*1 raffles, lottery Applying presumption the of validi operated and a the Const, State, Ill, 47(b), § “gam see Tex. art. ty Legislature’s to the definition of (d), (e), 47.01(4)(A) (B), and lotteries were denounced in bling device” in section any form. The former of version Article Granviel, 515, and the see 561 S.W.2d III, provided: section 47 review, of we the trial standard conclude 47.01(4)(B) pass prohibit- Legislature holding
The shall laws erred in court section ing the establishment of lotteries and in this of the Penal unconstitutional Code State, gift enterprises in this as well gambling as prosecution possession of a lotteries, gift the sale tickets in enter- first issue is sustained. Appellant’s device. involving prises or other the evasions appellant’s sustention of first issue Our lottery or principle, existing established sec appellant’s consideration pretermits in other States. Tex.R.App. ond issue. P. 47.1. Const, (amended 1980) Ill, § Tex. art. judgment is reversed Accordingly, added). The (Emphasis current version of trial and the is remanded to the cause 47(a) III, substantially Article section proceedings. court for further same, amended, per that as it except Significantly, mits certain lotteries. tickets
portion denouncing the sale lotteries, enterprises gift or other evasions
involving lottery principle did not process. amendment its
survive the form,
present the Constitution does not “lottery” “gambling device.”
define Where, here, provision as a constitutional In re L. VAN BLARCUM James it self-executing,10 is not is incumbent M. Van Blarcum. Clara to im Legislature legislation to enact City Corpus plement public policy. No. 13-99-281-CV. Pleasanton, 289, City 154 Tex. Christi Texas, Appeals of Court of 798, Legisla 276 S.W.2d Corpus Christi. ture terms which are not define de itself, provided fined the Constitution 6, April interpre definitions constitute reasonable 29, 2000. Rehearing Overruled June language tations of the constitutional do plain meaning do not violence constitutional framers.
and intent of the 227, State,
Schiuenke v. 960 S.W.2d 1997, pet. (Tex.App. Corpus Christi de —
nied). In the absence of constitutional re contrary, to the
straint definition to create
Legislature possesses power
and define offenses within its sound discre State, 790
tion. Willis v. S.W.2d also in
(Tex.Cr.App.1990). power Such and define power
cludes “establish Id; to criminal offenses.” see defenses Smith,
also Ex Parte S.W.2d (discussing inherent
(Tex.Cr.App.1969) crimes). Legislature to define
power Const, XVI, XVI, (de- (declaring bribery executive of an Compare art. 10.’ Tex. to be an or other official defining except pro- judicial or offense). officer nouncing usury Const, Legislature), Tex. art. vided *3 Lancaster, (“Homestar”); Inc. the re-
tailer, Housing Systems, Nationwide Inc. (“Nationwide”); and the company, finance Services, Housing Associates Finance Inc. (“As- Housing Ford Finance Services d/b/a sociates”),1 alia, alleging, inter violations Deceptive of the Texas Trade Practices— (“DTPA”),2 Consumer Protection Housing Texas Manufactured Standards Act,3 and of express breach Anticipating warranties. that defendants arbitration, they would move to *4 requested arbitration, stay alleg- also of ing agreement they the arbitration execut- ined connection with purchasing the home Gardner, Stephen Shephard, Judith A. is void and unenforceable because it vio- Law, Attorneys Dallas, curiae. Amicus Magnuson-Moss Warranty lates the (“the Act”).4 Smith, L. Scott Law Office L. Scott Smith, Christi, Corpus for Relator. proceeding This presents questions of Rutherford, Jay Walker, K. Jackson & (1) impression first in Texas: whether un- L.l.p., Worth, Fort Ridulfo, Michael P. der the a warrantor
Daniel, Anderson, Lehrman, Maixner & requiring the use of arbitration to Ridulfo, Christi, Corpus for Real Parties resolve arising claims under written war- In Interest. ranties for goods pursuant consumer to an agreement signed at the time
Before: The En Court Banc. (2) purchase, whether the trial in relying court’s decision on the Federal OPINION (FAA) general Arbitration Act and its favoring mandate give arbitration to effect Justice YÁÑEZ delivered the Opinion of to the arbitration agreement compelling Court, in which Justices DORSEY and binding arbitration of arising claims under joined. HINOJOSA was an abuse discre- original this proceeding, mandamus tion. relators James and Clara Van Blarcum (“the Blarcums”) Van request this Court to issues, By two the Van Blarcums con- direct the respondent, Judge Marisela Sal- tend trial compelling court’s decision daña, to vacate her February order of arbitration was an abuse of discretion be- compelling binding arbitration of dis- (1) cause: precludes binding the Act arbi- putes arising from purchase relators’ of a tration of consumer disputes and mobile home. conditionally We grant the (2) by requiring the Van Blarcums to bear writ. arbitration, the costs of the arbitration underlying agreement effectively proceeding, deprives the Van them of a Blarcums filed against resolving disputes suit forum for the mobile and is there- manufacturer, home American Homestar fore unconscionable. Homestar, Nationwide, 5221(f) (Ver-
