Court Opinion

ID: 9412784
Source: CourtListenerOpinion
Date Created: 2023-08-01 17:05:58.01258+00
Date Added: 2024-06-11T16:41:25.369900
License: Public Domain

NOTICE: NOT FOR OFFICIAL PUBLICATION.
  UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
                  AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

                                     IN THE
              ARIZONA COURT OF APPEALS
                                 DIVISION ONE

                   DONALD H. MAYES, Plaintiff/Appellee,

                                         v.

             TOM’S CAMPERLAND, INC., Defendant/Appellant.

                              No. 1 CA-CV 22-0753
                                FILED 8-01-2023

            Appeal from the Superior Court in Maricopa County
                           No. CV2022-003972
                The Honorable Randall H. Warner, Judge

              JURISDICTION ACCEPTED; RELIEF DENIED

                                    COUNSEL

Johnson, DeLuca, Kurisky & Gould, PC, Houston, Texas
By George A. Kurisky, Jr., Philip C. Brashier
Co-Counsel for Defendant/Appellant

The Cavanagh Law Firm, P.A., Phoenix
By Kerry M. Griggs
Co-Counsel for Defendant/Appellant

Clark & Associates, Eagle, Idaho
By Eric R. Clark
Counsel for Plaintiff/Appellee
                    MAYES v. TOM’S CAMPERLAND
                        Decision of the Court

                      MEMORANDUM DECISION

Judge Samuel A. Thumma delivered the decision of the Court, in which
Presiding Judge D. Steven Williams and Judge Paul J. McMurdie joined.

T H U M M A, Judge:

¶1            Defendant Tom’s Camperland, Inc. (Tom’s) appeals from the
denial of its motion to compel arbitration. Because Tom’s has shown no
error, the order is affirmed.

                FACTS AND PROCEDURAL HISTORY

¶2            In January 2021, plaintiff Donald H. Mayes entered into a
contract with Tom’s to buy a recreational vehicle with payments totaling
over $300,000. The six-page form contract, provided by Tom’s, detailed the
financing terms and stated that the terms applicable to the sale of a used
vehicle did not apply to this sale.

¶3            On page one, in a separate box, Tom’s form contract included
an “Agreement to Arbitrate,” stating: “By signing below, you agree that,
pursuant to the Arbitration Provision on page 5 of this contract, you or we
may elect to resolve any dispute by neutral, binding arbitration and not by
a court action.” Mayes did not sign the signature block on Tom’s form
contract in the box directly below this provision.

¶4             On page five, the contract included another box entitled
“Arbitration Provision” that further detailed each party’s rights to compel
arbitration on “any claim or dispute, whether on contract, tort, statute, or
otherwise,” and explained that any arbitration would be governed by “the
Federal Arbitration Act (9 U.S.C. § 1 et seq.) and not by any state law.” As
he did at the bottom of each page of the contract, Mayes signed at the
bottom of page five. On page six, Mayes signed under the provision stating
“you acknowledge that you have read all pages of this contract, including
the arbitration provision on page 5, before signing below. You agree to the
terms of this contract . . . .”

¶5            Mayes later filed this suit, alleging he took his RV to a
different dealer for maintenance and learned he had bought a used vehicle
not covered by a manufacturer’s warranty. Alleging he was told by Tom’s
that the RV was new, Mayes’ complaint asserted claims for breach of

                                     2
                       MAYES v. TOM’S CAMPERLAND
                           Decision of the Court

contract, breach of the consumer fraud act and fraud in the inducement. In
response, Tom’s moved to compel arbitration, arguing Mayes “signed and
agreed to the Arbitration Agreement” and that his claims fell within the
scope of that agreement. Mayes opposed the motion, arguing he
intentionally did not sign the Agreement to Arbitrate box on page one and
was therefore not bound to arbitrate the dispute.

¶6             Along with oral argument on the motion, the court held an
evidentiary hearing where Mayes and Tom’s finance manager and general
manager testified. Mayes testified that he read the Arbitration Agreement
and intentionally did not sign the agreement, indicating that he did not
want to arbitrate any dispute between the parties. The finance manager
testified that he mistakenly did not prompt Mayes to sign the Arbitration
Agreement but would not have sold the RV had he known that Mayes had
not signed the arbitration provision. Tom’s general manager also testified
that the dealership’s policy was to not go through with the deal if the
customer did not agree to arbitrate. But he agreed that the signature under
the Arbitration Agreement on page one was to signify the customer agreed
to arbitrate.

