Khan v. Taylor Cadillac, Inc.
2017 Ohio 8120
| Ohio Ct. App. | 2017Background
- Khan purchased a new Kia after negotiating price over two days; he reviewed documents overnight and returned to sign the purchase and retail installment contract.
- The transaction documents included an arbitration clause incorporated into the buyer’s order/retail installment contract.
- Khan sued Taylor Cadillac, salesman Lance Self, and Capital One, alleging unlawful inducement and consumer sales practice violations.
- Defendants moved to dismiss for lack of jurisdiction and to compel arbitration, submitting the signed contracts and an affidavit.
- Khan opposed, arguing the arbitration clause was procedurally and substantively unconscionable, violated the Retail Installment Act’s single-document rule, and demanded a jury trial under R.C. 2711.03(B).
- The trial court granted the motion to compel arbitration; the court of appeals affirmed, finding no evidence of unconscionability, no single-document violation, and no basis for a jury trial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability — unconscionability of arbitration clause | Khan: clause procedurally and substantively unconscionable (hidden, Khan mentally exhausted, unsophisticated) | Defs: clause was volontairely reviewed, not hidden, negotiated deal, Khan had time and assistance | Court: no procedural unconscionability; therefore arbitration enforceable |
| Single-document rule / integration under RISA/OCSPA | Khan: arbitration agreement was a separate document, violating the single-document rule | Defs: arbitration clause properly incorporated into buyer’s order/retail installment contract | Court: single-document rule not violated; clause properly incorporated |
| Right to jury trial under R.C. 2711.03(B) | Khan: requested jury trial on making/enforceability of arbitration clause; evidence warranted trial | Defs: no evidence undermining validity/enforceability; buyer’s order waived jury | Court: no sufficient evidence to require trial; waiver present; no jury required |
Key Cases Cited
- Taylor Bldg. Corp. of Am. v. Benfield, 884 N.E.2d 12 (Ohio 2008) (factors for procedural unconscionability and deference to trial court findings on arbitration clauses)