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Without clear factual findings establishing an agency relationship between a signatory and non-signatory to an arbitration agreement, the statutory presumption favoring arbitration cannot supersede the non-signatory's constitutional right to a jury trial, according to a federal district court in Idaho.
In Jackson v. Daimler Chrysler Financial Services Americas, LLC, No. CV-07-96-EBLW, 2007 WL 2051233 (D. Idaho July 12, 2007), Jackson sued the following parties for wrongful repossession of his motor vehicle: (1) Daimler, a financing company; (2) Stallings, a repossession company; and (3) McClane, a Stallings' employee. In addition, Daimler filed a claim for indemnity against Stallings.
Daimler also filed a motion to compel arbitration pursuant to an arbitration clause in Jackson's financing agreement. Stallings and McClane opposed arbitration on the ground that they were not parties to the arbitration agreement. In response, Daimler argued that Stallings and McClane were bound by the agreement as agents of Daimler.
The Court found that there were questions of fact regarding the existence of an agency relationship. In making this finding, the Court noted that the contract between Daimler and Stallings specifically stated that Stallings was an "independent contractor" and not an "agent."
Moreover, the Court expressed some concern over holding Stallings and McClane to an arbitration agreement they had not signed, regardless of any agency relationship. Those concerns were mitigated by the fact that Jackson joined Daimler's motion to compel, but the Court still found it necessary for Daimler to prove that Stallings and McClane "knowingly and voluntarily" waived their right to a jury trial.
In light of the fact questions surrounding waiver of the right to a jury trial and the existence of an agency relationship, the Court limited its order compelling arbitration to Jackson's claims against Daimler.
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