A-1 Premium Acceptance, Inc. v. Hunter
557 S.W.3d 923
| Mo. | 2018Background
- In 2006 A-1 Premium Acceptance (King of Kash) and borrower Meeka Hunter executed loan contracts containing an arbitration clause that specified disputes “shall be resolved by binding arbitration by the National Arbitration Forum (NAF) under the Code of Procedure then in effect.”
- In 2009 Minnesota sued NAF and NAF entered a consent decree ceasing consumer arbitration services nationwide, making NAF unavailable to administer consumer claims.
- After Hunter defaulted in 2015, A-1 sued to collect; Hunter counterclaimed under the Missouri Merchandising Practices Act and sought class certification.
- A-1 moved to compel arbitration of Hunter’s counterclaim under the parties’ agreement and, alternatively, asked the court to appoint a substitute arbitrator under FAA §5 because NAF was unavailable.
- The circuit court denied A-1’s application to compel arbitration; A-1 appealed. The Missouri Supreme Court reviewed de novo whether the FAA required appointment of a substitute arbitrator.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FAA §5 requires a court to appoint a substitute arbitrator when the named forum (NAF) is unavailable | A-1: FAA §5 is a default rule authorizing the court to appoint a substitute arbitrator so arbitration should be compelled | Hunter: The contract unambiguously required arbitration only before NAF, so §5 does not authorize substituting a different forum | Court: Agreement unambiguously limited arbitration to NAF; FAA §5 does not permit courts to expand arbitration beyond parties’ express agreement, so denial affirmed |
Key Cases Cited
- CompuCredit Corp. v. Greenwood, 565 U.S. 95 (discussing NAF litigation context)
- American Express Co. v. Italian Colors Restaurant, 570 U.S. 228 (arbitration agreements enforced according to their terms)
- US Airways, Inc. v. McCutchen, 569 U.S. 88 (default rules govern absent parties’ contrary intent)
- Ellis v. JF Enterprises, LLC, 482 S.W.3d 417 (Mo. banc 2016) (de novo review of legal question)
- Moss v. First Premier Bank, 835 F.3d 260 (2d Cir. 2016) (agreement naming NAF held to make NAF exclusive forum)