IN THE SUPREME COURT OF MISSISSIPPI NO. 2019-CA-00340-SCT JACKSON MAC HAIK CDJR, LTD.

v. BRENDA HESTER

DATE OF JUDGMENT: 02/06/2019 TRIAL JUDGE: HON. EDDIE H. BOW EN TRIAL COURT ATTORNEYS: RAYMOND PATRICK TULLOS JOHN RAYMOND TULLOS CHADW ICK MITCHELL W ELCH J. CHASE BRYAN J. KEVIN W ATSON COURT FROM W HICH APPEALED: SMITH COUNTY CIRCUIT COURT ATTORNEY FOR APPELLANT: CHADW ICK MITCHELL W ELCH ATTORNEY FOR APPELLEE: RAYMOND PATRICK TULLOS NATURE OF THE CASE: CIVIL - CONTRACT DISPOSITION: REVERSED AND RENDERED - 02/27/2020 MOTION FOR REHEARING FILED: MANDATE ISSUED: EN BANC. BEAM, JUSTICE, FOR THE COURT: ¶1. Mac H a i k a p p e a l s t h e c i r c u i t c ourt’s denial of its m otion to com p el arbitration.
Because this Court f

i nds that the claim s f

all within the scope of the valid arbitration provision and that no def enses exist to bar arbitration, w e r e v e r s e the circuit c o urt’s order deny ing Mac Haik’s m otion to com pel arbitration and order the claim s to arbitration. FACTS AND PROCEDURAL HISTORY¶2. On March 23, 2016, plaintif f Brenda Hester purchased a used 2014 Dodge R am f r om Jackson Mac Haik CDJR, Ltd. (Mac Haik). Hester executed a retail-installm ent s ale contract with Mac Haik f

or the purchase of the vehicle. The c ontract contained an arbitration provision. ¶3. On July 25, 2017, Hester f iled a com

plaint in the Sm i th C ounty C ircuit Court against
Mac Haik, Am erican Financial W arranty Corporation (Am e r ican W arranty), Randy Miggins d/b/a M&S Towing, and Randy M i ggins, alleging that the vehicle she bought f rom M ac Haik “was def ective in m aterials and w orkm anship f rom and af

ter the d ate of purchase” and “that said def e cts have existed since the Plaintif f started using said vehicle.” S he a l leged f urther that Ame r i c a n W arranty issued her a warranty but f a iled t o repair her truck. Hester never served Am erican W arranty with a summ ons and copy of her com plaint. ¶4. Hester alleged that Mac Haik took posse s s i on of h er v ehicle to m a ke warranted repairs and later allowed i t to be towed. Mac Haik, f inding that all of Hester’s claim s, which sound in tort or contract and relate to her purchase or condition of the vehicle at issue, argued that the claim s were s ubject to arbitration. On O ctober 3 , 2017, M ac H aik f i l e d a mo t i o n to

com pel arbitration t o which Hester did not respond. Mac Haik argued that Hester’s claim s

were within the scope of the arbitration clause and that no external constraints applied to bar its enf orcem ent. ¶5. On January 15, 2019, the circuit judge heard ar gum ent on M ac H a i k ’ s mo t i o n and ruled that he was n ot going t o com pel arbitration because (1) Hester’s claim , w hich related

to the vehicle she purchased f r om Mac Haik, f

ell outside the contract’s arbitration provision

2and (2) H ester had p urchased the vehicle f r om Mac Haik “under duress,” m aking the provision unenf

orceable. The circuit judge stated, There’s too m any issues here. And y ou’ve got a c laim outside the arbitration agreem ent . .

. . And f

rom what I gather, [ H ester] was under duress to sign it because if she hadn’t signed the docum e nts, s he wouldn’t h ave g otte n t h e vehicle. [ Mac Haik] [ was ] i n a b e tter superior bargaining p osition than s he was, and the contract is printed on a f o rm which the dealership prepared. ¶6. On February 6, 2 019, the circuit judge entered an order deny ing Mac Haik’s m otion

to com pel. On February

11, 2019, Mac Haik tim ely f i led its notice of

appeal. LAW AND ANALYSIS I. Whether the c ircuit court erred b y deny ing t he m otion to com pel arbitration. ¶7. “This Court reviews the grant or denial of a m otion to com pel arbitration de novo.” Sawyers v. Herrin-Gear Chevrolet Co., Inc. , 26 So. 3d 1026, 1 034 (Miss. 2 010) (citing E. Ford, Inc. v. T

aylor , 826 S o. 2 d 709, 713 (Miss. 2 002)). Under the Federal Arbitration Act, arbitration agreem ents “shall be valid, irrevocable, and enf orceable, save upon such grounds

as exist at law or in e q uity f or the revocation of any contract.” Rogers-Dabbs ChevroletHum m er, Inc. v

