FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT March 17, 2017
_________________________________
Elisabeth A. Shumaker
Clerk of Court
DAVID MOONEYHAM; KRYSTINA
MOONEYHAM,
Plaintiffs - Appellees,
v. No. 15-6221
(D.C. No. 5:15-CV-00212-M)
BRSI, LLC, d/b/a Big Red Kia; EXETER (W.D. Okla.)
FINANCE CORP,
Defendants - Appellants.
_________________________________
ORDER AND JUDGMENT*
_________________________________
Before KELLY, PHILLIPS, and MORITZ, Circuit Judges.
_________________________________
Plaintiff David Mooneyham purchased a used Dodge Ram from defendant Big
Red Kia (Big Red). Defendant Exeter Finance (Exeter) provided the financing. Two
years later, plaintiffs1 brought suit against defendants for claims relating to the Ram.
Citing an arbitration agreement that Mooneyham and Big Red executed, defendants
moved to compel arbitration. Plaintiffs objected, arguing that the arbitration
agreement doesn’t apply to their claims. The district court agreed and denied
*
This order and judgment isn’t binding precedent, except under the doctrines
of law of the case, res judicata, and collateral estoppel. But it may be cited for its
persuasive value. See Fed. R. App. P. 32.1; 10th Cir. R. 32.1.
1
Plaintiff Krystina Mooneyham appears to be only a nominal plaintiff.
defendants’ motion. Because we conclude the arbitration agreement applies to
plaintiffs’ claims, we reverse.
BACKGROUND
Mooneyham visited Big Red on February 9, 2013, to purchase a new vehicle.
He planned to apply the trade-in value of his old car and a $500 down payment
toward the purchase price and to finance any remaining balance due. But based on
Mooneyham’s credit history, Big Red declined to facilitate financing for a new
vehicle. So Mooneyham decided instead to purchase a used 2006 Dodge Ram from
Big Red, along with an extended service plan and guaranteed asset protection (GAP)
coverage. The total purchase price was $20,739.50, itemized as follows:
- Vehicle Purchase Price: $17,980.00
- Extended Service Plan: $2,500.00
- GAP Coverage: $500.00
- Fees: $259.50
- Down Payment: ($500.00)
Mooneyham received no credit toward the purchase for trading in his old car.
Thus, he required financing for the total purchase price of $20,739.50. Mooneyham
and Big Red memorialized these terms in two documents executed on February 9:
(1) a Retail Purchase Agreement/Bill of Sale (RPA); and (2) a Retail Installment Sale
Contract (RISC). Although the documents contain largely overlapping terms, only the
RISC sets forth the deal’s financing terms.
The RISC states that Big Red is the creditor, but further provides that Big Red
“assigns its interest in this contract to EXETER FINANCE CORP[.] (Assignee)
under the terms of [Big Red’s] agreement(s) with Assignee.” App. 74. But Exeter
2
wasn’t a party to the RISC. And nothing in the RISC suggests that the sale was
contingent upon Exeter’s agreeing to the RISC’s terms.
Unlike the RISC, the RPA does contain a financing contingency:
10. Motor Vehicle Delivery Agreement: If Vehicle is delivered to
Buyer before this sale is complete, subject to obtaining satisfactory
financing arrangements, then a “Motor Vehicle Delivery Agreement”
shall become a part of this Agreement.
Id. at 73. And Big Red and Mooneyham executed just such an agreement—titled a
“Motor Vehicle ‘Spot Delivery’ Agreement”—“as a prelude to an exchange of
ownership of the vehicle(s) described herein; subject to Dealer finding a lending
institution willing to purchase the Retail Installment Contract executed by the
parties.” Id. at 266.
Mooneyham and Big Red also entered into an “Agreement to Arbitrate” that
stated they would “settle by binding arbitration any dispute between them regarding:
(1) the purchase by [Mooneyham] of [the Ram]; (2) any products and services
purchased in conjunction with [the Ram]; (3) any financing obtained in connection
with the transaction; and/or (4) any other dispute related to the purchase/lease
transaction.” Id. at 267.
