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Locklear Automotive Group, Inc. v. Hubbard

Supreme Court of Alabama

September 29, 2017

Locklear Automotive Group, Inc.
v.
Brad Hubbard Locklear Automotive Group, Inc.
v.
Jeremy Averette Locklear Automotive Group, Inc.
v.
Carol Fuller Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive Group, Inc.
v.
Anthony Hood Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive Group, Inc.
v.
Jeffery Lollar and Betsy Lollar Locklear Automotive Group, Inc.
v.
Elizabeth Montana Booth Locklear Automotive Group, Inc.
v.
Dorothea Williams

         Appeal from Tuscaloosa Circuit Court (CV-16-900716, CV-16-900683, CV-16-901091, CV-16-900098, CV-16-900081, CV-16-900074, CV-16-900073)

          MURDOCK, Justice.

         Before us are appeals from denials of motions to compel arbitration filed by Locklear Chrysler Jeep Dodge, LLC ("Locklear CJD"), and Locklear Automotive Group, Inc. ("Locklear Group"), in actions filed by plaintiffs who alleged that they were victims of identity theft resulting from personal information they had provided Locklear CJD in order to explore the possibility of financing the purchase of a vehicle from Locklear CJD. In case no. 1160435, we affirm the order of the trial court denying the motion to compel arbitration; in the other appeals, we reverse the trial court's orders and remand the causes.

         I. Facts

         All the plaintiffs in these cases purchased vehicles from Locklear CJD. All the plaintiffs signed an arbitration agreement as part of their vehicle purchases; the operative language of those arbitration agreements is the same. And all the plaintiffs alleged that they were the victims of identity theft that resulted from providing personal information to Locklear CJD when they filled out credit applications for the vehicle purchases.

         In addition to naming Locklear CJD as a defendant, the plaintiffs' complaints named multiple other defendants who they alleged played a part in the identity thefts. Among the other defendants named is Locklear Group. According to an affidavit from Christopher S. Locklear, Sr., vice president of Locklear CJD, Locklear Group "is the sole member of Locklear Chrysler Jeep Dodge, LLC."

         The arbitration agreement signed by each plaintiff is titled "Binding Pre-Dispute Arbitration Agreement" ("the arbitration agreement"), and its operative language is as follows:

