2019 Ohio 4354
Ohio Ct. App.2019Background:
- Michael Dozier bought a 2010 Ford Taurus from Buckeye Motor Group and executed a retail installment contract that was assigned to Credit Acceptance Corporation.
- The contract contained a conspicuous arbitration clause (page 1 notice and full clause on page 5), which Dozier initialed; the clause broadly covered disputes and included a class-action waiver.
- The arbitration clause allowed either party to initiate arbitration and gave buyers a 30-day right to reject the clause by mailed notice.
- Dozier (pro se) sued Credit Acceptance in August 2018 alleging Consumer Sales Practices Act violations; Credit Acceptance moved to compel arbitration, dismiss, or stay the case.
- The trial court denied the motion, finding the arbitration clause unconscionable; Credit Acceptance appealed.
- The Eighth District reversed, holding Dozier presented no evidence of procedural unconscionability and that the clause (though containing a class waiver) was not unconscionable; the majority remanded with instructions to stay the litigation pending arbitration. The opinion includes a dissent arguing the class waiver violates public policy and the CSPA.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was the arbitration clause unconscionable? | Trial court found unconscionable; Dozier alleged CSPA violations | Credit Acceptance: clause valid; not procedurally or substantively unconscionable; party seeking to void must prove both | Reversed — Dozier presented no evidence of procedural unconscionability; clause was conspicuous, mutual, and offered a rejection right |
| Does a class-action waiver alone render the clause unenforceable? | (Dissent) Waiver defeats CSPA remedial scheme and violates public policy | Credit Acceptance: class waiver does not automatically void arbitration; courts have enforced waivers | Majority: waiver alone insufficient to void clause; distinguish prior cases where clause was hidden or adhesive; dissent would find public-policy problem |
| Remedy — compel arbitration or stay proceedings? | Dozier opposed arbitration; sought court remedy under CSPA | Credit Acceptance sought to compel arbitration, dismiss, or stay | Appellate court: reverse denial and remand to stay litigation pending arbitration under R.C. 2711.02(B) |
Key Cases Cited
- Javorsky v. Javorsky, [citation="81 N.E.3d 971"] (Ohio 2017) (standard of review for arbitration-enforceability issues depends on challenge)
- Hayes v. Oakridge Home, [citation="908 N.E.2d 408"] (Ohio 2009) (Ohio public policy favors enforcement of arbitration provisions)
- Taylor Bldg. Corp. of Am. v. Benfield, [citation="884 N.E.2d 12"] (Ohio 2008) (party seeking to void arbitration must prove both procedural and substantive unconscionability)
- Collins v. Click Camera & Video, Inc., [citation="621 N.E.2d 1294"] (Ohio Ct. App. 1993) (defines substantive and procedural unconscionability factors)
- Williams v. Aetna Fin. Co., [citation="700 N.E.2d 859"] (Ohio 1998) (presumption favoring arbitration where claim falls within arbitration clause)
- Ignazio v. Clear Channel Broadcasting, Inc., [citation="865 N.E.2d 18"] (Ohio 2007) (resolve doubts about arbitration in favor of arbitration)
- Hedeen v. Autos Direct Online, Inc., [citation="19 N.E.3d 957"] (Ohio App. 2014) (court may refuse contract enforcement when it violates public policy)
- Eagle v. Fred Martin Motor Co., [citation="809 N.E.2d 1161"] (Ohio App. 2004) (arbitration clauses that undercut statutes' remedial purposes can be unenforceable on public-policy grounds)
- Randolph v. Green Tree Fin. Corp., [citation="178 F.3d 1149"] (11th Cir. 1999) (class-waiver can defeat statutory remedial purpose and render arbitration unenforceable)
- Gilmer v. Interstate/Johnson Lane Corp., [citation="500 U.S. 20"] (U.S. 1991) (arbitration of statutory claims is generally enforceable)