*1 appel- are taxed appeal payments toward Costs he made reasonable Services, Inc., lant, Christian Mid-South during the four Honeycutt support necessary. if may issue for which execution Thus, the child’s birth. months preceding ground for abandon- that this we conclude merit.
ment is without Cope did also conclude during willfully child fail visit the
not immediately preceding
the four months Ac petition. of the termination filing us, Honeycutt cording to the record before TAYLOR Sharon child’s deliberately Cope about the misled Then, notifying Cope, without location. adop the child with Honeycutt placed Douglas Auto Sales. BUTLER and he that when family. Cope testified
tive Tennessee, Supreme Court done, Honeycutt he had found out what at Jackson. immediately par his interest in expressed stating his enting the child. addition to 7, April 2004 Session. Honeycutt, Cope Mid- intentions to called Aug. 2004. not inform them' that he did wish South to Thus, rights. parental to terminate his presented
sufficient evidence was child.
Cope willfully fail to visit the did not
Moreover, had we note that four months between the birth of the child elapsed filing and the
on December petition on March
termination without merit.
This issue is
IV. Conclusion termi- grounds
We conclude to the amended version pursuant
nation 36-1-
Tennessee Code Annotated section effective
113(g)(9)(A), June retroactively in this case. applied
not be found,
Further, trial court and we support
agree, evidence does as a basis for termination.
abandonment § 36-l-113(g)(l). Ann.
See TenmCode juvenile
Accordingly, the order vacated and the case is remanded
court is County for Shelby
to the Juvenile Court consistent with proceedings
immediate
opinion.
Joseph Barton, D. Millington, Auto”).1 (“City Tennes- parties signed The a con- see, for the appellant, Auto Sales. tract entitled “As Is Used Vehicle Retail Order”). Buyers (“Buyers Order” Cole, Jr.,
Sam F. Memphis, Tennessee, Buyers provided Order that the total cost appellee, Taylor. Sharon $10,058.00. of the vehicle was Taylor was OPINION to make a payment City cash down $1,310.00 BARKER, J., WILLIAM amount of M. delivered finance the opinion court, remainder. The which FRANK Order contained DROWOTA, F. III, C.J., and E. RILEY *4 which stated that BIRCH, ANDERSON claims, demands, and ADOLPHO A. “all disputes or contro- JR., joined. HOLDER, JJ. JANICE M. every versies of kind or nature between J., a concurring filed dissenting parties] arising [the from [sale opinion. shall vehicle] be settled binding arbitra- pursuant conducted to provisions granted permission appeal to in this Act, of the Federal Arbitration case to U.S.C. determine whether a claim for Section 12 seq.” et fraudulent inducement to a contract must be submitted to arbitration when the con- Taylor $1,000.00 sold her car for tract’s claims, arbitration clause covers “all proceeds used the part therefrom as of her demands, disputes or controversies” and payment; down she signed then a short- states that it is governed the Federal promissory term note agreeing pay to (“FAA”). Arbitration Act We hold that of remainder the down payment over the parties may agree to arbitrate claims of following three months. City Auto deliv- fraudulent despite inducement prohibition ered the vehicle Taylor day of arbitration of such claims under Tennes- signed. Order Taylor was law, see and because the City that Auto told her the time of specifically agreed case gov- that the FAA delivery long-term that her financing had clause, erns the they agreed to been approved. however, It is undisputed, arbitrate the claim for fraudulent induce- that at the delivery, time of Taylor signed ment However, of the contract. we also separate “Spot Delivery Agreement.” find that the arbitration clause in this case This City stated that Auto was is unconscionable and therefore void be- Taylor giving possession immediate cause right reserves the to a car “pending purchase of the install- forum for the defendants requiring ment sale aby financing insti- plaintiff to submit all claims to arbitra- tution.” The provided also reasons, For tion. these the trial court’s that, if proper financing could not be ob- overruled, dismissal of the complaint is tained days, City within three Auto would and the decision of the of Appeals Court option have the to “immediately rescind affirmed. Additionally, sale.” the event that FACTUAL BACKGROUND Taylor immediately did not return the ve- 4, 1998, hicle, On June Taylor Sharon (“Tay- City Auto would “have the lor”) purchased City a car from Auto Sales possession take immediate of the vehicle.” Taylor Douglas also names Appeals Butler as a de- Court of treated the defendants col- complaint representative fendant in Court, her as a lectively. appeal only City On to this City separate allegations Auto. No were application permission Auto filed an for Butler; City made he and Auto were appeal. collectively referred to The "defendants.” sale, ANALYSIS one after the
Approximately
week
applica-
City
Taylor
Auto notified
her
Fraudulent
Claim
I. Arbitration
financing
approved.
