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Bernhard Law Firm engaged to appeal arbitration order in consumer transaction dispute, files appellate briefs.

Bernhard Law Firm engaged to appeal arbitration order in consumer transaction dispute, files appellate briefs.


Bernhard Law Firm engaged to appeal arbitration order in consumer transaction dispute, files appellate briefs. If you want to discuss appeals of arbitration orders or seek help in an arbitration matter, contact Bernhard Law Firm at 786-871-3349 or abernhard@bernhardlawfirm.com.

See Bernhard Law Firm‘s appellate briefs here:

APPEAL BRIEF 3.2.15

APPEAL REPLY BRIEF 5.15.15

As garnered from the appellate briefs, the interesting background of the appeal follows:

Bernhard Law Firm PLLC

Bernhard Law Firm PLLC

“In this deceptive business practices case . . . the trial court granted Appellee’s motion to compel arbitration of the [Appellants]’ claims against the Appellee’s car dealership, even though (i) the parties had openly abandoned the buyer’s order containing the arbitration clause, (ii) the arbitration clause was substantively and procedurally unconscionable, and (iii) the trial court did not hold an evidentiary hearing. This conflicts with Seifert and Basulto, which require a valid and enforceable agreement to arbitrate, unaffected by abandonment or unconscionability.

“Months before bringing this case, the [Appellants] had put in an order for a Mitsubishi Outlander, payable in cash or financing, but no money ever exchanged hands. Instead, to obtain financing for the purchase and Appellee’s commissions, Appellee forged FORM W-2 tax statements and employee paystubs in the [Appellants]’ name without their authorization, and submitted these forgeries along with fabricated financial information to myriad financing institutions and credit bureaus; these institutions then contacted the [Appellants]’ main business client, causing injury.

“The [Appellants] immediately confronted Appellee, who admitted its fraud, cancelled the potential car purchase, and issued an apology letter to the [Appellants]’ business client. Both parties thereafter abandoned the buyer’s order, never invoking its provisions, performing obligations, or urging performance. The parties mutually understood that there was no valid agreement between them. Id.

“Months later, the [Appellants] filed the underlying action for fraud, interference with business relationships and defamation, and violations of FDUTPA and the FCCPA. The [Appellants] did not sue for breach of contract or rescission because the parties had abandoned any contractual agreement, mutually understanding that there was no agreement to breach or rescind, and because the [Appellants] were never given a copy of the buyer’s order.

“In response to the Complaint, Appellee filed a motion to compel arbitration. Therein, Appellee sought to resuscitate the abandoned and invalid buyer’s order, claiming that arbitration adhesion clauses required arbitration of the [Appellants’] action. The fine print on the backside of the buyer’s order holds waivers of nearly all of a consumer’s legal rights, including that:

  • Any claim brought by a consumer is subject to arbitration, irrespective of whether they involve fraud in the inducement or statutory claims, and regardless of whether the consumer obtains any financing to move forward with actual car purchase;
  • The trial court no longer has jurisdiction to determine the validity of the arbitration provision;
  • The consumer does not have a right to appeal the arbitration;
  • The consumer does not have a right to arbitration by panel;
  • The consumer does not have the right to choose the arbitrator;
  • The consumer does not have the right to class participation;
  • The consumer does not have the right to trial by jury;
  • The consumer does not have the right to full discovery;
  • The consumer does not have the right to participate in a determination of what information it can discover;
  • The consumer does not have the right to appeal;
  • The consumer does not have the right to consolidation; and
  • The consumer does not have the right to final injunctive relief (e.g. under FDUTPA).

“In contrast, the same adhesion clauses provide a significantly greater degree of power, rights, and influence to Appellee’s dealership, including:

  • The dealership has the right to not arbitrate its own foreseeable claims, such as for repossession or small claims, and instead file those claims in court;
  • The dealership has the right to seek self-help remedies without arbitration;
  • The dealership has the right to choose the arbitrator, regardless of any apparent bias (e.g., the arbitrator could be one of Appellee’s attorneys) and regardless of the cost (e.g., Appellee could have a pre-existing arrangement that must later be paid by consumer); and
  • The dealership has the right to participate in the determination of discoverable information, given that it alone selects its arbitrator of choice.