. Blaken e y , 9 5 0 So. 2d 170, 173 (Miss. 2007) (internal quotation m arks

om itted) (quoting 9 U.S.C. § 2 (1947)). Mississippi will “ liberally construe agreem ents with

a presum ption in f avor of arbitration.” Qualcom m Inc. v. A m . Wireless License Grp., LLC , 980 S o. 2d 261, 269 (Miss. 2007) (citing Term inix Int’l, Inc. v. Rice , 904 So. 2d 1051, 1054 (Miss. 2004)). ¶8. Mississippi courts generally conduct a two-pronged inquiry in which the f irst prong takes two considerations into account, so ultim at e l y t h e three questions to d eterm ine the

3validity of a m otion to com pel arbitration are as f

ollows: (1) whether the parties agreed to arbitrate, (2) whether the parties’ dispute is within the s cope of arbitration, and (3) whether
any def enses to the validity of

the contract exist that would bar arbitration. Rogers-Dabbs , 950 So. 2d at 173 (citing E. Ford , 826 So. 2d at 713). ¶9. This Court f

irst c onsiders whether the parties a greed t o arbitrate. Hester’s com plaint did not a l l e g e a n invalid contract, rather she alleged that the v ehicle was def ective. Even af ter M ac Haik f

iled its m otion to com

pel arbitration, s he did not allege that she d id not agree
t o a rbitrate. In f

act, she did not even respond to M ac Haik’s m otion. On a ppeal, sh e

m aintains that her claim s f a ll outside the scope of arbitration, acknowledging h er agreem ent to arbitrate. ¶10. The contract h eading s tat e d , “ R E T AIL INSTALLMENT SALE CONTRACT - S I M P L E F I N A N C E C H A R G E ( WITH ARBITRATION P ROVI S I O N )

. ” O n t h e r e v e r s e side of the contract, the arbitration provision stated, [ A] ny c laim or d

ispute, whether in contract, tort

. . . or otherwise including the interpretation and scope of this A rbitration P rovision, a nd t he arbitrability of the claim or dispute, between y o u and us . . . which arises o ut of or relates to your.
. . p urchase or condition of this vehicle . . . or any resulting transaction or relationship

. . . shall, at y our or our election, be resolved by neutral, binding arbitration. (Em phasis added.) ¶11. Hester s igned underneath the bold-ty pe f ont d isclosing to her that what she was doing was subject to an arbitration clause:
You agree to t he term s o f this c ontract a nd any dispute r esolution agreem ent y ou signed w ith this contract . Y o u c o nfirm that b efore y ou signed this contract a n d any d ispute resolution agreem ent, w e gave t hem

4to y ou, and y ou w e re free to take them and re v i e w them . You

acknow ledge that y ou have read both sides of this contract, i ncluding t he arbitration provision on the reverse side, before signing below . You confirm t hat y ou received a com pletely f illed-in copy o f these docum e nts w hen y ou signed them . ¶12. It is not disputed that Hester signed the contract and took possession of the vehicle. Hester’s signature conf

irm ed that Mac H aik provided her a “dispute resolution agreem ent,” that she was “f

ree to take them and review them ,” and t h a t s h e “read both s i des of this contract.” Theref

ore, this C ourt f

i nds suf f icient e vidence to show that the parties agreed to arbitrate the dispute. ¶13. Second, this Court consi d e r s w h e t h er Hester’s claim s f all within the scope of

the arbitration provision. 1 M ac Haik contends that the arbitration provision c overs “any dispute between y ou and us related to p u r c h a s e or c ondition of this vehicle.” Hester’s com plaint

states that the vehicle was d ef ective f rom the d ate of p urchase. W e agree with Mac Haik that the arbitration provision c overs such dispute; theref o re, Hester’s claim s are subject to arbitration. The judge erred by ruling that her claim s are not subject to arbitration. ¶14. The third consideration f o r the Court is whether any d ef enses to the contract exist to bar the applicability of the arbitration agreem e nt. “In considering this prong, courts should apply ordinary state-law contract p rinciples. D e f e n s e s s uch as f

raud, duress, and unconscionability m ay be asserted to invalidate the arbitration agreem ent without of f ending

