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, 2015Background
- 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)