"In connection with the undersigned's acquisition or attempted acquisition of the below described vehicle, by lease, rental, purchase or otherwise, the undersigned and the dealer whose name appears below, stipulate and agree, in connection with the resolution of any dispute arising out of, or relating to, resulting from or concerning any contracts or agreements, or agreements or contracts to be entered into by the parties, all alleged representations, promises and covenants, issues concerning compliance with any state or federal law or regulation, and all relationships resulting therefrom, as follows: That the vehicle, services, and products (hereinafter 'products') involved in the acquisition or attempted acquisition are regulated by the laws of the United States of America; and/or, that the contract(s) and agreements entered into by the parties concerning said products evidence transactions and business enterprises substantially involving and affecting interstate commerce sufficiently to invoke the application of the Federal Arbitration Act, 9 U.S.C. § 1, et seq. The undersigned agree that all disputes not barred by applicable statutes of limitations, resulting from, arising out of, relating to or concerning the transaction entered into or sought to be entered into (including but not limited to: any matters taking place either before or after the parties entered into this agreement, including any prior agreements or negotiations between the parties; the terms of this agreement and all clauses herein contained, their breadth and scope, and any term of any agreement contemporaneously entered into by the parties; the past, present and future condition of any products at issue; the conformity of the products to any contract description; the representations, promises, undertakings, warranties or covenants made by the dealer, its agents, servants, employees, successors and assigns, or otherwise dealing with the products; any lease, sale or rental terms or the terms of credit and/or financing in connection therewith; or compliance with any state or federal laws; any terms or provisions of any insurance sought to be purchased or purchased simultaneously herewith; any terms or provisions of any extended service contract sought to be purchased or purchased simultaneously herewith) shall be submitted to BINDING ARBITRATION, pursuant to the provisions of 9 U.S.C. § 1, et seq. and according to the Commercial Dispute Resolution procedures and/or consumer protocol (depending on the amount in controversy) of the American Arbitration Association (the AAA) then existing in the county where the transaction was entered into or sought to be entered into, except as follows: (a) In all disputes in which the matter in controversy (including compensatory and punitive damages, fees and costs) is more than $10, 000 but less than $75, 000.00, one arbitrator shall be selected in accordance with the AAA's Consumer Protocol. In all disputes in which the matter in controversy (including compensatory and punitive damages and fees and costs) is $75, 000.00 or more, the parties to this agreement shall select an arbitrator under the AAA's Commercial Rules and shall select one arbitrator from a list of at least 5 suitable arbitrators supplied by the AAA in accordance with and utilizing the AAA strike method. (b) An arbitrator so selected shall be empowered to enter an award of such damages, fees and costs, and grant such other relief, as is allowed by law. The arbitrator has no authority or jurisdiction to enter any award that is not in conformance with controlling law. Any party to this agreement who fails or refuses to arbitrate in accordance with the terms of this agreement may, in addition to any other relief awarded, be taxed by the arbitrator with the costs, including reasonable attorney's fees, of any other party who had to resort to judicial or other relief in compelling arbitration. In the event the dealer and the undersigned customer(s) have entered into more than one arbitration agreement concerning any of the matters identified herein, the undersigned customers and the dealer agree that the terms of this arbitration agreement shall control disputes between and among them. Any provision in this Agreement found to be in conflict with any procedure promulgated by the AAA which shall affect its administration of disputes hereunder, shall be considered severed herefrom. With respect to the process of arbitration under the AAA Commercial Rules or Consumer Protocol, the undersigned customer(s) and the dealer expressly recognize that the rules and protocol and the terms of this agreement adequately protect their abilities to fully and reasonably pursue their respective statutory and other legal rights. If for any reason the AAA fails or refuses to administer the arbitration of any dispute brought by any party to this agreement, the parties agree that all disputes will then be submitted to binding arbitration before the Better Business Bureau (the BBB) serving the community where the Dealer conducts business, under the BBB binding arbitration rules. ... This agreement shall survive any termination, cancellation, fulfillment, including, but not limited to cancellation due to lack of acceptable financing or funding of any retail installment contract or lease. Further information about arbitration can be obtained directly from the AAA or from a review of AAA's Commercial Dispute Resolution Procedures and Consumer Protocol, and/or the BBB's Binding Arbitration Rules, copies of which are available without charge for review from the AAA and the BBB. THE UNDERSIGNED HAVE AGREED TO WAIVE THE UNDERSIGNED(S)' RIGHT TO A TRIAL BY JUDGE OR JURY IN ALL DISPUTES OVER $10, 000.00 AND THAT ARBITRATION SHALL BE IN LIEU OF ANY CIVIL LITIGATION IN ANY COURT AND IN LIEU OF ANY TRIAL BY JUDGE OR JURY FOR ALL CLAIMS OVER $10, 000.00. THE TERMS OF THIS AGREEMENT AFFECT LEGAL RIGHTS. IF YOU DO NOT UNDERSTAND ANY PROVISION OF THIS AGREEMENT OR THE COSTS, ADVANTAGES OR DISADVANTAGES OF ARBITRATION, SEEK INDEPENDENT ADVICE AND/OR REVIEW THE WRITTEN CONSUMER AND/OR COMMERCIAL DISPUTE RESOLUTION PROCEDURES AND PROTOCOLS AND/OR CONTACT THE AAA OR BBB BEFORE SIGNING. BY SIGNING YOU ACKNOWLEDGE THAT YOU HAVE READ, UNDERSTAND AND AGREE TO BE BOUND BY EACH OF THE PROVISIONS, COVENANTS, STIPULATIONS AND AGREEMENTS SET FORTH AND REFERENCED HEREIN ABOVE.
"DESCRIPTION OF PRODUCTS/SERVICES: ___"

(Capitalization in original; emphasis omitted; and emphasis added.)

