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AutoNation Fin. Servs. Corp. v. Arain

The defendant finance company could rely on arbitration clause in installment sales contract that was signed by plaintiff and third party car dealership since finance company and dealership were sued as joint tortfeasors and the gist of the plaintiff's RICO claim is that the defendants conspired against him to charge him excessive amounts for a theft protection program as financed in the installment contract.

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Khalid Arain filed a class action complaint against AutoNation Financial Services Corporation and George Sutherlin Nissan, Inc. in connection with his purchase of a Theft Protection Program TPP at the time he bought a new car from Sutherlin. The complaint asserts claims under Georgia’s Racketeering Influenced and Corrupt Organizations Act, OCGA § 16-4-1 et seq., and alleges that Sutherlin, in its capacity as agent for AutoNation, made misrepresentations regarding the TPP. Both defendants moved to compel the arbitration of Arain’s claims pursuant to a clause contained in the Motor Vehicle Installment Sales Contract he signed at the time he purchased the car. Sutherlin Nissan was a signatory to the installment contract, but AutoNation was not. It is undisputed, however, that Arain financed his purchase of the TPP through the installment contract, and in fact, Arain seeks to recover the finance charges he paid under that contract in connection with the TPP. Arain also signed an agreement specifically covering the TPP he purchased from AutoNation, and Sutherlin signed the agreement as agent for AutoNation. But that agreement does not contain an arbitration clause.

After the defendants moved for arbitration, Arain voluntarily dismissed his claims against Sutherlin without prejudice. The trial court subsequently denied AutoNation’s motion to compel arbitration on the ground that AutoNation was a nonsignatory to the installment contract. Autonation appeals the denial of its motion.

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