Credit Acceptance Corp. v. Robert J. and Billye S. Front, etc.
231 W. Va. 518
| W. Va. | 2013Background
- Credit Acceptance appeals circuit court orders denying motions to compel arbitration in two WV cases arising from auto purchases.
- Contracts with Fronts and Shrewsburys arbitration clauses named NAF and AAA; NAF was barred by Minnesota consent decree and AAA moratorium limited to certain consumer-debt cases, yet AAA remained available for consumer disputes.
- Fronts' actions alleged WVCCPA violations, negligence, IIED, and invasion of privacy; Shrewsburys alleged the same claims.
- Circuit court held the contracts were procedurally and substantively unconscionable due to forum unavailability and that waiving jury rights violated state constitution and WVCCPA.
- Court applies collateral order doctrine to determine appealability of denial of arbitration; reviews de novo the denial decision.
- Court reverses and remands for entry of orders compelling arbitration due to continued availability of AAA as a forum and the FAA framework allowing substitute arbitration when the designated forum is ancillary to the agreement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether unavailability of designated arbitration forums renders the agreement unenforceable. | Fronts/Shrewsbury: forum unavailability makes contracts unconscionable. | Credit Acceptance: remaining AAA forum makes agreement enforceable. | No; AAA remains available; agreements enforced. |
| Whether waiving a jury trial in the arbitration clause invalidates the contract. | Waiver of jury rights violates WV constitution/WVCCPA. | Waiver is permissible under FAA. | Waiver does not render arbitration unenforceable. |
| Whether procedural unconscionability analysis focused on post-formation forum changes was proper. | Unavailability after formation demonstrates procedural unconscionability. | Procedural unconscionability must exist at formation, not due to later events. | Error; focus must be on formation; post-formation changes cannot alone deem unconscionable. |
| Whether the denial of arbitration is appealable as a collateral-order under Cohen Robinson doctrine. | Denial conclusively determines arbitration obligation. | Interlocutory posture excludes immediate appeal. | Yes; denial of arbitration is immediately appealable. |
| Whether Section 5 FAA permits substitution of a non-available forum when an integral forum is unavailable. | Non-availability of chosen forum allows substitution if ancillary. | If forum is integral, substitution voids arbitration. | Substitution allowed only if forum is ancillary; here AAA ancillary, but AAA remains available. |
Key Cases Cited
- Brown ex rel. Brown v. Genesis Healthcare Corp., 228 W.Va. 646 (W. Va. 2011) (procedural/substantive unconscionability sliding scale; contract validity under FAA)
- Brown v. Genesis Healthcare Corp., 229 W.Va. 382 (W. Va. 2012) (Brown II; sliding scale guiding unconscionability analysis; subsequent overruling context)
- Khan v. Dell Inc., 669 F.3d 350 (3d Cir. 2012) (Section 5 of FAA substitution when forum unavailable; integral vs ancillary test)
- Montgomery v. Applied Bank, 848 F. Supp. 2d 609 (S.D. W. Va. 2012) (AAA moratorium on consumer debt collection arbitrations; forum availability context)
- Robinson v. Pack, 223 W.Va. 828 (W. Va. 2009) (collateral order doctrine applicability in interlocutory appeals)
- McGraw v. American Tobacco Co., 224 W.Va. 211 (W. Va. 2009) (interlocutory arbitration review under FAA §16 vs final order)
- Computation Credit Corp. v. Greenwood, 132 S. Ct. 665 (U.S. 2012) (NAF consent decree; context for forum unavailability)