¶7            After taking the matter under advisement, the court issued a
minute entry concluding the Arbitration Agreement on page one was “to
leave no doubt that the buyer agrees to arbitrate.” The court found that
“Mayes testified credibly that he saw this signature line but intentionally
did not sign because he did not agree to the arbitration provision.” Based
on the evidence provided, including the testimony at the hearing, the court
found the parties did not manifest an agreement to the Arbitration
Agreement. The court noted the ambiguity between the signature under the
language on page six, where Mayes acknowledged that he had read the
arbitration provision, and the lack of signature on page one but “resolve[d]
that ambiguity by finding no meeting of the minds on the issue of
arbitration.” Thus, the court denied Tom’s motion to compel arbitration.
Tom’s timely filed a notice of appeal from that ruling.

                                DISCUSSION

I.     Jurisdiction.

¶8             This court has “an independent duty to determine whether [it
has] jurisdiction. State v. Bayardi, 230 Ariz. 195, 197 ¶ 6 (App. 2012). This
court derives its appellate jurisdiction from statute. Ariz. Const. art. VI, § 9;
Garza v. Swift Transp. Co., Inc., 222 Ariz. 281, 283 ¶ 12 (2009). Generally, an
order denying a motion to compel arbitration is a non-final judgment that

                                       3
                      MAYES v. TOM’S CAMPERLAND
                          Decision of the Court

cannot be appealed. See Ariz. Rev. Stat. (A.R.S.) § 12-2101(A)(1) (2023); see
also Brumett v. MGA Home Healthcare, L.L.C., 240 Ariz. 420, 431 ¶ 21 (App.
2016).1 Tom’s notice of appeal cites A.R.S. § 12-2101.01(A)(1), which grants
this court jurisdiction to hear appeals from orders “denying an application
to compel arbitration made under [A.R.S.] § 12-1502 or 12-3007.” But Tom’s
motion to compel arbitration relied solely on 9 U.S.C. § 1 through 16, the
Federal Arbitration Act. Thus, although challenged by Mayes, A.R.S. § 12-
2101.01(A)(1) does not grant this court appellate jurisdiction. See Sec. Alarm
Fin. Enters., L.P. v. Fuller, 242 Ariz. 512, 515 ¶ 5 (App. 2017).

¶9              “[U]nder appropriate circumstances,” this court may exercise
special action jurisdiction “even when the parties have not requested such
relief.” Phillips v. Garcia, 237 Ariz. 407, 410 ¶ 6 (App. 2015); see also Danielson
v. Evans, 201 Ariz. 401, 411 ¶ 35 (App. 2001) (after finding appellate
jurisdiction lacking, court sua sponte accepted special action jurisdiction).
This case presents just such a situation, particularly given that the issues
presented are largely issues of law. Fuller, 242 Ariz. at 515 ¶ 7; Ariz. R.P.
Spec. Act. 1(a). Thus, in its discretion, this court exercises special action
jurisdiction to hear Tom’s appeal. See A.R.S. § 12-120.21(A)(4).

II.    The Superior Court Properly Denied Tom’s Motion to Compel
       Arbitration.

¶10            The denial of a motion to compel arbitration is reviewed de
novo, Fuller, 242 Ariz. at 515 ¶ 9, recognizing this court will defer to the
superior court’s findings of fact absent clear error, Harrington v. Pulte Home
Corp., 211 Ariz. 241, 246–47 ¶ 16 (App. 2005). “[T]he fundamental
prerequisite to arbitration is the existence of an actual agreement or contract
to arbitrate.” Escareno v. Kindred Nursing Ctrs. W., L.L.C., 239 Ariz. 126, 129
¶ 7 (App. 2016) (citation omitted); see also Volt Info. Scis., Inc. v. Bd. of Trs. of
Leland Stanford Junior Univ., 489 U.S. 468, 478 (1989) (“the [Federal
Arbitration Act] does not require parties to arbitrate when they have not
agreed to do so”). The burden is on the party seeking to compel arbitration
to “show that the plaintiff accepted the arbitration agreement.” Escareno,
239 Ariz. at 129 ¶ 7.

