Court Opinion

ID: 157173
Source: CourtListenerOpinion
Date Created: 2010-08-14 04:55:06+00
Date Added: 2024-06-11T09:42:37.243770
License: Public Domain

F I L E D
                                                                   United States Court of Appeals
                                                                           Tenth Circuit
                     UNITED STATES COURT OF APPEALS
                                                                           DEC 1 1998
                            FOR THE TENTH CIRCUIT
                                                                      PATRICK FISHER
                                                                               Clerk

    RUSSELL G. JOHNSON;
    JUDITH A. JOHNSON,

                Plaintiffs-Appellants,
                                                         No. 97-6410
    v.                                              (D.C. No. 96-CV-2054)
                                                         (W.D. Okla.)
    LYNN HICKEY DODGE INC.,
    a foreign corporation,

                Defendant-Appellee.

                            ORDER AND JUDGMENT            *

Before BALDOCK , EBEL , and MURPHY , Circuit Judges.

         After examining the briefs and appellate record, this panel has determined

unanimously to grant the parties’ request for a decision on the briefs without oral

argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1.9. The case is therefore

ordered submitted without oral argument.

*
      This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
      Plaintiffs in this case, Russell and Judith Johnson, purchased a used

automobile from defendant in October 1995. In December 1996, plaintiffs filed

suit against defendant alleging fraud and misrepresentation in violation of the

Truth in Mileage Act, 49 U.S.C. §§ 32701-32711. Plaintiffs claimed that

defendant’s false representations as to the automobile’s mileage constituted

deceptive and unfair trade practices in violation of the Act. Defendant moved

to stay the court proceedings and compel arbitration pursuant to an arbitration

clause in the parties’ purchase agreement.

      The dispute resolution clause in the agreement provided that any dispute

between the parties arising out of the sale of the vehicle “shall be submitted to

binding arbitration in accordance with the arbitration rules of the American

Arbitration Association pursuant to the Federal Arbitration Act, Title 9, U.S.C.

§ 1 et seq. and/or the Oklahoma Uniform Arbitration Act, Title 15 O.S. § 801,

et seq.” Appellants’ App. at 19. Plaintiffs opposed mandatory arbitration

contending that because there was a genuine issue as to the validity of the

arbitration agreement, they were entitled to a jury trial on the issue of whether the

parties had a valid agreement to arbitrate. The district court granted defendant’s

motion, stayed the judicial proceedings, and ordered the parties into arbitration.

      The arbitrator returned an award of $3,500.00 including attorney fees in

favor of plaintiffs. Plaintiffs moved the district court to confirm the award,

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reserving their right to appeal the court’s order compelling arbitration. Plaintiffs

are before this court appealing the district court’s order compelling arbitration

and the district court’s order confirming the arbitration award. We have

jurisdiction pursuant to 9 U.S.C. § 16, and review the district court’s order

compelling arbitration de novo,   see Armijo v. Prudential Ins. Co. , 72 F.3d 793,

796 (10th Cir. 1995). “We also review de novo a district court’s decision to deny

a jury trial on the factual question of whether the parties agreed to arbitrate.”

Avedon Eng’g, Inc. v Seatex , 126 F.3d 1279, 1283 (10th Cir. 1997).

      On appeal, plaintiffs assert that the district court erred in compelling

Judith Johnson to arbitrate because she was not a signatory on the sales contract

containing the arbitration clause. Relying on    Thomson-CSF, S.A. v. American

Arbitration Association , 64 F.3d 773 (2d Cir. 1995), plaintiffs posit lengthy

arguments in support of their assertion. None of these arguments, however, were

presented to the district court. The only mention of this issue in plaintiffs’

response to defendant’s motion for stay and to compel arbitration, is plaintiffs’

cursory statement that:

      Furthermore, Plaintiff Judith Johnson  did not sign any agreement to
      arbitrate . As such, she cannot be forced into arbitration of her
      claims against Defendant, even if Defendant is able to show a valid
      agreement existed between Defendant and Plaintiff Russell Johnson.
      See Voss v. Oklahoma City , 618 P.2d 925, 928 (Okla. 1980).

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Appellants’ App. at 26. This single paragraph presented to the district court

became a nine-page argument replete with supporting case law in plaintiffs’

appellate brief.   We have held that “[p]ropounding new arguments on appeal in

an attempt to prompt us to reverse the trial court undermines important judicial

values.” Tele-Communications, Inc. v. Commissioner          , 104 F.3d 1229, 1233

(10th Cir. 1997). “Thus, an issue must be presented to, considered [and] decided

by the trial court before it can be raised on appeal.”    Id. (further quotations

omitted).

       Moreover, as defendant pointed out in its reply to plaintiffs’ response,

see Appellants’ App. at 74, and, as we have independently confirmed, plaintiffs

misrepresented the Oklahoma Supreme Court’s decision in          Voss . There is no

language on page 928, or anywhere else in the        Voss opinion, which supports

plaintiffs’ contention that Judith could not be held to the agreement to arbitrate.

