LoRoad, LLC v. Global Expedition Vehicles, LLC
2015 U.S. App. LEXIS 9029
| 8th Cir. | 2015Background
- LoRoad (Oregon) negotiated with GXV (Missouri) for a custom expedition vehicle; GXV sent a proposed Assembly Agreement (including a $120,000 nonrefundable deposit and an arbitration clause).
- LoRoad returned a marked-up draft on Nov. 16, 2012 showing handwritten changes and the name “LeeAnna Lough” written above the LoRoad signature line; LoRoad wired $120,000 on Nov. 2, 2012.
- GXV signed and faxed back the marked-up document on Feb. 13, 2013 and treated it as a final contract; LoRoad immediately disputed that the Nov. 16 document was a final, executed agreement and called the deposit a "good faith" payment.
- Parties exchanged further communications; GXV performed some work and spent money, then ceased work after LoRoad continued to deny an executed contract and sought adequate assurances from GXV.
- LoRoad filed to compel arbitration under the arbitration clause in the Assembly Agreement; the district court granted summary judgment for GXV, finding LoRoad never accepted a final Assembly Agreement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a final, enforceable Assembly Agreement (and thus an arbitration agreement) was formed | The signed document GXV returned (Feb. 13) incorporated the Nov. 16 marked-up draft and GXV’s signature manifests mutual assent to the arbitration clause | The Nov. 16 draft was a negotiation mark-up, not an authorized signature or final acceptance; LoRoad never intended to be bound | No contract formed; arbitration clause unenforceable because LoRoad did not accept a final agreement |
| Whether LoRoad’s $120,000 payment constituted conduct recognizing a contract | The deposit matched the contract’s required nonrefundable $120,000 and shows recognition of the contract | LoRoad treated the payment as a good-faith deposit made before any agreement was finalized and repeatedly disavowed a signed contract | Payment insufficient to show LoRoad recognized a binding contract |
| Whether consistent, unchanged arbitration language across drafts created a standalone arbitration agreement | Because the arbitration clause never changed, it evidences mutual intent to arbitrate regardless of other open terms | No evidence parties intended a separate, freestanding arbitration agreement; arbitration depends on a final Assembly Agreement | No separate arbitration agreement; arbitration enforceable only if a final Assembly Agreement existed (which it did not) |
Key Cases Cited
- PCS Nitrogen Fertilizer, L.P. v. Christy Refractories, L.L.C., 225 F.3d 974 (8th Cir. 2000) (party who has not agreed to arbitrate cannot be forced to do so)
- FutureFuel Chem. Co. v. Lonza, Inc., 756 F.3d 641 (8th Cir. 2014) (ongoing negotiations can show lack of mutual assent)
- Computer Network, Ltd. v. Purcell Tire & Rubber Co., 747 S.W.2d 669 (Mo. Ct. App. 1988) (objective manifestation of intent and subsequent conduct guide contract-formation inquiry)
- Arrowhead Contracting, Inc. v. M.H. Wash., LLC, 243 S.W.3d 532 (Mo. Ct. App. 2008) (no contract to arbitrate formed amid ongoing negotiations)
- Baier v. Darden Restaurants, 420 S.W.3d 733 (Mo. Ct. App. 2014) (party seeking arbitration bears burden to prove valid agreement)
- Howard Constr. Co. v. Jeff-Cole Quarries, Inc., 669 S.W.2d 221 (Mo. Ct. App. 1983) (writing must indicate consummation of a contract, not mere negotiations)
- Conolly v. Clark, 457 F.3d 872 (8th Cir. 2006) (post-agreement communications can reveal continuing negotiations, not final assent)
- Moses.com Sec., Inc. v. Comp. Software Sys., Inc., 263 F.3d 783 (8th Cir. 2001) (no contract where contemporaneous conduct showed ongoing negotiations)
- Shapleigh Inv. Co. v. Miller, 193 S.W.2d 931 (Mo. Ct. App. 1946) (examples of contract formation in drafting contexts)
- Brown Mach., Div. of John Brown, Inc. v. Hercules, Inc., 770 S.W.2d 416 (Mo. Ct. App. 1989) (definition of an offer as manifestation inviting assent)