Russell G. Johnson Judith A. Johnson v. Lynn Hickey Dodge Inc., a Foreign Corporation

Citations: 166 F.3d 347; 1998 WL 826829; 1998 U.S. App. LEXIS 37243Docket: 97-6410

Court: Court of Appeals for the Tenth Circuit; November 30, 1998; Federal Appellate Court

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Citation of unpublished opinions is now permitted if they hold persuasive value on a material issue, provided a copy is attached to the citing document or furnished to the Court and all parties during oral arguments. This change follows the General Order of November 29, 1993, which suspends 10th Cir. Rule 36.3 until December 31, 1995. 

In the case Russell G. Johnson and Judith A. Johnson v. Lynn Hickey Dodge Inc., the plaintiffs filed suit against the defendant for fraud and misrepresentation under the Truth in Mileage Act after purchasing a used car in October 1995. The defendant sought to compel arbitration based on an arbitration clause in the purchase agreement. The clause required disputes related to the vehicle sale to be resolved through binding arbitration according to American Arbitration Association rules and the Federal Arbitration Act.

The plaintiffs contested the arbitration, arguing there was a genuine issue regarding the validity of the arbitration agreement, thus entitling them to a jury trial on that matter. The district court granted the defendant's motion, stayed judicial proceedings, and ordered arbitration. The arbitrator awarded the plaintiffs $3,500, including attorney fees. 

On appeal, the plaintiffs challenged the district court's decision to compel arbitration, particularly for Judith Johnson, who did not sign the sales contract. They cited Thomson-CSF, S.A. v. American Arbitration Association in their arguments, but these points were not adequately raised in the lower court. The appeal is under the jurisdiction of 9 U.S.C. § 16, with de novo review applicable to both the order compelling arbitration and the denial of a jury trial regarding the arbitration agreement's validity.

A single paragraph presented to the district court expanded into a comprehensive nine-page argument in plaintiffs' appellate brief. It is established that presenting new arguments on appeal without prior trial court consideration undermines judicial values, as noted in Tele-Communications, Inc. v. Commissioner. Consequently, issues must be decided by the trial court before being raised on appeal. Additionally, the plaintiffs misrepresented the Oklahoma Supreme Court's ruling in Voss, as the court's opinion does not support their assertion regarding arbitration agreements. Since this issue was insufficiently argued at the trial level, it will not be considered on appeal.

The plaintiffs claim that Russell Johnson should have been granted a jury trial to determine the existence of a valid arbitration agreement, alleging he was fraudulently induced to sign without understanding the arbitration terms. State contract law governs arbitration agreements, indicating that signing a contract implies understanding its terms. The district court held that a party signing a contract with a clear arbitration provision is presumed to agree to arbitration, a conclusion the appellate court supports.

Under 9 U.S.C. § 2, an arbitration provision in a contract is valid and enforceable. The existence of such an agreement is a matter of contract between the parties, and a jury trial is warranted only if genuine issues of material fact exist regarding the agreement's existence. In this case, Russell's signature on the purchase contract indicated acceptance of its terms, including the arbitration clause, which was clearly presented. His claims of misunderstanding and lack of intent to be bound are deemed without merit, leading to the conclusion that no genuine issue of material fact exists regarding the arbitration agreement, thus a jury trial was unnecessary.

Plaintiffs claim that the arbitration award should be vacated due to a manifest disregard for the law and public policy violations. However, the defendant points out that plaintiffs did not seek to vacate the award in the district court but instead moved to confirm it, retaining the right to appeal only the order compelling arbitration. Plaintiffs argue that certain precedents treat orders confirming arbitration awards as final and appealable, which the court acknowledges. Nonetheless, the court emphasizes that the district court typically sets aside arbitration awards only under exceptional circumstances, such as fraud or manifest disregard of the law. Since plaintiffs had the chance to challenge the arbitration award but opted for confirmation instead, their claims of error are not properly presented for appeal, as issues not raised in the district court are generally not considered on appeal. Consequently, the judgment of the United States District Court for the Western District of Oklahoma is affirmed. The order and judgment are not binding precedent except under specific legal doctrines, and citation of such orders is generally disfavored but permitted under certain conditions.