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General Motors Acceptance Corp. v. Johnson

December 27, 2004

GENERAL MOTORS ACCEPTANCE CORPORATION, PLAINTIFF,
v.
ROBERT JOHNSON AND PAULINE JOHNSON, DEFENDANTS
(PAULINE JOHNSON, THIRD-PARTY PLAINTIFF APPELLANT; GATEWAY CHEVROLET, GEO, OLDSMOBILE, INC., THIRD-PARTY DEFENDANT-APPELLEE).



Appeal from the Circuit Court of Cook County. No. 02 M1 164531. Honorable Leon Wool, Judge Presiding.

The opinion of the court was delivered by: Justice Gordon

This cause of action arises from an order of the circuit court granting third-party defendant's, Gateway Chevrolet, Inc. (Gateway), motion to stay litigation pending arbitration based on an arbitration agreement signed by Gateway and third-party plaintiff, Pauline Johnson (Pauline). Pauline contends that arbitration could not be ordered because her contract with Gateway, along with the accompanying arbitration agreement, was void due to Gateway's violation of section 2B the Consumer Fraud and Deceptive Business Practices Act (hereinafter referred to as the Consumer Fraud Act or Act) (815 ILCS 505/2B (West 2002)). She further alleges that the arbitration agreement was invalid due to a lack of consideration and that Gateway improperly failed to request arbitration in the first instance. For the following reasons, we affirm.

[9]     BACKGROUND

On October 17, 2001, Pauline and her husband, Robert Johnson, purchased a 2002 Chevrolet Cavalier from Gateway. According to an affidavit signed by Pauline, a Gateway employee went to her home with her husband and persuaded her to sign a retail installment contract for the purchase of the vehicle. Pauline and Robert also signed an arbitration agreement, which provided in pertinent part:

"IMPORTANT ARBITRATION DISCLOSURES

The following Arbitration Clause significantly affects your rights in any dispute with Us. Please read these disclosures and the Arbitration Clause carefully before you sign this Agreement.

1. Either You or Us may unilaterally choose to have any dispute between you and Us decided by arbitration and not in court.

2. If a dispute is arbitrated, both You and Us will give up the right to a trial by the court or a trial by jury.

3. If a dispute is arbitrated, You will give up Your right to participate as a class representative and/or a class member on any class claim you may have against us.

4. In arbitration, the information which can be obtained through discovery by you from Us and/or by Us from You is generally more limited than the information which can be obtained through discovery in a lawsuit.

5. Other rights that [Y]ou and/or Us would have had in court may not be available in arbitration.

6. Even if [the] dispute is arbitrated, Your vehicle may still be repossessed if [Y]ou do not honor Your lease and both [Y[ou and Us may seek provisional remedies from court [sic]. Any claim or dispute whether in contract, tort, fraud, breach of warranty or otherwise (including the interpretation and scope of this clause and the arbitrarility [sic] of any issue). Between You and Us or our employees, agents, successors or assigns, which arise out of or relate to this Agreement or any resulting transaction or relationship (including any such relationship with any third parties who do not sign this Agreement) shall at Your or Our election (or the election of any such third party). Be resolved by a neutral binding arbitration and not by a court action [sic]."

The day after purchasing the vehicle, Robert attempted to return it to Gateway, but Gateway employees refused to take the vehicle back. Pauline asserted that she also attempted to return the vehicle two days after signing the contract, but was told she could not do so. The Johnsons thereafter defaulted on their finance payments and the vehicle was repossessed. The assignee of the contract, plaintiff, General Motors Acceptance Corporation, filed a complaint against the Johnsons seeking damages for breach of contract. Pauline then obtained leave from the court to file a third-party complaint against Gateway. The third-party complaint alleged that Gateway failed to give Pauline notice of her right of rescission and refused to cancel the contract and accept return of the vehicle all in violation of section 2B of the Consumer Fraud Act. 815 ILCS 505/2B (West 2002).

On August 28, 2003, Gateway filed a motion to stay all trial court proceedings pending arbitration pursuant to the arbitration agreement. Pauline opposed the motion, contending that it would be fundamentally unfair to allow Gateway to benefit from the arbitration agreement, which she would have rescinded along with the retail installment contract had Gateway not violated the Act. A hearing on the motion was conducted on February 2, 2004. The court found that the sole question before it was whether the arbitration agreement existed at all and whether the dispute fell within the ...


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