Bellemere v. Cable-Dahmer Chevrolet Inc.
2013 Mo. App. LEXIS 1548
| Mo. Ct. App. | 2013Background
- Bellemere purchased a 2006 Chevrolet Monte Carlo from Cable-Dahmer on Sept. 30, 2011; sales staff made representations about the car and a Buyer’s Guide that suggested a warranty applied.
- Two sequential purchase agreements were signed by Bellemere: Exhibit B (initial) and Exhibit C (amended). Both contained identical arbitration clauses.
- Exhibit B lacked finalized trade-in valuation and loan payoff terms; Exhibit C included those terms but was not signed by an authorized Cable-Dahmer representative as the contract form required.
- Bellemere discovered significant hidden defects shortly after purchase and sued Cable-Dahmer and individual employees alleging fraud, negligence, negligent misrepresentation, and MPA violations.
- Defendants moved to compel arbitration based on the arbitration clause in the purchase agreement; the trial court denied the motion, finding Exhibit C was not a fully executed, binding agreement and thus no arbitration agreement was formed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was a valid arbitration agreement formed? | Bellemere: No valid, binding contract exists because dealer never executed Exhibit C. | Defendants: An arbitration clause exists in the signed documents and should be enforced. | Court: No — Exhibit C lacked dealer signature as required by its own terms, so no contract (and thus no arbitration agreement) was formed. |
| Should questions about mutuality/formation be decided by arbitrator? | Bellemere: Court must decide formation; formation never occurred. | Defendants: Challenges to the whole contract (mutuality) go to arbitrator per Prima Paint/Buckeye. | Court: Formation issues (whether a contract was formed) are for the court under state contract law; Prima Paint/Buckeye apply only where a contract was validly formed and its enforceability is challenged. |
| Can dealer’s later conduct cure lack of signature (mutuality)? | Bellemere: No — the contract explicitly conditioned binding effect on dealer signature. | Defendants: Dealer’s actions (seeking enforcement) cured the lack of signature. | Court: No — when the form expressly requires authorized signature to form a contract, unilateral after-the-fact conduct does not supply that essential element. |
| If Exhibit C invalid, does Exhibit B still bind plaintiff to arbitration? | Bellemere: Exhibit B was not final and therefore not binding. | Defendants: Exhibit B should still obligate Bellemere to arbitrate since Exhibit C failed. | Court: No — Exhibit B lacked material terms (trade-in valuation/payoff) and was not a final agreement; it cannot be transformed into a binding arbitration agreement by failure of Exhibit C. |
Key Cases Cited
- Frye v. Speedway Chevrolet Cadillac, 321 S.W.3d 429 (Mo. App. W.D. 2010) (framework for reviewing motions to compel arbitration)
- Nitro Distrib., Inc. v. Dunn, 194 S.W.3d 339 (Mo. banc 2006) (standards for arbitration agreement validity)
- Whitworth v. McBride & Son Homes, Inc., 344 S.W.3d 730 (Mo. App. W.D. 2011) (party asserting arbitration bears burden; factual findings on formation reviewed for substantial evidence)
- Kansas City Urology, P.A. v. United Healthcare Servs., 261 S.W.3d 7 (Mo. App. W.D. 2008) (FAA favors arbitration but arbitration is contractual and cannot bind absent agreement)
- Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967) (fraud-in-the-inducement claims as to entire contract are for arbitrator if contract is valid)
- Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006) (where contract is valid, challenges to contract’s legality are for arbitrator)
- Johnson v. Vatterott Educ. Ctrs., Inc., 410 S.W.3d 735 (Mo. App. W.D. 2013) (lack of required signatory prevented arbitration agreement from being enforceable)
- Morrow v. Hallmark Cards, 273 S.W.3d 15 (Mo. App. W.D. 2008) (state law governs existence of arbitration agreement; employer not bound by unsigned handbook provisions)