not been
tion for
had
Inducement
vehicle,
did not return the
Taylor
When
“a written
FAA
applies
The
along
Auto
the car
repossessed
aor
any maritime transaction
provision in
personal
belonging
Taylor
items
involving
transaction
evidencing a
that time.
inside the vehicle at
were
by arbitra
commerce to settle
interstate
per-
possession
Taylor’s
Auto retained
arising
controversy
out
tion a
thereafter
$1,000.00
belongings along
sonal
with the
or transaction.”
U.S.C.
such contract
down payment.
is “to
§
of the FAA
purpose
according enforceability,
ensure
against City
alleg-
Auto
filed suit
terms,
arbi
private agreements
their
of the Tennessee Consumer
ing violation
Lehman
trate.” Mastrobuono
Shearson
(“TCPA”),
arguing
Act
Protection
Hutton, Inc.,
514 U.S.
her
improperly
obtained
*5
(1995)
Volt
(quoting
76
131 L.Ed.2d
$1,000.00
payment and her personal
down
Sci,
Tr.
Leland
Inc. v. Bd.
of
of
Info.
by using
car
property that was
Univ.,
489 U.S.
Junior
Stanford
deceptive tactics in violation of the TCPA.
(1989)).
1248,
In this
gov-
arbitration clause
re
Tennessee
statute as
claims, demands,
“all
disputes
erns
or con-
quiring
determination
the is
of every
or
troversies
kind
nature between
including
sues of rescission
the contract
parties] arising
[the
[sale
from the
Specifically,
fraud in the inducement.
Id.
vehicle].”
arbitration clause also
the Court found
there was no contract
that arbitration
states
shall
“conducted
if
procured
arbitrate
the contract were
pursuant
provisions
the Federal
by
at
fraud. Id.
37.
Act,
Arbitration
9 U.S.C.
et
Section
This Court has also held that
Furthermore,
seq.”
provi-
contains
fraud
the inducement are to be resolved
any
“agree
ques-
sion
by
by
the courts
an arbitrator
regarding
particular
whether
contro-
by
is governed
when the contract
Tennes-
versy
subject
shall be
Co.,
see law. Frizzell Constr.
at
9 S.W.3d
decided
the arbitrator.”
Frizzell,
pur-
84. In
the arbitration clause
When a contract is controlled
claims,
ported
govern
disputes
“[a]ll
FAA
and contains a broad arbitration
or
out
questions arising
other matters
clause, claims of fraudulent
inducement
of,
to,
relating
Agreement.”
Prima,
subject to
arbitration.
Paint
clause,
In addition to this arbitration
Co.,
&
Corp.
Mfg.
Flood
Conklin
contained a
stating
the contract
clause
395, 403-04,
1801,18
L.Ed.2d
TJ.S.
S.Ct.
Tennessee law would form
the basis
(1967). Specifically,
the United
questions concerning
con-
deciding
*6
Supreme
lan
States
Court held that the
scope
interpretations.
tract’s
and
heldWe
permit
of
guage
the FAA
the
“does not
that:
court
in
federal
to consider claims of fraud
By
stating
the contract
to
generally.”
the inducement
Id. at
by
law,
governed
parties
Tennessee
the
Instead,
1801.
ad
S.Ct.
the court
their
have indicated
intention to arbi-
if
allegations
they
dress
of
only
fraud
disputes
of,
“arising
trate all
out
re-
or
directed to the arbitration clause itself.
their
lating
only
to”
to
—but
403-04,
at
Id.
