realities of the situation indicate that the parties did not so intend.” As such, the court stated, “If the consideration given in exchange for the installment contract was adequate, it likewise supported the arbitration agreement.” Te court found that the consumers did not contest the adequacy of the consideration supporting the installment contract (e.g. Bridgecrest supplied consumers with a vehicle and provided financing in exchange for a promise to pay and several other promises). As such, the court found there was adequate consideration.
Te court next considered whether the arbitration agreement was conscionable. Te consumers argued that the arbitration agreement was unconscionable because it was “one-sided or lacks mutuality and makes illusory promises that enable Bridgecrest to unilaterally divest itself of an obligation to perform under the agreement.” Specifically, the consumers contended that the anti-waiver provision in the arbitration agreement allowed Bridgecrest to initiate litigation in circuit court and engage in self-help repossession without waiving its right to compel arbitration on other claims. Te court found that even if Bridgecrest’s primary remedy is repossession, excluding self-help from arbitration does not render the arbitration agreement one-sided. Tat is, the consumers retained the right to contest Bridgecrest’s exercise of self-help in court with injunctive relief. Te court ultimately concluded that Bridgecrest and consumers could compel arbitration on any claim the agreement encompassed.
Te court finally considered whether Bridgecrest was barred by collateral estoppel. Te consumers argued that Bridgecrest was estopped from enforcing the arbitration agreement because Bridgecrest unsuccessfully sought to invoke the same arbitration agreement in Haight v. DriveTime Car Sales Company, LLC, WD81164, where the circuit court and Missouri Court of Appeals determined the arbitration agreement was invalid. Te court determined that the issues presented in Haight were “remarkably different” than the issues presented here, which prevented application of collateral estoppel.
Following the issuance of the opinion, the consumers filed a motion for rehearing on a narrow issue related to the anti- waiver provision in the arbitration agreements. Bridgecrest cannot respond unless the court requests a response. We recognize the enforceability of similar arbitration agreements referenced in installment contracts is something of incredible importance to the Missouri Bankers Association members. Tis opinion will put to rest any uncertainty with respect to the adequacy of consideration for similar agreements. We appreciate the opportunity to have filed an amicus brief on MBA’s behalf on the practical importance of the enforceability of such agreements, which undoubtedly was persuasive for the court in reaching this favorable result.
Marci Kawski, a Wisconsin-based partner with Husch Blackwell, leads the firm’s consumer financial services practice. Sara Fevurly is an attorney in Husch Blackwell’s Kansas City office and is a member of the firm’s commercial litigation practice team. Visit
huschblackwell.com for more details. Husch Blackwell is an MBA associate member.
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