         In the blank line following the "DESCRIPTION OF PRODUCTS/SERVICES" typically was printed the year and model of the vehicle to be purchased, as well as the vehicle-identification number ("VIN") of that vehicle. Below that were blank lines for the date to be filled in and lines for signatures of the customer and a dealer representative. In two of the cases before us -- the complaints filed by

          Jeffery Lollar and Betsy Lollar and by Anthony Hood -- there are allegations that the arbitration agreements were altered after the Lollars and Hood signed their agreements, allegations that will be explained in more detail when we discuss the facts of each case.

         A. Case no. 1160435: Jeffery Lollar and Betsy Lollar

         Jeffery Lollar and Betsy Lollar originally visited Locklear CJD on May 28, 2013, and purchased a 2009 Dodge Ram truck. In the course of doing so, they signed the arbitration agreement. The Lollars again visited Locklear CJD in December 2015 because they were considering purchasing another vehicle. In the course of exploring that option, they filled out a credit application to see if they would qualify for a loan. The Lollars ultimately decided to purchase a vehicle from another dealership and, thus, did not sign an arbitration agreement in connection with their 2015 visit to Locklear CJD.

         Sometime after their 2015 visit to Locklear CJD, the Lollars were informed by the Northport Police Department that they had been the victims of identity theft. The Lollars allege that Locklear CJD and Locklear Group, by and through their employees, had represented to them when they provided their personal information that their information would be kept confidential. Instead, according to the Lollars, Locklear CJD and Locklear Group wrongfully procured, disclosed, disseminated, used, provided, and/or sold the Lollars' personal information.

         The Lollars filed a complaint in the Bibb Circuit Court on October 7, 2016, against Locklear CJD, Locklear Group, and other defendants.[1] They asserted the following claims against Locklear CJD and Locklear Group: (1) negligence; (2) wantonness; (3) invasion of privacy; (4) conversion; (5) fraud-deceit, suppression, and misrepresentation; (6) tort of outrage; (7) civil conspiracy; (8) violation of Alabama's Consumer Identity Protection Act; (9) "respondeat superior"; and (10) breach of fiduciary duty.

         On October 28, 2016, Locklear CJD and Locklear Group filed a joint motion to compel arbitration of all the Lollars' claims against them. In support of the motion, they submitted an affidavit from Christopher S. Locklear, Sr., who stated that he was the custodian of records at Locklear CJD and that a copy of the arbitration agreement signed by the Lollars in 2013 was attached to his affidavit. The copy of the arbitration agreement submitted with the motion to compel arbitration contained the signatures of Jeffery Lollar and Betsy Lollar, a signature of a dealer representative, the date of the 2013 transaction, and in the space for "Description of Products/Services" was printed "2009 RAM 1500" with an accompanying VIN, followed by "LOCKLEAR CHRYSLER JEEP DODGE, LLC." Locklear CJD and Locklear Group filed an amended motion to compel on February 1, 2017.

         On February 8, 2017, without the benefit of a response from the Lollars or a hearing, the trial court entered an order denying the motion to compel arbitration. The order did not state a rationale for the decision. Locklear CJD and Locklear Group filed a timely appeal of the trial court's order denying their motion to compel arbitration. B. Case no. 1160375: Anthony Hood

         In November 2015, Anthony Hood visited Locklear CJD to look at vehicles. On December 19, 2015, Hood purchased a 2016 Dodge Ram 3500 truck[2] from Locklear CJD, and, in the course of doing so, he signed the arbitration agreement. At that time, Hood also completed a credit application and provided Locklear CJD with personal information. Like the Lollars, Hood alleged that Locklear CJD represented to him that his information would be kept confidential. In March 2016, Hood was informed by the Northport Police Department that he was the victim of identity theft.

         On December 5, 2016, Hood filed his complaint in the Bibb Circuit Court against Locklear CJD, Locklear Group, and other defendants.[3] He asserted the following claims against Locklear CJD and Locklear Group: (1) negligence; (2) wantonness; (3) invasion of privacy; (4) conversion; (5) fraud-deceit, suppression, and misrepresentation; (6) tort of outrage; (7) civil conspiracy; (8) violation of Alabama's Consumer Identity Protection Act; (9) "respondeat superior"; and (10) breach of fiduciary duty. In his complaint, Hood recounted that he "purchase[d] a 2016 3500 Dodge Ram" truck from Locklear CJD and that, in the course of doing so, he "completed a credit or financial application" provided by "Locklear Dodge personnel." Hood filed a first amended complaint on December 12, 2016, to correct his legal name in the party references.

