Johnson ex rel. Johnson v. JF Enterprises, LLC
2013 Mo. LEXIS 31
| Mo. | 2013Background
- Anita Johnson purchased a 2008 Suzuki from JF Enterprises (Missouri LLC) and signed multiple documents in a single sitting, including a sale agreement, an installment contract with a merger clause, and a separate arbitration agreement.
- The installment contract contained a merger clause stating it was the complete and exclusive statement of the agreement, except as later modified in writing.
- Johnson received a promotional financing program; she signed the arbitration agreement which purported to cover disputes relating to the credit, purchase, financing contract, and related transactions.
- Johnson later sued Franklin (the dealer) and American Suzuki in circuit court for negligent misrepresentation, MMPA violation, and negligence.
- Franklin moved to compel arbitration relying on the arbitration agreement; Johnson argued the merger clause in the installment contract did not incorporate the arbitration agreement.
- The trial court overruled the motion to compel arbitration; the Court of Appeals transferred the case to the Missouri Supreme Court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Contemporaneous documents harmonization | Johnson argues merger clause precludes arbitration of financing disputes. | Franklin argues installment contract is complete and arbitration is not incorporated. | Contemporaneously signed documents harmonize; arbitration applies. |
| Effect of merger clause on arbitration | Merger clause precludes extrinsic arbitration agreement. | Arbitration agreement can be harmonized with financing contract. | Merger clause does not void arbitration; harmonizable. |
| Arbitration scope over financing disputes | Arbitration clause covers all disputes including financing. | Arbitration clause is not a financing document and may be limited. | Arbitration clause applies to financing disputes. |
| Unconscionability and fraud defenses | Arguments exist that could render merger/arbitration provisions voidable. | No decision on unconscionability; remand for those issues. | Remanded for unconscionability and fraud considerations. |
Key Cases Cited
- CIT Group/SalesFin., Inc. v. Lark, 906 S.W.2d 865 (Mo.App.1995) (merger clause indicates intended finality; aids contract interpretation)
- Jake C. Byers, Inc. v. J.B.C. Investments, 834 S.W.2d 806 (Mo.App.1992) (merger clause strong indication of completeness; not always determinative)
- Martin v. U.S. Fidelity Corp., 996 S.W.2d 506 (Mo.banc 1999) (contemporaneously signed documents construed together to determine intent)
- Four-Three-O-Six Duncan Corp. v. Sec. Trust Co., 372 S.W.2d 16 (Mo.1963) (documents executed contemporaneously may be construed together)
- Krueger v. Heartland Chevrolet, Inc., 289 S.W.3d 637 (Mo.App.2009) (merger clause may control over contemporaneous arbitration addendum)
- J.E. Hathman, Inc. v. Sigma Alpha Epsilon Club, 491 S.W.2d 261 (Mo.banc 1973) (merger doctrine governs extrinsic evidence; permits harmonization)
- Union Elec. Co. v. Fundways, Ltd., 886 S.W.2d 169 (Mo.App.1994) (extrinsic evidence ignored under merger doctrine)