Inc.,
(Tenn.Ct.App.1991)
In
the Court
of
of
rejected the
majority
specifically
Prima
Blaine
Frizzell
opinion
of
provided
and held that the
fraudulent
that the laws of Tennessee
Paint
issue of
would
In
govern
inducement could
not be submitted
arbi
the arbitration of the contract.
contrast,
tration under the
Ar
arbitration
in this
Tennessee Uniform
the
(Tenn.
clearly
governed
bitration Act. 818 S.W.2d
37-38
case
states that
is to be
Ct.App.1991).
recognizing that the
the FAA and
the Tennessee Uni-
While
of
Act.
provides
FAA
for arbitration of claims
form
This distinction
Arbitration
fraud,
history in
interpreted
important considering
long
the Court
Appeals
of
fraud,
not induced
of
contract was
allowing
arbitration
the federal courts
are un-
terms of the arbitration
claims under the
fraudulent
inducement
Prima,
reserves
Paint,
402-05,
the contract
conscionable because
FAA,
see
U.S.
litigate
claims it
law for
though
even
Tennessee
requiring
claims,
may have
prohibits the arbitration of such
see
Frizzell,
any of her claims
Taylor to submit
at 84.
9 S.W.3d
arbitration.
Frizzell,
that,
we stressed
the Arbi-
Whether
A.
Determines
Who
in
deciding
a claim of fraudulent
whether
Is
tration Clause Unconscionable?
arbitration,
subject
courts
ducement
Paint,
United States Su-
In Prima
specific
terms of the
upon
must focus
Court held that while
preme
contract at issue. 9 S.W.3d at
arbitrator,
fraud are to be submitted
parties agreed
that if the
to arbitrate
held
forma-
specifically attack the
claims that
inducement,
then
the claim fraudulent
provision of
con-
tion of the arbitration
despite
under Tennes
prohibition
judicially
tract are to be
determined.
law,
the claim must be submitted
see
FAA],
equally
Id. The converse is
[of
arbitration.
Under [section]
agree
jurisdic-
respect
true—if the
did
arbi
to a matter within
inducement,
for
trate
claim of fraudulent
courts save
tion of the federal
clause, the
they
compelled
then
could not be
to arbi
of an arbitration
existence
arbi-
despite
trate the claim
the fact
federal court is instructed to order
the FAA
it is satisfied
proceed
claim could be arbitrated under
tration to
once
making
that ‘the
(with
to comply
or the failure
Taylor signed
undisputed
It is
not in
agreement) is
is-
specifically
a contract that
stated that “all
if the claim is fraud
Accordingly,
sue.’
claims, demands,
disputes
controversies
the inducement
*7
every
par
kind or nature
[the
of
between
goes
issue
to the
clause itself—an
which
arising
ties]
[sale
vehicle]
from the
of the
to
‘making’ of
arbitra-
the
pur
by binding
shall be settled
arbitration
to
may proceed
court
tion—the federal
provisions
suant
to the
the Federal
of
adjudicate it.
added).
(Emphasis
Act.”
Arbitration
403-04,
Paint, 388
87 S.Ct.
Prima
U.S.
Therefore,
Taylor knowingly
because
(internal
omitted).
footnote
1801
contract,
signed
agreed
the
she
to arbi
Generally,
agree
a valid
whether
a claim
fraudulent
inducement.
trate
par
the
exists between
ment to arbitrate
II.
the Arbitration Provision Un-
Was
courts,
by the
ties is to be determined
conscionable?
challenges
complaint specifically
if
the
grounds
clause on
such
Taylor
argues that the arbitra
arbitration
also
unconscionability, the court
fraud or
agreement is void because it
uncon
validity
before
permitted
if the
to determine
maintains that even
scionable. She
requires
interpret
provi-
the
appeal
us to
the issue of un-
2. The dissent contends that
contract,
majority is
and the
conscionability
it was
of the
was waived because
sions
Court,
doing jus-
opinion
be
that we would not
was before this
the
raised until the case
only the
case were we to consider
considered. The
tice in this
and therefore should not be
obligations
Taylor
the
of Ms.
under
extent
duties and
majority agrees
the dissent to the
rights and reme-
pleadings
vague
as to
contract and
look
and unclear
However,
by
dies available to the defendant.
pleadings.
the issues raised
submitting
ress,
dispute
remainder of the
to
unconseionability, may
applied
arbitration.
Am.Jur.2d Alternative Dis
agreements
invalidate arbitration
with-
(2002
pute
§
Resolution
Supp.); see out
contravening”
provi-
enforcement
also Burden v. Check into
Ken
Cash
Assoc.,
sions of
FAA.
Doctor’s
v.
Inc.
