05-1896 MURPHY V. COURTESY FORD

SUPREME COURT CASES

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State: Florida

Court: Florida Southern District Court

Docket No: 3d05-1896

Case Date: 12/20/2006

Plaintiff: 05-1896 MURPHY

Defendant: COURTESY FORD

Preview:NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DISPOSED OF.

IN THE DISTRICT COURT OF APPEAL OF FLORIDA THIRD DISTRICT JULY TERM, A.D. 2006

ERIN MURPHY, Appellant, vs.

** ** ** CASE NO. 3D05-1896

COURTESY FORD, L.L.C., a Florida ** Limited Liability Corporation d/b/a "WORLD FORD KENDALL," ** Appellee. **

LOWER TRIBUNAL NO. 05-777

Opinion filed December 6, 2006. An Appeal from the Circuit Court for Miami-Dade County, Leon M. Firtel, Judge. Samuel M. Spatzer; Jay M. Levy, for appellant. Goldsmith & Atlas, and Mark Atlas, for appellees.

Before GREEN, RAMIREZ, and LAGOA, JJ. RAMIREZ, J. Erin Murphy, the consumer/buyer, appeals the trial court's non-final order compelling arbitration of her damages claim

against the seller, Courtesy Ford, L.L.C., a Florida Limited Liability Corporation d/b/a "World Ford Kendall". She also

appeals

the

trial We

court's both

order orders,

denying finding

her that

motion Murphy

for is

rehearing.

affirm

required to arbitrate her dispute with Courtesy Ford. Erin Murphy, who was nineteen years old at the time, came into Courtesy Ford to buy a used Ford F-150 pick-up truck.

During the course of the purchase and sale transaction with Courtesy documents. Ford's staff, Murphy knew she was signing legal

She did not read the sale and purchase documents.

She neither asked any questions regarding the sale and purchase documents, nor raised any objection to their execution. The

first time Murphy objected to any of the terms of the contract was after her car was repossessed. The printed buyer's in red purchase ink on order the provides front side a warning of the statement document,

immediately above the buyer's signature.

This warning advises

the buyer of the significance of the provisions printed and completed on both the front and back sides of the document. states: The front and back of this Order comprise the entire agreement affecting this purchase and no other agreement or understanding of any nature concerning same has been made or entered into, or will be recognized. I have read the matter printed on the back hereof and agree to it as a part of this order the same as if it were printed above my signature. I certify that I am 18 years of age, or older, and hereby acknowledge receipt of a copy of this order. It

2

In

sum,

the

purchase

order

notifies

the

consumer

in

three

different paragraphs to read the reverse side of the purchase order. REVERSE It also states in big black letters, "READ CONDITIONS ON SIDE." The subject arbitration agreement clause,

paragraph 12, was contained on the reverse side of the buyer's purchase order, in the same size type-face as all the other terms. Murphy Deceptive Statute, sued Courtesy Trade Ford for damages Act under Florida's Florida filed a

and

Unfair

Practices et. seq.

("FDUTPA"), Ford

sections

501.201,

Courtesy

motion to stay proceedings and compel arbitration, which the trial court granted. Murphy then appealed this non-final order.

She also filed in the trial court a motion for a rehearing which was heard after this Court temporarily relinquished jurisdiction of the appeal. At the evidentiary hearing in the trial court on Murphy's motion for rehearing, Courtesy or Ford established from it did not and

actively

discourage the

prevent

Murphy terms.

knowing

understanding

disputed

contract

Murphy

admitted

there was nothing preventing or blocking her from reading the documents; no one prevented her from reading the documents

before she signed them; she did not ask for more time to review the documents or review them in more detail; she did not object

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to signing any of the documents; she did not ask any questions about the documents; she knew the documents were legal documents when she signed same; she simply chose not to read the

documents; and the first time she objected to any of the terms of the contracts was after her car was repossessed. She also

admitted that she received a copy of the buyer's purchase order at the time of purchase, but she never reviewed it. court, thus, reaffirmed its initial ruling. The trial then

Murphy

appealed.

We now affirm, finding that the trial court properly

found that the arbitration agreement was enforceable. First, the arbitration clause in the buyer's purchase order applies to Murphy's claim under the FDUPTA. There are three

elements for courts to consider in ruling on a motion to compel arbitration of a given dispute, under federal statutory

provisions and Florida's arbitration code: (1) whether a valid written agreement to arbitrate exists; (2) whether an arbitrable issue exists; and (3) whether the right to arbitration was

waived. 1999). The claim

Seifert v. U.S. Home Corp., 750 So. 2d 633, 636 (Fla.

test

for a

determining

arbitrability provision between

of

a

particular whether and a the

under

broad

arbitration exists

is

"significant

relationship"

the

claim

agreement containing the arbitration clause, regardless of the legal label attached to the dispute. Id. 637-38. See also

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Passerrello v. Robert L. Lipton, Inc., 690 So. 2d 610 (Fla. 4th DCA 1997)(applying arbitration agreements to deceptive trade

practice and fraud claims).