Appellee’s arbitration adhesion clauses are entirely lopsided, inure solely to the benefit of Appellee, and eliminate the [Appellants’] rights beyond a reasonable attempt to provide an inexpensive alternative to resolve disputes while maintaining constitutional and statutory guarantees. Id. These backside adhesion clauses also bear no signature, initials, or endorsement to reflect the [Appellants’] agreement. Id.

“The [Appellants] filed a response to the motion to compel, along with supporting affidavits by both [Appellants], advising the trial court that (i) the [Appellants] and Appellee abandoned any attempted purchase of a car; (ii) the arbitration provision asserted was procedurally and substantively unconscionable; and (iii) that an evidentiary hearing must be held to determine procedural unconscionability.

“At a February 10, 2015 non-evidentiary hearing, the trial court advised that it had read through the filings and then took oral argument from the [Appellants] and the Appellee on the motion to compel. Despite the lack of an evidentiary hearing and the [Appellants’] objections thereto, the trial court found that an enforceable purchase contract existed, not abandoned, and that the contract was neither procedurally nor substantively unconscionable. On these findings, the trial court entered an order compelling arbitration.

Bernhard Law Firm has argued in its appellate brief that:

“Even where parties perform the initial formalities of contract formation—i.e. signing—they may still invalidate that contract through conduct inconsistent with its validity and enforceability, or acquiescence thereto. See, e.g., Maruri v. Maruri, 582 So. 2d 116, 117 (Fla. 3d DCA 1991). Florida law deems such conduct as abandonment, which renders a contract legally invalid and unenforceable. Id. Once abandoned, a contract may not be specifically enforced. Gustafson v. Jensen, 515 So. 2d 1298, 1301 (Fla. 3d DCA 1987).

“Appellee has in every way treated the buyer’s order as abandoned, invalid, and unenforceable. Appellee immediately failed to adhere to any of its provisions, and both parties acquiesced to these failures. Appellee went so far as to issue an apology letter to put the matter behind it. Given this mutual abandonment, the Court should find that there is no valid and enforceable contract between the parties, reversing enforcement of its arbitration provisions below. Id.

“Further, arbitration is supposed to be an economical alternative to vindicate legal rights without curtailing rights and remedies available in court. See, e.g., Romano Ex Rel. Romano v. Manor Care, Inc., 861 So. 2d 59, 62–63 (Fla. 4th DCA 2004). However, with consumer adhesion clauses to arbitrate, “there is virtually no bargaining between the parties” and the “business responsible for drafting the contract is in a position to unilaterally create one-sided terms that are oppressive to the consumer.” Basulto v. Hialeah Automotive, 141 So. 3d 1145, 1160–61 (Fla. 2014). Such arbitration clauses, unequally allocating influence to gain an unjust advantage, are unenforceable as unconscionable. Id. at 1157.

“Here, Appellee’s extensive arbitration adhesion clauses encompass any claim or act by the Arrasolas, yet exempt all of Appellee’s foreseeable claims and remedies. Appellee’s clauses waive the [Appellants’] statutory, constitutional, discovery, and appellate rights, while empowering the Appellee to select the sole arbitrator. Appellee obtained the [Appellants’] signature to its discriminatory terms by couching them in the complex fine print on the unsigned backside of a pre-purchase order form, provided among other forms without mention of what arbitration is, whether it could be avoided, or how it would affect the [Appellants]. Neither of the [Appellants] attended school beyond the 11th grade, which is apparent. Weighing this procedural and substantive inequity, Appellee’s arbitration provisions are unconscionable and unenforceable.

“Additionally, a trial court must hold an evidentiary hearing to determine whether facts support contract formation, abandonment, validity, or unconscionability, and failure to do so is reversible error. See Rowe Enter. LLC v. Int’l Sys. & Elec. Corp., 932 So. 2d 537, 541–42 (Fla. 1st DCA 2006). Here, there were no proper factual findings supporting arbitration because the trial court refused to provide an evidentiary hearing, despite the [Appellants’] requests and objections. Accordingly, this Court should reverse the order compelling arbitration.

See the appellate briefs here:

APPEAL BRIEF 3.2.15

APPEAL REPLY BRIEF 5.15.15

If you want to discuss appeals of arbitration orders or seek help in an arbitration matter, contact Bernhard Law Firm at 786-871-3349 or abernhard@bernhardlawfirm.com

Bernhard Law Firm PLLC

Bernhard Law Firm PLLC

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