LEE HOBBS, and JONESBURG )
UNITED METHODIST CHURCH, )
individually and on behalf of all others )
similarly situated, )
)
Plaintiffs-Respondents, ) No. SD33529
) Filed: 10-26-15
v. )
)
TAMKO BUILDING PRODUCTS, INC., )
)
Defendant-Appellant. )
APPEAL FROM THE CIRCUIT COURT OF JASPER COUNTY
Honorable Gayle L. Crane, Circuit Judge
AFFIRMED
Tamko Building Products, Inc. (Tamko), a manufacturer of roofing shingles,
appeals from an order denying its motion to compel arbitration of disputes with plaintiffs
Lee Hobbs and the Jonesburg United Methodist Church (referred to individually as
Hobbs and Jonesburg and collectively as Plaintiffs), who purchased Tamko’s shingles.1
Tamko contends the trial court erred in denying its motion to compel arbitration because,
1
See § 435.440.1(1) RSMo (2000) (authorizing an appeal to be taken from an
order denying an application to compel arbitration).
inter alia, the parties entered into a valid arbitration agreement which was printed on the
outside packaging of the shingle bundles. Because we disagree with Tamko that the
parties entered into a valid arbitration agreement, we affirm.
Standard of Review
The trial court denied Tamko’s motion to compel arbitration after considering
affidavits filed by the parties and hearing arguments of counsel. See Rule 55.28
(authorizing a court to hear the matter on affidavits presented by the respective parties
when a motion is based on facts not appearing of record).2 Whether the trial court should
have granted a motion to compel arbitration is a question of law that this Court reviews
de novo. Eaton v. CMH Homes, Inc., 461 S.W.3d 426, 431 (Mo. banc 2015). “However,
issues relating to the existence of an arbitration agreement are factual and require our
deference to the trial court’s findings.” Katz v. Anheuser-Busch, Inc., 347 S.W.3d 533,
539 (Mo. App. 2011); Baier v. Darden Rests., 420 S.W.3d 733, 736 (Mo. App. 2014).
“Under Rule 55.28, affidavits may be offered as evidence on motions, but, as in the case
of oral evidence, the trial court can believe or disbelieve the statements made in such
affidavits.” Flegel v. Holmes, 614 S.W.2d 779, 780 (Mo. App. 1981). Here, the trial
court made no factual findings. Rule 73.01(c) requires that “[a]ll fact issues upon which
no specific findings are made shall be considered as having been found in accordance
with the result reached.” Id.; Arizon Structures Worlwide, LLC v. Global Blue
Technologies-Cameron, LLC, --- S.W.3d ----, 2015 WL 5836252, at *3 (Mo. App. E.D.
2
All references to rules are to Missouri Court Rules (2015).
2
Oct. 6, 2015).3 Our summary of the relevant facts has been prepared in accordance with
these principles.
Factual and Procedural Background
Hobbs and Jonesburg purchased Heritage Series Shingles (the shingles) in July
2005 and September 2007, respectively. At the time of purchase, Plaintiffs were only
shown Tamko’s representations and marketing materials identifying the shingles as
durable, reliable and free from defects for at least 30 years. According to Tamko, the
shingles came with a “Limited Warranty” (the warranty) that was printed, in its entirety,
on the outside of the wrapper of every bundle of shingles. The warranty provided a
remedy for damages caused by manufacturing defects and included, inter alia, a binding
arbitration clause. Neither Hobbs nor Jonesburg received a copy of the warranty at the
time of purchase, nor was either made aware that the warranty included the binding
arbitration clause.
In 2013, Hobbs discovered that his shingles were warping, curling and beginning
to fail. After some investigation on the internet, Hobbs located a warranty claim, filled it
in by hand and sent it to Tamko. That same year, Jonesburg also noted leaks in its ceiling
related to its shingles’ failures. A Jonesburg representative contacted Tamko by phone
and received a warranty claim form, which Jonesburg completed and returned to Tamko.
The warranty claim forms did not include the arbitration agreement. Thereafter, Hobbs
received a letter from Tamko denying his claim. While Jonesburg’s claim was not denied
3
Rule 74.01(a) defines a judgment to include “any order from which an appeal
lies.” Id. Therefore, the provisions of Rule 73.01(c) apply to the trial court’s order in the
case at bar. An order denying a motion to compel arbitration need not be denominated as
a judgment, however, in order to be appealable. See, e.g., Nicholson v. Surrey Vacation
Resorts, Inc., 463 S.W.3d 358, 367 (Mo. App. 2015).
