The Alabama Supreme Court has ordered a dissatisfied customer and his wife to pursue their fraud and breach-of-warranty claims against a Mobile dealership through arbitration rather than a lawsuit.
The court upheld the validity of a mandatory arbitration provision in the buyer's order form. Such provisions have become common among dealerships in Alabama, lawyers for both sides said.
In September 1996, English Office bought a 1996 Infiniti I30 from Infiniti of Mobile Inc., paying in full for the vehicle.
He signed and initialed a handwritten purchase agreement and a computer-generated version, both of which included a standard 'dispute resolution' clause in bold, large type. The clause called for 'arbitration of all disputes and controversies of every kind and nature between (the) buyer and Infiniti of Mobile arising out of or in connection with the purchase of this vehicle.'
He and his wife later sued in Choctaw County Circuit Court, alleging that the dealership's sales representative told them the car was new when, in reality, it had previously been wrecked and suffered substantial damage. Both Infiniti of Mobile and the sales representative were named as defendants.
The dealership contends it did nothing improper and that Office was aware the car had been damaged and repaired, according to its lawyer, Marion Quina Jr. of Mobile.
The trial court judge rejected the dealership's argument that the Offices had to submit their claim to arbitration. The state Supreme Court disagreed, saying an error in the dealership's name on the computer-generated buyer's order form did not invalidate the arbitration provision.
Quina said he and other dealership lawyers have recommended for years that their clients incorporate arbitration provisions in their contracts, and now 'the Alabama Supreme Court has strongly enforced arbitration provisions for dealers.'
The Offices' lawyer said the decision erodes consumers' right to recover damages.
'Everybody will use arbitration agreements to avoid your constitutional right to a jury trial,' said David Huggins of Mobile. 'You either don't buy a car or you give up your constitutional right.'