Finally, Mooneyham and Big Red executed a GAP Addendum, an Extended
Service Agreement, and a Vin Etch Protection Warranty. Defendants assert that the
parties also executed an Odometer Disclosure Statement and an As-Is
Acknowledgment. Plaintiffs don’t dispute this assertion.
As provided for in the February 9 Spot Delivery Agreement, Mooneyham
3
drove away in the Ram the same day these documents were executed. But Exeter
rejected the proposed financing terms and declined to purchase Big Red’s interest in
the RISC. On Monday, February 11, Big Red called Mooneyham to inform him that
the financing arrangement had “fallen through” and that he needed to sign additional
paperwork. Id. at 155.
Mooneyham returned to the dealership, and Big Red presented him with
Exeter’s proposed financing arrangement. Exeter agreed to loan Mooneyham only
$19,740 for the purchase, rather than $20,739.50. And although the financed amount
decreased by $1,000, the monthly payments increased from approximately $500 to
$516. Mooneyham and Big Red signed a second RISC containing these terms.
Because Exeter agreed to finance $999.50 less than originally contemplated,
Mooneyham and Big Red also executed a new extended service plan priced at
$1,500.50 (exactly $999.50 less than the initial plan). The initial plan covered the
Ram for 72 months/85,000 miles; the substitute plan lasted for only 36
months/36,000 miles. The vehicle purchase price, GAP coverage, and fees remained
unchanged. Mooneyham and Big Red executed a new Retail Purchase Agreement
setting forth these terms. In addition to executing a new RPA, RISC, and extended
service plan, Mooneyham and Big Red re-executed several documents they
previously executed on February 9: an Agreement to Furnish Insurance Policy, a
GAP Addendum, and a Spot Delivery Agreement. They didn’t re-execute any of the
other original documents, including, critically, the arbitration agreement.
Two years later, on February 9, 2015, plaintiffs filed suit against defendants.
4
They alleged Big Red and Exeter violated various federal lending and consumer
protection laws during the purchase and that Big Red failed to disclose that the Ram
allegedly had certain defects. Defendants removed the action to federal court and
moved to compel arbitration of all claims, relying on the February 9, 2013 arbitration
agreement. Plaintiffs objected, arguing that (1) the arbitration agreement was
rescinded by the February 11 agreements and wasn’t incorporated into the new
agreements; (2) Mooneyham didn’t assent to the arbitration agreement; and (3) the
arbitration agreement is unconscionable.
The district court agreed with plaintiffs that the arbitration agreement doesn’t
cover their claims. Specifically, the district court concluded that the parties entered
into two separate transactions and that while the arbitration agreement covered only
the first transaction, plaintiffs’ claims arise only from the second transaction.
Accordingly, it denied defendant’s motion to compel arbitration without addressing
plaintiffs’ alternative arguments. Defendants appeal.
DISCUSSION
I. The arbitration agreement applies to plaintiffs’ claims.
We generally review de novo the denial of a motion to compel arbitration.
Nesbitt v. FCNH, Inc., 811 F.3d 371, 376 (10th Cir. 2016). But plaintiffs assert that
we should instead review the district court’s denial of defendants’ motion for clear
error. See Naimie v. Cytozyme Labs., 174 F.3d 1104, 1111 (10th Cir. 1999)
(explaining that we review primarily factual questions for clear error).
5
Plaintiffs’ argument rests on the premise that a contract (presumably, the
arbitration agreement) can’t be formed without a meeting of the minds—the
existence of which presents a question of fact under Oklahoma law. See O’Neal v.
Harper, 75 P.2d 879, 882 (Okla. 1937); Gentry v. Fife, 155 P. 246, 247 (Okla.
1916).2 But there’s no question that the parties here formed a contract. Indeed,
plaintiffs concede Mooneyham and Big Red entered into the arbitration agreement;
they simply dispute its applicability to their claims. See Aplee. Br. 13 (“The
[arbitration agreement] cited and relied upon by [defendants] only applies to the
transaction that was not rescinded . . . .”). Thus, the district court’s conclusion that
the arbitration agreement doesn’t apply to plaintiffs’ claims turns on the scope of that
agreement, not its existence. And the scope of the agreement presents a legal
question that we review de novo. Nesbitt, 811 F.3d at 376.
