Court Opinion

ID: 5288045
Source: CourtListenerOpinion
Date Created: 2022-01-07 11:16:00.205636+00
Date Added: 2024-06-11T08:28:49.359513
License: Public Domain

Laura Denvir Stith, Judge, dissenting. I dissent. The United States Supreme Court has held, “When deciding whether the parties agreed to arbitrate a certain matter (in-eluding arbitrability), courts generally ... should apply ordinary state-law .principles that govern the formation of contracts.” First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995). But the Supreme Court added an important qualification “applicable when courts decide whether a party has agreed that arbitrators should decide arbi-trability: Courts should not assume that the parties agreed to arbitrate arbitrability unless there is 'clea[r] and unmistakable]’ evidence that they did so.” Id. (emphasis added); accord Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 68, 130 S.Ct. 2772, 177 L.Ed.2d 403 (2010). Therefore, the record must provide “clear and unmistakable” evidence the parties intended to delegate questions of arbitrability to the arbitrator. The majority fails to give meaning to this high standard of proof when it holds “clear and unmistakable” evidence of such intent is irrebuttably provided based solely on the fact Mr. Pinkerton signed a contract referencing the American Arbitration Association’s rules of arbitration and one of the unattached commercial AAA rules at that time delegated issues of arbitrability to an arbitrator. Regardless of whether this is a valid conclusion for commercial or sophisticated parties—as numerous federal courts have held—Mr. Pinkerton undeniably is an unsophisticated consumer, and only one of the cases on which the majority relies involved an unsophisticated party. Despite the majority’s refusal to so recognize, Missouri historically has required greater specificity and protection for eon-sumer contracts purporting to waive the consumer’s litigation rights—including the right to jury trial, forum selection clauses, and waiver of negligence clauses—than it has for such provisions in a contract between sophisticated parties. Rather than presuming the consumer understands the contract, the courts look to the record to determine whether the waiver is valid on a case-by-case basis. Applying these principles here, it is error to find the contract’s mere incorporation of the unattached and undescribed AAA rules would have unambiguously signaled to an unsophisticated consumer that an arbitrator rather than a judge would determine whether the arbitration provision itself was valid. The contract’s reference to the AAA rules is but one fact among many the courts must consider in determining the factual issue' of whether the parties “dearly and unmistakably” intended tó delegate the arbitrability issue to the arbitrator. I. THE CONTRACT DID NOT UNAMBIGUOUSLY DELEGATE THE ISSUE OF CONTRACT FORMATION TO THE ARBITRATOR I agree with the majority'that the intention of the parties as to the meaning of a contract becomes a factual issue requiring a court to resort to parol evidence only when an1 ambiguity arises and “cannot be resolved within the four corners of the contract.” Whelan Sec. Co. v. Kennebrew, 379 S.W.3d 835, 846 (Mo. banc 2012). When the contract is ambiguous1, however, the law is well-settled that-the issue of intent is a factual question as to which parol evidence is admissible. Id. While Missouri law provides that matters incorporated by reference into a contract “are as much a part of the contract as if they had been set out in the contract,” Dunn Indus. Grp., Inc. v. City of Sugar Creek, 112 S.W.3d 421, 435 n.5 (Mo. banc 2003) (citations omitted), Missouri law also is well-settled that “[m]ere reference” to another agreement in the primary contract “is insufficient, to establish that [a party] bound itself to the” other agreement, id. at 436. The party must specifically incorporate by reference the secondary agreement to be bound to it by contract principles. Id. at 436 n.5. Parties can incorporate a separate document only if “the contract makes clear reference to the document and describes it in such terms that its identity may be ascertained beyond doubt.” Intertel, Inc. v. Sedgwick Claims Mgmt. Servs., Inc., 204 S.W.3d 183, 196 (Mo. App. 2006). This Court recently applied these rules in the arbitration context in State ex rel. Hewitt v. Kerr, 461 S.W.3d 798, 811 (Mo. banc 2015). Hewitt held a vague or indefinite- incorporation by reference of arbitration rules- may make the contract ambiguous, and in such a case the contract will be construed against the drafter. Id. In Hewitt, the employment contract said it incorporated “Rules and Regulations of the National Football League.” Id. at 803. Those rules in turn incorporated arbitration guidelines of the NFL. Id. at 804. This Court concluded the guidelines nonetheless were not binding on Mr. Hewitt because the “guidelines were not referenced in Mr. Hewitt’s employment contract, nor were they clearly referenced -in the constitution and bylaws. ... Th[e contract] reference does not identify the guidelines in such a way that Mr; Hewitt could ascertain them beyond doubt.” Id. at 811. Hewitt continued: At best, under the terms of the constitution and bylaws, Mr. Hewitt agreed to arbitrate by undefined terms that the commissioner would establish. But these terms also lack certainty; Mr. Hewitt had no way to identify these terms and had no way to know that the NFL intended the guidelines to govern arbitration proceedings. Given the ambiguity of any .terms actually referenced, Mr. Heyñtt could not assent to them. Moreover, Mr. Hewitt did not bear the burden to seek out cm unknown document