Case Name: Apryl L. PARKERSON v. Wayne SMITH, Verda Pearl Smith, Town and Country Builders, Inc. d/b/a Town and Country Mobile Homes and Champion Home Builders Co., Inc.
Court: Mississippi Supreme Court
Jurisdiction: Mississippi
Decision Date: 2002-03-07
Citations: 817 So. 2d 529
Docket Number: No. 2000-CA-00549-SCT
Parties: Apryl L. PARKERSON v. Wayne SMITH, Verda Pearl Smith, Town and Country Builders, Inc. d/b/a Town and Country Mobile Homes and Champion Home Builders Co., Inc.
Judges: DIAZ, EASLEY AND GRAVES, JJ., CONCUR. CARLSON, J., CONCURS IN RESULT ONLY. DIAZ, J., CONCURS WITH SEPARATE WRITTEN OPINION JOINED BY McRAE, P.J., EASLEY AND GRAVES, JJ. COBB, J., DISSENTS WITH SEPARATE WRITTEN OPINION. PITTMAN, C.J., CONCURS-IN PART AND DISSENTS IN PART WITH SEPARATE WRITTEN OPINION JOINED BY WALLER, J. COBB AND CARLSON, JJ., JOIN IN PART. SMITH, P.J., NOT PARTICIPATING.
Reporter: Southern Reporter, Second Series
Volume: 817
Pages: 529–554

Head Matter:
Apryl L. PARKERSON v. Wayne SMITH, Verda Pearl Smith, Town and Country Builders, Inc. d/b/a Town and Country Mobile Homes and Champion Home Builders Co., Inc.
No. 2000-CA-00549-SCT.
Supreme Court of Mississippi.
March 7, 2002.
Rehearing Denied June 6, 2002.
Edward A. Williamson, Philadelphia, Attorney for Appellant.
Sandra S. Mohler, David M. Ott, Hat-tiesburg, Dale Gibson Russell, Ridgeland, Michael O. Gwin, Jackson, William Bennett Carter, Meridian, Attorneys for Ap-pellees.

Opinion:
McRAE, P.J., for the Court.
¶ 1. Apryl L. Parkerson filed a complaint on May 17, 1999, against Champion Home Builders Co., Inc., and Wayne and Verda Pearl Smith, owners of Town & Country Builders, Inc., d/b/a Town & Country Mobile Homes. The complaint alleged defective manufacture and negligent set-up of Parkerson's mobile home. The defendants made a motion to have the case dismissed and to compel arbitration. Parkerson subsequently filed an amended complaint wherein she alleged that Champion issued an express warranty covering the mobile home; that Verda Pearl Smith had extended certain implied and express warranties to her as a part of the sale and purchase of the mobile home; that by extending Champion's warranties to the plaintiff, Town & Country was acting as Champion's agent; and that the defendants had failed to comply with express and implied warranties arising under Mississippi law and the Magnuson-Moss Warranty Act.
¶ 2. Even though Champion, the manufacturer, was never a signatory to the finance contract between Parkerson and Town & County concerning the arbitration, the Circuit Court of Neshoba County dismissed the case and compelled arbitration by order dated March 23, 2000. Par-kerson timely perfected this appeal. We find that the circuit court erred in dismissing Parkerson's case and requiring her to submit her claims to arbitration as the Magnuson-Moss Warranty Act precluded the Federal Arbitration Act. We further find that Champion, the manufacturer, never had an agreement to arbitrate; and therefore, it cannot compel arbitration. Therefore, we reverse and remand to the Neshoba County Circuit Court for a trial on the merits.
FACTS
¶ 3. On July 1, 1998, Apryl L. Parkerson purchased a Gateway/Advantage Shamrock II mobile home from Town & Country Mobile Homes, Inc., for $61,466.13. As part of this transaction, Parkerson and Verda Pearl Smith of Town & Country signed a contract entitled "Retail Installment Contract, Security Agreement, Waiver of Trial by Jury and Agreement to Arbitration or Reference or Trial by Judge Alone." That agreement provided in pertinent part as follows:
ARBITRATION OF DISPUTES AND WAIVER OF JURY TRIAL:
a. Dispute Resolution. Any controversy or claim between or among you and me or our assignees arising out of or relating to this Contract or any agreements or instruments relating to or delivered in connection with this Contract, including any claim based on or arising from an alleged tort, shall, if requested by either you or me, be determined by arbitration, reference, or trial .by a judge as provided below. A, controversy involving only a single claimant, or claimants who are related or asserting claims arising from a single transaction, shall be determined by arbitration as described below. Any other controversy shall be determined by judicial reference of the controversy to a referee appointed by the court or, if the court where the controversy is venued lacks the power to. appoint a referee, by trial by a judge without a jury, as described below. YOU AND I AGREE AND UNDERSTAND THAT WE ARE GIVING UP THE RIGHT TO A TRIAL BY JURY, AND THERE SHALL BE NO JURY WHETHER THE CONTROVERSY OR CLAIM IS DECIDED BY ARBITRATION, BY JUDICIAL REFERENCE, OR BY TRIAL BY A JUDGE.