1 We p o in t o u t h ere th a t M ac H aik arg u es f o r th e f irst tim e o n ap p eal th at H ester’s claim s b elo n g in arb itratio n b ecau se th e arb itratio n p r o v isio n co n tain s a d eleg atio n clau se, w h ich p ro v id es th at q u estio n s reg ard in g sco p e o r i n terp retatio n o f th e arb itratio n p ro v isio n , in clu d in g arb itrab ility o f t h e c l a i ms, m u s t b e d ecid ed b y an arb itrato r. B ecau se th is co n ten t io n w a s n o t f

irst raised in th e trial co u rt, w e f i n d it w aiv e d f

o r p u rp o ses o f th is ap p eal. 5the FAA.” Greater Canton Ford Mercury, Inc. v. Ables , 948 S o. 2d 417, 423 (Miss. 2007)

(citing E. Ford , 826 So. 2d at 713-14). ¶15. Again, H ester did not respond to the m otion to com pel, n or did s he assert any def enses
to the contract. It was only af ter the judge s ua s

p onte e ngaged in an exchange with Mac
Ha i k ’ s c o unsel a t the hearing in which he i ntroduced def enses of p rocedural unconscionability and duress that Hester presented this argum ent. Hester contends o n appeal that she was the weaker party with zero participation in the draf ting of the contract and that she was presented w ith a t ake-it-or-leave-it c ontract. Thi s C o u rt does not f i nd that either duress o r procedural unconscionability were pleaded or s upported by the evidence; theref ore, no external constraints bar the applicability of the arbitration agreem e nt. CONCLUSION ¶16. The parties e ntered into a valid arbitration agreem e nt that covers the scope of Hester’s claim s. Hester did not present any def e nses to the contract that would bar the a pplicability of the arbitration agreem ent. W e reverse and render the circuit court’s order deny ing Mac Haik’s m otion to com

pel arbitration. ¶17. REVERSED AND RENDERED. COLEMAN, MAX WELL, CHAMBE RLIN, ISHEE AND GRIFFIS, JJ., CONCUR. KITCHENS, P.J., C ONCURS IN P ART AND DISSENTS IN PART WITH SEPARATE WRITTEN O PINION JOINED B Y KING, P.J. RANDOLPH, C.J., NOT PARTICIPATING. KITCHENS, P RESIDING JUSTICE, C ONCURRING I N PART AND DISSENTING IN PART:

6¶18. I respectf ully c oncur in part and dissent in part. I would af f irm in p art and reverse in part the trial c ourt’s decision that Brenda Hester’s claim s are o u tside the scope of the arbitration agreem ent. ¶19. Hester’s com

plain t a l l e g e d that she purchased a 2014 Dodge Ram vehicle f rom the
Mac H aik dealership on March 2 3 , 2016. Hester averred that, in February 2017, the vehicle “broke dow n and ceased to operate on Highway 503 in Sm i th County , Mississippi.” She claim ed that the warranty com pany , Am erican Financial W arranty Corporation, and another

com pany , Mastertech, had agreed to r epair or replace the vehicle w e r e i t f o u n d def ective.
Hester alleged that, shortly af t er the vehicle f

ailed, she had requested that M ac Haik and the warranty c orporation repair the vehicle, but they ref used to do so. She averred that she had lef t the vehicle in Mac Haik’s possession f or repairs but that Mac Haik had caused it to be towed and stored at a t owing com pany , resulting in a $2,113.25 storage f ee charged to her. ¶20. Mac Hai k f

i l e d a mo t i o n t o c om

pel arbitration. The m otion c ited an arbitration
agreem ent included in the retail installm ent sale contract signed b y Hester when she bought the vehicle, which is quoted here in pertinent part: Any claim or dispute, whether in c o n t r act or tort, statute or o therwise (including the interpretation and s c ope of this Arbitration Provision, and the a rb itrability of the c laim or dispute), between y ou an d us o r our e m ploy ees , agents, successors or assigns, which arises out of o r r e l a t es to y our credit application, purchase or condition of this vehicle, this contract or any resulting transaction or relationship (including any such relationship with third parties who do not sign this contract) shall, at y o ur or our own election, b e resolved by neutral, binding arbitration and not by a court action. ¶21. I would f

ind that H ester’s dispute w ith Mac Haik based o n its towing an d storing the vehicle is not subject to the arbitration p rovision. “Under the FAA, this Court m ust conduct