not clearly identified in his employment contract or the constitution and bylmus. Though'the NFL and the Rams may have intended to incorporate the guidelines into the constitution and bylaws and the employment contract, respectively, it is a well-settled rule that “[i]f ambiguous, [a contract] will be construed against the drafter.” Triarch Indus., Inc. v. Crabtree, 158 S.W.3d 772, 776 (Mo. banc 2005). The Rams had the burden to incorporate the terms in such a way that Mr. Hewitt could manifest his consent. Having failed to do so, Mr. Hewitt did not assent, to the essential terms of arbitration found in the guidelines. Id. (emphasis added). While the majority says that no Missouri arbitration case -has looked at the context of an agreement to arbitrate in determining its ambiguity, Hewitt did just that. In determining whether the contract was ambiguous, Hewitt did not merely note that the Rams contract said it incorporated another matter and conclude this fact alone unambiguously made the incorporated matter a part of the contract. Instead, it looked at the terms, looked at the rules incorporated, determined the incorporated rules were not clear as to where to find the guidelines they in-turn incorporated, and determined the contract, therefore, was ambiguous and must be interpreted against the drafter. Id. Even more directly on point is 50 Plus Pharmacy v. Choice Pharmacy Systems, LLC, 463 S.W.3d 457 (Mo. App. 2015). Missouri law long has provided, “Whether a dispute is covered by an arbitration clause is relegated to the courts as a matter of law and is to be determined from the contract . entered. into. by the parties.” Greenwood v. Sherfield, 895 S.W.2d 169, 174 (Mo. App. 1995). 50 Plus Pharmacy recognized “there is a significant • difference between the question of who should decide arbitrability versus whether arbitration should be compelled.” 463 S.W.3d at 460. While “the latter question ,:. operates under a [presumption of arbitrability], the former ... operates under a principle' wherein the law reverses ■ the presumption.” Id. (citations omitted). In Missouri, therefore, “unless the parties clearly and unmistakably provide otherwise, the question of whether the parties agreed to arbitrate is to be decided by the court, not the arbitrator;” Id. at 461 (citations omitted). The Missouri .Court of Appeals recently followed 50 Plus Pharmacy in Dolly v. Concorde Career Colleges, Inc., - S.W.3d -, -, 2017 WL 4363863, at *3 (Mo. App. Oct. 3, 2017). Dolly involved a dispute oyer an arbitration provision in an enrollment agreement between a small. college and its students. Id. at -, at *1. The enrollment. agreement incorporated .the AAA rules by .reference, and the college argued this was sufficient evidence of the parties’ intent to delegate arbitrability of their dispute to the arbitrator. Id. at -, at *2. The appellate court disagreed, however, noting, “While parties may agree to arbitrate.... questions pf arbitrability ... that would normally be for the court[,] there must be clear and unmistakable evidence of such [an] agreement.” Id. (internal quotations omitted). The appellate court specified that, “While the language in the. relevant AAA Rules might be clear and unmistakable, that language is not recited, in the agreement signed by the Students” and a “general reference to the AAA Rules in an arbitration provision is not sufficient to establish an agreement to delegate [arbitrability].” Id. at -, at *3. The question of who the parties are and what parties in their situation would understand the contract to mean also has been recognized by other states in determining whether a delegation clause in an arbitration agreement is ambiguous. As the Supreme Court of Kentucky noted in Dixon v. Daymar Colleges Group, LLC, 483 S.W.3d 332 (Ky. 2015), “when a party raises a good-faith [formation] challenge to [an] arbitration agreement itself, that issue must be resolved before a court can say that [the party] clearly and unmistakably intended to arbitrate that very validity question.” Id. at 342, quoting, Rent-A-Center, 561 U.S. at 82, 130 S.Ct. 2772 (Stevens, J., dissenting). In Dixon, a group of students argued an arbitration provision was not binding on them “because their signature was physically inscribed before the arbitration provision ... itself.” Id. While Dixon conceded “the delegation provision was clear,” it noted “the language of the delegation provision is largely beside the point.” Id. Instead, the decision confirmed “a trial court is tasked with determining whether there exists a 'valid, binding arbitration agreement’ before it may order a case to arbitration.” Id. at 341, quoting, JPMorgan Chase Bank, N.A. v. Bluegrass Powerboats, 424 S.W.3d 902, 907 (Ky. 2014). Dixon found language that incorporated subsequent amendments inadequate to include the arbitration provision after the signature line on the reverse side of the page. 483 S.W.3d at 346; see also Walker v. Builddirect.Com Techs. Inc., 349 P.3d 549, 551 (Okla. 2015) (reciting general incorporation rules requiring “a contract must make clear reference to the extrinsic document to be incorporated, describe it in such terms that its identity and location may be ascertained beyond doubt, and the parties to the agreement [must have] had knowledge of and assented to the incorporated provisions”). The majority does not formally disagree with these principles. But these principles are inconsistent with the majority’s determination that the mere incorporation of AAA rules is inherently unambiguous. To so hold is error. The majority is required to look at the contract as a whole, including who signed it and the nature of the contract, and of the