In addition, Florida public policy

favors resolving disputes through arbitration when the parties have agreed to arbitrate. Orkin Exterminating Co. v. Petsch, All doubts regarding

872 So. 2d 259, 263 (Fla. 2d DCA 2004).

the scope of an arbitration agreement must be resolved in favor of arbitration. DCA 2002). claims can Qubty v. Nagda, 817 So. 2d 952, 956 (Fla. 5th

Furthermore, Florida case law is clear that FDUTPA properly be submitted to arbitration. Orkin

Exterminating Co., 872 So. 2d at 261; Aztec Med. Servs., Inc. v. Burger, 792 So. 2d 617, 620 (Fla. 4th DCA 2001). we review a court's ruling on novo. And finally,

a motion to compel arbitration de

Orkin Exterminating Co., 872 So. 2d at 261. Passerrello, 690 So. 2d at 610, cited by Courtesy Ford, is

directly on point with the case before us.

Faced with similar

facts, the Fourth District Court held in Passerrello that a used car buyer was required to arbitrate her dispute with the bank even though the arbitration clause was contained in the purchase contract and not in the finance contract. Id. at 611. See also

Morse Operations, Inc. v. Sonar Radio Corp., 449 So. 2d 1002 (Fla. 4th DCA 1984)(where the arbitration clause was contained in the buyer's order and not in the finance or installment sale contract).

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Here, Murphy's causes of action are tied directly to the purchase of the vehicle. Because her claims involve the

contractual agreement, the trial court was correct in finding there was a significant relationship between her claims and the buyer's order 690 which So. 2d contained at 611. the The arbitration trial court clause. properly

Passerrello,

applied the test for determining arbitrability to the facts of the case and was correct in finding the that the arbitration was

agreement enforceable.

contained

within

purchase

contract

Furthermore, we find that the trial court was correct in finding that Murphy failed to to make a sufficient the showing of

unconscionability agreement. must find

required

overturn

arbitration

To invalidate a contract under Florida law, a court that the contract is both procedurally and

substantively unconscionable.

Powertel, Inc. v. Bexley, 743 So. The party seeking to avoid the the burden Care to Ctr., establish Inc. v.

2d 570, 574 (Fla. 1st DCA 1999). arbitration provision has

unconscionability.

Gainesville

Health

Weston, 857 So. 2d 278, 288 (Fla. 1st DCA 2003). To determine whether a contract is procedurally

unconscionable, a court must look to the manner in which the contract was entered into and consider factors such as whether the complaining party had a meaningful choice at the time the

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contract

was

entered

into.

Id.

at

284.

Courts

consider

"whether the complaining party had a realistic opportunity to bargain regarding the terms of the contract or whether the terms were merely presented on a `take-it-or leave-it' basis; and

whether he or she had a reasonable opportunity to understand the terms of the contract." Id. In Florida, a party to a contract

is not "permitted to avoid the consequences of a contract freely entered into simply because he or she elected not to read and understand its terms before executing it or because in Id.

retrospect, the bargain turns out to be disadvantageous." at 288. "[t]o

As the First District Court of Appeal stated in Weston, such a result would Id. be to render contracts

sanction

worthless as a tool of commerce."

In Palm Beach Motor Cars Ltd., Inc. v. Jeffries, 885 So. 2d 990 (Fla. 4th DCA 2004), a buyer sought to have an arbitration agreement in a purchase agreement declared unenforceable on the grounds that it was unconscionable. The Fourth District Court

of Appeal held that the arbitration provision in the purchase agreement between the automobile buyer and the automobile The

dealership was procedurally unconscionable.

Id. at 991.

arbitration provision in that case was located on the back of the agreement. There was language on the front of the agreement

alerting the buyer to the terms on the back which was in the smallest print on the page. Id. The automobile dealer's

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employees testified that it was not their practice to inform customers of terms on the back of the agreement or of the

arbitration provision, and they did not inform the buyer of these terms. The Id. court properly distinguished the facts in

trial

Jeffries from the facts in the case before us, finding that Murphy failed to establish procedural unconscionability. In

particular, the trial court found that the arbitration agreement was not procedurally unconscionable because the agreement

appeared in the same type

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