A federal district court in Ohio has refused a plaintiff’s request to rescind an arbitration agreement that reserved the selection of venue and administrator to the plaintiff, holding that the defendant’s violation of those provisions by filing an improper demand in another venue did not warrant that drastic remedy.

In Ewers v. Genuine Motor Cars, Inc., No. 1:07 CV 2799, 2008 WL 755268 (N.D. Ohio, Mar. 19, 2008), Ewers purchased a vehicle from Genuine through the Ebay website. Ewers traveled from Ohio to Florida to pick up the vehicle. When Ewers arrived in Florida, Genuine presented Ewers with purchase documents, including an arbitration agreement. Ewers signed the agreement.

Later, a dispute arose over alleged misrepresentations made during the purchase. Genuine agreed to refund Ewers’s money if the vehicle was returned and a liability release was signed. Ewers refused, and Genuine filed a demand for arbitration with the American Arbitration Association in Florida. Ewers opposed arbitration, claiming that the agreement was unconscionable, fraudulently induced, and breached to the point where rescission of the entire agreement was warranted.

The Court first found no evidence of unconscionability. It noted that Ewers was college educated and married to an attorney who was present when the documents were signed. Furthermore, the Court noted that Genuine was not required to explain every provision of the agreement prior to Ewers signing the agreement. While the Court said it was "disturbed" by Genuine’s failure to inform Ewers of the arbitration agreement until his arrival in Florida, it determined the agreement was not "part and parcel" of the purchase contract and found no evidence that Genuine would not have released the vehicle if the agreement was not signed.

Second, the Court rejected Ewers’s allegation of fraudulent inducement, noting that the allegations were related to breach of contract or to fraud in the entire contract, issues that were reserved for the arbitrator.

Finally, the Court denied rescission of the entire agreement. While the Court acknowledged that Genuine had instigated arbitration with a particular administrator in its home state – in violation of the terms of the agreement – the Court did not find this breach to be sufficiently material to warrant rescission. Instead, it simply empowered Ewers to select the administrator and ordered that the arbitration take place near Ewers’s home in Ohio.