Consequently, because this issue was raised but not adequately argued to the

district court, see Rademacher v. Colorado Ass’n of Soil Conservation Dists.

Med. Benefits Plan , 11 F.3d 1567, 1571 (10th Cir. 1993), we will not consider

plaintiffs’ argument on appeal.

       Next, plaintiffs assert that, pursuant to 9 U.S.C. § 4, Russell Johnson

should have been afforded a jury trial on the issue of whether a valid arbitration

agreement existed. Plaintiffs argue that Russell was fraudulently induced to enter

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into the arbitration agreement.    See Appellants’ Br. at 21. Plaintiffs allege fraud

because prior to signing the purchase agreement Russell did not receive any

definition or explanation of arbitration, and because he was induced to sign the

agreement without reading it.

       State contract law principles generally govern whether parties have agreed

to arbitrate. See First Options of Chicago, Inc. v. Kaplan      , 514 U.S. 938, 944

(1995). The district court, relying on    Schooley v. Merrill Lynch, Pierce Fenner &

Smith, Inc. , 867 F. Supp. 989, 992 (W.D. Okla. 1994),       aff’d 107 F.3d 21 (10th

Cir. 1997) (table), held that the party who signs a contract is presumed to have

read the contract and understands the terms. The court further stated that when a

party signs a contract containing an unambiguous arbitration provision, that party

has assented to arbitration and cannot later argue that he did not intend to do so.

See id. We agree.

       “A written provision in . . . a contract evidencing a transaction involving

commerce to settle by arbitration a controversy thereafter arising out of such

contract . . . shall be valid, irrevocable, and enforceable . . . .” 9 U.S.C. § 2.

“The existence of an agreement to arbitrate ‘is simply a matter of contract

between the parties; [arbitration] is a way to resolve those disputes–but only those

disputes–that the parties have agreed to submit to arbitration.’”     Avedon

Eng’g, Inc. , 126 F.3d at 1283 (quoting    First Options of Chicago, Inc.   , 514 U.S.

                                             -5-
at 943). When parties dispute the existence of an arbitration agreement, a jury

trial on that issue is warranted unless there are no genuine issues of material fact

as to the existence of the agreement.    See id.

        Here, Russell’s signature on the purchase contract indicated his acceptance

of the terms of the contract, including the unambiguous arbitration provision.

The arbitration clause was not buried in the additional terms of the contract, but

appeared as a separate paragraph on the face of the contract that required separate

signature. See Appellants’ App. at 19. Russell’s signature on the dispute

resolution paragraph raises the presumption that he read and understood the

terms. See Schooley , 867 F. Supp. at 992. We conclude that Russell’s claims

that the arbitration clause was not explained to him and that he did not intend to

be bound by the arbitration clause are without merit. Therefore, there is no

genuine issue of material fact regarding the parties’ agreement to arbitrate, and a

jury trial on the issue was not warranted.    See Avedon Eng’g, Inc. , 126 F.3d at

1283.

        Finally, plaintiffs assert that the arbitration award should be vacated

because it manifestly disregards applicable law and is contrary to public policy.

As defendant contends in its answer brief, plaintiffs did not move the district

court to vacate the award or place any of their objections to the award before that

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court. Instead, plaintiffs moved the district court to confirm the award, reserving

the right to appeal only the court’s order compelling arbitration.

       In reply, plaintiffs argue that because certain courts have held orders

confirming arbitration awards to be final appealable orders, the district court’s

order in this case is final and appealable.    See Appellants’ Reply Br. at 3-4 (citing

Hewlett-Packard Co. v. Berg , 61 F.3d 101, 104 (1st Cir. 1995);     Synergy Gas Co.

v. Sasso , 853 F.2d 59, 62 (2d Cir. 1988)). We agree with plaintiffs that the

district court’s confirmation order in this case is final and appealable. That,

however, is not the issue or the focus of our concern.

       The district court will set aside an arbitration award “‘only in very unusual

circumstances’ such as fraud, corruption, or a decision in manifest disregard of

the law.” Kelley v. Michaels , 59 F.3d 1050, 1053 (10th Cir. 1995) (quoting       First

Options of Chicago, Inc. , 514 U.S. at 942). Here, plaintiffs had the opportunity

to argue their objections to the district court in a motion to vacate the arbitration

award. Instead they chose to move for confirmation and appeal only the court’s

order compelling arbitration. Therefore, because it is a general rule that this court

will not consider an issue on appeal that was not raised in the district court,

“except for the most manifest error,”     see Sac & Fox Nation v. Hanson , 47 F.3d

1061, 1063 (10th Cir. 1995) (further quotations omitted), plaintiffs’ claims of

                                              -7-
error in the arbitration award are not properly before this court and will not be

considered.

      The judgment of the United States District Court for the Western District

of Oklahoma is AFFIRMED.

                                                     Entered for the Court

                                                     Bobby R. Baldock
                                                     Circuit Judge

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