Tylicee S. Greene v. Alliance Automotive, Inc. D/B/A JD Byrider and AutoBanc-2 Corporation D/B/A CNAC
2014 Mo. App. LEXIS 245
Mo. Ct. App.2014Background
- Greene bought a vehicle and signed a Retail Installment Contract (Purchase Agreement) containing an arbitration clause and a "right to reject" that required mailing notice within 10 days.
- Alliance (JD Byrider / Autobanc-2) repossessed Greene's vehicle after an alleged missed payment; Greene later sued alleging conversion, MMPA and related claims.
- Alliance moved to compel arbitration relying on the Purchase Agreement; Greene opposed, arguing the arbitration clause was part of an adhesion contract and unconscionable.
- The trial court denied Alliance's motion to compel arbitration (without comment) and denied Alliance's motion for relief; Alliance appealed.
- The trial court reviewed closing videotape showing a rapid, cursory signing process in which the arbitration clause was not explained and Greene had limited opportunity to read the document.
- The appellate court affirmed, holding the arbitration agreement lacked mutuality of consideration and was therefore unenforceable.
Issues
| Issue | Plaintiff's Argument (Greene) | Defendant's Argument (Alliance) | Held |
|---|---|---|---|
| Validity/enforceability of arbitration clause | Clause is procedurally and substantively unconscionable; adhesion contract and not knowingly accepted | Clause was disclosed, signed, and could have been rejected; party is bound by signature | Clause unenforceable — court finds insufficient mutuality of consideration and problematic formation evidence |
| Acceptance of arbitration clause | Signing did not reflect knowing acceptance because closing was rushed and clause not explained | Signature evidences acceptance and presumption of having read the contract | Signature weighed against context; acceptance questionable but not dispositive; court relied on consideration defect |
| Mutuality / consideration (whether both parties bound) | Clause unbalanced; Alliance retained self-help remedies while requiring Greene to arbitrate | Arbitration agreement allowed self-help without waiving arbitration rights; still mutual | Agreement lacked mutuality: anti-waiver/self-help provisions allowed Alliance to unilaterally avoid arbitration, so no binding contract |
| Waiver / use of self-help repossession | Alliance’s repossession demonstrates inconsistent conduct and may waive arbitration right | Anti-waiver clause preserves right to arbitrate despite self-help | Court did not need to resolve waiver; but anti-waiver language underscores lack of mutual obligation and supports unenforceability |
Key Cases Cited
- Nitro Distributing, Inc. v. Dunn, 194 S.W.3d 339 (Mo. banc 2006) (summary proceedings and rules for arbitration dispute evidence)
- Frye v. Speedway Chevrolet Cadillac, 321 S.W.3d 429 (Mo. App. 2010) (mutuality and consideration requirements for arbitration agreements)
- Brewer v. Missouri Title Loans, 364 S.W.3d 486 (Mo. banc 2012) (arbitration clause unenforceable where lender retained judicial/self-help remedies while borrower required to arbitrate)
- M & I Marshall & Ilsley Bank v. Sader & Garvin, L.L.C., 318 S.W.3d 772 (Mo. App. 2010) (trial court determines existence of arbitration agreement from evidence)
- Robinson v. Title Lenders, 364 S.W.3d 505 (Mo. banc 2012) (standard of review for whether trial court should have compelled arbitration)