1. and Associates 3. Tex.Rev.Civ.Stat.Ann. art. parties-in-interest real present proceed- in the Supp.2000). non ing. 4. 15 U.S.C.A. 2301-12 (Ver- §§ 17.41-63 & Tex.Bus. Com.Code Ann. Supp.2000) non 1987 & given effect Agreement that the must be
Facts under the Federal Arbitration Act both 23, 1997, May the Van Blarcums On (FAA)5 and the Texas Arbitration Act a Retail Nationwide executed Installment (TAA),6 dispute with the and that their (“the Contract-Security Agreement Con- was within the encompassed Van Blarcums tract”) purchase of a mobile home Agreement. Following a terms of the Christi, Corpus Texas. At the same 2, 1999, February Judge Salda- hearing on time, Contract, part they and as parties to arbi- proceed ña ordered separate with Nationwide a Arbi- executed terms of the tration in accordance with the (“the Agreement”). Agreement tration stayed litigation of Agreement, and claims, that “all Agreement specified The matter resolution of the pending suit out of disputes, arising and controversies Thereafter, Van Blar- arbitrator. sale, relating way pur- to the Reconsideration, cums a Motion for filed chase, occupancy [mobile home] following which trial court denied ... under war- including any claims 15,1999. hearing April second by means ranties ... be resolved [would] final and arbitration.” The Real Parties’ Jurisdictional also it to the Agreement provided “inures Challenges the manufacturer of benefit addressing the Van Blar- Before if *5 fully ... as as the manufacturer Home issues, the we must first consider cums’ Retail signatory a to the Installment was jurisdictional challenges. real parties’ the of ... “to benefit Contract” juris lacks assert parties Real this Court provides fi- mortgagee who lender or compel the trial order diction over court’s the At purchase for the Home.” nancing TAA ling pursuant to the be arbitration purchase, the Van Blarcums the time appropriate is mandamus not an cause a retailer’s written provided were with parties under the TAA. Real con remedy by The mobile Nationwide. compel urged pur motion to was tend the by separate also a writ- home was covered TAA, the FAA and the suant to both Homestar, warranty by which was not ten granted entirety, in its because it was provided. aspect” “that improper mandamus is the TAA. of the order under purchase and installa- Subsequent the home, the Van Blarcums tion of mobile argument of their that support In and Homestar of vari- notified Nationwide under relief is unavailable mandamus construction and installa- ous defects Anglin B. TAA, Co. parties real cite Jack Despite receiving assurances that tion. (Tex. 266, 272 Tipps, Inc. v. 842 S.W.2d remedied, nu- be the deficiencies would 1992). Anglin is parties’ reliance Real complaints remained unsatisfied merous court, Anglin, supreme misplaced. Blarcums first nine months the Van after denying a trial court’s order reviewing warranty repairs be made. requested arbitration, held manda compel motion to 1998, 31, Blar- Van July or about On a trial court mus available when relief is County an Court-at- cums filed action motion to com party’s denies improperly Three, County, Nueces Tex- Law Number brought under FAA. Id. pel alia, declaratory dicta, as, seeking, stated that inter the court at 272-73. permit relief, stay and a Acts injunctive damages, the Texas Federal “[b]oth interlocutory party appeal and Homestar arbitration. Nationwide request denying a granting arbitra- order compel a motion to filed 271-72.7 At Id. at claims, arbitration.” arguing compel Van tion of the Blarcums’ Tipps, (2000). Anglin Co. Inc. v. time Jack B. seq. 7. At the U.S.C.A. 1 et 5. See 9 1992) decided, 266, (Tex. was 842 S.W.2d gov the Texas Arbitration article 238-2 of §§ 171.001-098 Tex.Civ.Prac. & Rem 6. See Code interlocutory orders appealability of (Vernon erned the Supp.2000). 1997 and present issue case is an compelling issuing pursuant order arbitration as trial granting parties’ court real motion to to the FAA. reject arbitration. We therefore provisions The FAA declares written parties’ argument Anglin
real ap- “valid, irrevocable, and enforce- plicable to the facts before us. able, upon grounds save such as exist at not, however,
We need deter law in equity for the revocation of mine, whether mandamus relief is avail § 2 contract.” 9 U.S.C.A. The able under the Texas Act because the Agreement Van claim the in- Blarcums Agreement specifically provides arbitra valid and unenforceable because it re- governed tion “shall be provisions quires binding arbitration of written war- of the Federal Arbitration Act and the ranty claims in violation Magnuson- rules of AAA [American Arbitration Moss Act. parties may designate Association].” Mandamus is proper remedy
