NAJERA v. DAVID STANLEY CHEVROLET
2017 OK CIV APP 62
| Okla. Civ. App. | 2017Background
- Najera purchased three trucks from David Stanley Chevrolet (DSC) in 2014 and executed, for each sale, a Purchase Agreement (containing a red-ink arbitration clause) and a Retail Installment Sale Contract (RISC) on the same dates.
- DSC repossessed the trucks in 2015; Najera sued asserting breach of contract, conversion, and fraud, among other claims.
- DSC moved to compel arbitration, attaching the Purchase Agreements; Najera opposed, arguing no assent to arbitration, fraudulent induction, unconscionability, and that each RISC (which contains a merger clause stating it "contains the entire agreement") is the parties’ complete contract and lacks an arbitration clause.
- The trial court held the RISCs were the exclusive contracts and denied DSC’s motion to compel arbitration, without addressing Najera’s other attacks on the arbitration clause.
- On interlocutory appeal the Court of Civil Appeals reviewed de novo whether the arbitration agreement is part of the parties’ agreement and whether the documents can be harmonized.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the RISC, by its merger clause, is the parties’ entire agreement and therefore excludes the Purchase Agreement’s arbitration clause | The RISC’s language ("This contract contains the entire agreement between you and us relating to this contract") shows the parties intended the RISC alone to govern the transaction, so no arbitration clause applies | The Purchase Agreement and RISC were executed contemporaneously and paragraph 12 of the Purchase Agreement requires all written contracts in the same transaction to be read together; the RISC’s merger clause refers only to the RISC itself and does not negate a separate arbitration clause | The documents can be harmonized; the RISC does not alone constitute the entire agreement and Najera’s claims are subject to the Purchase Agreement’s arbitration clause; reversal of the trial court’s order and remand for further proceedings |
| Whether other attacks on the arbitration clause (fraudulent inducement, unconscionability, assent) were decided | Najera urged multiple defenses to arbitration validity | DSC asserted arbitration clause enforceable and not negated by RISC | Trial court did not resolve these defenses; appellate court declined to decide them in the first instance and remanded for the trial court to address them |
Key Cases Cited
- Johnson ex rel. Johnson v. JF Enters., LLC, 400 S.W.3d 763 (Mo. 2013) (contemporaneously signed sales and financing documents may be harmonized and an arbitration clause enforced)
- Mooneyham v. BRSI, LLC, [citation="682 F. App'x 655"] (10th Cir. 2017) (under Oklahoma law, a RISC merger clause that references "this contract" does not preclude treating contemporaneous documents as part of the same transaction; arbitration clause enforceable)
- Nitro-Lift Techs., L.L.C. v. Howard, 568 U.S. 17 (2012) (generally, challenges to the contract as a whole are for the arbitrator unless they specifically target the arbitration clause)
- Walker v. BuildDirect.com Techs. Inc., 349 P.3d 549 (Okla. 2015) (distinguishable: signature/notice issues affect incorporation by reference; not applicable where the party signed the arbitration agreement)