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A Missouri appellate court has compelled arbitration of statutory fraudulent concealment claim arising out of a motor vehicle purchase contract, holding that the finance company was not a non-party to the buyer-dealer arbitration agreement, but rather stepped into the shoes of the dealer as an assignee.
In Boulds v. Chase Auto Finance Corp., No. ED 90525, 2008 WL 4330334 ( Mo. Ct. App. Sept. 23, 2008), Boulds bought a vehicle from Dick Dean Economy Cars (Dean). In completing the purchase, Boulds and Dean executed a retail buyer's order (RBO), an arbitration agreement addendum to the RBO, and a retail installment contract (RIC). Dean's rights under the RIC were assigned to Chase in order to finance Boulds' purchase.
After problems allegedly arose with the vehicle, Boulds demanded rescission, and Dean refused. Boulds then filed suit against Dean and Chase, as Dean's assignee, for fraud and for failure to disclose the vehicle's defects under Missouri statute. Mo. Rev. Stat. § 408.405.
When Dean moved to compel arbitration in accordance with the parties' agreement, Boulds voluntarily dismissed her claims against Dean. Chase then moved to dismiss, arguing that the arbitration agreement applied to disputes between it and Boulds, and that Boulds' claim was nevertheless unavailable and time-barred under Missouri law. The trial court granted Chase's motion to dismiss.
On appeal, after first rejecting Chase's contentions that Boulds either lacked standing to sue or was time-barred from suing under § 408.405, the Court addressed whether the arbitration agreement in the addendum to the RBO applied to disputes between Boulds and Chase as Dean's assignee.
While the Court agreed that "nothing in the [RIC] mentions arbitration," and that Chase only appears as a party in the RIC as assignee, the Court held Chase's absence as a party to the RBO or addendum did not necessarily defeat its motion to compel. "Even in the absence of explicit incorporation," observed the Court, "instruments executed at the same time, by the same contracting parties, for the same purpose, and in the course of the same transaction will be considered and construed together."
The Court found that language in the arbitration agreement stating that it was "part of your contract with the dealer" revealed the parties' intent that all three documents were part of one all-encompassing contract. In accordance with the parties' intent, the Court found the arbitration agreement addendum applied to claims brought in relation to the RBO and RIC. According to the Court, it "should not allow Boulds to sidestep her arbitration obligation merely because Chase financed her purchase," stepping into the shoes of signatory Dean.
Accordingly, the Court reversed the trial court's order, and remanded the matter to the trial court with instructions to compel arbitration.
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