which they arbitration act wish to control for an order compelling arbitration under proceedings contract, under the and the Canales, the FAA. Freds v. 877 S.W.2d courts will honor choice. D. See Wil (Tex.1994); v. Under Co., son Constr. Co. v. Cris Equipment Turford wood, 643 (Tex.App.— S.W.2d S.W.2d 392 n. 3 (Tex.App. Corpus— 1997) (orig.proceeding). Beaumont Man 1999, orig. Christi proceeding re [leave ). only damus will issue correct a clear quested] Moreover, the FAA applies to abuse of discretion or the violation of a arising all claims from a transaction involv duty imposed by ing commerce, law when there is no interstate U.S.C.A. (2000), adequate remedy by other law. undisputed and it is Walker that the sale of Packer, (Tex.1992) mobile home S.W.2d 839-40 “involves” commerce. A (orig.proceeding). We conclude the clear abuse of transaction discre “involves” tion commerce. See occurs when the court’s decision on a Allied-Bruce Terminix *6 Dobson, 265, 272-75, Cos. v. 513 factual arbitrary U.S. 276- issue is so and capricious 78, 834, 115 (1995); S.Ct. 130 to amount to L.Ed.2d 753 clear error or is a of violation Assocs., L L Kempwood & legal L.P. Omega duty. v. A clear of abuse discretion Builders, Inc., 125, (Tex. 9 S.W.3d also exists with in analyzing error or 1999). Accordingly, for purposes of deter applying party the law. Id. A who is mining jurisdiction, we view the order compelled to arbitrate having without granting (4) denying award; or compel motions to modifying correcting arbi or an or 29, 1965, R.S., May tration. Act Leg., of (5) 65th vacating directing an award without a 689, 1, 1593, 1593, § ch. 1965 Tex.Gen.Laws rehearing. 26, 1995, by redesignated Leg., May Act of 74th 171.098(a) (Ver Tex.Civ.Prac. & Rem.Code Ann R.S., 588, 1, § ch. 1995 Tex.Gen.Laws Thus, Supp.2000) (emphasis supplied). non 3402, 3402, 8, 1997, by May revised Act of conclude, we as have several of our sister R.S., 165, 5.01, 171.098, Leg., § 75th ch. sec. courts, that, contrary Anglin, to the dicta in 329, (current 1997 Tex.Gen.Laws version provide the Texas statute does not for 171.098(a) at & Tex.Civ.Prac. Rem.Code Ann. type appeal compelling from an order arbi (Vernon Supp.2000)). Except redesig- See, Motorcars, e.g., Lipshy tration. Inc. v. nation, provisions essentially the remain un Assocs., 68, (Tex. Sovereign 944 S.W.2d 69-70 changed. 1997, writ) App. (holding no an order — Dallas currently pro- Section 171.098 of the TAA compelling arbitration under the Act is Texas
vides: appealable declining not and to follow dicta (a) party may appeal judgment A a or de- Anglin); Elm Creek Villas Homeowner chapter cree entered under this or an order: Ass’n, 150, Roofing, Inc. v. Beldon 940 S.W.2d (1) denying application an to arbi- 1996, writ) (Tex.App. Antonio no 171.021; — San tration made under Section (same); Texas, Healthplan Cigna Gathe v. (2) granting application stay an to arbitra- Inc., (Tex.App 879 S.W.2d 171.023; tion made under Section . —Hous denied) (same). ton [14th Dist.] writ (3) confirming denying or confirmation of award; an and the to FAA’s endorsement right to do so will have lost its
agreed by underlying Id. The litigation purposes. the statute’s dispute have resolved Freís, to adequate remedy appeal. determining no test for whether has McMahon agree agreements involving S.W.2d at 284. Absent valid enforce arbitration parties to arbitrate the has as fol statutory ment between claims been stated issue, no to obligation there is claims lows: If arbitration ordered arbitrate. Id. is arbi- statutory claim to not be the trial court agreement,
without such an
trable,
party opposing arbitration
ordering
has abused its discretion
Congress
intend-
must demonstrate
Id.
arbitration.
ed
or limit waiver of
prohibit
to
If the
is
judicial
party
forum.
unable
Magnuson-Moss Act Overrides
so,
do
it must
then
demonstrate
Federal Arbitration
conflict” exists between
“inherent
issue,
Blar-
first
their
Van
underlying pur-
FAA and
statute’s
cums
trial court abused
contend the
poses.
compelling
arbitration be
discretion
(In
Acceptance Corp.
re
Knepp v. Credit
Act,
cannot be
cause under the
a consumer
(Bankr.N.D.Ala.
Knepp), 229 B.R.
compelled
a claim to
to submit
1999).
purchases
the consumer
arbitration when
Magnu-
1974, Congress passed
manufacturer
product
covered written
improve
adequacy
Act “to
son-Moss
parties
retailer
Real
con
warranties.
consumers,
[and]
available
information
tend, however,
in the
nothing
that because
2302(a)
prevent deception.”
U.S.C.A.
text,
history,
purpose
Act’s
legislative
require-
specific
The Act sets out
arbitration,
FAA,
rather
precludes
disclosures,
duties
regarding
ments
controlling.
than the
is
associated with warranties
remedies
passed
FAA
Congress
Act, any
Under the
products.8
consumer
“primary purpose”
The FAA ‘s
a warran-
damaged by
consumer who
agreements to arbi
private
ensure “that
comply
obligation
with an
tor’s failure
according
their
trate
enforced
warranty or
under a written
Sciences,
v. Board
terms.” Volt
Inc.
