Jorja Trading, Inc. v. Willis, 566 S.W.3d 510

Background

Leah Willis and Adrian Bartholomew bought a 2002 Suzuki XL7 from Automatic Auto Finance (AAF); the retail installment contract was later assigned to Jorja Trading. Appellees defaulted; Jorja sued in small claims court and obtained judgment; appellees appealed to circuit court and filed counterclaims alleging usury and UCC violations.
Appellants (Jorja, AAF, Cashfish Motor Pawn, Virginia Rivers, Monte Johnston) moved to dismiss and compel arbitration of the counterclaims; after amendments and renewed motions, the circuit court held a hearing and denied the joint motion to compel arbitration.
The circuit court found the arbitration clause lacked mutuality of obligation and that appellants had waived arbitration by seeking a district-court monetary judgment; appellants appealed the denial of their motion to compel arbitration.
The arbitration clause allowed “self-help remedies, such as repossession,” contained a class-action/consolidation waiver, and provided that purchaser could select an arbitrator “with [seller’s] consent,” with a court appointment if the parties could not agree.
The court analyzed mutuality under Arkansas contract law, Arkansas statutes limiting repossession/self-help, and the Revised Uniform Arbitration Act provision disfavoring bans on consolidated arbitration; it affirmed denial of the motion to compel arbitration on lack-of-mutuality grounds.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Validity: mutuality of obligation	Appellees: clause is one-sided; appellants bear no meaningful obligations	Appellants: clause allows both sides self-help and bars class-action arbitration, creating mutual obligations	Court held clause lacked mutuality; self-help and class-waiver provisions were one-sided in appellants’ favor
Effect of "self-help (repossession)" language	Appellees: purchasers can't meaningfully invoke repossession; provision benefits only secured party	Appellants: language permits either party to employ self-help, e.g., reclaim property	Court held Arkansas law restricts repossession to secured parties; provision practically benefits only appellants and is one-sided
Class-action / consolidation waiver	Appellees: waiver restricts purchasers more, protecting appellants and denying meaningful reciprocal obligation	Appellants: waiver applies to both parties; prevents consolidated arbitration and thus creates mutual obligation	Court found the consolidation waiver effectively one-sided; R.U.A. §16-108-210 disfavors bans on consolidated arbitration and similar Arkansas precedent supports skepticism
Arbitrator-selection clause	Appellees: appellants could avoid arbitration by withholding consent to purchaser’s arbitrator choice	Appellants: clause permits purchaser to select arbitrator with seller consent; court appointment if no agreement	Court agreed the circuit court erred to the extent it found appellants could unilaterally avoid arbitration, but error was harmless given other mutuality defects

Key Cases Cited

Hickory Heights Health & Rehab, LLC v. Cook, 557 S.W.3d 286 (Ark. App. 2018) (standard of review and arbitration-as-contract principles)
Courtyard Gardens Health & Rehab., LLC v. Quarles, 428 S.W.3d 437 (Ark. 2013) (arbitration contract construction principles)
GGNSC Holdings, LLC v. Lamb, 487 S.W.3d 348 (Ark. 2016) (two-threshold questions for compelling arbitration)
Carter v. Four Seasons Funding Corp., 97 S.W.3d 387 (Ark. 2003) (contracts construed against drafter)
Erwin-Keith, Inc. v. Stewart, 546 S.W.3d 508 (Ark. App. 2018) (appellate review scope regarding arbitration rulings)
Hot Spring Cty. Med. Ctr. v. Ark. Radiology Affiliates, P.A., 288 S.W.3d 676 (Ark. App. 2008) (mutual obligations required for enforceable contract)
Hamilton v. Ford Motor Credit Co., 257 S.W.3d 566 (Ark. App. 2007) (mutuality need not be mirror image but both parties must be bound)
Gorman v. Ratliff, 712 S.W.2d 888 (Ark. 1986) (Arkansas disfavoring self-help remedies like eviction/repossession in some contexts)
Duhon v. State, 774 S.W.2d 830 (Ark. 1989) (broad interpretation outlawing self-help measures to regain property)
Van Buren Sch. Dist. v. Jones, 232 S.W.3d 444 (Ark. 2006) (class-certification prerequisites under Rule 23)
Ark. Blue Cross & Blue Shield v. Hicks, 78 S.W.3d 58 (Ark. 2002) (administrative feasibility and class-definition considerations)
Diamante, LLC v. Dye, 430 S.W.3d 710 (Ark. 2013) (Rule 23 factors for class certification)