b. Arbitration. Since this Contract touches and concerns interstate commerce, an arbitration under this Contract shall be conducted in accordance with the United States Arbitration Act (Title 9, United States Code), notwithstanding any choice of law provision in this Contract. The Commercial Rules of the American Arbitration Association ("AAA") also shall apply....
(emphasis added).
¶ 4. Verda Pearl Smith and Parkerson signed another document entitled "Manufactured Home SeWUp and Warranty." Champion was not a signatory to this document or the retail installment contract. However, Town & Country also provided Parkerson with a document from Champion entitled "Manufacturer's One Year Manufactured Home Limited Warranty." Parkerson asserts that Wayne and Verda Pearl Smith assured her that they would personally see that all promises and warranties were kept and that Parkerson would be treated fairly.
¶ 5. Parkerson alleges that her mobile home was delivered and set up in a grossly defective condition. She contends that the Smiths failed to keep their promises of personal attention and that Town & Country and Champion failed to honor their express and implied warranties.
¶ 6. Parkerson stated in an affidavit that she signed the retail installment contract without reading or understanding any of the language regarding waiver of trial by jury and agreement to arbitration. She asserts that she is not knowledgeable or sophisticated in contract dealings and that none of the preprinted language on the contract was explained to her. She further contends that when she signed the retail installment contract she was of the understanding that the contract was between herself and Bank America Housing Services. She stated that she "had no idea . that any of the language in that contract in any way related to the warranties and promises made by [the Smiths] . or the warranties provided through [the Smiths] by Champion Home Builders."
STANDARD OF REVIEW
¶ 7. The primary issues raised in this appeal present questions of law. "Questions concerning the construction of contracts are questions of law that are committed to the court rather than questions of fact committed to the fact finder." Mississippi State Highway Comm'n v. Patterson Enterprises, Ltd., 627 So.2d 261, 263 (Miss.1993). The standard of review for questions of law is de novo. Starcher v. Byrne, 687 So.2d 737, 739 (Miss.1997).
DISCUSSION
¶ 8. The principal issue before this Court is whether the Magnuson-Moss Warranty Act supercedes the Federal Arbitration Act and, in turn, the arbitration clause of the subject contract, thereby preventing the defendants from invoking arbitration. Additionally, Parkerson asserts that the arbitration clause is unenforceable because it is ambiguous and unconscionable.
¶ 9. The question of whether the Magnu-son-Moss Warranty Act renders binding arbitration clauses in consumer contracts unenforceable is an issue of federal law not yet definitively addressed by the United States Supreme Court. However, to date, nearly every federal court which has addressed the issue has ruled that the Mag-nuson-Moss Warranty Act prevails over the arbitration clause. Yeomans v. Homes of Legend, Inc., 2001 WL 237313 (M.D.Ala.2001); Pitchford v. Oakwood Mobile Homes, Inc., 124 F.Supp.2d 958 (W.D.Va. 2000); Raesly v. Grand Housing, Inc., 105 F.Supp.2d 562 (S.D.Miss.2000); Wilson v. Waverlee Homes, Inc., 954 F.Supp. 1530 (M.D.Ala.1997), aff'd, 127 F.3d 40 (11th Cir.1997). See also Rhode v. E & T Investments, Inc., 6 F.Supp.2d 1322 (M.D.Ala.1998); Boyd v. Homes of Legend, 981 F.Supp. 1423 (M.D.Ala.1997).
¶ 10. While the Federal Arbitration Act (FAA) does in fact favor the enforcement of arbitration agreements, it appears that it has been superceded by the Magnuson-Moss Warranty Act. A federal statute overrides the FAA where the statute's text or history shows a clear congressional intent to do so, or where there is inherent conflict between compelling arbitration and the purposes of the statute. Shearson/Am. Exp., Inc. v. McMahon, 482 U.S. 220, 226-27, 107 S.Ct. 2332, 2338, 96 L.Ed.2d 185 (1987). In addition, where statutory provisions are in irreconcilable conflict, the more recently enacted and more specific statute controls over an earlier and more general statute. HCSC-Laundry v. United States, 450 U.S. 1, 6, 101 S.Ct. 836, 67 L.Ed.2d 1(1981). The Magnuson-Moss Warranty Act was enacted approximately 50 years after the FAA, and new legislation must be presumed to have been enacted in light of earlier enactments. United States v. Trident Seafoods Corp., 92 F.3d 855, 862 (9th Cir.1996).