We begin with the language of the arbitration agreement. See Okla. Stat. tit.
15, § 155 (“When a contract is reduced to writing, the intention of the parties is to be
ascertained from the writing alone, if possible . . . .”). On February 9, 2013,
Mooneyham and Big Red agreed “to settle by binding arbitration any dispute
between them regarding: (1) the purchase by [Mooneyham] of [the Ram]; (2) any
products and services purchased in conjunction with [the Ram]; (3) any financing
2
Oklahoma law governs this appeal. See First Options of Chi., Inc. v. Kaplan,
514 U.S. 938, 944 (1995) (“When deciding whether the parties agreed to arbitrate a
certain matter (including arbitrability), courts generally . . . should apply ordinary
state-law principles that govern the formation of contracts.”).
6
obtained in connection with the transaction; and/or (4) any other dispute related to
the purchase/lease transaction.” App. 42.
On its face, this comprehensive provision appears to cover each of plaintiffs’
claims; those claims all relate to “the purchase by [Mooneyham] of [the Ram].” Id.
And several claims also relate to the “financing obtained in connection with the
transaction.” Id. But the district court concluded that the agreement doesn’t apply to
plaintiffs’ claims. It reasoned that (1) the parties entered into two separate
transactions—one on February 9, 2013, and another on February 11, 2013;
(2) plaintiffs’ claims relate solely to the second transaction; and (3) the arbitration
agreement doesn’t apply to the second transaction.
The key premise underlying the district court’s conclusion is that the parties
entered into two separate transactions for the purchase of the Ram. We disagree. The
parties’ conduct, and they documents they executed, evince a single transaction
occurring over two days.
To begin, we agree with defendants that the parties didn’t finalize the purchase
on February 9. Instead, the purchase was contingent upon Exeter’s approval of the
financing terms. This strongly suggests the parties began the transaction—but didn’t
conclude it—on February 9.
The February 9 Spot Delivery Agreement and RPA, working in conjunction,
create this contingency. The RPA states, “If Vehicle is delivered to Buyer before this
sale is complete, subject to obtaining satisfactory financing arrangements, then a
‘Motor Vehicle Delivery Agreement’ shall become a part of this Agreement.” Id. at
7
261. The RPA thus expressly contemplates and incorporates the February 9 Spot
Delivery Agreement.
Mooneyham and Big Red executed that agreement “as a prelude to an
exchange of ownership of the [Ram]; subject to Dealer finding a lending institution
willing to purchase the Retail Installment Contract executed by the parties.” Id. at
266. And it required Mooneyham to “return [the] vehicle within 24 hours of any
verbal or written notice that the deal [could not] be completed.” Id. Finally, the
February 9 Spot Delivery Agreement contains Mooneyham’s signed
acknowledgement that the Spot Delivery Agreement was necessary because, as of the
date he signed it, his “loan ha[d] not been approved.” Id. These provisions all
indicate that the purchase wasn’t final on February 9.
Nevertheless, plaintiffs contend that the February 9 agreements weren’t
contingent. They assert that this is evident from the parties’ decision to execute a
second Spot Delivery Agreement on February 11. Because Exeter proposed the
modified financing terms, plaintiffs argue, there was no need to make the February
11 agreement contingent on Exeter’s acceptance of those terms. But regardless of
whether the February 11 Spot Delivery Agreement was strictly necessary,
Mooneyham and Big Red apparently chose not to assume that Exeter would agree to
the financing terms merely because it proposed them. That cautious approach didn’t
retroactively undo the contingent nature of the February 9 agreements.
Plaintiffs also argue that the February 9 agreements weren’t contingent
because the RISC (the financing agreement) doesn’t contain a contingency provision.