Info.
for dam-
“bring
contract
suit
service
Trustees,
468, 479, 109 S.Ct.
489 U.S.
ages
legal
equitable
relief.”
and other
(1989);
have failed to meet
burden
their
under the
plicability
alleging
of the Act
that the
McMahon test
to establish
the Act’s
mobile home at
does not fall
issue
within
text,
legislative history,
purpose
scope
product”
“consumer
Act’s
Congress
preclude
intended to
enforce-
definition. The Act defines “consumer
ment of the
parties
FAA. Real
cite Gilmer
personal
product”
“any tangible
proper
Corp.,
Lane
500 U.S.
Interstate/Johnson
ty
which is distributed
commerce and
(1991),
S.Ct.
230, 238, 242,107 2332. S.Ct. Act that not fall “[a] house would within notes,
As the Energy product Southern court the definition of consumer since a the question in each is quite ‘tangible personal prop- of those cases was house not “12 statutory right pro- erty,’ “whether a support action to their contention that Cong.Rec. (1974), (2000). § 9. 15 78j(b) reprinted U.S.C.A. H9316 (1999). Fed.Reg. in 19703 n. (2000). seq. § 10. 18 U.S.C.A. 1961 ei (2000). seq. § 11. 29 U.S.C.A. 621 et any type not IDSM was incor- provision
the
Blarcums’
does
Van
mobile home
“con-
fit within the intended definition of
the terms
the written war-
porated into
ranties,
Additionally, they claim
product.”
binding
sumer
the rationale that
arbitra-
Homes,
(because
support
in
v.
Clark
Jim Walter
precluded
provisions
is
the
tion
(M.D.Ala.1989). Their
F.Supp.
require
only allow warrantors to
consum-
Clark, however, misplaced.
reliance on
is
“initially
ers to
resort” to such informal
Clark,
contracted with a build-
plaintiffs
suit)14' is
procedures
filing
inappli-
before
prefabricated
a
er
the construction of
Therefore,
parties
cable.
real
contend
court
or modular home. Id. at 1044. The
in the
the use of
nothing
prohibits
that
Act
good
a
is mova-
distinguished between
that
in a
binding
provisions
separate
stationary,
a
holding
ble and one
is
agreement.
con-
prefabricated
stationary
home is
once
Id.
1043-44.
completed.
struction is
noted,
it
the
states
Agreement
As
with,
contemporaneously
“is executed
prefabricated
a
home that is sta-
Unlike
of,”
It
part
is
the Contract.
further states
land,
attached to
a mobile
tionary once
“as
it “inures to the benefit of’ Homestar
very
home
its
nature is a movable
by
fully
signato
was a
as
the
Act
interpreting
FTC rules
dwelling.
if manufacturer
Contract,
to
ry”
a
and “inures to
any ambiguity
state
about whether
financing
providing
of’
lender
product
covered under a definition benefit
is
coverage.”
purchase
in favor of
home.
con
should be “resolved
for the
We
700.1(a)
Thus, keep-
“incorporated”
16 C.F.R.
into
Agreement
clude
is
in
ing
scope
part
mind
broad
we
and “is
of’ the Contract.
written
although
stationary dwelling
a
conclude
by
warranties
Nationwide
Homestar
good”
falls outside the reach of “consumer
separate
documents and
are contained
property,”
it
a mobile
Agreement.
because
“real
no reference to the
make
it
home
within the definition because
Nonetheless,
that if
Act
we conclude
“tangible
property” even
personal
remains
an
including
from
prohibits a warrantor
though may
proper-
it
be attached
real
judicial
in its
absolute
remedies
bar
700.1(a)-(f) (2000).
ty.
16 C.F.R.
See
warranty,
precludes a
it also
warrantor
an
bar
incorporating
from
such
absolute
Agreement
Arbitration
corresponding
Allowing
sales contract.
Separate Document
agreement
in a separate
to do
warrantors
parties
argue
they
clearly
next
do
what
Real
in this
does
bar
in a
be to allow
ing
not
would
the Agreement
case because
executed
around the Act and would
an “end-run”
con
“separate
prohibition
was a
Van Blarcums
completely
eviscerate
its
not
“written
tract” and was
included
arbitration. See Wilson
against binding
they
argue
warranty.”
support,
Homes,
F.Supp.