¶ 11. The Magnuson-Moss Warranty Act is codified as 15 U.S.C. § 2310(d)(1) (2000), which states that any "consumer who is damaged by the failure of a supplier, warrantor, or service contractor to comply with any obligation under this chapter, or under a written warranty, implied warranty, or service contract, may bring suit for damages and other legal and equitable relief." The plain language of the statute indicates that it intends to preserve the. right of any consumer.. to bring a lawsuit , for breach of written or implied warranties.
¶ 12. In Raesly v. Grand Housing, Inc., 105 F.Supp.2d 562 (S.D.Miss.2000), the United States District Court for the Southern District of Mississippi held that the Magnuson-Moss Warranty Act precluded binding arbitration of the written warranties. Id. at 573. In so doing, the Court relied on, inter alia, federal regulations issued by the Federal Trade Commission. 40 Fed.Reg. 60211 (1975) (stating that reference within the written warranty to any binding, non-judicial remedy is prohibited by the Rule and the [Magnuson-Moss Warranty] Act). The Raesly court also relied on Wilson v. Waverlee Homes, Inc., 954 F.Supp. 1530 (M.D.Ala.1997), aff'd 127 F.3d 40 (11th Cir.1997), which has been affirmed by the United States Court of Appeals for the Eleventh Circuit.
¶ 13. We find the court's analysis in Wilson to be compelling. There, the court conducted a meticulous analysis of the history of the Magnuson-Moss Warranty Act, as well as the applicable regulations adopted by the Federal Trade Commission. Wilson, 954 F.Supp. at 1537-38. In holding that the binding arbitration clauses violated the Magnuson-Moss Warranty Act, the court found the House report and the remarks of Congressman Moss, one of the sponsors of the bill, particularly enlightening:
"First, the bill provides the consumer with an economically feasible private right of action so that when a warrantor breaches his warranty or service contract obligations, the consumer can have effective redress. Reásonable attorney's fees and expenses are provided 'for the successful consumer litigant, and the bill is further refined so as to place a minimum extra burden on the courts by requiring as a prerequisite to suit that the purchaser give the [warrantor] reasonable opportunity to settle the dispute out of court, including the use of a fair and formal dispute settlement mechanism . "
119 Cong.Rec. 972 (Jan. 12, 1973) (emphasis added). Congressman Moss therefore made clear that the informal dispute settlement mechanisms or pro cedures are a "prerequisite," not a bar, to suit in court. The House report on the bill makes this point even clearer. The report states that "[a]n adverse decision in any informal dispute settlement proceeding would not be a bar to a civil action on the warranty involved in the proceeding." H.R.Rep. 93-1107, 93d Cong., 2d Sess. 41, reprinted in 1974 U.S.C.C.A.N. 7702, 7723. This history reflects that it was Congress's intent that any nonjudicial dispute resolution procedures would be nonbinding, and consumers would always retain the right of final access to court.
Wilson, 954 F.Supp. at 1538 (emphasis in original) (footnote omitted).
¶ 14. As previously stated, the district court's decision was affirmed by the United States Court of Appeals for the Eleventh Circuit. Wilson v. Waverlee Homes, Inc. 127 F.3d 40 (11th Cir.1997). It is also noteworthy that Chief Judge Thompson's rationale in Wilson was also followed by Judge DeMent in Yeomans v. Homes of Legend, Inc., 2001 WL 237313 (M.D.Ala.2001).
¶ 15. The Circuit Court of Virginia has also held that the Magnuson-Moss Warranty Act precludes binding arbitration:
In Pitchford, Judge James H. Michael held that "there can be no agreement at the time of sale to enter into binding arbitration on a written warranty". The clear intent of the Magnuson-Moss Warranty Act, he wrote, "is to encourage alternate dispute settlement mechanisms but to not deprive any party of their right to have their warranty dispute adjudicated in a judicial forum."
Philyaw v. Platinum Ent., Inc., 2001 WL 112107, *2 (Va. Cir. Ct.2001) (citing Pitchford v. Oakwood Mobile Homes, Inc., No. 99-CV-53; VLW 000-3-215 (W.D.W.Va. 2001)).