¶11            Tom’s argues the court erred by disregarding the
presumption favoring arbitration under both federal and Arizona law. But
such a presumption does not apply when the parties dispute whether there
is a valid agreement to arbitrate. See First Options of Chi., Inc. v. Kaplan, 514

1 Absent material revisions after the relevant dates, statutes and rules cited

refer to the current version unless otherwise indicated.

                                         4
                    MAYES v. TOM’S CAMPERLAND
                        Decision of the Court

U.S. 938, 944–45 (1995); see also Century Indem. Co. v. Certain Underwriters at
Lloyd’s, London, 584 F.3d 513, 526–27 (3d Cir. 2009) (citing cases). As the
Arizona Supreme Court noted, “[a]lthough it is commonly said that the law
favors arbitration, it is more accurate to say that the law favors arbitration
of disputes that the parties have agreed to arbitrate.” S. Cal. Edison Co. v.
Peabody W. Coal Co., 194 Ariz. 47, 51 ¶ 11 (1999). Because the primary issue
here is whether the parties agreed to arbitrate their disputes, the
presumption favoring arbitration does not influence the analysis.

¶12            Tom’s also argues that Mayes agreed to arbitration by signing
pages five and six of the contract. Both federal and Arizona courts have held
that general state contract principles apply when determining the validity
of arbitration agreements. See Kaplan, 514 U.S. at 944; Broemmer v. Abortion
Servs. of Phx., Ltd., 173 Ariz. 148, 150 (1992). Under Arizona law, contract
formation requires the party seeking to enforce the contract to show that
the other party expressed a manifest intention to be bound by the contract.
Tabler v. Indus. Comm’n, 202 Ariz. 518, 52–21 ¶ 8 (App. 2002). Nothing on
page five of the contract shows Mayes intended to be bound by the
Arbitration Agreement. The signature line for page five, presumably
included to show the signor has seen the page, includes no language
showing agreement or explains that, by signing, Mayes agreed to the
Arbitration Agreement. Thus, Mayes’ signature on page five does not
indicate he agreed to the Arbitration Agreement.

¶13           Similarly, Mayes did not bind himself to the Arbitration
Agreement by signing on page six. Under federal and Arizona law, an
arbitration provision is treated as a separate agreement, independent of the
underlying contract. See Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388
U.S. 395, 402 (1967); Hamblen v. Hatch, 242 Ariz. 483, 487 (2017). Consistent
with this principle, the contract included the separate Arbitration
Agreement on page one for Mayes to agree to arbitrate any disputes. Thus,
by not signing the agreement on page one, Mayes demonstrated his intent
not to be bound by the Arbitration Agreement, as the superior court found
after the evidentiary hearing. To read the agreement on page six, where the
signor agrees to the contract terms, to include the Arbitration Agreement,
would render meaningless the separate Arbitration Agreement (including
the separate signature requirement that Mayes did not sign) on page one.
Aztar Corp. v. U.S. Fire Ins. Co., 223 Ariz. 463, 478 ¶ 56 (App. 2010) (“[A]
cardinal rule of contract interpretation that we do not construe one term of
a contract to essentially render meaningless another term.”).

                                      5
                     MAYES v. TOM’S CAMPERLAND
                         Decision of the Court

¶14            Next, citing Cooper v. Youngtown Health Inc., 1 CA-CV 19-0854,
2020 WL 7024347 (Ariz. App. Nov. 24, 2020) (mem. dec.) and Serafin v. Balco
Properties Ltd., LLC, 185 Cal. Rptr. 3d 151 (App. 2015), Tom’s argues the lack
of signature on page one is not dispositive. Serafin explains, “it is not the
presence or absence of a signature [on an agreement] which is dispositive;
it is the presence or absence of evidence of an agreement to arbitrate which
matters.” 185 Cal. Rptr. 3d at 159 (citation omitted). Tom’s argues that
Mayes’ failure to object when signing the contract shows he agreed to the
Arbitration Agreement. Consistent with Serafin’s directive, here, the
superior court found there was no evidence of an agreement to arbitrate
after considering, among other things, testimony received at an evidentiary
hearing. And as Cooper explains, whether a party intended to be bound is a
question of fact. 2020 WL 7024347, at *3 ¶ 19; see also Tabler, 202 Ariz. at 521
¶ 12. By not signing, Mayes did not intend to be bound by the Arbitration
Agreement. Moreover, Tom’s failed to question Mayes’ failure to sign the
arbitration provision. Tom’s argues that Mayes testimony is “unreasonable
and unreliable,” but this court does not “reweigh the evidence or reassess
credibility issues on appeal.” Williams v. King, 248 Ariz. 311, 317 ¶ 26 (App.
2020). Tom’s has not shown the superior court erred in finding that Mayes
did not agree to the Arbitration Agreement.