Waverlee
(11th
section
the Van Blarcums’ reliance on
(M.DAla.1997), aff'd,
requirement that a consumer resort Challenge Binding Relators’ dispute settlement mechanism informal Arbitration (IDSM) remedy prior pursuing legal *9 2312(c) here, the Act autho Section warranty.13 Because for breach rules promulgate govern- to no rizes FTC parties, to real according 2310(a)(3) (2000). (2000); § 2310(a)(3) § 14. See 15 U.S.C.A. 16 C.F.R 13. U.S.C.A. 15 (2000). 703.2(a) ing implementation Here, warranty.”). the Act. 15 U.S.C. a give offers 2312(c)(2000). Accordingly, the FTC has both Homestar and Nationwide provided published guides and rules interpreting separate written warranties and are there- Act, (1) including following: Rule fore written “warrantors” Act. under the 701, specifying the information that must Section 700.8 of the Interpreta- FTC’s appear warranty in a written on a consum- prohibits indicating tions a warrantor from (2) er product; Rule detailing the any warranty or contract that service obligations of sellers and warrantors warrantor, the decision of the service con- make warranty information available to tractor, any designated or third party is (3) prior purchase; consumers and Rule final any involving or dispute 703, specifying the minimum procedural or service contract. standards for internal dispute settle- added). § C.F.R. 700.8 (emphasis It fur- (“IDSM”), ment mechanism which must be ther characterizes such statements as by any followed warrantor who wishes to “deceptive” because the “gives Act state IDSM, incorporate an through prior a re- jurisdiction and federal courts over suits requirement, sort into the terms of a writ- breach of and service con- ten consumer product warranty.15 Recent- added). tract.” Id. (emphasis ly, published Action,”16 the FTC its “Final (but encourages does not re- Fed.Reg. (1999), a review of war- quire) warrantors to establish informal dis- ranty-related guides, rules and including pute settlement mechanisms for the fair its Interpretations of the Act (“Interpreta- expeditious settlement of consumer tions”) and Rules and 703. disputes, and authorizes the to estab- FTC generally
The Act applies to procedures writ lish minimum for such informal ten covering warranties prod (2). consumer 2310(a)(1), § mechanisms. 15 U.S.C. 700.3(c). § ucts. See 16 C.F.R. provide Section The rules the minimum standards 2301(5) of the Act a defines “warrantor” as which by any must be met informal mecha- “any supplier or other person gives who or nism that a incorporates warrantor a into offers to give a written warranty or who is written warranty. § 16 C.F.R 703. Al- obligated be under an though war may, warrantor if it elects to do ranty.” 2301(5); § so, U.S.C. see also 16 a provision include requiring consum- § 701.1(g) C.F.R. (defining “warrantor” as pursue er to informal dispute resolution “any supplier or person other gives procedures suit,18 who filing before the rules 18. The Act does not 15. See Federal 16. The pretations tended to tees." See 64 tially pute Settlement Warranty son-Moss ranty Disclosure of der the erning cerning ulations, C.F.R. 16 C.F.R. Advertising resort” to informal Terms; §§ Pre-Sale complete Review of Magnuson-Moss Statements and clarify 701-703 Terms and Warranty Fed.Reg. Rule advisory Trade 700 et Written Consumer the Act's Procedures; Availability title is "Final (2000). Interpretations require Warranties Governing Commission Conditions; Act; seq. in nature and are in- requirements. Interpretations Warranty consumers to "ini- dispute The FTC’s Inter- Rule of Written War- Informal Dis- Action Con- Rules, Guides Rule Gov- Governing resolution Guaran- Product Act, Magnu- Reg- For Un- rarely suit, warranties. The standards established U.S.C. follows: procedures Rather, lishes such ers to resort manufacturer’s sort now law resolution of the claim to the first seeks a consumer from state contemplated comes into Despite the fact that the Rule 110(a)(3) state lemon laws. include such requirements rights serves as it procedures lemon 2310(a)(3). provides procedures a to the in court unless the consumer play (i.e., FTC laws, (or prerequisite Warranty pursuing any provisions procedures prior must meet the minimum essential reference Apparently, recently the manner state-operated) warranties), inclusion of if paralleling Specifically, many the FTC. See 15 a warrantor estab- requires in their written commented as [703] state lemon prohibit warrantors filing originally the Rule prior consum- seldom section IDSM. point filing suit. re-
494 64 Fed.
require products. that such mechanism inform ranties on consumer Waverlee, they Reg. that if with consumers dissatisfied In the issue at procedures, they may of the outcome the court a before was whether defendant remedies, § pursue 708.5(g)(1), at legal rely id. on an manufacturer could arbitration “[djecisions [mjechanism of the that in an installment contract a clause between binding any person.” Id. shall not be a home retailer and consumer mobile Moreover, prohibit (where § 703.5(j)- at the rules party was a manufacturer not a from a charging contract) warrantor consumers compel to to the con- the sales for fee use of the mechanism. Id. at binding sumer to submit to arbitration. 703.3(a). The the manufacturer could not court held arbitration in such circumstances. 2310(d) provides that “a Section consum- the Act the manufac- precluded Because damaged of a er who is failure binding including turer from a arbitration warrantor, supplier, or service contractor- agreement warranty in to its own written comply obligation to with under this consumer, concluded the court a im- chapter, warranty, or under written by surrogate not “do manufacturer could contract, plied warranty, may or service or it is to vicarious means what forbidden bring damages” other in suit for relief Waverlee, do own 954 on its behalf.” 15 state federal court. U.S.C. that F.Supp. at 1539. The court reasoned 2310(d)(1). contrary a result in “the holding would interpreted Rule has to prohib- 703 been complete and utter evisceration binding in it the clauses use arbitration at Magnuson-Moss Act.” Id. .1540. re- warranties.19 The Commission cently reaffirmed view that “reference Energy, the Alabama Su- Southern any binding warranty within the written preme reached a conclusion: Court similar non-judicial remedy by the is say Suffice it to several although Rule at Fed.Reg. the Act.” 64 19708 Act Magnuson-Moss sections of the (1975)). Fed.Reg. 60211 (quoting 40 dispute-reso- make reference to informal Commission, The “that this inter- noting mechanisms, those procedures or lution correct,” pretation continues be declined provisions also make it clear and other rule, stated, to amend the “Rule consumer is to have access to a that a from prohibit will continue to warrantors short, judicial remedy. a including binding arbitration clauses may expressly dis- set forth informal their contracts with consumers that would may pute-resolution mechanism and require dis- consumers submit pre- of that make the use mechanism' binding at putes arbitration.” Id. action, but it filing a court requisite cited ap- with 19708-09. Commission the use provide not of such may by an Alabama federal proval a decision binding or that it is bar mechanism Homes, court, v.. district Wilson Waverlee action. a court Inc., 1530, holding at that the F.Supp. (cita- at Energy, including Southern 732 So.2d prohibits warrantors omitted) supplied). (emphasis war- clauses written tions Fed.Reg. (emphasis original) at 19707 provide also con-
Those statutes
omitted).
