Court Opinion

ID: 3063937
Source: CourtListenerOpinion
Date Created: 2015-10-14 21:18:55.239027+00
Date Added: 2024-06-11T11:49:37.985593
License: Public Domain

[DO NOT PUBLISH]

              IN THE UNITED STATES COURT OF APPEALS

                       FOR THE ELEVENTH CIRCUIT            FILED
                         ________________________ U.S. COURT OF APPEALS
                                                              ELEVENTH CIRCUIT
                                No. 08-14799                     FEB 17, 2009
                           Non-Argument Calendar               THOMAS K. KAHN
                         ________________________                  CLERK
                     D. C. Docket No. 08-80532-CV-WPD

EARL SCOTT,
                                                                Plaintiff-Appellant,

                                      versus

EFN INVESTMENTS, LLC,
d.b.a. Napleton’s Nissan,
CITIFINANCIAL AUTO CORPORATION,

                                                             Defendants-Appellees.

                          ________________________

                  Appeal from the United States District Court
                      for the Southern District of Florida
                        _________________________

                              (February 17, 2009)

Before BLACK, BARKETT and MARCUS, Circuit Judges.

PER CURIAM:

     Earl Scott appeals from the district court’s final order dismissing his putative

class action claims against EFN Investments, LLC and CitiFinancial Auto

Corporation (the “Defendants”), arising out of an automobile purchase.           The
district court concluded that an agreement to arbitrate the parties had entered into --

separate and distinct from the sales contract for the automobile purchase -- was

valid and enforceable, thereby dismissing the case in favor of arbitration.         On

appeal, Scott argues that the district court erred in ruling that the agreement to

arbitrate was not rescinded when the associated sales contract was rescinded. After

careful review, we affirm.

      We review de novo the district court’s grant of a motion to dismiss for

failure to state a claim, accepting all factual allegations in the complaint as true and

construing them in the light most favorable to the plaintiff. See Hill v. White, 321

F.3d 1334, 1335 (11th Cir. 2003).

      The relevant facts are these. Scott alleged that on or about April 22, 2007 he

visited Napleton’s Nissan (“Napleton’s”) to purchase a used automobile, and

ultimately selected a 2005 Nissan Altima. On that same day, Scott signed a Retail

Installment Sales Contract (“RISC”). The RISC was a “spot deliver” agreement,

wherein the used vehicle was delivered to Scott subject to acceptance by a

financing institution of the RISC. The RISC contained an arbitration clause.

According to Scott, within days after the RISC was executed the dealership

rescinded the agreement and advised that the vehicle must be returned to the

dealership immediately.

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      Also on April 22, 2007, however, Scott executed a separate and distinct

Agreement to Arbitrate. This stand-alone Agreement to Arbitrate reads in part:

      By entering into this Agreement to Arbitrate (“Agreement”),
      Customer(s) and Dealership (collectively referred to as “the Parties”)
      agree, except as otherwise provided in this Agreement, to settle by
      binding arbitration any dispute between them regarding: (1) the
      purchase/lease by Customer(s) of the above-referenced Vehicle; (2)
      any products and services purchased in conjunction with the Vehicle;
      and/or (3) any dispute with respect to the existence, scope or validity
      of this Agreement. Matters that the Parties agree to arbitrate include,
      but are not limited to, disputes related to the Retail Purchase/Retail
      Lease Agreement and any documents incorporated therein by
      reference (whether such reference is made in the Retail
      Purchase/Retail Lease Agreement or the document itself), the
      application for and terms of financing for the transaction, the
      Finance/Lease Contract, any alleged promises, representations and/or
      warranties made to or relied upon by the Parties and any alleged
      unfair, deceptive or unconscionable acts or practices.

      Notwithstanding any other provision of this Agreement, the Parties
      agree that they are not waving their right to exercise any self-help or
      provisional remedy available at law or pursuant to agreement between
      them. Nor is either Party required to arbitrate any individual claim (as
      opposed to a class action) that is filed and properly within the
      jurisdiction of a small claims court or equivalent state court.