LLC,
(6th
tucky,
Cir.2001);
In determining whether there
matter
be decided
the courts and not
arbitrate,
is a valid
“courts
arbitrator,
specifically
because it
chal
generally ...
apply ordinary
should
state-
lenges
validity
of the agreement
principles
govern
law
formation of
irrespective
arbitrate
validity
contracts,”
Options
Chicago,
First
Inc. whole contract.
Kaplan,
U.S.
S.Ct.
B.
Is the Arbitration
Provision
1920,
285 jurisdictions have addressed other Refrigera- Lewis question is a law. See provisions. Fruit, one-sided arbitration & Cold Sawyer Vegetable Co. v. (6th 427, Co., 12 435 n. Storage 709 F.2d Supreme Court of example, For Cir.1983). Virginia held that: West en- agreement an arbitration [W]here If contract or term thereof is a loan part into as of a consumer tered at the time the contract is unconscionable a waiver contains substantial transaction made, may to enforce the a court refuse including ac- rights, of the borrower’s contract, the remainder enforce courts, preserving the cess without the unconscionable the contract forum, the a lender’s (Second) of Restatement Con term. See and, there- is unconscionable (1981). § “The determination tracts a matter fore, and unenforceable as void is is not uncon that a contract or term or of law. setting, light in the of its scionable made Lending Corp., 204 v. Cos. Arnold United factors in and effect. Relevant purpose (1998). 229, 511 S.E.2d W.Va. pro contracting clude weaknesses that “[a] in Arnold stated Court in more specific like those involved cess unconscionability must fo- determination fraud, capacity, rules as contractual ” parties, of the positions on the cus relative Restate invalidating other causes.... position, adequacy bargaining (Second) § cmt. a ment of Contract available to the meaningful alternatives of unfair terms plaintiff, and ‘the existence ” Enforcement of (quoting Art’s the contract.’ Id. at 861 generally grounds on of uncon- refused Chesapeake & Poto- Inc. Shop, Flower scionability “inequality of the where the Co., 413 S.E.2d 186 W.Va. mac Tel. to shock the bargain so manifest as (1991)). test, the Court Applying sense, judgment of common person positions that “the relative noted oppressive and where the terms are so lender on one parties, corporate a national make person that no reasonable would elderly, unsophisticated consum- side and ” hand, no one honest and them the other, ‘grossly unequal.’ on the were ers oth person accept would them on the fair (footnote omitted). Additionally, there 869, 872 King, er.” Haun loan broker was “no evidence re Fried (Tenn.Ct.App.1984) (quoting available to the any option loan made other man, 64 A.D.2d 407 N.Y.S.2d found that Finally, the Court Arnolds.” (1978)); Aquascene, also Inc. v. Norit see ‘unrea- “the terms (M.D.Tenn. F.Supp. 602 Corp., su Am. Lending.” to United sonably favorable’ 1993). An unconscionable contract is one reasons, found the Court Based on these one-sided, in provisions are so which the to be uncon- circumstances, view of all facts and scionable. *9 contracting any is denied party
that Supreme Court Similarly, Montana meaningful for choice. Id. opportunity an arbitration as unconscionable voided for adver- in a contract provision contained yet has address While Tennessee directory that re- telephone in a in tisement provision an arbitration issue of whether judicial a forum for the right a contract reserves served a consumer which amounts due for collection of mer- Publisher only to the courts for the to access arbitration limiting the consumer to not the consumer voidable chant and Direct, all Iwen v. U.S. West unconscionability, of of claims. a number the basis 286 512,
293 Mont.
presented agreement this on a take-it- against Indeed, could Taylor. have it is basis, or-leave-it it is also a contract in imagine hard to other what claims it would meaningful which there was not choice against have her other than one to recover on the part of the weaker bargaining or the vehicle collect a debt. At same party regarding acceptance of provi- time, Taylor required any to arbitrate [Disparities sions .... in rights claim might that she have the contracting must not be so Auto. unreasonably one-sided and favorable to drafter, case, they in that signed The contract between agreement becomes unconscionable Taylor adhesion, is one of and oppressive. it is a standardized form that 996;
Id. at
see also Williams v. Aetna Fin.
on essentially
was offered
a
it or
“take
Co.,
464,
83 Ohio St.3d
700
859
it”
affording Taylor
N.E.2d
leave
basis without
a
(1998),
denied,
cert.
bargain.
U.S.
