Love v. Crestmont Cadillac
2017 Ohio 1555
| Ohio Ct. App. | 2017Background
- In Sept. 2014 Love bought a vehicle from Crestmont and signed a separate "Agreement to Binding Arbitration" requiring AAA-administered arbitration of disputes "arising out of or in any way related to this consumer transaction."
- The arbitration agreement expressly waived the right to a court trial and included conspicuous warnings (including that arbitration was not required to purchase/finance the vehicle).
- After purchase Love alleged persistent vehicle defects, misrepresentations, excessive fees, and asserted claims under the CSPA, MMWA, warranty and common-law theories.
- Love sued in April 2016; Crestmont moved to stay the litigation pending arbitration under R.C. 2711.02. The trial court granted the stay; Love appealed.
- Love argued (1) many claims predated and thus fell outside the arbitration clause and (2) the arbitration clause was unconscionable (procedural and substantive), including purported conflict with AAA due process protocol and a CSPA private-attorney-general prohibition.
- The appellate court reviewed de novo whether the parties agreed to arbitrate and whether the agreement was unconscionable, and affirmed the trial court’s stay pending arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Love's claims fall outside arbitration because misconduct occurred before signing | Love: many deceptive/unconscionable acts occurred during procurement and thus not covered | Crestmont: clause is broad, covers all disputes "arising from" the transaction | Held: Arbitration clause is broadly worded and presumptively covers Love's claims; no allegation that the arbitration clause itself was fraudulently induced, so claims are arbitrable |
| Whether MMWA claims can be compelled to arbitration | Love: MMWA prohibits arbitration or FTC interpretation bars arbitration | Crestmont: MMWA does not bar arbitration; rights may be asserted in arbitration | Held: MMWA does not preclude arbitration; arbitration does not strip substantive MMWA rights |
| Whether the arbitration agreement is procedurally unconscionable (adhesive, unequal bargaining, lack of counsel/AAA info) | Love: contract was adhesive, presented rapidly, no meaningful choice, no AAA rule explanation, no counsel advised | Crestmont: agreement was clear, conspicuous, separate, Love was educated and responsible to read it; no evidence she was prevented from seeking counsel or unable to understand | Held: No procedural unconscionability — Love failed to prove lack of meaningful choice or incapacity; clause not misrepresented or hidden |
| Whether the arbitration agreement is substantively unconscionable (unreasonable terms / public policy) | Love: clause bars private-attorney-general CSPA actions and may conflict with AAA protocol or be commercially unreasonable | Crestmont: terms were clear, provided AAA rules/contact, did not eliminate substantive statutory rights | Held: No substantive unconscionability — terms commercially reasonable; AAA protocol compliance is for arbitrator to decide; prohibition on private-attorney-general actions does not negate CSPA rights |
| Whether trial court abused discretion by not holding an evidentiary hearing before staying the case | Love: should have an evidentiary hearing on enforceability/unconscionability | Crestmont: procedural rules do not require a hearing on R.C. 2711.02 stay; court may rely on briefing | Held: No abuse of discretion — supplemental briefing provided adequate record; hearing not required absent R.C. 2711.03 basis |
Key Cases Cited
- Abm Farms v. Woods, 81 Ohio St.3d 498 (Ohio 1998) (to defeat a stay, party must show the arbitration provision itself, not just the contract generally, was fraudulently induced)
- Taylor Bldg. Corp. of Am. v. Benfield, 117 Ohio St.3d 352 (Ohio 2008) (party asserting unconscionability bears burden to prove both procedural and substantive quantum)
- Hayes v. Oakridge Home, 122 Ohio St.3d 63 (Ohio 2009) (Ohio public policy favors arbitration and arbitration agreements are enforceable absent legal/equitable grounds for revocation)
- Maestle v. Best Buy Co., 100 Ohio St.3d 330 (Ohio 2003) (trial court need not hold evidentiary hearing on motion to stay under R.C. 2711.02 when not based on R.C. 2711.03)
- McAdams v. McAdams, 80 Ohio St. 232 (Ohio 1909) (parties are responsible for reading what they sign; cannot claim deception if terms could have been known by reading)