3
outright, it received an offer of only replacement shingles for a portion of the damaged
area, excluding costs of replacement and repair of the damage the original shingles
caused.
In April 2014, Plaintiffs filed the underlying class action petition against Tamko
in the Circuit Court of Jasper County alleging, on behalf of themselves and all others
similarly situated, violations of the Missouri Merchandising Practices Act, negligence,
and entitlement to declaratory relief. Tamko responded with a motion to compel
arbitration.
Tamko’s motion was accompanied by an affidavit from Tamko employee Titia
Miller (Miller) stating, in relevant part, that: (1) the warranty, which included an
arbitration clause, was contained on every package of the shingles; (2) a true and accurate
copy of the warranty was attached to the affidavit; and (3) the warranty also was
available in printed form from distributors and on the internet. In response, Plaintiffs
each submitted an affidavit. In relevant part, their affidavits state: (1) they did not
receive a copy of the warranty at the time of purchase; (2) their respective claims do not
arise out of the warranty because they had never received a copy of it; (3) they became
aware of the warranty containing the arbitration clause only after making their claims; (4)
if they had known the warranty contained an arbitration clause, they would not have
purchased Tamko’s shingles; and (5) they never agreed to arbitrate any dispute with
Tamko.
At the hearing on Tamko’s motion, the court heard arguments of counsel. After
taking the matter under advisement, the trial court denied Tamko’s motion to compel
arbitration. This appeal followed.
4
Discussion and Decision
Tamko presents three points for decision. Point I contends the trial court erred in
denying Tamko’s motion to compel arbitration because the parties entered into a valid
arbitration agreement. Tamko’s other two points assume a valid arbitration agreement
existed and contend the trial court erred in denying Tamko’s motion to compel arbitration
because Plaintiffs’ claims fall within the scope of the arbitration agreement (Point II), and
that the arbitration agreement is not unconscionable (Point III). Because we conclude
Tamko’s first point is dispositive of this appeal, we need not address Tamko’s second and
third points.
In Point I, Tamko argues that Plaintiffs accepted the terms of the arbitration
provision in the warranty because they: (1) “kept and used the shingles” and/or (2)
“invoked their rights under the warranty.” Based on their acceptance of the terms,
Tamko argues the parties entered into a valid arbitration agreement. Giving deference to
the trial court’s resolution of the factual issues here, as we must, that argument has no
merit.
Plaintiffs argue, and we agree, that they never accepted the terms of the warranty
to arbitrate disputes with Tamko. As Plaintiffs point out, they did not accept the
arbitration agreement by merely purchasing the shingles. See PCS Nitrogen Fertilizer,
L.P. v. The Christy Refractories, LLC, 225 F.3d 974, 980 (8th Cir. 2000) (mere
acceptance of and payment for goods does not constitute acceptance of all the terms in
the seller’s counter-offer and create a contract that included an arbitration agreement). In
addition, Plaintiffs never signed any document agreeing to the arbitration clause in the
warranty. Plaintiffs further maintain that Tamko did not form a contract with them by
5
simply “wrapping its fine print around packaging the ‘ultimate purchaser’ will likely
never see because it is torn off and discarded.” This argument is supported by a number
of Missouri appellate decisions affirming a trial court’s decision to deny arbitration
because there was insufficient evidence of an agreement to arbitrate. See, e.g., Sharp v.
Kansas City Power & Light Co., 457 S.W.3d 823, 829 (Mo. App. 2015) (holding that an
arbitration agreement had not been formed because, inter alia, “consumers had not signed
the contracts containing the dispute resolution provision”); Baier, 420 S.W.3d at 739-40
(holding that employer and employee did not mutually assent because there was not a
signed agreement); Kunzie v. Jack-In-The-Box, Inc., 330 S.W.3d 476, 485-86 (Mo.
App. 2010) (reversing order to compel arbitration and remanding case for evidentiary
hearing to determine whether employee unequivocally agreed to be bound by arbitration,
as employee’s continued work was not enough to manifest his intent to be bound by
proposed arbitration agreement as new condition of employment); Arrowhead
Contracting, 243 S.W.3d at 534 (holding that no express written agreement existed to
compel parties to arbitrate their claims). We are unpersuaded by Tamko’s contrary
arguments.