8
It’s true that the RISC, standing alone, doesn’t create a contingency. And the RISC
does state, “This contract contains the entire agreement between you and us relating
to this contract.” Id. at 74. But we agree with defendants that this provision (which
plaintiffs call a merger clause) applies only to the RISC itself—that is, the clause
precludes incorporation of other agreements into the RISC. But the clause doesn’t
preclude incorporation of other agreements into the transaction as a whole.3
Moreover, under Oklahoma law, the RISC can’t be read in a vacuum. “Several
contracts relating to the same matters, between the same parties, and made as parts of
substantially one transaction, are to be taken together.” Okla. Stat. tit. 15, § 158. See
also Strickland v. Am. Bakery & Confectionery Workers Union & Indus. Nat’l
Welfare Fund, 527 P.2d 10, 13 (Okla. 1974) (“[W]here two written instruments refer
to the same subject matter and on their face show that each was executed as a means
of carrying out the intent of the other, both should be construed as one contract.”). By
its terms, the February 9 Spot Delivery Agreement plainly operates alongside the
3
For the same reason, we reject plaintiffs’ argument that this merger clause
and a similar clause in the RPA preclude incorporation of the arbitration agreement
into the overall transaction. And to the extent the extra-jurisdictional cases that
plaintiffs cite relied on merger clauses in refusing to enforce arbitration agreements,
we therefore decline to follow them. See Crown Pontiac, Inc. v. McCarrell, 695 So.
2d 615, 618 (Ala. 1997) (giving force to a merger clause in a later-executed version
of same document); Duval Motors Co. v. Rogers, 73 So. 3d 261, 264, 267-68 (Fla.
Dist. Ct. App. 2011) (refusing to apply principle that documents executed
contemporaneously should be read together). Plaintiffs also cite Krueger v.
Heartland Chevrolet, Inc., 289 S.W.3d 637, 639-40 (Mo. Ct. App. 2009), which the
Missouri Supreme Court later overruled using the same reasoning we apply here. See
Johnson ex rel. Johnson v. JF Enters., 400 S.W.3d 763, 769 (Mo. 2013). Finally,
plaintiffs cite Rugumbwa v. Betten Motor Sales, 136 F. Supp. 2d 729, 733 (W.D.
Mich. 2001), which relied on a Michigan law not applicable here.
9
RISC. It states that it is “incorporated by reference into all documents relating to the
purchase of [the Ram], including the Retail Purchase Agreement and the Retail
Installment Contract.” App. 266 (emphasis added).
Although the RISC doesn’t reciprocate this reference, that omission doesn’t
override the intent that Mooneyham and Big Red clearly expressed by executing the
agreements together. See Glover v. Cornish (In re Estate of Carlson), 367 P.3d 486,
491 n.1 (Okla. 2016) (holding that § 158’s rule of construction applies “although the
instruments do not in terms refer to each other” (emphasis omitted) (quoting Pauly v.
Pauly, 176 P.2d 491, 495 (Okla. 1946))). Moreover, the RPA—a key document in the
purchase—does expressly reference and incorporate the February 9 Spot Delivery
Agreement.
Finally, as a practical matter, ignoring the conditional language and effect of
the February 9 Spot Delivery Agreement would render its execution pointless. Its
sole purpose was to let Mooneyham drive away in the Ram, despite the fact that
Exeter hadn’t yet approved the financing terms. If the February 9 purchase wasn’t
contingent on Exeter’s approval, then the parties signed the February 9 Spot Delivery
Agreement for no reason—an interpretive result that we must avoid. McGinnity v.
Kirk, 362 P.3d 186, 199 (Okla. 2015) (“A contract is to be construed as a whole,
giving effect to each of its parts, and not construed so as to make a provision
meaningless, superfluous or of no effect.” (footnote omitted)).
10
Accordingly, we conclude that the contingent nature of the February 9
purchase suggests the parties continued the same transaction into February 11, rather
than starting a new one on that date.
That conclusion is bolstered by the fact that, as defendants note, the vehicle’s
ownership changed hands only once. Although the February 9 Spot Delivery
Agreement was “executed as a prelude to an exchange of ownership,” App. 266,
Mooneyham purchased insurance for the Ram on February 11 in his capacity as its
owner. And on February 9, Mooneyham and Big Red executed an Odometer
Disclosure Statement, which was required to reflect the Ram’s mileage “at the time
of transfer of [the] vehicle.” Okla. Stat. tit. 47, § 1107.1.