matters incorporated, before it can determine whether incorporation of the AAA rules “clearly and unmistakably” informed an unsophisticated party such as Mr. Pinkerton that he was delegating to an arbitrator the right to determine the validity of the arbitration clause itself. In particular, the majority is required to consider the fact that this is a contract between a sophisticated business entity and a consumer. The majority suggests Missouri law just does not allow it to consider this fact unless it first finds the contract ambiguous, even though it is consideration of the unsophisticated nature of the plaintiff that is key to the determination of ambiguity in the first instance. Indeed, the majority even concedes Missouri does consider the sophistication of the parties when considering the validity of a waiver of the right to sue the other party for their own negligence. But, it says, that is an isolated exception, not relevant here. The majority is wrong on all counts. Many Missouri cases, addressing a wide variety of issues and in a myriad of contexts, have stated that the sophistication of the parties properly is considered in determining an agreement’s meaning and validity. These cases are part of a long history of Missouri cases recognizing that cases involving the giving up by an unsophisticated party of a litigation right requires more exacting scrutiny and consideration of the unsophisticated nature of the signer in determining whether a contract is unambiguous. 50 Plus Pharmacy specifically recognized “a general reference to ‘the then Existing Commercial Arbitration Rules of the American Arbitration Association^] ... [is] not the sort [of express delegation] addressed or contemplated by the Rent-A-Center court as dictating delegation of the gateway matter of the question of arbi-trability to the arbitrator.” 463 S.W.3d at 461. This is, of course, the very question at issue in this case, and the same result should be reached. Similarly, Dolly held mere reference to the AAA rules “does not constitute ‘clear and unmistakable’ evidence of delegation to an arbitrator of disputes relating to formation and enforceability of the arbitration provision.” — S.W.3d at -, 2017 WL 4363863, at *3. Perhaps the most well-known decision about whether the sophistication of the party determines the validity of the waiver is Purcell Tire & Rubber Co. v. Executive Beechcraft, Inc., 59 S.W.3d 505 (Mo. banc 2001). This Court was tasked with determining whether an ambiguity existed in a contract between two “sophisticated busi.nesses, experienced in th[e] type of transaction.” Id. at 510-11. In holding there was no ambiguity in the liability waiver at issue, this Court specifically held “[ajmbiguity depends on context” and “[IJanguage that is ambiguous to an unsophisticated party may not be ambiguous to a sophisticated commercial entity.” Id. at 510, citing, Alack v. Vic Tanny Int’l of Mo., Inc., 923 S.W.2d 330, 338 n.4 (Mo. banc 1996) (emphasis added). It was only because of the contract’s “commercial context,” that Purcell held there was no ambiguity, repeatedly citing the fact the parties were “sophisticated businesses” in each instance. 59 S.W.3d at 509-11. The majority incorrectly suggests these eases have no. application here and just mean more specific language must be used in to waive the seller’s negligence. This misses the point. The reason more specific language must be used is that an unsophisticated purchaser would not understand the more general language was intended to waive negligence unless that fact were spelled out in the contract. The analogy is exact. Unsophisticated persons such as Mr. Pinkerton would not understand that incorporation of the AAA rules meant that an arbitrator 'would decide issues of arbi-trability unless that fact'were spelled out in-the contract. Moreover, Purcell’s recognition of the importance of whether a party is sophisticated is not, as the majority would suggest, an isolated instance. The principle the majority adopts—that a provision that would be clear to a sophisticated party may not be clear to ah unsophisticated one—has been applied time.and again to attempts to get an unsophisticated consumer to contract to waive the right to sue for negligence.1 Furthermore, the principle on which these cases are founded—that “ambiguity depends on context” and the sophistication of the 'parties—was stated by Purcell as a general concept,, and this Court has recognized it as such. For example, Utility Service & Maintenance, Inc. v. Noranda Aluminum, Inc., 163 S.W.3d 910, 913 (Mo. banc 2005), a ease involving an indemnity provision in a contract between two “sophisticated commercial entities,” said Missouri “has [and continues to] draw[] a distinction between contracts with consumers and contracts between businesses of equal power and sophistication.” Id., citing, Alack, 923 S.W.2d at 338 n.4. Similarly,...numerous . other Missouri cases have applied the principle that ambiguity depends on context and the sophistication of the consumer to other types of contract provisions that attempt to limit an unsophisticated party’s rights. Importantly, this.Court applied these principles to a contract purporting to waive the right to jury trial in Malan Realty Investors, Inc. v. Harris, 953 S.W.2d 624 (Mo. banc 1997), stating the fundamental right to “a jury trial may be waived by contract..., However ... [there is a] real concern [in such situations regarding] the relative bargaining powers of the parties.” Id. at 627. To determine the validity of a jury trial waiver, Malan took into account several factors, including the “disparity in bargaining power between the parties [and] the business acumen