Guest Commentary By Marci Kawski and Sara Fevurly, Husch Blackwell
Missouri Supreme Court Rules
Arbitration Agreement in Retail Installment Sales Contract is Enforceable
In July, the Missouri Supreme Court in Bridgecrest Acceptance Corp. v. Donaldson (No. SC99269) and Bridgecrest Acceptance Corp. v. Jones (No. SC99270) reversed the circuit court’s overruling of its motions to compel arbitration. Te Missouri Supreme Court found the arbitration agreement signed by the consumers was legally valid, conscionable and not precluded by collateral estoppel. Te court remanded for further proceedings consistent with the opinion. Te opinion includes language that will be extremely helpful instruction for the lower courts in assessing future similar standalone arbitration agreements incorporated by reference into installment contracts.
By way of a brief overview, the consumers entered into an installment contract to finance and buy a vehicle. Each also signed an arbitration agreement referenced in the installment contract (and vice versa). Te consumers failed to make required payments for the vehicle, so Bridgecrest repossessed and sold the vehicle. Aſter, Bridgecrest sought the deficiency
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in the circuit court. Te consumers counterclaimed raising putative class claims. Bridgecrest moved to dismiss or stay the counterclaims and compel arbitration. Te circuit court overruled the motion to compel, and the Missouri Court of Appeals affirmed. Te Missouri Supreme Court accepted transfer.
Te court first considered the circuit court’s finding that the arbitration agreement lacked consideration. Te consumers argued that the arbitration agreement lacked adequate consideration because there was consideration supporting the installment contract but not the separate arbitration agreement. Te court found that the retail installment contract and the arbitration agreement were part of a singular contract given the clear language in the incorporation provision in the installment contract. And even in the absence of the incorporation provision, the court noted that “contemporaneously signed documents relating to one subject matter or transaction are construed together except when the
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