Nothing in the record indicates the parties transferred ownership back to Big
Red on February 11 and then re-transferred it to Mooneyham. They didn’t execute a
new Odometer Disclosure Statement showing the mileage the Ram accrued between
February 9 and 11. Big Red didn’t demand return of the Ram—an option the
February 9 Spot Delivery Agreement contemplates if “the deal cannot be completed.”
App. 266. And Mooneyham didn’t demand return of his trade-in vehicle.4
4
Our conclusion that the vehicle’s ownership changed hands only once—on
February 9—seems supported by Okla. Stat. tit. 47, § 1-141. Under that statute,
ownership is deemed to pass upon possession, despite the conditionality of sale: “[I]n
the event a vehicle is the subject of an agreement for the conditional sale or lease
thereof with a right of purchase upon performance of the conditions stated in the
agreement and with an immediate right of possession vested in the conditional
vendee or lessee, . . . then such conditional vendee or lessee . . . shall be deemed the
owner for the purpose of this Code.” § 1-141. Of course, neither party cites this
statute, and it isn’t essential to our decision.
11
In concluding that the parties entered into two separate transactions, the
district court focused solely on the fact that they modified several terms after their
initial agreement on February 9. The district court identified these as (1) different
financing terms; (2) “[a] new and different Retail Purchase Agreement/Bill of
Sale[,] . . . which included a different total selling price;”5 and (3) a different
extended service plan. Id. at 156-57.
True, certain terms in the parties’ final agreement differ from those in their
initial agreement. But neither the district court nor plaintiffs bridge the gap between
that premise and their conclusion—that the parties entered into two transactions.
Instead, for the reasons discussed above, we conclude that the parties engaged in only
a single transaction. And that conclusion renders Sanford v. H.A.S., Inc., 136 F. Supp.
2d 1215, 1222 (M.D. Ala. 2001), which the district court relied on in concluding that
the arbitration agreement didn’t apply, inapposite.
In Sanford, plaintiff purchased a car from a dealership and signed an
arbitration agreement. The dealership gave plaintiff the right to return the car “should
he find the car to have problems.” Id. at 1218. The deal was final, but plaintiff could
revoke it at his option. And he did so two days later, when he claimed the car had
“too many problems” and returned it in exchange for return of his down payment. Id.
Two days after that, plaintiff returned to the dealership with another down payment
5
While the two RPAs list a different “balance due on delivery” (because that
amount includes the price of the extended service plan), they list the same “total
selling price” because the cash price of the vehicle and the GAP coverage price
didn’t change. App. 72, 260.
12
when the dealership told him the problems could be repaired. The next day, the
parties negotiated a new deal, and plaintiff re-purchased the car—this time without
signing an arbitration agreement. Id. at 1218-19. The court declined to compel
arbitration, id. at 1224, finding that plaintiff bought the car, returned it, and bought it
again, id. at 1222 (“It is undisputed that two sales actually occurred . . . .”). Those
two purchases amounted to two transactions. Here, by contrast, plaintiffs purchased
the car only once. Thus, the district court’s reliance on Sanford was misplaced.
Plaintiffs also cite an array of mostly extra-jurisdictional cases in which each
court declined to compel arbitration after the parties entered into an initial agreement
containing an arbitration clause but then executed a subsequent agreement lacking
one.6 But these cases are inapt for the same reason as Sanford: unlike the parties in
the cases plaintiffs cite, Big Red and Mooneyham conducted a single transaction
(albeit over multiple days).