¶ 16. In addition, in 1999 the Federal Trade Commission issued a regulation determining that binding pre-dispute arbitration agreements are not enforceable under the Magnuson-Moss Warranty Act. 64 Fed.Reg. 19700, 19708 (1999). When an agency interprets a statute that it is responsible for administering, we must defer to the agency's interpretation so long as the interpretation is reasonable. Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843, 104 S.Ct. 2778, 2782, 81 L.Ed.2d 694 (1984).
¶ 17. The Magnuson-Moss Warranty Act was enacted more recently than the Federal Arbitration Act and is more specific. The language of the Act clearly indicates that by enacting it, Congress intended to preserve for consumers the right to bring suit for breach of written or implied warranties. Therefore, the Magnu-son-Moss Warranty Act has superceded the FAA in regard to breach of consumer warranties, and binding arbitration cannot be compelled in this case without contravening the purposes of the Act. The circuit court therefore erred in dismissing the Smiths and Town & Country, and we therefore reverse and remand Parkerson's claim against the Smiths and Town & Country to the circuit court for a full trial on the merits.
¶ 18. We also find that the circuit court erred in compelling Parkerson to arbitration against Champion. In Wilson v. Waverlee Homes, Inc. 127 F.3d 40 (11th Cir.1997), Waverlee Homes, the manufacturer, was not a party to the installment sales and financing contracts which contained a clause for final and binding arbitration between the plaintiffs and the seller. Wilson, 954 F.Supp. at 1532. Waverlee sought to invoke the arbitration clause, and the district court held that Waverlee, as a nonparty to the agreement containing the arbitration clause, lacked standing to compel arbitration on the warranty claims. Id. at 1534.
¶ 19. Champion is in the same position as Waverlee in Wilson. Champion was not a party to the contract containing the arbitration provision, and therefore may not invoke the arbitration clause to which it was never a party. To hold otherwise would allow a manufacturer which is not a signatory to an agreement to assert rights found in that agreement. The Wilson court declined to make such a broad interpretation, as do we.
¶20. In Wilson, the court pointed out the following language from the contract between Wilson and the seller: "Any controversy or claim between or among you and I or our assignees . shall, if requested by either you or me, be determined by arbitration." Id. The language found in Parkerson's contract with Town & Country is strikingly similar. The Wilson court went on to state that "[n]o stretch of the imagination would be adequate to encompass the concept that the parties to either contract contemplated disputes with non-parties relating to stated and implied warranties." Id. The court also noted that the warranty provided by Waverlee, like the warranty provided by Champion in the present case, did not contain an arbitration provision nor did it seek to incorporate by reference the arbitration provisions in the installment sales and financing agreements between Wilson and the seller. Id. The court found that "the plaintiffs at no time and in no way agreed with Waverlee to waive their Magnuson-Moss Act rights, nor did they agree with [the seller] to extend such a third-party benefit to Wav-erlee." Since Parkerson did not knowingly and intelligently waive any rights as to Champion, we find that Champion is precluded from compelling arbitration of Par-kerson's express or implied warranty claims against it. We therefore also reverse and remand Parkerson's claim against Champion to the circuit court for a trial on the merits.
CONCLUSION
¶21. The Magnuson-Moss Warranty Act precludes enforcement of binding arbitration agreements in regard to written or implied consumer warranties. Moreover Champion is precluded from compelling any of Parkerson's claims to arbitration because it was not a signatory to the arbitration provision. Because we are reversing and remanding based on these conclusions, we find it unnecessary to address the additional issue raised by the parties.
¶ 22. We therefore reverse the circuit court's judgment and remand this case to the Neshoba County Circuit Court for a trial on the merits as to the Smiths and Town & Country, as well as Champion Home Builders.
¶ 23. REVERSED AND REMANDED.
DIAZ, EASLEY AND GRAVES, JJ., CONCUR. CARLSON, J., CONCURS IN RESULT ONLY. DIAZ, J., CONCURS WITH SEPARATE WRITTEN OPINION JOINED BY McRAE, P.J., EASLEY AND GRAVES, JJ. COBB, J., DISSENTS WITH SEPARATE WRITTEN OPINION. PITTMAN, C.J., CONCURS-IN PART AND DISSENTS IN PART WITH SEPARATE WRITTEN OPINION JOINED BY WALLER, J. COBB AND CARLSON, JJ., JOIN IN PART. SMITH, P.J., NOT PARTICIPATING.