of the party opposing the waiver.” Id. Various federal courts similarly have applied Purcell’s, analysis and principles, considering the sophistication of the parties in deciding whether fundamental rights may be contractually waived. See, e.g., Lift Truck Lease & Serv., Inc. v. Nissan Forklift Corp., N. Am., 2013 WL 3092115, at *2 (E.D. Mo. June 18, 2013) (“In Missouri, sophisticated parties may contract to relinquish fundamental rights[.]”); Sports Capital Holdings (St. Louis), LLC v. Schindler Elevator Corp. & Kone, 2014 WL 1400159, at *2 (E.D. Mo. Apr. 10, 2014) (involving a dispute over an elevator maintenance contract and noting, “It is well-settled in Missouri that ‘[sophisticated parties have freedom of contract—even to make a bad bargain, or to relinquish fundamental rights’ ”). This Court has recognized’ the importance of the sophistication of the parties in considering the validity of a forum selection clause as well. In High Life Sales Co. v. Brown-Forman Corp., 823 S.W.2d 493 (Mo. banc 1992), this Court noted, “Many courts have refused to enforce a forum selection clause on the grounds of unfair-mess if thé contract was entered into under circumstances that cáused it to be adhesive.” Id. at 497 (citations omitted). Based on this premise, this Court held the forum selection agreement “was not unfair [because] it was between two substantial and successful companies, drafted and agreed upon by their respective counsel following give-and-take negotiations on various provisions.” Id. Missouri cases similarly have considered the sophistication of the parties in determining the validity of the terms of a lease waiver provision in Halls Ferry Investments, Inc. v. Smith, 985 S.W.2d 848, 853 (Mo. App. 1998), stating, “While the lease failed to state that no such obligation existed, an ambiguity cannot 'be created by silence, especially when both parties are sophisticated bargainers.” Likewise, Missouri courts have “long .., held that an ambiguity [in a contract generally] cannot be created by silence, especially when both parties are sophisticated bargainers.” Morelock-Ross Properties, Inc. v. English Vill. Not-for-Profit Sewer Corp., 308 S.W.3d 275, 280 (Mo. App. 2010) (determining a contract for sewage collection services between sophisticated parties could not be rendered ambiguous on the grounds it failed to expressly mention how certain' fees should be collected) (citations and quotations omitted). These cases are not merely “exceptions” that can be ignored in determining the meaning of the arbitration clause. They are the rule in cases involving the validity under Missouri law of a waiver of rights by an unsophisticated consumer. When dealing with a contract in which the parties have such unequal bargaining power, the principle set out in Pureell that “ambiguity depends on context” and the sophistication of the party is not an exception to the general rule regarding interpretation, applicable (for some unexplained reason) only in the case of waivers of the right to sue for negligence. Indeed, it would make no sense to allow consideration of a party’s sophistication in that context but no other. Rather, these are established principles of Missouri contract law, applicable to the many kinds of waivers of litigation rights contained in contracts between sophisticated and unsophisticated parties. For these reasons, when, as here, the issue is the validity of an unsophisticated consumer’s waiver of litigation rights,’ Missouri’s consistent rule has been to consider the lack of sophistication of one of the parties in 'determining how that party would interpret the waiver. This is the only way to treat an arbitration clause the same as other contract clauses are treated under Missouri law, which the majority concedes is required by the Federal Arbitration Act (FAA). The waiver of the right to have a judge determine the issue of arbitrability, like the a waiver of the right to sue for negligence, the right to jury trial, and the right to select one’s forum, should be considered “in context” and in light of the relative Sophistication of the parties. Indeed, it must be considered in the same way as are other comparable contractual waivers in Missouri. See Rent-A-Ctr., 561 U.S. at 68, 130 S.Ct. 2772; Brewer v. Mo. Title Loans, 364 S.W.3d 486, 497 (Mo. banc 2012) (arbitration provisions are required to be treated the same as, and subject to the same defenses as, other contract provisions). The majority does not cite any contrary Missouri cases. Instead, it relies on a number of United States court of appeals cases. While most of those cases do hold incorporation of-the AAA rules unambiguously waives the right to have a court determine arbitrability,-those cases do not govern here for numerous reasons. First, the FAA leaves the question of who should decide contract formation issues to the parties to determine by contract; it does not require that these issues be delegated to the arbitrator. Second, as noted earlier, the FAA’requires arbitration clauses be treated the same as other comparable contract provisions in the state. Rent-A-Ctr., 561 U.S. at 68-69, 130 S.Ct. 2772. In this case, that means the arbitration clause should be governed by the same principles of incorporation by reference, context, and the sophistication of the consumer as are other contractual waiver provisions, for these are general principles of Missouri contract law. For that reason, it does not matter if under federal law the AAA incorporation provision would be considered unambiguous; this is a matter of state law. See State v. Storey, 901 S.W.2d 886, 900 (Mo. banc 1995) (federal interpretation of Missouri law is not binding on Missouri