Background
Jeannie Ashelin and Corey Scheideman purchased a 2019 Chevrolet Bolt from Ed Napleton St. Louis Imports. They signed a financing contract, a buyer’s order, and a separate arbitration agreement. Each provided that covered disputes would be resolved through binding arbitration governed by the Federal Arbitration Act rather than state arbitration law.
After allegedly discovering serious problems with the vehicle’s high-voltage charging and battery-cooling systems, the plaintiffs sued the dealership entities and Fifth Third Bank for violations of the Missouri Merchandising Practices Act, fraud, negligent misrepresentation, and unjust enrichment. The circuit court denied the defendants’ amended motion to compel arbitration because the agreements omitted the notice statement required by section 435.460 of the Missouri Uniform Arbitration Act.
The Court’s Holding
The Court of Appeals held that the Federal Arbitration Act governed the agreements. The transactions involved interstate commerce because the plaintiffs were Missouri residents, one dealership defendant was an Illinois corporation, and Fifth Third Bank was a national bank principally based in Ohio. The agreements also expressly selected the FAA as the governing arbitration law.
The court rejected the plaintiffs’ contention that the defendants waived reliance on the FAA through their original motion to compel. The circuit court allowed an amended motion invoking the FAA, never ruled on the original motion, and ruled only on the amended motion. Because the FAA applied, it preempted Missouri’s statutory notice requirement, which would impose an additional condition on the enforceability of arbitration agreements. The court reversed and remanded with instructions to enter an order compelling arbitration under the parties’ agreements.
Key Takeaways
- The FAA governed because the agreements involved interstate commerce and expressly selected federal arbitration law.
- Missouri’s required arbitration-warning language cannot invalidate an arbitration agreement covered by the FAA.
- The defendants did not waive the agreements’ FAA provision by initially citing Missouri law where the circuit court permitted amendment and ruled only on the amended motion.
Why It Matters
The decision reinforces that Missouri courts may not use section 435.460’s notice requirement to defeat an arbitration agreement governed by the FAA. For contracts involving interstate commerce, ordinary contract language sufficient under federal law cannot be subjected to an additional state-law warning requirement.
The opinion also illustrates that an initial pleading error concerning governing arbitration law does not necessarily amount to waiver when it is promptly corrected by an authorized amendment before the trial court rules.