(footnotes
required to
sumer is
use the manufacturer’s
only
complies
if it
with the FTC’s
IDSM
19,708
Fed.Reg.
(discussing
Thus,
Rule
19. See 64
set out in Rule 703.
standards
against
prohibition
effect,
703’s
incorporate
states
Rule
these
warranties); see
South
in written
also
clauses
ques-
into
lemon laws. A threshold
their
Homes,
Lee,
Energy
Inc.
732 So.2d
ern
v.
many
tion
law
state lemon
suits
(Ala.1999) (citing Wilson Waverlee
complies
IDSM
with Rule 703
whether the
Inc.,
Homes,
F.Supp.
1537-40
must use
thus whether the consumer
(11th
(M.D.Ala.1997), aff'd,
F.3d 40
Cir.
proceed directly to a
that IDSM or
1997)).
court action.
*11
agrees
The dissent
the Act bars
product.’
of a consumer
15 U.S.C.A.
2301(7).
Thus,
arbitration of the Van Blarcums’
defen-
[dealer]
claims,
warranty
subject
written
provisions
but concludes
dants are
to those
of
that arbitration
implied
gen-
of their
Act that address
in
warranty
warranties
eral,
non-warranty
may
implied
particu-
warranties in
claims
be com-
lar,
pelled
specifically
not those
because the Act
but
directed to
preclude
does not
In
written warranties.
support,
it.
Boyd
the dissent cites
Inc.,
Legend,
Homes
F.Supp.
(foot-
(emphasis
Id. at 1436-37
supplied)
of
(M.D.Ala.1997),
jurisdictional
remanded on
omitted).
Boyd
*12
supplied).
Agree
Because the
(emphasis
Rhode,
The
home seller in
like
mobile
Blar-
compels
ment
arbitration
the Van
Boyd,
signatory
the seller in
was a
to both
warranty
written
claims in
cums’
violation
containing
an installment contract
an arbi-
Agreement
is inval
the
we hold the
agreement
tration
and
separate
a
arbitra-
entirety,
id
in its
both
and unenforceable
agreement,
provide
tion
but did not
the
warranty
as to the Van Blarcums’ written
warranty.
plaintiff
a written
Id. at
with
warranty
and
claims.
sustain
implied
We
fact,
In
the installment contract be-
1332.
the
first issue.
Van Blarcums’
plaintiff
specifically
tween the
and seller
valid
holding
Our
that no
arbitration
except
all
the im-
disclaimed
warranties
unnecessary
agreement exists makes it is
not be
plied warranties that could
avoided
for
the Van Blarcums’ sec-
Nonetheless,
us to address
law.
the
Id.
court held
Tex.R.App.P.
ond
See
issue.
claims
plaintiffs
against
that insofar as the
47.1.
included
express-warranty
the
seller
Blar-
conditionally
We
GRANT the Van
claims,
precluded
the Act
the seller from
for
and direct
petition
cums’
mandamus
invoking the arbitration clause as to those
the
her order of Feb-
respondent to vacate
claims,
that
the
could
but
seller
2,
The
ruary
compelling
arbitration.
plaintiffs
implied-
arbitration of
breach of
respondent
if
fails to
only
writ will issue
warranty claims. Id.
opinion.
act
in
with this
promptly
accord
Thus, although
Boyd
both the
not
Chief Justice SEERDEN
distinguished
Rhode
between
courts
participating.
written-warranty
and implied-
breach
claims,
warranty
the
distinction
each
Justice RODRIGUEZ delivered
on the
that the seller
case was based
fact
opinion, in which
dissenting
Justice
not
provided
ivarranty
had
written
joined.
CHAVEZ
case,
present
plaintiff.
the
the
howev-
RODRIGUEZ, Justice, dissenting.