      . . . This Agreement evidences a transaction involving interstate
      commerce. The parties acknowledge and agree that the Federal
      Arbitration Act (9 U.S.C. § 1 et seq.) (“FAA”) shall govern any
      arbitration under this Agreement.

      . . . the Parties agree that by entering into this Agreement, they are
      waiving their right to a jury trial and their right to bring or participate
      in any class action or multiplaintiff action in court or through
      arbitration. Once one of the parties has demanded arbitration, binding

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      arbitration is the exclusive method for resolving any and all claims
      between then.

      After Napleton’s took possession of the Nissan Altima, Scott filed this

lawsuit in state court, alleging violations of the Florida Motor Vehicle Sales

Finance Act, the Fair Credit Reporting Act, the Equal Credit Opportunity Act, the

Florida Unfair and Deceptive Trade Practices Act, and breach of contract. The

Defendants removed the case to federal court, and based upon the Agreement to

Arbitrate, moved to dismiss Scott’s case in favor of arbitration. The district court

agreed with the Defendants, and dismissed the case. This appeal follows.

      The Federal Arbitration Act provides that a written arbitration agreement

arising from a contract involving interstate commerce “shall be valid, irrevocable,

and enforceable, save upon such grounds as exist at law or in equity for the

revocation of any contract.” 9 U.S.C. § 2. While we recognize the strong federal

policy in favor of arbitration, see generally Seaboard Coast Line R.R. v. Trailer

Train Co., 690 F.2d 1343, 1348 (11th Cir. 1982), we will not compel parties to

arbitrate a dispute where the parties have not agreed to do so, Klay v. All

Defendants, 389 F.3d 1191, 1200 (11th Cir. 2004). In determining the propriety of

a motion to compel arbitration, we engage in a two-step inquiry: (1) first, we

determine whether the parties agreed to arbitrate the dispute; and (2) second, we

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decide whether “legal constraints external to the parties’ agreement foreclosed

arbitration.” Id. (quotations omitted).

      As for the first step, the plain language of the Agreement to Arbitrate

indicates that Scott agreed to arbitrate all disputes regarding “the purchase/lease by

Customer(s) of the above-referenced Vehicle,” as well as any “disputes related to

the Retail Purchase/Retail Lease Agreement” or “any alleged unfair, deceptive or

unconscionable acts or practices.” These encompass the very disputes that Scott

has alleged in his complaint -- which include violations of the Florida Motor

Vehicle Sales Finance Act, the Fair Credit Reporting Act, the Equal Credit

Opportunity Act, the Florida Unfair and Deceptive Trade Practices Act, and breach

of contract. It thus seems clear that under the Agreement to Arbitrate, Scott has

agreed to submit these very counts to arbitration.

      As for the second step, Scott argues that because the Defendants rescinded

the sales contract, the stand-alone Agreement to Arbitrate necessarily was

rescinded. But as the Supreme Court has held, “unless the challenge is to the

arbitration clause itself, the issue of the contract’s validity is considered by the

arbitrator in the first instance.” Buckeye Check Cashing, Inc. v. Cardegna, 546

U.S. 440, 445-46 (2005).       Because Scott is not challenging the validity of the

Agreement    to   Arbitrate,   but   that   “the   transaction   in   its   entirety   was

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revoked/rescinded,” the challenge must be decided by an arbitrator. Id. Moreover,

while Scott contends that there is nothing left to arbitrate because there are no

remaining substantive contractual provisions, Scott’s complaint alleges, among

other things, a breach of contract count, clearly indicating that he is challenging the

existence of these contractual provisions. Further, as the district court reasoned, if

the Agreement to Arbitrate only governed a completed sale, there would be no

need for a stand-alone agreement in addition to the arbitration clause contained in

the RISC.1 We therefore conclude that the stand-alone Agreement to Arbitrate is

valid and enforceable.

       Accordingly, we affirm the district court’s dismissal of the case in favor of

arbitration.

       AFFIRMED.

       1
          Scott also relies on several cases holding that when a party unilaterally cancels or
nullifies an entire contract, any arbitration clause contained there is also cancelled and therefore
unenforceable. As the district court found, however, these cases are distinguishable from the
instant one -- where Scott entered into a stand-alone Agreement to Arbitrate.

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