93 Va. Cir. 404
Fairfax Cir. Ct.2016Background
- Sanders (PA resident) purchased a 2009 Ford Flex from Certified Car Center (Fairfax County) after dealer representations and a collision-history report indicating no collisions.
- After purchase, the vehicle failed inspection and a later inspection showed it was structurally and mechanically unsafe and had been in a collision.
- Sanders sued the dealer alleging concealment and misrepresentations about the vehicle’s condition.
- At sale, the parties signed a written arbitration agreement selecting binding arbitration in the federal district where the vehicle was purchased (Eastern District of Virginia), naming a local arbitration panel and requiring agreement on the individual arbitrator.
- The agreement apportioned arbitration costs between the parties, bound both to the arbitrator’s decision, and contained different carve-outs to allow some claims to be brought in court (dealer: buyer’s failure to pay; buyer: claims under $1,000).
- Defendants moved to stay proceedings and compel arbitration; the court considered whether the arbitration clause was procedurally or substantively unconscionable (particularly for lack of mutuality).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the arbitration agreement is unconscionable (procedurally or substantively) because it is a contract of adhesion and lacks mutuality | Sanders: agreement is a standard-form adhesion contract and substantively unfair because it does not impose identical obligations (lacks mutuality) | Defendants: arbitration agreement is presumptively enforceable under Virginia law; terms are not one-sided and both parties are bound and share costs | Court: arbitration agreement is enforceable — procedural adhesion alone insufficient; lack of identical requirements does not render clause unconscionable unless so one-sided as to be illusory or unduly burdensome |
Key Cases Cited
- TM Delmarva Power v. NCP of Va., 263 Va. 116, 557 S.E.2d 199 (Va. 2002) (Virginia public policy generally favors arbitration)
- Giordano v. Atria Assisted Living, Va. Beach, L.L.C., 429 F. Supp. 2d 732 (E.D. Va. 2006) (arbitration agreements are interpreted under state contract law)
- Philyaw v. Platinum Enters., 54 Va. Cir. 364 (Va. Cir. Ct. 2001) (procedural and substantive unconscionability analysis; adhesion + onerous forum found unconscionable)
- Dan Ryan Builders, Inc. v. Nelson, 230 W. Va. 281, 737 S.E.2d 550 (W. Va. 2012) (lack of mutuality is a factor under unconscionability but not automatically fatal)
- Boatwright v. Aegis Def. Servs., L.L.C., 938 F. Supp. 2d 602 (E.D. Va. 2013) (upholding arbitration clause where parties were equally bound)
- Taylor v. Butler, 142 S.W.3d 277 (Tenn. 2004) (distinguishing case where one party retained full judicial forum while the other was forced to arbitrate)