(the manufacturer)
er,
both Homestar
seller)
(the
provided separate
majority
I
with
that the bind-
agree
Nationwide
Accordingly,
ing
both are
in this
agreement
written warranties.
issue
arbitration
Act
Magnuson-Moss
warrantors under the
and are
case
written
conflicts with
(Act)
including in a written war-
precluded
Warranty
Act
and is unenforceable
ranty any
binding
warranty
ar-
provision calling
as
the Van
written
Blarcums’
However,
disagree
I
it is
bitration.
claims.
warranty
implied
as to their
unenforceable
“It is
familiar law of contracts that
claims.
Pal
illegal agreement
unenforceable.”
Assur., Inc.,
regard
case
real
in this
with
ma v.
79 F.3d
The
issues
Verex
(1)
(5th Cir.1996)
are
bind-
implied
warranties
whether
(quoting
DiFrancesco
Co.,
warranty claims
ing
implied
Houston
Ins.
858 S.W.2d
arbitration
v.
Gen.
(2)
writ));
Act;
no
under
(Tex.App.
— Texarkana
warranty
providing a written
Phillips
Phillips, 820
789 whether
S.W.2d
(Tex.1991).
Ráther than address
Agreement
changes the result.
The arbitration
issues,
majority
these
reasons
Nationwide and the Van Blar-
between
“[bjecause
arbitra-
Agreement compels
provides
arbitration of
cums
of, the
for the benefit
manufacturer
Although
was not a
ed to be
American Homestar
agreement,
signatory
subject
of the
Home which is
of the
Contract,
agreement
is a
provides the manufacturer
fully as if
Retail Installment
beneficiary
agreement:
third-party
of the
signatory to the
was a
manufacturer
parties agree
The
that this Arbitration Pro-
Contract.
Retail Installment
of, and is intend-
vision inures to the benefit
(instructions given to district
to va-
the Van
warran-
court
tion of
Blarcums’ written
Act
ty
part),
in violation
Act
the court held that the
claims
cate
non-
is invalid and
did not
arbitration of
Agreement
prohibit
unenforceable
See
entirety,
implied warranty
both as to the
Blarcums’
claims.
Van
written or
Rhode,
F.Supp.
at 1441.
implied
Boyd,
district
majority
claims.”
also concludes that
another Alabama
court concluded
writ-
prohibits
because Nationwide and Homestar are
arbitration of
Act, they
claims,
written warrantors under the
express warranty
ten
does
but
precluded from
war-
including
a written
prohibit
not
warran-
*13
any provision
ranty
calling
binding
Rhode,
ar-
for
ty
F.Supp.2d
See
6
at
claims.
bitration. Because I
with the
disagree
Boyd
1332. While
and Rhode are distin-
majority’s reasoning and its conclusion re-
guishable from our case in that
written
no
arbitration of the
warran-
garding
implied
provided by
of
warranties were
the seller
claims,
ty
I respectfully dissent from that
homes,
Boyd
in
reasoning
mobile
portion
majority’s
of the
opinion.
in
holding
supportive
Rhode are
that
binding
the conclusion
arbitration
in
interpreted
The courts Alabama have
warranty
implied
claims is not
supersede
the Act to
Arbitra
the Federal
the Act whether
not a written war-
(FAA)
regard
binding
tion Act
with
ranty
given.
is
of express
arbitration
written warranties.
Investments, Inc.,
v. E
See Rhode
& T
6
analysis
court’s
Act’s
Boyd
The
of the
1322,
(M.D.Ala.1998)
F.Supp.2d
1381-32
impact on
of implied
arbitration
warranties
(buyer
claims,
not compelled to
if
arbitrate
is
I
same
apply
well reasoned. would
that
any,
breach
express
of written or
war
reasoning
analysis and
to the
before
case
Act);
pursuant to
v.
ranties
Wav
Wilson
Boyd
this
The
court
that
Court.
noted
Homes,
.,
F.Supp.
erlee
Inc.