         Locklear CJD and Locklear Group filed a joint motion to compel arbitration on December 12, 2016. In support of the motion, they submitted an affidavit from Christopher S. Locklear, Sr., who stated that he was the custodian of records at Locklear CJD and that a copy of the arbitration agreement signed by Hood was attached to his affidavit. The copy of the arbitration agreement submitted with the motion to compel arbitration contained Hood's signature on a line designated "CUSTOMER, " a signature of a dealer representative on a line designated "DEALER, " and the date of the transaction. In the space for "Description of Products/Services" was printed "2015 RAM 3500" and a VIN. Immediately above the "DEALER" signature line was typed or printed "LOCKLEAR CHRYSLER JEEP DODGE, LLC."

         On January 18, 2017, Hood filed a response in opposition to the motion to compel arbitration. Hood's response again stated that, "[a]round November 2015, [Hood] purchased a 3500 Dodge Ram at Locklear Chrysler Jeep Dodge, LLC, " and that he "signed a Pre-Dispute Arbitration Agreement pertaining to the vehicle." In support of his response, Hood filed his own affidavit in which he testified:

"3. I did not sign the Arbitration Agreement attached to Locklear Defendants' Motion to Stay.
"4. The words 'Locklear Chrysler Jeep Dodge, LLC' at the bottom of the agreement are different typeset than the rest of the agreement and not part of an original document.
"5. A copy of the only agreement presented and given to me is attached to this Affidavit. Someone altered the original to add the words 'Locklear Chrysler Jeep Dodge, LLC' after the fact and filed the altered agreement in Court with the Locklear Defendants' Motion."

         The version of the arbitration agreement Hood attached to his affidavit is a "blank form" of the agreement in that it contains no signatures, no date, and no description of the purchased vehicle. At the bottom, however, it does contain signature lines designated for the "DEALER" and for the "CUSTOMER." It comports with the foregoing averments in that it does not bear the typed or printed words "LOCKLEAR CHRYSLER JEEP DODGE, LLC."

         On the other hand, a version of the arbitration agreement Hood attached as an exhibit to his appellate brief and represented by Hood in his brief to be a copy of the actual agreement is signed. It bears Hood's signature as "CUSTOMER, " the signature of a representative of the "DEALER, " the date of the transaction, and the make, model, and VIN of the subject vehicle. This version likewise comports with the averments above, i.e, it does not contain the typed or printed words "LOCKLEAR CHRYSLER JEEP DODGE, LLC."

         On January 23, 2017, the trial court heard oral arguments on the motion to compel arbitration and, on the same date, entered an order denying the motion. The order did not state a rationale for the decision, except to note that the "[f]indings [are] made orally in the record." The order was issued by the same circuit judge who entered the order in the Lollars' case. In the hearing on the motion to compel arbitration, the trial court explained its decision as follows:

"THE COURT: Okay. Well, I got it. Well, what I'm kind of stuck on is the nexus of the actions to the thing. And, of course, even listening to all that, it seems like to me, the nexus is not there for --because this is a -- looks like a totally separate and independent matter. And, of course, the question does, though, become and it's going to be another question and, maybe, to deal with on a motion -- on a summary judgment issue later on is whether or not the dealership should be held responsible for somebody else's independent criminal actions, that's a whole other issue. But I'm going to deny the motion for arbitration because seems like that's a totally separate issue. It really is in my opinion. And so -- and, of course, if my bosses see otherwise. I'll go along with whatever they say. But I really think that it's a separate issue. Of course -- but the meat gets down to whether or not the dealership is going to be liable. I have to see whether there's enough evidence to connect that to it. Now I don't know. But that's something right now. But let's look at this -- I'm going to deny the motion to arbitrate."

         Locklear CJD and Locklear Group filed a timely appeal of the trial court's order from the denial of their motion to compel arbitration.