119 realistic opportunity to
See
(1999)
(refus
(6th
1990).
S.Ct.
Generally, agreement to ar a void opinion. contract, concurring dissenting and bitrate, general in a incorporated 4 Am. as a contract. separate is treated J., concurring HOLDER, JANICE M. § 77 Dispute Resolution Jur. Alternative in part dissenting part. in part If the is not (Supp.2002) holding that majority’s I in the concur contract, general of the substance of for fraudulent inducement Taylor’s claim remedy only, and is collat pertains to the to arbi- contract must be submitted matters, it is sever- eral contractual contract’s arbitration tration because the body of the contract. able from the main claims, demands, provision covers “all dis- Tennessee, In can be “[a]n specifically or controversies” and putes or a either an entire contract severable governed by the Federal that it is states of the according to the intention contract I howev- separately, Arbitration Act. write parts parties, and the fact that divisible er, disagree majority’s I because with are included within the same document the issue uneon- decision address being not them from consid preclude does its scionability and with conclusion separate and enforced as contracts.” ered in case uncon- provision this Huddleston, Leasing Truck Co. v. Penske scionable. (Tenn.1990).
Unconscionability alleged not was provision Because the arbitration tried, and was not pleadings, was Buyers only Order relates to reme This line Appeals. in the Court of raised dy and is collateral to all other contract the first time in argument appears matters, we find that it is severable from Therefore, I Taylor’s to this Court. brief remaining portions of the contract. the issue was waived. would hold that
Moreover, of uncon- if the issue even waived, I scionability had been dis- CONCLUSION agree majority’s conclusion summary, In hold that a claim for we in this case is the arbitration subject to fraudulent inducement was arbi- requires unconscionable. The parties tration in this case because the of her claims Taylor to arbitrate all Buyers gov- in the Order agreed “Dealer, Auto, providing that: while FAA, the FAA provides erned recovery vehi- pursue however How- for arbitration of claims for fraud. Uniform Com- cle the Tennessee under ever, find that we also of Debt due mercial and Collection Code clause in the Order is unconsciona- majority con- action.” The state court reserves and therefore void because it ble this cludes City Auto right to a forum for unreasonably favorable to Auto and requiring Taylor to submit all persuaded I Taylor. am not oppressive reasons, the deci- to arbitration. For these analysis. by majority’s Appeals to overrule sion of the Court my view, the mere fact that there complaint court’s the trial dismissal affirmed, forums available different and the ease is remanded not make the arbitration con- case does proceedings court for further this the trial jurisdic Other provision unconscionable. opinion. sistent with *11 tions have provi held an arbitration
sion granting party option one Christopher liti A. EADIE gate binding its claims while the other v. party to arbitrate all of its See, e.g., unconscionable. Harris v. Green CO., INC., COMPLETE et al. (3d 173, Tree Fin. Corp., 183 F.3d Cir.1999); Pate Melvin Man Williams Tennessee, Supreme Court of Homes, (In Pate), Inc. re ufactured at Nashville. 841, (Bankr.S.D.Ga.1996); B.R. Ex 2, June 2004 Session. 592, parte McNaughton, 728 So.2d (Ala.1998); Servicing Corp. Conseco Fin. 27, Aug. Wilder, (Ky.Ct. 47 S.W.3d 343-44 App.2001). A unconscionable
where the “inequality bargain is so
manifest as shock judgment of a
person sense, of common and where the oppressive
terms are so that no reasonable
person hand, make would them on the one
and no person honest and fair would ac
cept them on the King, other.” Haun v.
690 S.W.2d 872 (Tenn.Ct.App.1984) House,
(quoting Brenner v. Little Red Sch.
Ltd., 302 N.C. 274 S.E.2d
(1981)). Although agree
ment requires Taylor to arbitrate all of her
claims while a providing forum to claims, Auto for in my opinion certain symmetry
this lack of does not rise to the being
level of shocking unfairly oppres Instead,
sive. it is not unreasonable
Taylor agree forego
claim, vehicle, recovery
that can expeditiously judi be decided in a
cial forum. Servicing See Conseco Fin.
Corp.,
Furthermore,
there no presume basis to that arbitra adequate
tion will afford
opportunity present her claims. id. See I
at 344. am of opinion at issue should be according
enforced to its terms. There
fore, I would affirm the trial court’s dis Taylor’s
missal of complaint.