Unchecked box a lesson in diligence

Despite repeated requests by Randall, the dealership allegedly failed to give him his paperwork for more than a month after the June 13, 2020, deal. He received it in July and noticed his signature had been forged on some of it, the lawsuit alleged.

Randall’s lawsuit claims his experience constituted three violations of the Truth in Lending Act by the dealership; one count of deceptive sales practices in violation of Kentucky law by the dealership and ACA, because the lender bought the retail installment sales contract; one count of violating the Kentucky Motor Vehicle Retail Installment Sales Act by the dealership; and one count of common law fraud against the dealership.

The Suburban’s bill of sale and retail installment sales contract contained an arbitration provision executable by either party, and the defendants pursued this in the Western District of Kentucky.

District Judge Charles Simpson III said Kentucky law holds that anyone who signs a contract they’ve had a chance to read is bound by it. However, he said the Kentucky Supreme Court ruled in 2015 that arbitration provision language underneath a signature doesn’t count as part of the contract if the language before the signature doesn’t reference and signal agreement to the later arbitration wording.

Randall signed a bill of sale with language declaring that a signature meant agreement to the arbitration clause, Hicks said. However, below that was a checkbox and wording stating that checking the box acknowledged an arbitration agreement. Simpson ruled in February that its existence implied the arbitration provision was only included when the box was checked.

The box wasn’t checked.

“Despite the document’s multiple attempts to ensure an enforceable arbitration agreement, the dealer’s failure to check the box rendered the arbitration clause in the bill of sale useless,” Hicks said.

The retail contract’s arbitration clause had a similar two-step process. The document carried a signature line underneath an “agreement to arbitrate” clause as well as a signature line at the end of the document. Simpson said this “leads to the reasonable inference” that one had to sign off on the arbitration separately for it to be incorporated.