Reinsurance Focus

A Florida court of appeals affirmed a trial court decision to deny arbitration finding a later signed contract supplanted an earlier contract with an arbitration provision. The Appellant, HHH Motors, LLP, signed a retail purchase agreement with Appellees, Jenny and Kristopher Holt, to purchase a Dodge Ram truck. The contract contained an arbitration provision. To finance the truck purchase, both parties then executed a retail installment sales contract (“RISC”) which failed to include a similar provision. The contract did include a merger clause however, which signified that the RISC was to be a complete and final agreement between HHH Motors and the Holts.

The Holt’s then filed a class action lawsuit alleging HHH Motors violated Florida’s Deceptive and Unfair Trade Practices Act relating to certain customer charges. The trial court denied HHH Motors motion to compel arbitration based on the retail purchase agreement, and they subsequently appealed.

HHH Motors argued that their right to arbitration vested when the original agreement was signed. They further argued that as the contracts were signed “contemporaneously,” both contracts should be interpreted together. While the appeals court did acknowledge two documents signed contemporaneously on the same transaction may be interpreted together, this argument was not dispositive. The RISC was “was sufficiently unequivocal to render the [retail purchase agreement] arbitration clause nugatory.” The court further noted that if HHH Motors wanted to include an arbitration clause in the RISC, they easily could have done so. HHH Motors v. Holt, No. 1D13-4397, (Fla. 1st DCA, Dec. 3, 2014).

This post written by Matthew Burrows, a law clerk at Carlton Fields Jorden Burt in Washington, DC.

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