A federal court in Illinois held that where an arbitration agreement in a motor vehicle purchase contract clearly stipulates that questions of arbitrability will be submitted to arbitration, a court must submit any questions of arbitrability to the arbitrator.

In Gatlin v. Criscione, No. 1:07-cv-7212, 2008 WL 2745956 (N.D. Ill. July 11, 2008), Gatlin signed a contract to buy a car from Bill Kay. The contract contained an arbitration agreement which provided that "'dispute' includes any question regarding whether a matter is subject to arbitration under this Arbitration Agreement."

The contract also provided that if Kay was unable to secure financing, Gatlin would be required to return the vehicle, and if he failed to do so, Kay was authorized to repossess the vehicle. Kay was unable to secure financing for Gatlin. When Gatlin failed to return the vehicle, Kay hired Illinois Solution Group (ISG) to repossess the vehicle. Caputo, an ISG employee, was in charge of retrieving the vehicle.
Later, Caputo falsely informed two police officers that Gatlin was in possession of a weapon while driving, so the officers arrested Gatlin. Caputo also filed a police report alleging that Gatlin submitted false information in his credit application. Gatlin was criminally charged, but the charge was later dropped.

Gatlin then sued Caputo for false arrest and malicious prosecution, and sued ISG and Kay based on the doctrine of respondeat superior. Kay moved to compel arbitration pursuant to the arbitration agreement in the motor vehicle purchase contract.

Gatlin opposed the motion to compel, arguing that because Caputo, on behalf of Kay, initiated criminal proceedings against Gatlin, Kay waived his right to arbitration. The Court rejected Gatlin's argument on the reasoning that Kay "was not seeking resolution of a dispute contemplated by the arbitration clause; [he] was attempting to take possession of the vehicle. Certainly, Bill Kay would not have had a justiciable claim at that point. It follows that Bill Kay has not waived [his] right to arbitration."

Gatlin also argued that his claims did not fall within the scope of the arbitration agreement because false arrest and malicious prosecution claims are too attenuated to fall within the scope of an arbitration agreement in a motor vehicle purchase contract. In opposition, Kay maintained that the parties had agreed to submit the question of arbitrability to an arbitrator. The Court held that the arbitration agreement "clearly stipulates that questions of arbitrability will be submitted to arbitration. The court must therefore submit the question of arbitrability to the arbitrator."

The Court stayed the arbitration of Gatlin's claims against Kay until Gatlin's claims against the non-signatories to the arbitration agreement, ISG and Caputo, were resolved by a court. Because Gatlin's claims against Kay were based on respondeat superior, Kay's liability was contingent on a determination of the non-signatories' liability at court.