Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Ross v. Quality Homes of McComb, Inc.

United States District Court, S.D. Mississippi, Western Division

November 16, 2017




         This cause is before the Court on a Motion to Dismiss or, Alternatively, Compel Arbitration [Doc. No. 1');">14] filed by Defendant Quality Homes of McComb, Inc. Having considered the motion, the Plaintiffs' response in opposition, and applicable statutory and case law, and being otherwise fully informed in the premises, the Court finds as follows:

         I. BACKGROUND

         Buyers of a manufactured home sued the home's manufacturer, installer, transporter, financier, and retail-seller after inspecting the home and declaring it “uninhabitable.” The buyers allege the defendants misrepresented the nature and quality of the home, breached fiduciary duties, slandered them with racial slurs, and violated assorted federal and state consumer protection and unfair trade practices laws. The motion before the Court centers on an arbitration provision in an agreement between the manufacturer, the retail-seller, and the buyers.

         Plaintiffs Earl and Maxcine Ross (the “Rosses”) bought a manufactured home made by Defendant Platinum Homes, LLC (“Platinum”) from Quality Homes of McComb, Inc. (“Quality”), a McComb-based retail seller [Doc. No. 1');">1, ¶VI]. Defendant U.S. Bank, N.A. (“U.S. Bank”) financed the purchase [Doc. No. 1');">1, ¶VI].

         As a part of the purchase, the Rosses signed a “Platinum Homes, LLC. Limited Warranty” containing a provision requiring the parties to mediate or arbitrate:

[A]ny controversy, claim, or dispute between or among the Manufacturer, homeowner, independent retailer finance company or any other person or entity arising from or relating to the Manufactured home, its sale, transportation, setup, repair, installation, use, design, manufacture, financing . . . including any claim relating to the validity of this arbitration provision.

[Doc. No. 1');">14-1');">1, p. 2].

         In conspicuous fashion, the provision notifies the parties that by executing the Limited Warranty they “ARE KNOWINGLY GIVING UP AND WAIVING CERTAIN RIGHT [sic] TO LITIGATE DISPUTES IN COURT, INCLUDING WAIVING OF A TRIAL BY JURY” [Doc. No. 1');">14-1');">1, p. 2]. The provision also incorporates “applicable rules” of the American Arbitration Association (“AAA”) [Doc. No. 1');">14-1');">1, p. 1');">1].

         About two weeks after purchase, transportation company Miss-Lou Mobile Home Movers, LLC (“Miss-Lou”) delivered the home to Quality's lot [Doc. No. 1');">1, ¶VIII]. The Rosses inspected the home and found it deficient in several respects: it contained “a gap in the celling where the roof did not come together, ” and “sheetrock [that] had fallen from the wall in the living room” [Doc. No. 1');">1, ¶IX]. The Rosses also detected an unpleasant chemical odor [Doc. No. 1');">1, ¶VIII].

         Hoping to convince Quality to fix the issues, the Rosses visited Quality several times [Doc. No. 1');">1, ¶¶XI, XII]. On the third visit, the Rosses overheard a phone conversation during which Defendant Joey Harbin, a Platinum manager, said, “I am not coming down there to change out nothing for those niggers” [Doc. No. 1');">1, ¶XII]. Ultimately, Quality refused the Rosses' request to exchange their manufactured home for another [Doc. No. 1');">1, ¶XIII] and U.S. Bank refused their request to rescind the financing contract [Doc. No. 1');">1, ¶XIV].

         Two-and-a-half years after inspecting the home, the Rosses sued Quality, Miss Lou, Platinum, Harbin, and U.S. Bank alleging (1');">1) breach of fiduciary duty; (2) breach of contract; (3) breach of the implied covenants of good faith and fair dealing; (4) fraudulent misrepresentations; (5) “unconscionability”; (6) statutory violations and unfair trade practices; and (7) slander [Doc. No. 1');">1, Counts I-X].

         In response, Quality, Platinum, Harbin, and U.S. Bank moved to dismiss the Rosses' suit for failure to state a claim upon which relief can be granted. See Fed.R.Civ.P. 1');">12(b)(6). Quality moves, in the alternative, to compel arbitration [Doc. No. 1');">14]. Although Platinum and Harbin appear to support mediation or arbitration under the terms of the Limited Warranty [Doc. No. 29], U.S. Bank takes no position on the issue [Doc. No. 1');">13].


         Arbitration disputes present three questions: (1');">1) which party should prevail on the merits; (2) who decides which party should prevail on the merits -- the court or an arbitrator; and (3) who decides arbitrability, i.e., whether the dispute is subject to arbitration. First Options of Chicago, Inc. v. Kaplan, 1');">14 U.S. 938');">51');">14 U.S. 938, 942 (1');">1995).

         The motion before the Court involves the third question. Although no party raises the issue, the Limited Warranty contains a delegation provision requiring the arbitrator -- rather than the Court -- to determine the scope of the arbitration provision. See Douglas v. Regions Bank, 757 F.3d 460, 462 (5th Cir. 201');">14). The Fifth Circuit has directed district courts to compel arbitration “in almost all cases” in which the arbitration provision at-issue contains a delegation clause. Kubala v. Supreme Prod. Servs., Inc., 1');">199');">830 F.3d 1');">199, 202 (5th Cir. 201');">16).

         The delegation clause analysis consists of two steps. Reyna, 839 F.3d at 378. First, the Court examines state-law contract-formation principles to determine whether the Limited Warranty contains a valid agreement to arbitrate and, if so, as to which parties. Id. Second, the Court determines whether the Limited Warranty contains a valid delegation provision. Id.

         Compelled arbitration turns upon the terms of the contract, not upon an occurrence or a transaction. See Janvey v. Alguire, 847 F.3d 231');">1, 240 (5th Cir. 201');">17). Consistent with arbitration's contractual roots, “a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.” Id. at 240. Thus, the Court first turns to the threshold issue of which, if any, parties have agreed to arbitrate this dispute. Reyna v. Int'l Bank of Commerce, 839 F.3d 373, 377 (5th Cir. 201');">16). In so doing, the Court does not consider the merits of the Rosses underlying claims. Tittle v. Enron Corp., 1');">10');">463 F.3d 41');">10, 425n. 1');">12 (5th Cir. 2006) (citing AT & T Techs., Inc. v. Commc'ns Workers of Am., 475 U.S. 643, 649 (1');">1986)). The Court applies Mississippi contract law to determine whether the parties entered into a valid agreement to arbitrate the dispute. See Kubala, 830 F.3d at 203.

         A. Existence of a Valid Agreement to Arbitrate

         The Federal Arbitration Act (“FAA”), 9 U.S.C. § 1');">1 et seq., reflects “both a liberal federal policy favoring arbitration, and the fundamental principle that arbitration is a matter of contract.” AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (201');">11');">1) (internal quotation marks omitted).

         Under the FAA, an arbitration clause in a “contract evidencing a transaction involving commerce” is “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.