courts); Brewer, 364 S.W.3d at 492 (“[Federal law] permits state courts to apply state law defenses to the formation for the particular contract at issue on a case-by-case basis”). Third, and even more importantly, all of the federal cases addressing delegation of the arbitrability issue by incorporation of the AAA rules except Fallo v. High-Tech Institute, 559 F.3d 874 (8th Cir. 2009), involve a sophisticated business entity or executive.2 As noted in Brennan v. Opus Bank, 796 F.3d 1125, 1130-31 (9th Cir. 2015), the rest of these federal cases simply do not address whether delegation by incorporation would apply in a consumer case or one involving an unsophisticated party. Neither do any of these cases suggest the FAA requires them to find that incorporation of the AAA rules is sufficient to delegate the issue of arbitrability. Delegation of arbitrability is simply an infer-ense they have drawn in the sophisticated business transactions presented to them. Id. Brennan said it would apply such a presumption to the sophisticated entities in that case, but it expressly left unresolved the question of whether “incorporation of the AAA rules can be clear and unmistakable evidence of delegation of arbitrarily where one party is an unsophisticated consumer.” Ingalls v. Spotify USA, Inc., 2016 WL 6679561, at *3 (N.D. Cal. Nov. 14, 2016); see also Quilloin v. Tenet HealthSystem Philadelphia, Inc., 673 F.3d 221 (3d Cir. 2012) (refusing to find delegation of questions of arbitrability in case _ in which contract said AAA rules governed). The unsophisticated consumer issue has been directly determined in numerous district court cases in the Ninth Circuit. Even prior to Brennan, the district court in Tomkins v. 23andMe, Inc., 2014 WL 2903752, at *11 (N.D. Cal. June 25, 2014), held incorporation by reference of the AAA rules is just one factor in determining whether the parties intended to delegate the arbitrability decision to the arbitrator. Tomkins concluded “incorporation of the AAA rules does not necessarily amount to ‘clear and unmistakable’ evidence of delegation, particularly when the party asked to accept the agreement is a consumer.” Id. The court subsequently refused to extend the presumption used in cases between sophisticated commercial parties to cases involving consumers if the arbitration agreement itself “lacks an express delegation provision on its face, so a consumer would have to look up the AAA rules to find [the delegation provision].”3 Id. Since Brennan, “Every district court decision in [the Ninth Circuit] to address the question ... has [followed the Tomkins approach and] held that incorporation of the AAA rules was insufficient to establish delegation in consumer contracts involving at least one unsophisticated party.” Ingalls, 2016 WL 6679561, at *3; Money Mailer, LLC v. Brewer, 2016 WL 1393492, at *2 (W.D. Wash. Apr. 8, 2016); Galilea, LLC v. AGCS Marine Ins. Co., 2016 WL 1328920, at *3 (D. Mont. Apr. 5, 2016); Vargas v. Delivery Outsourcing, LLC, 2016 WL 946112, at *8 (N.D. Cal. Mar. 14, 2016); Aviles v. Quik Pick Express, LLC, 2015 WL 9810998, at *6 (C.D. Cal. Dec. 3, 2015); Meadows v. Dickey’s Barbecue Rest. Inc., 144 F.Supp.3d 1069, 1078 (N.D. Cal. 2015). For example, in Meadows, after noting “an inquiry about whether the parties clearly and unmistakably delegated arbi-trability by incorporation should first consider the position of those parties,” the court concluded it is “much less reasonable” to find ‘“clear and unmistakable’ evidence of delegation” for an “inexperienced individual, untrained in the law,” such as a restaurant franchisee, than it is for “a large corporation ... or a sophisticated attorney.” 144 F.Supp.3d at 1078. Similarly, in Aviles, a truck driver filed suit against the defendant trucking company, which moved to compel arbitration. 2015 WL 9810998, at *1. Even though the plaintiff was “an independent contractor who operates his own trucking business,” the court deemed him an unsophisticated party because he was “untrained in the law” and it was “doubtful that [he] actually understood the import of [the bolded delegation clause’s] terms.” Id. at *6. Based on the plaintiffs unsophisticated status, the court found there could not be clear and unmistakable intent to delegate. Id. Again, in Vargas, an “unsophisticated luggage delivery driver” signed an arbitration agreement that included a delegation provision incorporating the AAA rules “without an opportunity to review the documents or consult with an attorney.” 2016 WL 946112, at *8. The court found the plaintiffs status as an “unsophisticated” party to be dispositive and held the delegation clause to be invalid because “incorporation of AAA’s rules does not evidence a ‘clear and unmistakable’ intent to delegate disputes involving unsophisticated employees.” Id. at *7. In Galilea, the court held the plaintiffs, who had formed an LLC for the purpose of owning a boat, were “individuals] not well-versed in arbitration law” and, therefore, “unlikely to be aware that the AAA' rules provide for the arbitrator to determine his own jurisdiction.” 2016 WL 1328920, at *3. The court itself then determined arbitrability because the plaintiffs were not “sophisticated parties] for [arbitration] purposes.” Id. Finally, in Money Mailer, the court held incorporation of the AAA rules did not “show a ‘clear and unmistakable’ intent to delegate questions of arbitrability” when the bound party was a “small business owner ... [with] no legal experience.” 