, we do not ag ree that Bloc k waived its rig ht to compel arbitra tion.

C.

As a fi na l matte r, we no te Ms. Cha pma n’ s mo tio n f

ile d in thi s Cou rt wh e re in sh e re qu e sts that, in response to B lock’s asse rtion that she was not p re j u d iced by

Bloc k’s delay

in reque sting arbitration, she be allowed to file an aff idavit showing time expended by her attorney s prior to entry-16-

of the trial c ourt’s orde r compe lling ar bitration. Block arg ues t hat t his motion should not be g rante d beca use it would be improper to allow t he int roduction of evidenc e before this Court that was not prese nted to the trial court when it e ntere d its orde r. We reser ved our de cision reg arding this mot ion; howeve r, upon our review of the record before us and our analy sis in the contex t of applicable law, it is our determination that ac cepta nce of the af fidavit offe red by

Ms. Chapman would not aff ect our de c isi on a s se t f

orth h e re in. Ac c or din g ly , w e fi ndthe mot ion moo t.

I V. Conclusion

For the fore g oing r easons, we hold that the arbitration ag ree ment betwee n Ms. Chapman and Bloc k is enforc eable . Acc ording ly
, we affirm the judgme nt of t he trial c ourt compelling arbitration and re mand for whateve r further action may be necessary as consist ent wit h this opini on. Costs of appea l are adjudg ed ag ainst the appe llant, Lucy R. Chapman.

_________________________________________ SHARON G. LEE, J UDGE