Deer Automotive Group, LLC v. Brown
454 Md. 52
| Md. | 2017Background
- Liberty Ford sold used vehicles to Brown (2007) and Spencer (2012); each contract contained arbitration provisions, including waivers of class actions.
- Brown and Spencer filed a class action in March 2015 alleging Liberty Ford conditioned a touted “free lifetime” warranty on purchasing costly dealer services, violating the Magnuson-Moss Warranty Act.
- Instead of moving to compel arbitration in the class action, Liberty Ford filed a separate, freestanding petition to compel arbitration in the same circuit court (the "Arbitration Action").
- The circuit court denied the petition to compel arbitration and also denied consolidation of the two dockets; Liberty Ford appealed the denial from the separately filed arbitration case.
- The Court of Special Appeals allowed the appeal to proceed; Brown and Spencer sought and this Court granted review to decide whether the denial of the separate petition was a final, appealable order when a previously filed related case was pending in the same court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether denial of a petition to compel arbitration filed as a separate action is a "final judgment" when a related, previously filed case on the same dispute is pending in the same court | The denial is not final; Maryland decisions forbid appeals from denials when filed within an existing case and allowing a separate action is an end-run that permits piecemeal appeals | The denial is final because the separate petition was the only claim in that docket and denial terminated that action; Kavanagh dicta and some lower-court authority support appealability | Not final: where a pending related case exists, a separately filed petition to compel arbitration that is denied does not terminate the parties' ability to litigate the claim and so is not an appealable final judgment under §12-301 |
| Whether filing a separate arbitration action to obtain immediate appellate review is permissible procedure | Filing a separate action to evade the final judgment rule is improper and undermines the rule against piecemeal appeals | Filing a freestanding petition is procedurally valid and distinct from moving within the existing case; appealability follows because the separate action was terminated by denial | Improper: court rejects tactic—permitting such separate actions would allow circumvention of final-judgment rule and Haynie supports disallowing the end-run |
| Which authority governs appealability: Maryland Uniform Arbitration Act/State final-judgment rule vs. Federal Arbitration Act | The Maryland final-judgment rule controls; FAA does not override state rules on when an appeal is final | FAA provides for immediate appeals of orders denying arbitration and is incorporated by contract; defendant urges recognition of federal provision | Maryland rule governs appealability here; FAA did not displace the state final-judgment requirement in this context |
| Whether the trial court should have consolidated the actions or directed filing in the pending case | Plaintiffs: consolidation or directing the arbitration motion into the class action was appropriate to avoid piecemeal litigation | Liberty Ford: separate action was acceptable and ended the arbitration docket upon denial, so appeal should lie | Trial court’s denial of consolidation was unhelpful; court held the arbitrability issue should have been raised in the pending class action and the separate petition did not create appellate jurisdiction |
Key Cases Cited
- Koons Ford of Baltimore, Inc. v. Lobach, 398 Md. 38 (2007) (interpreting Congress’ intent that MMWA claims not be subject to binding arbitration)
- Am. Bank Holdings, Inc. v. Kavanagh, 436 Md. 457 (2013) (denial of petition to compel arbitration filed within an existing action is not a final, appealable order; discussed distinction with freestanding petitions)
- Litton Bionetics, Inc. v. Glen Constr. Co., Inc., 292 Md. 34 (1981) (denial of a petition to consolidate separate arbitration proceedings is a final judgment where no other case is pending)
- FutureCare NorthPoint, LLC v. Peeler, 229 Md. App. 108 (2016) (Court of Special Appeals held denial of an independent petition to compel arbitration was a final judgment)
- Haynie v. Gold Bond Bldg. Prods., 306 Md. 644 (1986) (criticized use of separate declaratory actions to circumvent pending litigation and final-judgment rule)