2016 WL 1393492, at *2. The middle district of Alabama in Palmer v. Infosys Technologies Ltd., Inc., 832 F.Supp.2d 1341 (M.D. Ala. 2013), similarly refused to hold mere- incorporation of the AAA rules into an arbitration provision constitutes a clear and unmistakable agreement to delegate the issue of arbitra-bility. This is particularly true when the relevant state law provides such issues are to be resolved by the court, as Palmer found was the case in California and as is the case in Missouri for the reasons already noted in cases involving unsophisticated consumers. Id. at 1344. The . single United States court of appeals case on which the majority relies involving- a. consumer. Fallo, simply assumed the incorporation rule applied in the consumer context before it, without recognizing the cases it relied on were commercial cases. 559 F.3d at 878-79. Further., while Fallo says it affirmed delegation of arbitrability to the arbitrator, it then proceeded to interpret delegation as including only the question, of what claims were subject to arbitration, for it went on to consider the merits of Fallo’s unconscionability challenge rather than leaving that issue to the arbitrator. Id. Fallo has been further limited by the Eighth Circuit’s decision in Nebraska Machinery Co. v. Cargotec Solutions, LLC, 762 F.3d 737, 741 n.2 (8th Cir. 2014), which said the question of the existence of an agreement to arbitrate is for the court. Far more persuasive is the decision by the Montana Supreme Court in Global Client Solutions v. Ossello, 382 Mont. 345, 367 P.3d 361 (2016), that, like the federal district court cases just discussed, rejected the idea there is a “‘general rule’ that incorporation of the AAA rules into an arbitration clause constitutes an agreement to arbitrate arbitrability.” Id. at 369. Noting the only-cases finding otherwise “almost exclusively involye[d], arbitration disputes between sophisticated parties in commercial settings,” Ossello refused to find the parties had agreed to arbitrate arbitrability, noting “the AAA rules [were] not part of the record and neither the DAA nor [the creditor’s] arguments specify which of the multiple sets of commercial or consumer AAA rules [were] supposedly incorporated [into the contract].”- Id. While here, as the majority notes, attorneys for both parties located the relevant AAA rules -and attached them to their motions, the question is not what sophisticated legal minds can figure out today about the AAA rules but rather what .a student such as Mr. Pinkerton understood at the time. As in Ossello, the AAA rules were neither attached nor explained at the only time that is relevant in determining-Mr. Pinkerton’s intent. In Morgan v. Sanford Brown Institute, 225 N.J. 289, 137 A.3d 1168 (2016), the Supreme Court of New Jersey held an arbitration delegation provision in an enrollment agreement between student-plaintiffs and a college that said it was to be administered according to AAA rules was unenforceable because it “did not clearly and unmistakably” show intent to “delegate arbitrability.'' Id. at 1182. The contract in question was written “in nine-point font” and included a “more than 750-word arbitration clause set forth in thirty-five unbroken lines.” Id. at 1181. The court noted, “The meaning of arbitration is not self-evident to the average consumer,” Id. at 1180. It concluded, therefore, that such a provision could not be enforceable unless it “explain[ed] in some broad or general way that arbitration is a substitute for the right to seek relief in our court system.” Id. at 1179. The majority just waves off these cases by saying they are not consistent with Missouri law.'But for all of the reasons already discussed, they are indeed consistent with Missouri law’s recognition that the sophistication of the signer affects the determination whether a contract waiver is ambiguous. It is the majority that is incorrectly treating an arbitration clause differently than it treats other contractual attempts to waive the litigation rights of an unsophisticated consumer. Under these- settled principles of Missouri law, while a consumer signing a student enrollment form including an arbitration agreement may understand the right to sue over certain types of claims in court are being-waived, that does not apprise the student that. the validity of the waiver itself will be determined by the arbitrator rather than by a court. Just as Purcell and the other cited cases recognized that use of general language about waivers might be insufficient in a consumer context involving an unsophisticated party, so here use of general incorporation by reference language should not be sufficient to constitute irrebuttable proof of an intent to delegate arbitrability. Indeed, the concerns expressed in those cases have even greater application because the United States Supreme Court has held the party seeking to require arbitration has the burden of proving by “clear and unmistakable” evidence that the other party intended to delegate arbitrability to the arbitrator. - ■ At a minimum, this is a question' of fact that should be put to the parties’ proof, not decided by an irrebuttable presumption. As Alack stated, “our law on such an important point cannot be so out of step with the understanding of our citizens.” 