First, Tamko argues that Plaintiffs accepted the terms of the arbitration provision
in the warranty because they “kept and used the shingles[.]” The cases upon which
Tamko relies, however, are distinguishable from the case at bar. For example, Tamko
relies on Hill v. Gateway 2000, Inc., 105 F.3d 1147 (7th Cir. 1997), which held that the
arbitration clause located inside the packaging of a computer was enforceable because, by
keeping the computer beyond 30 days, the purchasers accepted the vendor’s offer,
including the arbitration clause. Id. at 1149-50. In Hill, however, there was no dispute
6
that the purchasers received the computer documentation, which included the arbitration
agreement, and they had the opportunity to reject that condition by returning the
computer. Id. at 1148. Based upon the facts presented to the trial court, that is not the
case here. Unlike computer documentation, the packaging for shingles is not an item
typically kept by a consumer after the shingles are unbundled and used. Plaintiffs’
affidavits stated unequivocally that they were not aware of the arbitration provision, and
they dispute any assertion that they agreed to arbitrate their claims with Tamko. In fact,
Plaintiffs dispute that they ever received the warranty that Tamko now wishes to enforce.
Plaintiffs also maintain that, had they been aware of the arbitration provision, they would
not have purchased the shingles. Plaintiffs’ retention and use of the shingles does not
prove that they accepted the terms to arbitrate their disputes in this case.4
Second, Tamko argues that Plaintiffs accepted the terms of the arbitration
provision because they “invoked their claims under the warranty[.]” This argument
primarily involves only Hobbs because he searched for information on the internet and,
according to Tamko, had the opportunity to view Tamko’s website on which the
arbitration provision could be found.5 We are unpersuaded by this argument. Both
Hobbs and Jonesburg stated that they became aware of the warranty and its terms only
4
We also find the facts surrounding the purchase of the shingles in this case
distinguishable from the purchase of computer software or use of credit cards. See, e.g.,
ProCD, Inc. v. Zeidenberg, 86 F.3d 1447, 1452-53 (7th Cir. 1996) (terms in box of
software binding after purchaser did not return the product); Pierce v. Plains Commerce
Bank, 11-01222-CV-W-BP, 2012 WL 5992730, at *1-2 (W.D. Mo. 2012) (arbitration
provision provided to consumer in credit card agreement enforceable when consumer
used the card).
5
This argument is based upon Miller’s affidavit statement that the arbitration
clause was available on Tamko’s website. Hobb’s claim form, which was attached to
Miller’s affidavit, does not include the warranty language or any arbitration clause.
7
after they filed their claim with Tamko, and that their underlying action does not arise out
of the warranty.6 Given the record before us, Tamko has failed in its burden to prove a
valid, enforceable agreement to arbitrate Plaintiffs’ disputes. Dunn Indus. Group, Inc.,
112 S.W.3d at 427-28; see, e.g., Nelson v. Tamko Bldg. Products, Inc., CIV.A. 15-1090-
MLB, 2015 WL 3649384, at *2 (D. Kan. 2015) (holding that Tamko failed to submit
evidence sufficient to establish an enforceable agreement to arbitrate). Accordingly, the
trial court did not err in denying Tamko’s motion to compel arbitration. Point I is denied.
Points II and III are denied as moot. Therefore, we affirm the trial court’s order denying
Tamko’s motion to compel arbitration.
JEFFREY W. BATES, J. – OPINION AUTHOR
NANCY STEFFEN RAHMEYER, J. – CONCUR
WILLIAM W. FRANCIS, JR., C.J./P.J. – CONCUR
6
For these same reasons, we do not reach Tamko’s estoppel argument that
“having asserted a claim under [the warranty] that included the arbitration clause,
[P]laintiffs cannot now deny that the contract exists.” See, e.g., Nelson v. Tamko Bldg.
Products, Inc., CIV.A. 15-1090-MLB, 2015 WL 3649384, at *2 (D. Kan. 2015) (court
similarly did not reach issue of estoppel).
8
LEE HOBBS, and JONESBURG UNITED METHODIST CHURCH, individually and on behalf of all others similarly situated, Plaintiffs-Respondents v. TAMKO BUILDING PRODUCTS, INC.
Combined Opinion