Thompson v. Lithia Chrysler Jeep Dodge Of Great Falls

343 Mont. 392, 185 P.3d 332 (2008)

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Nature of the Case

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Facts

P went to D with the intention of purchasing a new vehicle. P identified a 2005 Dodge Ram 1500, which had a sales price of $39,224. P made a cash down payment of $2,000 on the Dodge truck, traded in their 2000 GMC Sierra 2500 (GMC truck), which had a trade-in value of $23,612 (offset by a $22,100 loan payoff for a net trade-in allowance of $ 1,512), and offered to finance the remainder. P signed a Retail Installment Contract that contained a number of terms and conditions, including a series of arbitration provisions. P also signed a Vehicle Buyer's Order which contained a 'Notice to Purchaser' which stated that the Retail Installment contract was not valid until accepted by the bank or finance company to which it will be assigned. The Order likewise addressed arbitration, stating that 'any controversy or claim arising out of or relating to this order, or breach thereof, shall be settled by arbitration.' The rates quoted on the papers were 3.9%. P was permitted to take the truck home, and they operated it for a little over a week. D then contacted them and told them that they would need to sign new finance papers with a higher annual percentage rate of 4.9 percent. P refused to accept a higher rate and D informed them that they would have to return the Dodge truck if they failed to sign. They brought the truck back and attempted to recover the GMC truck they had offered in trade, but Lithia informed them that it had already been sold and that Lithia refused to return P's $ 2,000 cash down payment. P alleges that D refused to accept the Dodge truck at this point, but they left the truck with its keys at the dealership. P then contacted Daimler Chrysler Services North America to verify that the Contract and Order were not enforced. DCFS informed them that there was no record of a loan. Later, Lithia submitted financing papers to DCFS, which accepted the loan. P's counsel received a letter from D's counsel stating that although the contract signed by P contained a provision 'allowing the dealership the right to rescind the contract' in the event the dealership could not sell the loan for the quoted rate, D decided, rather than rescind the transaction, to execute a 'rate buy down concession.' According to the letter, the 'rate buy down concession' occurred when 'the dealership paid money towards the loan on P's behalf so that the interest rate reflected on the original contract could be maintained. P sued D for (1) Fraud; (2) Conversion; (3) Damage of Chattel with Malice; (4) Negligence; (5) Violation of the Montana Consumer Protection Act; and (6) Punitive Damages. D filed a motion to stay the proceedings and compel arbitration on April 18, 2006. The court granted D's motions to compel arbitration and to stay the proceedings. The District Court concluded that because Ps were challenging the contract as a whole, and not just the arbitration clause, case law required that the matter be heard by the arbitrator.