923 S.W.2d at 337. This Court should recognize a generally applicable principle of Missouri contract law that when a consumer contract purports to incorporate by reference another writing, the court should determine whether the parties actually know and understand the provisions to be included. Applying these principles here, Mr. Pinkerton was a young, non-college educated student who was trying to go to school- to learn how to repair aircraft en-. gines. The school he attended is a large for-profit corporation. The school did not provide Mr. Pinkerton with a copy of the AAA rules. Nothing in -the contract explains the content of the AAA rules even generally, nor does the contract explain where and how to find them. The contract does not explain that, while the referenced rules were called “commercial” rules at that time, they nonetheless applied to consumers like Mr. Pinkerton and precluded him from having a court decide whether the agreement or the delegation provision was enforceable or binding. An average consumer might well presume the rules are simply that: rules governing the procedural aspects of arbitration, not “rules” that actually take áway the consumer’s rights. Certainly nothing in the contract mentioned delegation of arbitration decisions to an arbitrator. It is not surprising that both Mr. Pinkerton and the school’s agent testified they had no idea what the AAA rules contained and no idea what they required the arbitrator or the court to decide. Neither .said they understood the rules delegated to an arbitrator the arbi-trability issue itself. - On these facts, a trial court certainly could find Mr. Pinkerton did not . “clearly and unmistakably” intend to delegate arbi-trability to an arbitrator. This Court should remand the case for a factual determination whether Mr. Pinkerton actually knew and understood what the provisions of the AAA rules were, where he could find them, and whether, as a matter of fact, he clearly and unmistakably showed an intent to delegate arbitrability issues to an arbitrator. II. MR. PINKERTON SPECIFICALLY CHALLENGED THE DELEGATION PROVISION The majority notes the Supreme Court has held that to challenge1 the delegation of arbitrability, a party has to have challenged the provision specifically. The majority then states Mr. Pinkerton failed to do so in the trial court.4 The latter statement is factually incorrect. The record clearly shows Mr. Pinkerton argued—in opposition to the motion to refer the matter to arbitration—that the ' arbitration agreement, including the delegation clause, was invalid. Indeed, in his suggestions in opposition to the defendant’s renewed motion to compel arbitration, in response to the school’s claim he had not raised the issue specifically, Mr. Pinkerton used capital letters for emphasis in stating he did raise the issue and repeated he “disputes the existence and enforceability of any agreement to delegate issues of arbitrability to an arbitrator.” He similarly argues in this Court that the putative, delegation provision does “not delegate any threshold issues to an arbitrator.” This issue was preserved. III. UNCONSCIONABILITY IS A CONTRACT FORMATION ISSUE While the majority recognizes “this Court has held that unconscionability is a state law defense to contract formation,” the majority nonetheless unnecessarily creates uncertainty by suggesting it is not sure why this is the case because “con-scionability is not an essential element of contract formation. As such, while uncon-scionability is a defense to contract formation and, therefore, a contract’s validity and enforceability, it is not an issue of whether a contract has ever been concluded.” Slip op. at *20 (citations and quotation omitted). This dicta interprets the term “contract formation” more narrowly than does the Supreme Court. Indeed, as this Court explained in Brewer v. Missouri Title Loans, 364 S.W.3d at 492 n.3: While Missouri courts traditionally have discussed unconscionability under the lens of procedural unconscionability and substantive unconscionability, Concepcion instead dictates a review that limits the discussion to whether state law defenses such as unconscionability impact the formation of a contract. ... Accordingly, the analysis in this Court’s ruling today—as well as this Court’s ruling in Robinson v. Title Lenders, Inc.,-no longer focuses on' a discussion of procedural unconscionability or substantive unconscionability, but instead is limited to a discussion of facts relating to uncon-scionability impacting the formation of the contract. (Citations and quotation omitted.) In other words, the unconscionability of the terms of a contract may be such that it negates the formation of the contract at all, or the unconscionability may instead impact enforcement of particular terms or of the contract as a whole. Robinson pointed out the former type of unconscionability in formation is exemplified by “procedural” unconscionability such as “high pressure sales tactics, unreadable fine print, or misrepresentation among other unfair issues in the contract formation process.” Robinson v. Title Lenders, Inc., 364 S.W.3d 505, 508 n.2 (Mo. banc 2012), quoting, State ex rel. Vincent v. Schneider, 194 S.W.3d 853, 858 (Mo. banc 2006). Brewer advised that in cases otherwise subject to arbitration, “Future decisions by Missouri’s courts addressing unconscionability likewise shall limit review of the defense of unconsciona-bility to the context of its relevance to contract formation.” 