         C. Case no. 1160335: Brad Hubbard

         On November 18, 2015, Brad Hubbard visited Locklear CJD and purchased a 2015 Jeep Grand Cherokee sport-utility vehicle. In the course of doing so, he signed the arbitration agreement. At that time, Hubbard also completed a credit application and provided Locklear CJD with personal information. In early 2016, Hubbard discovered that he was the victim of identity theft.

         On July 1, 2016, Hubbard filed a complaint in the Tuscaloosa Circuit Court against Locklear CJD. Locklear CJD filed a motion to compel arbitration on August 9, 2016. On August 11, 2016, the trial court entered an order granting Locklear CJD's motion. The following day Hubbard filed a motion to set aside the order, but on August 29, 2016, he withdrew his motion.

         On August 22, 2016, Hubbard filed his first amended complaint in which he added additional defendants, namely Allen Bentley, Wireless Advantage Communications, Inc., Verizon Communications, Inc., and Verizon Credit, Inc., as well as asserted additional claims. On October 12, 2016, Hubbard filed a second amended complaint in which he added Locklear Group as a defendant and asserted additional claims against the defendants. The second amended complaint asserted the following claims against all the named defendants, including Locklear CJD and Locklear Group: (1) negligence; (2) wantonness; (3) violation of Alabama's Consumer Identity Protection Act; (4) conversion; (5) invasion of privacy; (6) tort of outrage; (7) civil conspiracy; and (8) negligent and/or wanton hiring, retention, supervision, and/or training.

         Locklear Group filed a motion to compel arbitration on October 13, 2016. On October 18, 2016, the trial court set the motion for a hearing date of October 28, 2016. On October 27, 2016, Hubbard filed a response in opposition to the motion to compel arbitration. In his response, Hubbard contended that Locklear Group could not enforce the arbitration agreement because it was not a signatory to the agreement and the language of the agreement was limited to the signing parties -- Locklear CJD and Hubbard. Hubbard did not oppose arbitration of his claims against Locklear CJD.

         On December 27, 2016, the trial court entered an order denying Locklear Group's motion to compel arbitration. In its order, the trial court quoted a portion of the arbitration agreement and then stated:

"This arbitration provision is broad in the sense that it applies to 'any dispute' arising from or related to 'any contracts or agreements.' However, it is narrow in the sense that it applies only to 'the undersigned and the dealer' or to contracts entered into 'by the parties.' The provision does not define 'dealer' or 'parties' in such a way that would include Locklear [Group]. See
MTA, Inc. v. Merrill, Lynch, Pierce, Fenner, 114 So.3d 27 (Ala. 2012).
"Accordingly, Locklear ... Group's Motion to Stay and Compel Arbitration is due to be and hereby is DENIED."

(Capitalization in original.)

         Locklear Group filed a timely notice of appeal from the trial court's order denying its motion to compel arbitration.[4]

         D. Case no. 1160336: Jeremy Averette

         On October 29, 2015, Jeremy Averette visited Locklear CJD and purchased a 2016 Dodge Ram truck. In the course of doing so, he signed the arbitration agreement. At that time, Averette also completed a credit application and provided Locklear CJD with personal information. On February 18, 2016, Averette was notified by the Northport Police Department that he was the victim of identity theft.

         On June 27, 2016, Averette filed a complaint in the Tuscaloosa Circuit Court against Locklear CJD. Locklear CJD filed a motion to compel arbitration on August 9, 2016. On August 29, 2016, the trial court entered an order granting Locklear CJD's motion to compel arbitration.

         On August 22, 2016, Averette filed his first amended complaint in which he added additional defendants, namely Allen Bentley, Wireless Advantage Communications, Inc., Verizon Communications, Inc., and Verizon Credit, Inc., as well as asserted additional claims. On October 12, 2016, Averette filed a second amended complaint in which he added Locklear Group as a defendant and asserted additional claims against the named defendants. The second amended complaint asserted the following claims against all the named defendants, including Locklear CJD and Locklear Group: (1) negligence; (2) wantonness; (3) violation of Alabama's Consumer Identity Protection Act; (4) conversion; (5) invasion of privacy; (6) tort of outrage; (7) civil conspiracy; and (8) negligent and/or wanton hiring, retention, supervision, and/or training.