954
2310(d)
not,
does
section
nor does
(M.D.Ala.1997),aff'd,
1537-40
remanded on
about
in connec-
Cir.1999)
(11th
grounds,
al
protections.” (emphasis Id. at 1439 non-written, respect implied, with ed).2 revamp supplement Rather than warranties. under the treatment of warranties law, chose Congress state to maintain (foot- (emphasis original) Id. 1440-41 quo. Id. at 1440. status omitted). note effectively Boyd reasoning court’s Rhode, Further, granted the court following excerpts: summarized arbitration, the seller’s motion This difference in treatment between limited extent Rhode’s com- except non-written warranties express stated written or plaint that implied stems the fact warran- Rhode, 6 at 1332. F.Supp.2d claims. See *14 ties, recog- as the Act Magnuson-Moss im- The court for arbitration of allowed nizes, most arise under state law for the im- See It is plied warranty claims. id. part. warranties unlike the writ- These of to the arbitration portant note primary are fo- ten warranties that claims not made implied warranty was Act, cus of therefore are not contingent upon whether or not written product bargaining powerful of between sug- warranty There is no provided. was relatively and weak con- manufacturers written or gestion that had there been a Instead, they sumers. derive from preclude the Act express warranty, would Be- legislative judicial processes. warranty claims. implied of arbitration directly processes cause these are not confirms that The result Rhode susceptible unequal-bargaining to the Act’s ef- distinguish the Alabama courts Act, concerns addressed Con- on express warranty fect on claims provid- to refrain from gress’s decision claims, or not warranty whether implied ing implied additional protection given. written warranties warranties in the makes sense. therefore, would, the Act
I conclude binding of preclude not arbitration does implied warranty Van Blarcums’ only with to written respect [I]t is I hold that Accordingly, claims. would Congress sought in the warranties that only is agreement arbitration invalidated Magnuson-Moss protect Act to consum- requires binding arbi- the extent that it powerful ers from more exploitation claims; warranty tration of the written suppliers who de- manufacturers binding arbitration requires the extent it requirement impose sired claims, warranty including implied other of disputes binding be arbitra- resolved claims, I non-warranty would claims not do so with Congress tion. chose that the should enforced provision hold be suppliers to manufacturers and respect and this Court should arbitration subject implied to non-written and only under the FAA. warranties. warranty. binding arbitration for Binding implied written If warranties arbitration Act, possible when no implied warranty claims is do state law under the nor not given, agreeing warranty warranty written implied protections include restric- part of a warranty of those same claims implied arbitration tions way additionally limits Boyd al- in no and Rhode claims. courts warranty pro- implied or eliminates state law lowed tections. absence of under the claims
Chief Justice SEERDEN not
participating.
Dissenting opinion joined by Justice
CHAVEZ.
The CITY and The OF AMARILLO
Civil Service Commission of the
City Amarillo, Appellants, FENWICK, Appellee.
James K.
No. 07-99-0189-CV. Texas, Appeals
Court of
Amarillo.
April 2000.
Rehearing May Overruled Nunn, City Attorney,
Merril E. Pamela Wolek, Amarillo, City Attorney, Assistant appellant. Deats, Deats, P.C., Craig B. Jenkins & Austin, appellee. BOYD, C.J.,
Before QUINN JOHNSON, JJ.
QUINN, Justice. City of Amarillo and its Civil Ser- (collectively vice Commission referred to City) appeal judgment as the from a final entered in favor of James K. Fenwick (Fenwick). City points, Via two con- that the tends trial court erred conclud- City ing pur- denied Fenwick’s ported statutory right to a continuance of hearing rights his civil and his service against pro- self-incrimination and to due notes court concluded (11th grounds by 188 F.3d Cir. that because the dealer was not “written ” 1999) (instructions given to district court warrantor, the Act did preclude not bind- part), in and Rhode v. E & T vacate ing arbitration of the implied consumers’ Investments, Inc.,6 F.Supp.2d 1322 (em- non-warranty and other claims. Id. (M.D.Ala.1998). distinguishable. Both are phasis supplied). Significantly, Boyd court noted that it was addressing not Boyd, the issue was whether a defen- “interesting question” now before this dant mobile home signa- dealer who was a Court: tory purchase to a contract containing It interesting to note that the court is agreement arbitration but had provid- not not now confronted with a claim where a ed warranty written to the consumer pursue consumer seeks to both written could compel arbitration of the consumer’s warranty non-written against claims claims involving only non-written warran- Therefore, a warrantor. the court need ties. The court noted that this question not address interesting question Waverlee, presented was not in where the whether the Magnuson-Moss Act would defendant manufacturer had provided a restrict arbitration non- written warranty to the Boyd, consumer. warranty well, written partic- claim as F.Supp. at 1435. In distinguishing to, ular if it Waverlee, closely were related or the court noted: with, intertwined Here, however, the [dealer] defendants Although claim. this issue could have are not written warrantors under the Homes, been raised Waverlee it was Magnuson-Moss Act, having provided not. no written warranty to [purchaser] plaintiffs. Id. at n. 1435 8. Consequently, they are not subject to the provisions numerous Rhode, plaintiff brought breach of the Act exclusively aimed at written warranty against claims both the manufac- warranties, including governing those turer and the seller of a mobile home. the establishment of informal dispute Rhode, F.Supp.2d at 1325. As in Waver- procedures, which were shown in Wav- lee, the manufacturer provided had erlee Homes to be the source of the plaintiff warranty, with a written but was a expressions clearest of congressional in- signatory to neither the installment con- preclude tent to binding arbitration in tract, agree- which included an arbitration certain circumstances. ment, separate nor a agree- arbitration are, however, The [dealer] defendants plaintiff ment between the and the seller. ‘warrantors’ under the which de- Id. plaintiffs at 1328-29. The breach of person fines such a ‘any supplier against claims the manufacturer person other ... who is or be obli- were not intertwined with his breach gated under an warranty, 15 warranty against claims the seller. Id. at 2301(5), U.S Waverlee, .C.A. an im- and defines 1331. As the court held the plied warranty as one ‘arising under agreement included in the sales (as title) State law modified this applicable contract was not to the manu- facturer, connection with the supplier sale to compel refused warranties, either against the manufac- all “claims under plaintiffs claims ” express implied in violation of the turer. Id.