Finally, plaintiffs argue that the Oklahoma Supreme Court’s recent decision in
Walker v. BuildDirect.com Technologies, Inc., 349 P.3d 549 (Okla. 2015), is
controlling. There, a consumer contract stated that it was subject to the seller’s
“Terms of Sale.” Walker, 349 P.3d at 551. The contract contained no such terms, but
6
See Dasher v. RBC Bank (USA), 745 F.3d 1111, 1113 (11th Cir. 2014);
Applied Energetics, Inc. v. NewOak Capital Mkts., LLC, 645 F.3d 522, 523, 526 (2d
Cir. 2011); Smith v. Steinkamp, 318 F.3d 775, 777-78 (7th Cir. 2003); Matterhorn,
Inc. v. NCR Corp., 763 F.2d 866, 870, 875 (7th Cir. 1985); Harold H. Huggins
Realty, Inc. v. FNC, Inc., 575 F. Supp. 2d 696, 700, 713 (D. Md. 2008); Harris v.
David Stanley Chevrolet, Inc., 273 P.3d 877, 879 (Okla. 2012); Davis v. KB Home of
S.C., Inc., 713 S.E.2d 799, 805-06 (S.C. Ct. App. 2011), aff’d in pertinent part,
vacated in part, No. 2011-199587, 2014 WL 2535489 (S.C. Jan. 29, 2014).
13
the seller asserted that the phrase referred to a document bearing that title on its
website. Citing an arbitration clause contained in the online document, the seller
sought to compel arbitration. Id. at 552. The Oklahoma Supreme Court held that the
contract didn’t incorporate the arbitration clause in the online document, id. at 554, in
large part because the purchasers didn’t “ha[ve] reasonable notice of and assent[] to
the terms to be incorporated,” id. at 553. But unlike the plaintiffs in Walker,
Mooneyham plainly had notice of the arbitration agreement; after all, he signed it.
Accordingly, Walker is inapplicable here.
Because we disagree with the district court’s conclusion that the parties
conducted two separate transactions, we conclude that the arbitration agreement
applies to the parties’ disputes. But even if we agreed the parties entered into two
transactions, the arbitration agreement’s plain language would still apply to
plaintiffs’ claims. By its terms, the agreement applies to disputes over “any financing
obtained in connection with the transaction” and “any other dispute related to the
purchase/lease transaction.” App. 42 (emphases added). Even if the parties entered
into two final, non-contingent financing or purchase agreements, this language covers
“any” such agreement, id.—not only those the parties signed on February 9.
Accordingly, we conclude that the arbitration agreement applies to plaintiffs’ claims.
II. The arbitration agreement isn’t unconscionable.
Alternatively, plaintiffs argue that we should affirm the district court’s order
because the arbitration agreement is unconscionable. Although the district court
14
didn’t reach this issue, we conclude as a matter of law that the agreement isn’t
unconscionable and therefore decline to affirm on this basis.
Plaintiffs first argue the agreement is unconscionable because it provides,
“[T]he Parties agree they are not waiving their right to exercise any self-help or
provisional remedy available by law or pursuant to an agreement between them.”
App. 42. Relying solely on California law, plaintiffs argue this provision renders the
agreement unconscionable because it’s one-sided: Big Red could repossess the car
while still seeking arbitration, but plaintiffs have no corresponding self-help remedy.
See Trompeter v. Ally Fin., Inc, 914 F. Supp. 2d 1067, 1073-74 (N.D. Cal. 2012)
(characterizing arbitration agreement as unconscionable in part because it allowed
“creditor [to] repossess a vehicle or file suit to collect a debt owed by a defaulting car
buyer,” while providing “no corresponding remedy” to debtor).7 But even if
California law were instructive in Oklahoma, subsequent California Supreme Court
decisions have called Trompeter into question. See Sanchez v. Valencia Holding Co.
353 P.3d 741, 756 (Cal. 2015) (“[W]e see nothing unconscionable about exempting
the self-help remedy of repossession from arbitration.”); Pinnacle Museum Tower
Ass’n v. Pinnacle Mkt. Dev. (US), LLC, 282 P.3d 1217, 1232 (Cal. 2012) (“A contract
term is not substantively unconscionable when it merely gives one side a greater
benefit . . . .”). Plaintiffs cite no Oklahoma law supporting their argument, and they
7
Defendants argue that we should decline to consider this specific
unconscionability argument because plaintiffs failed to advance it below. But we’re
free to affirm on any basis that finds support in the record, even if plaintiffs didn’t
present it to the district court. See Felix v. Lucent Techs., Inc., 387 F.3d 1146, 1165
(10th Cir. 2004).
