CONN APPLIANCES v. POWERS, 417 P.3d 390

Conn Appliances brought suit on July 9, 2015, seeking to collect an alleged unpaid retail installment balance from Teresa Powers arising from a March 4, 2014 retail installment agreement.
Conn alleged default with last payment on August 29, 2014 and sought judgment for breach after sending notice and demand; it alleged $2,074.35 owed.
Powers was personally served July 15, 2015 but did not answer or appear; docket shows no responsive pleading or appearance by Powers.
The trial court, while ruling on Conn’s request for default judgment, sua sponte found an arbitration clause in the parties’ agreement and concluded the clause required binding arbitration of Conn’s collection claim despite an exception in the contract excluding collection remedies.
The Court of Civil Appeals reviewed the order compelling arbitration on appeal, considered statutory and precedent limits on courts ordering arbitration, and examined waiver by failure to appear.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a trial court may sua sponte compel arbitration absent a party's application/motion	Conn argued arbitration is a waivable forum-selection/affirmative defense but the court should not compel arbitration sua sponte; moving party required under statute	Trial court (implicitly) treated arbitration clause as binding and compelled arbitration without a party motion	Court held the Uniform Arbitration Act requires an application/motion; courts may not order arbitration sua sponte — enforcement is by motion of a party
Whether Powers waived the right to arbitrate by failing to appear, requiring default judgment instead of arbitration	Conn argued Powers waived arbitration by not answering/appearing and default judgment should be entered under default rules	Powers did not appear to assert arbitration; trial court nonetheless ordered arbitration	Court held Powers waived arbitration by failing to appear; trial court erred and must enter default judgment for Conn on remand

Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 (1985) (FAA enforces privately negotiated arbitration agreements upon motion of a party; courts should not force arbitration sua sponte)
Shaffer v. Jeffery, 915 P.2d 910 (Okla. 1996) (agreement to arbitrate is treated as an affirmative defense and may be waived)
Thompson v. Bar-S Foods Co., 174 P.3d 567 (Okla. 2007) (standard of review for orders on motions to compel arbitration; arbitration is an alternative forum)
Oklahoma Oncology & Hematology P.C. v. US Oncology, Inc., 160 P.3d 936 (Okla. 2007) (order compelling arbitration is an appealable interlocutory order)
Oxley v. General Atlantic Resources, Inc., 936 P.2d 943 (Okla. 1997) (courts must enforce contracts as written and may not rewrite contract terms)