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AN Luxury Imports, Ltd. D/B/A BMW of Dallas, Inc., AN Luxury Imports GP, LLC, and United States Warranty Corp. v. D. Scott Southall
01-15-00194-CV
Tex. App.
Jun 4, 2015
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Background

  • Appellants AN Luxury Imports, Ltd d/b/a BMW of Dallas, AN Luxury Imports GP, LLC, and United States Warranty Corp seek to compel arbitration under the FAA.
  • Appellee D. Scott Southall disputes arbitration, arguing against compelled arbitration.
  • Sale Agreement incorporates an Arbitration Agreement by reference; applicable provisions state arbitration if signed.
  • Warranty and Sale Agreements constitute a single transaction read together; claims against U.S. Warranty relate to the same transaction.
  • Trial court denied arbitration; appellants appeal asserting arbitration is required under the agreements.
  • Arbitration should be compelled to avoid piecemeal litigation and because claims are within the scope of the Arbitration Agreement.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Does arbitration apply to all claims arising from the transaction? Southall and BMW intended one contract; arbitration applies to all disputes Southall seeks exclusive Texas court jurisdiction Yes, arbitration applies to all arising disputes under the contract.
Is U.S. Warranty bound by the Arbitration Agreement as a non-signatory? Warranty is part of the same transaction and intertwined with arbitration U.S. Warranty not signatory; arbitration may not bind it Equitable estoppel and intertwinement support arbitration for U.S. Warranty claims.
Should the court compel arbitration under the FAA despite potential piecemeal litigation? FAA requires arbitration for arbitrable claims Possible piecemeal litigation disfavored; some claims may be non-arbitrable Arbitration should be compelled; court may order all claims to arbitration.
Do the Magnuson-Moss Warranty Act claims fall within arbitration? Warranties are arbitrable under the arbitration clause MSWA claims should be treated under FAA arbitration MSWA claims are subject to arbitration where applicable under the agreement.
Does the arbitration clause control over conflicting contract provisions? Arbitration clause harmonizes with the Sale Agreement Conflicting language could prevent arbitration Contract provisions harmonized; arbitration favored.

Key Cases Cited

  • Cantella & Co. v. Goodwin, 924 S.W.2d 943 (Tex. 1996) (arbitration preference when contract includes arbitration provision)
  • Frost Nat’l Bank v. L & F Distribs., Ltd., 165 S.W.3d 310 (Tex. 2005) (interpretation with harmonization of contract terms; arbitrate if possible)
  • J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223 (Tex. 2003) (interpret contracts harmoniously and enforce arbitration clauses)
  • Dean Witter Reynolds v. Byrd, 470 U.S. 213 (1985) (FAA requires arbitration of arbitrable claims even if inefficient)
  • Walton v. Rose Mobile Homes, LLC, 298 F.3d 470 (5th Cir. 2002) (Magnuson-Moss does not preclude arbitration under a valid agreement)
  • Kaye/Bassman Intern. Corp. v. Help Desk Now, Inc., 321 S.W.3d 806 (Tex. App.—Dallas 2010) (interpret arbitration provisions in context of whole contract)
  • Jones v. General Motors, Corp., 640 F.Supp.2d 1124 (D. Ariz. 2009) (vehicle purchaser claims arbitrable where intertwined with arbitration)
Read the full case

Case Details

Case Name: AN Luxury Imports, Ltd. D/B/A BMW of Dallas, Inc., AN Luxury Imports GP, LLC, and United States Warranty Corp. v. D. Scott Southall
Court Name: Court of Appeals of Texas
Date Published: Jun 4, 2015
Docket Number: 01-15-00194-CV
Court Abbreviation: Tex. App.