15
wholly fail to explain why one-sided self-help remedies render an arbitration
agreement inherently unconscionable. Accordingly, we reject this argument.
Plaintiffs next argue that the arbitration agreement is unconscionable because
of its cost structure. They assert arbitration costs can range from $10,000 to $50,000,
which they maintain is beyond their means. But as defendants note, plaintiffs
misunderstand the agreement’s cost structure. Plaintiffs’ costs are limited to $750
because defendants initiated arbitration. Plaintiffs don’t suggest this fixed cost is so
exorbitant as to render the arbitration agreement unconscionable, and we conclude
that it is not.
CONCLUSION
Mooneyham bought one truck, and he bought it only once. In doing so, he
signed an arbitration agreement covering “any dispute” regarding the purchase of the
truck. True, the parties renegotiated several terms before finalizing the purchase. But
that fact doesn’t nullify the agreement. Nor is the agreement unconscionable.
Accordingly, we reverse the district court’s order denying defendants’ motion, and
we remand with directions to stay the proceedings and compel arbitration.
Entered for the Court
Nancy L. Moritz
Circuit Judge
16
15-6221, Mooneyham v. BRSI, LLC d/b/a Big Red Kia; Exeter Finance Corp.
PHILLIPS, Circuit Judge, dissenting.
I respectfully dissent. The majority concludes that the single Agreement to
Arbitrate applies to both the attempted transaction on February 9, 2013 and the completed
transaction on February 11, 2013, despite language suggesting otherwise in the
Agreement to Arbitrate.
In conspicuous writing immediately above Mooneyham’s signature, the
Agreement to Arbitrate proclaims that “THIS AGREEMENT IS INCORPORATED BY
REFERENCE INTO THE RETAIL PURCHASE AGREEMENT.” App. 267 (emphasis
added). A document incorporated by reference ‘“becomes constructively a part of the
writing,’ forming a single instrument.” Walker v. Builddirect.com Technologies Inc., 349
P.3d 549, 553 (Okla. 2015) (quoting 11 Williston on Contracts § 30:25 (4th ed. 1999)).
When Mooneyham signed the Agreement to Arbitrate on February 9, 2013, one Retail
Purchase Agreement existed—the Retail Purchase Agreement dated the same day. But
that Retail Purchase Agreement failed because Exeter rejected the proposed financing
terms. That left no Retail Purchase Agreements to incorporate the Agreement to
Arbitrate.1
On February 11, BRSI notified Mooneyham that financing was disapproved and
had him return to the dealership. Upon his returning, BRSI presented Mooneyham with a
new Retail Purchase Agreement with less favorable terms. In the new agreement,
1
BRSI is a sophisticated business with skilled attorneys who easily could have
worded this to include future retail purchase agreements to ease our interpretative task.
Mooneyham’s monthly payments increased from about $500 to $516, the amount
financed declined by $1,000, and the extended service plan shrunk from 72
months/85,000 miles to 36 months/36,000 miles.
BRSI could have avoided this lawsuit by having Mooneyham sign another
Agreement to Arbitrate (assuming he would still have signed despite the described less-
favorable terms). But BRSI chose not to do so. Instead, BRSI forged ahead with the
February 11, 2013 Retail Purchase Agreement, which did not incorporate the arbitration
agreement.2
I don’t know why BRSI did not ask Mooneyham to sign an Agreement to
Arbitrate when he signed the second purchase agreement. Perhaps it was careless,
perhaps it was overconfident that the earlier Agreement to Arbitrate survived the failed
transaction, or perhaps it was concerned that Mooneyham might not be in a mood to sign
another arbitration agreement. But to cure its failure, BRSI would have us assume that
Mooneyham would have signed a second arbitration agreement and hold him to it. I
decline to do so and would affirm the district court’s decision.
2
At oral argument, BRSI’s counsel agreed that some changes to a purchase
agreement could necessitate a second Agreement to Arbitrate, but he disputed that those
circumstances existed in this case. Oral Arg. 26:41–28:25.
2