364 S.W.3d at 493 n.3. The Supreme Court has recognized un-conscionability may affect contract formation or may be an issue of contract enforcement.5 The same reasoning applies to other defenses such as duress or fraud. Brewer and relevant Supreme Court cases recognize duress as a defense against formation, but lack of duress is not an essential element of contract formation. Baker v. Bristol Care, Inc., 450 S.W.3d 770, 782 (Mo. 2014) (“[A] contract is voidable due to ... duress ... but such [a] defense [has] nothing to do with contract formation. In fact, [duress] defenses assume a contract was formed.”) (citations omitted). It does not follow that a party alleging duress is not raising a contract formation challenge. The same is true of fraud. For these reasons, I dissent from the majority’s holding that Mr. Pinkerton did not preserve the issue of delegation, its questioning of the fact that unconscionability has been recognized as an issue of contract formation, and its holding that, in a consumer ease such as this, the mere reference to incorporation of the AAA rules, without their attachment and without specifically referencing the incorporation of the delegation provision, is unambiguous. I believe the language would be ambiguous to an unsophisticated party if the Court does as Purcell requires and considers the context and the parties’ relative sophistication. The case should be remanded for determination of the factual question whether an unsophisticated student such as Mr. Pinkerton clearly and unmistakably intended to delegate the issue of arbitrability to the arbitrator.  . In addition to Purcell, numerous other Missouri cases have followed the same rationale in the context of liability waivers. See Village of Big Lake v. BNSF Ry. Co., 433 S.W.3d 460, 468 (Mo. App. 2014) ("It is [] clear that a different standard applies to determine whether general exculpatory clauses or indemnity clauses can cover claims of future negligence depending on whether the parties to the contract are sophisticated businesses, experienced in this type of transaction.”) (citations omitted); National Info. Solutions, Inc. v. Cord Moving & Storage Co., 475 S.W.3d 690, 692 (Mo. App. 2015) ("In general, for a party to effectively release itself from or limit liability for its own negligence, the language of the contract must be clear, unequivocal, conspicuous and include the word 'negligence’ or its equivalent. But less precise language may be effective when the contract is negotiated at arm’s-length .between ’ equally sophisticated commercial entities.”) (citations omitted); Lone Star Indus., Inc. v. Howell Trucking, Inc., 199 S.W.3d 900, 903 n.2 (Mo. App. 2006) ("[C]ourts'have drawn a distinction between contracts with consumers and contracts between businesses of equal power and sophistication.”); Caballero v. Stafford, 202 S.W.3d 683, 696 n.2 (Mo. App. 2006) ("We do not ignore the principal [sic] that less precise language may be effective in agreements negotiated at arms length between equally sophisticated commercial entities.”); Milligan v. Chesterfield Vill. GP, LLC, 239 S.W.3d 613, 616 n.3 (Mo. App. 2007) ("Sophisticated businesses that negotiate .at arm’s length may limit liability without specifically mentioning 'negligence,' ‘fault,’ or an equivalent,”); Easley v. Gray Wolf Invs., LLC, 340 S.W.3d 269, 273 (Mo. App. 2011) (finding it "significante ]” that "the evidence established that [Appellant] was a relatively sophisticated party contracting at arm’s length with [Respondent]”); Monsanto Co. v. Gould Elecs., Inc., 965 S.W.2d 314, 316-17 (Mo. App. 1998) (“Here, [Respondent] and [Appellant] are sophisticated commercial entities. [Respondent] agreed to indemnify [Appellant] from ‘any and all liabilities .... ’ Such terms clearly and unequivocally provide for [Respondent] to indemnify [Appellant] against any and all claims.”),   . See Petrofac, Inc. v. DynMcDermott Petroleum Operations Co., 687 F.3d 671, 673-74 (5th Cir. 2012) (dispute between a subcontracting corporation against the general contractor company); Qualcomm Inc. v. Nokia Corp., 466 F.3d 1366, 1368 (Fed. Cir. 2006) (patent infringement dispute between telecommunication corporations); Terminix Int'l Co. v. Palmer Ranch Ltd. P’ship, 432 F.3d 1327, 1329 (11th Cir. 2005) (dispute between limited partnerships arising from 20 extermination service contracts); Contec Corp. v. Remote Solution Co., 398 F.3d 205, 207 (2d Cir. 2005) (indemnification dispute between electronics corporations).   . While the court in Zenelaj v. Handybook Inc., 82 F.Supp.3d 968, 974 (N.D. Cal. 2015), said Tompkins did not base its holding on the fact it was a consumer case, Tompkins certainly treated the matter as a fact question requiring consideration of the consumer’s lack of sophistication and bargaining power. Prior to Brennan, however, the Zenelaj decision had caused a circuit split on this issue.   . The Supreme Court recognizes two types of challenges to the validity of arbitration: "One type challenges specifically the validity of the agreement to arbitrate. ... The other challenges the contract as a whole....” Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 444, 126 S.Ct. 1204, 163 L.Ed.2d 1038 (2006). A challenge to a delegation provision within an arbitration agreement must be made to that provision specifically as distinct from a challenge to the arbitration agreement as a whole. Rent-A-Ctr., 561 U.S. at 70-72, 130 S.Ct. 2772.   . E.g., Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287, 304 n.9, 130 S.Ct. 2847, 177 L.Ed.2d 567 (2010) ("The parties’ dispute about the [contract’s ratification date presents a formation question in the sense above, and is therefore not on all fours with, for example, the formation disputes we referenced in Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 444, n. 1, 126 S.Ct. 1204, 163 L.Ed.2d 1038 (2006), which concerned whether, not when, an agreement to arbitrate was ‘concluded.’ ”); Buckeye, 546 U.S. at 444 n.1, 126 S.Ct. 1204 ("The issue of the contract's validity is different from the issue whether any agreement between the alleged obligor and obligee was ever concluded.”). Buckeye went on to list several examples of formation questions, including “whether [a party] ever signed the contract, whether the signor lacked authority to commit the alleged principal, and whether the signor lacked the mental capacity to assent.” 546 U.S. at 444 n.1, 126 S.Ct. 1204 (citations omitted).