         Locklear Group filed a motion to compel arbitration on October 13, 2016. On October 17, 2016, the trial court set the motion for a hearing date of October 19, 2016. On October 18, 2016, Averette filed a response in opposition to the motion to compel. In his response, Averette, like Hubbard, contended that Locklear Group could not enforce the arbitration agreement because it was not a signatory to the agreement and the language of the agreement was limited to the signing parties -- Locklear CJD and Averette. Averette did not oppose arbitration of his claims against Locklear CJD.

         On December 27, 2016, the trial court entered an order denying Locklear Group's motion to compel arbitration. The substantive language of the order, except for the name of the plaintiff, was exactly the same as the order in Hubbard's case, and it was issued by the same circuit judge.

         Locklear Group filed a timely notice of appeal from the trial court's order denying its motion to compel arbitration.

         E. Case no. 1160337: Carol Fuller

         On November 21, 2015, Carol Fuller visited Locklear CJD and purchased a 2008 Toyota Avalon automobile. In the course of doing so, she signed the arbitration agreement. At that time, Fuller also completed a credit application and provided Locklear CJD with personal information. In February 2016, Fuller was notified by the Northport Police Department that she was the victim of identity theft.

          On October 7, 2016, Fuller filed a complaint in the Tuscaloosa Circuit Court against Locklear CJD, Locklear Group, and other defendants, asserting the following claims: (1) negligence; (2) wantonness; (3) violation of Alabama's Consumer Identity Protection Act; (4) conversion; (5) invasion of privacy; (6) tort of outrage; (7) civil conspiracy; and (8) negligent and/or wanton hiring, retention, supervision, and/or training.

         On October 11, 2016, Locklear CJD and Locklear Group filed a joint motion to compel arbitration. On October 26, 2016, the trial court set the motion for a hearing date of October 28, 2016. On October 27, 2016, Fuller filed a response in opposition to the motion to compel. In her response, Fuller -- as did Averette and Hubbard -- contended that Locklear Group could not enforce the arbitration agreement because it was not a signatory to the agreement and the language of the agreement was limited to the signing parties -- Locklear CJD and Fuller. Fuller did not oppose arbitration of her claims against Locklear CJD.

         On December 27, 2016, the trial court entered an order granting the motion to compel as to Locklear CJD but denying it as to Locklear Group. Except for the name of the plaintiff and references to Locklear CJD's motion to compel, the order was substantively the same as the orders entered in Hubbard's and Averette's cases, and it was issued by the same circuit judge.

         Locklear Group filed a timely notice of appeal from the trial court's order denying the motion to compel arbitration as to it.

         F. Case no. 1160436: Elizabeth Booth

         On December 7, 2015, Elizabeth Booth visited Locklear CJD and purchased a 2015 Jeep Grand Cherokee sport-utility vehicle. In the course of doing so, she signed the arbitration agreement. At that time, Booth also completed a credit application and provided Locklear CJD with personal information. In January 2016, Booth was notified by the Northport Police Department that she was the victim of identity theft.

         On October 7, 2016, Booth filed a complaint in the Bibb Circuit Court against Locklear CJD, Locklear Group, and other defendants, asserting the following claims: (1) negligence; (2) wantonness; (3) violation of Alabama's Consumer Identity Protection Act; (4) conversion; (5) invasion of privacy; (6) tort of outrage; (7) civil conspiracy; and (8) negligent and/or wanton hiring, retention, supervision, and/or training.

         Locklear Group and Locklear CJD filed their joint motion to compel arbitration on October 11, 2016. On November 9, 2016, Booth filed a response in opposition to the motion to compel. In her response, Booth -- as did Fuller, Averette, and Hubbard -- contended that Locklear Group could not enforce the arbitration agreement because it was not a signatory to the agreement and the language of the agreement was limited to the signing parties -- Locklear CJD and Booth. Booth did not oppose arbitration of her claims against Locklear CJD.

         On January 31, 2017, the trial court held a hearing on the motion to compel arbitration. On February 1, 2017, the trial court denied the motion to compel as to Locklear Group, but it granted the motion as to Locklear CJD. Except for the name of the plaintiff, the order was substantively the same as the ...


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