¶15           Also citing Cooper, Tom’s argues that signing on page one was
not a condition precedent to enforcing the Arbitration Agreement. The
Arbitration Agreement, however, including a separate signature block, was
on a form Tom’s provided, meaning any ambiguity is to be construed
against Tom’s. See MT Builders, L.L.C. v. Fisher Roofing, Inc., 219 Ariz. 297,
302 ¶ 10 (App. 2008) (citations omitted). Moreover, to enforce an arbitration
agreement, Tom’s needed to show that Mayes agreed to arbitrate. See
Escareno, 239 Ariz. at 129 ¶ 7. Nor does Tom’s waiver argument change the
conclusion; Tom’s first must show the parties agreed to arbitrate, which it
failed to do. See Fuller, 242 Ariz. 512, 516 ¶ 12 (deciding waiver after
determining no contract principles invalidated the arbitration agreement).

¶16          Tom’s finally argues that Mayes is bound by the Arbitration
Agreement based on the “direct benefits” estoppel doctrine. Under this
concept, “a nonsignatory may be compelled to arbitrate only when the
nonsignatory (1) knowingly exploits the benefits of an agreement
containing an arbitration clause, or (2) seeks to enforce terms of that
agreement or asserts claims that must be determined by reference to the
agreement.” Austin v. Austin, 237 Ariz. 201, 210 ¶ 29 (App. 2015). Given that
Mayes signed the agreement to purchase the RV, Tom’s has not shown that
he is a “nonsignatory” under the “direct benefits” estoppel concept
recounted in Austin. Moreover, although noting the concept, Austin found

                                       6
                     MAYES v. TOM’S CAMPERLAND
                         Decision of the Court

it did not apply to the facts presented in that case. Id. at 210 ¶ 31. And on
the record presented here, Tom’s has not shown that this case presents facts
implicating this concept, particularly given Mayes’ fraud in the inducement
claim seeks to undo the contract.

¶17             The other cases Tom’s cites involved third parties seeking to
enforce rights under a contract including a valid, binding arbitration
provision entered into by another, and are distinguishable on that basis. See
Benson v. Casa De Capri Enters., LLC, 252 Ariz. 303, 305 ¶ 3 (2022) (binding
arbitration provision in an insurance contract); E.I. DuPont de Nemours & Co.
v. Rhone Poulenc Fiber & Resin Intermediates, S.A.S., 269 F.3d 187, 200 (3d Cir.
2001) (binding arbitration provision in a joint venture agreement); Sherer v.
Green Tree Servicing LLC, 548 F.3d 379, 380 (5th Cir. 2008) (binding
arbitration provision in a loan agreement); Bridas S.A.P.I.C. v. Gov’t of
Turkmenistan, 345 F.3d 347, 356 (5th Cir. 2003) (binding arbitration provision
in joint venture agreement). Unlike these cases, this dispute is between the
original participants. Tom’s has not shown how those cases should extend
to these facts.

III.   Attorneys’ Fees Requests.

¶18          Both parties seek their taxable costs under A.R.S. § 12-341, and
Mayes seeks his attorneys’ fees on appeal under A.R.S. § 12-341.01. Because
Tom’s is not the prevailing party, its request for costs is denied. Mayes is
awarded his reasonable attorneys’ fees and taxable costs contingent upon
compliance with ARCAP 21.

                               CONCLUSION

¶19         Accepting special action jurisdiction, the order denying
Tom’s motion to compel arbitration is affirmed.

                           AMY M. WOOD • Clerk of the Court
                           FILED:    JT

                                         7