7a two-step inquiry : f irst, whether the parties intended to arbitrate the dispute, and second, if they did int e n d t o arbitrate, ‘whether legal constraints external to the p arties’ agreem ent f oreclosed the arbitration of those claim s.’” Q ualcom m Inc. v. Am . Wireless License Grp., LLC , 980 So. 2d 2 61, 2 68 (Miss. 2007) (quoting E. Ford, Inc. v. Taylor , 8 26 S o. 2d 709, 713 (Miss. 2002)). Under the f irst prong, we consider whether a valid arbitration agreem ent exists and whether the parties’ agreem ent is within its s cope. Scruggs v. Wyatt , 60 So. 3d 758, 766 (Miss. 2011) (quoting Gre a t e r C a n t o n Ford Mercury, Inc. v. Ables , 948 So. 2d 417, 421 (Miss. 2007)). Because “[ a]rbitration is contractual by nature[ ,] ‘a party cannot be required to subm i t to arbitration any dispute w hich he h as not agreed so to subm i t.’” Sm ith

ex rel. Sm ith v. Ca

p t a i n D ’ s , LLC , 9 63 So. 2 d 1 116, 1119 (Miss. 2 007) (quoting Thom son-CSF, S.A. v. Am . Arbitration Ass’n , 64 F.3d 773, 776 (2d C ir. 1995)). Although

a liberal policy f

avoring arbitration e x i s t s , “ s uch agreem ents m ust not be so broadly construed as to encom

pass claim s and p arties that w ere not intended b y the original contract.” Id. (quoting Thom s on-CSF , 64 F.3d at 776). ¶22. The arbitration p r o v i s i o n w a s part of a r etail installm ent sale contract that Hester signed w hen she bought the vehicle. It provided f o r arbitration of any claim arising out of or relating to the “purchase or condition” of the vehicle. An arbitration agreem ent, like the one
at issue, that em

ploy s the “any c ontroversy o r c l a i m arising out of or related to” language, is c onsidered to be a broad arbitrati o n a g r e e m e nt. Id. (internal quotation m arks om itted) (quotin g S

m i t h Barney, Inc. v

. Henry , 7 75 So. 2d 7 22, 7 26 (Miss. 2001). W hen the arbitration language is b r oad, any claim that “touch[ es]” m atters covered by the contract is

8c o n s i d e red arbitrable. MS Credit Ctr., Inc. v. Horton , 926 So. 2d 167, 176 (Miss. 200 6 )

(internal quotation m arks om i t t e d ) ( q uoting Pennzoil Exploration & Prod. Co. v. Ram co Energy Ltd. , 139 F.3d 1061, 1067 (5th Cir. 1998)). ¶23. A l t h o u g h H e ster’s arbitration agreem e nt with Mac Haik w a s broad, its c o v e r a g e nonetheless was restricted to those claim s that “touched” Hester’s purchase o f the vehicle or the condition of the vehicle. Because Hester’s com p laint all e g e d that the com p lained-of def ects in the vehicle h ad existed since she had p u r c h a s e d i t, I agree with the m ajority ’s f inding that her claim s r elated to the vehicle’s def ective n ature were within the scope of the arbitration agreem ent. But Hester also a lleged dam ages caused by Mac Haik’s towing of the vehicle af t er it broke down approxim ately one y ear af ter its purchase. S he alleged that, rather

t h a n r e p a i r ing the vehicle a f ter its breakdown, Mac Haik caused it to be towed away , resulting in her incurri n g storage costs in the a m ount o f $2,113.25. The parties reasonably could not have contem

p lated that claim s arising f rom towing an d storing a vehicle l ong af ter its purchase would be subject to an arbitration agreem ent covering claim s arising out of or relating to the p urchase or condition of the vehicle. Those claim s of Hester’s had nothing to do with the purchase of the vehicle or with its condition a t the tim e of p urchase. In f act, the trial court specif

ically f ound that Hester’s claim related to the towing and storage costs “f [ ell] outside the arbitration agreem ent.” I would af f irm i n part the trial court’s f i nding that Hester’s claim s were outside the scope of the arbitration agreem ent and r em and f or a trial on the towing and storage claim s. KING, P.J., JOINS THIS OPINION.

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