Opinion of the Court by Justice VENTERS.
Appellant, Velessa Hathaway, appeals as a matter of right from a Court of Appeals order denying her petition for intermediate relief against an opinion and order by Appellee, Judge Audra J. Eckerle of the Jefferson Circuit Court. Appellee's order directed that Appellant must arbitrate her dispute with Real Party in Interest, Commonwealth Dodge, LLC, pursuant to an arbitration clause included in a vehicle purchase agreement signed by Appellant. Appellant petitioned the Court of Appeals for a writ of prohibition, arguing that the circuit court was acting outside of its jurisdiction because the arbitration clause did not satisfy the requirements of KRS 417.050 or KRS 417.200, that she had no adequate remedy by appeal, and that she would suffer great injustice and irreparable injury if forced to arbitrate. The Court of Appeals denied Appellant's petition.
Appellant now argues that we should reverse the Court of Appeals and grant a writ of prohibition against Appellee. For the reasons set forth herein, we affirm the Court of Appeals.
In 2009, Appellant purchased a used 2007 Dodge Charger from Commonwealth Dodge. Before completing the purchase, Appellant alleges that one of Commonwealth Dodge's agents represented to her that the Charger had no history of repairs, and that she relied on that representation. Appellant then executed a retail sales installment contract, traded in her vehicle as a down-payment, and applied for financing. Among the documents Appellant signed to complete the transaction was a vehicle purchase agreement which included the following arbitration clause, situated directly above the signature line, in all capital letters:
Shortly after the purchase, Appellant discovered that the Charger had been repaired several times by Commonwealth Dodge. When she attempted to rescind the contract, Commonwealth Dodge refused to rescind the deal or return Appellant's original vehicle to her.
Appellant then filed suit in the Jefferson Circuit Court against Commonwealth Dodge alleging fraud, conversion of her vehicle, violations of Kentucky's Motor Vehicle Installment Sales Contract Act, violations of the federal Truth in Lending Statute, violations of Kentucky's usury and small loan statutes, breach of warranty and breach of Kentucky's Consumer Protection Act. Commonwealth Dodge moved to compel arbitration based on the arbitration clause in the vehicle purchase agreement. Appellee granted Commonwealth Dodge's motion and ordered the parties to arbitration.
Appellant next filed a petition for a writ of prohibition with the Court of Appeals to prevent arbitration, arguing that the circuit court did not have jurisdiction because the arbitration clause did not specifically designate Kentucky as the location for the arbitration. See KRS 417.200; Ally Cat, LLC v. Chauvin, 274 S.W.3d 451 (Ky. 2009). The Court of Appeals denied her petition, finding that the statement in the arbitration clause, "SUCH ARBITRATION SHALL BE CONDUCTED IN THE COUNTY IN WHICH THE DEALERSHIP IS LOCATED," coupled with the reference in the sales documents plainly indicating that Commonwealth Dodge was located in Kentucky, fully complied with KRS 417.200's requirement that the agreement
As an initial matter, we note that a writ of prohibition is only warranted when:
Hoskins v. Maricle, 150 S.W.3d 1, 10 (Ky. 2004).
Appellant first argues that the arbitration clause in question does not satisfy the Kentucky Arbitration Act's jurisdiction statute, KRS 417.200, and thus Appellee had no subject matter jurisdiction to order the parties to arbitration. KRS 417.200 states:
Based on this statutory language, we held in Ally Cat, 274 S.W.3d at 455, that under the Kentucky Arbitration Act:
In Ally Cat, the arbitration clause was governed by the Kentucky Arbitration Act and failed to provide that the arbitration was to occur in Kentucky. Accordingly, we held that the statute failed to confer jurisdiction on the court to enforce the agreement to arbitrate. Id.
However, unlike the arbitration clause in Ally Cat, the agreement now before this Court includes a "choice of law" provision selecting the Federal Arbitration Act as the law governing any dispute between the parties. Therefore, since choice of law provisions are generally valid in arbitration clauses, the Federal Arbitration Act governs the arbitration clause in this matter. Conseco Finance Servicing Corp. v. Wilder, 47 S.W.3d 335, 341 (Ky.App.2001) (citing Volt Information Sciences, Inc. v. Board of Trustees ofLeland Stanford Junior University, 489 U.S. 468, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989)) (stating that choice of law provisions in arbitration agreements are to be generally upheld); see also Stout v. J.D. Byrider, 228 F.3d 709 (6th Cir.2000) (applying the Federal Arbitration Act to an arbitration clause in an agreement between an Ohio car dealership and an Ohio citizen).
As we noted in Ernst & Young, LLP v. Clark, 323 S.W.3d 682, 687 (Ky. 2010), when arbitration "agreements explicitly require that disputes be governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq., we need not consider Kentucky's Uniform Arbitration Act. . . ." Therefore, "Ally Cat has no applicability to an arbitration agreement governed exclusively by the Federal Arbitration Act." Id., n. 8. Applying that same logic to the current matter, we conclude that Ally Cat has
Despite our conclusion that the agreement is subject to the Federal Arbitration Act rather than the Kentucky statute, we agree with the Court of Appeals's analysis regarding the adequacy of the language designating Kentucky as the site of the arbitration. By designating the "COUNTY IN WHICH [COMMONWEALTH DODGE] IS LOCATED" as the venue for the arbitration, and where it is not doubted that the dealership is located in Kentucky, the agreement "provides for arbitration in this state." The language would satisfy the jurisdictional prerequisite imposed by KRS 417.200 in cases where the Kentucky law was applicable.
Appellant next argues that the vehicle purchase agreement fails to satisfy KRS 417.050 because "grounds exist at law for [the] revocation of [the vehicle purchase agreement] contract." However, as explained in the prior section, the arbitration agreement is governed by the Federal Arbitration Act and not the Kentucky Arbitration Act. We therefore review this argument under the corresponding section of the Federal Arbitration Act, 9 U.S.C. § 2, to determine whether "grounds exist at law for revocation" of the arbitration clause.
Under the Federal Arbitration Act, general contract principles apply in determining the enforceability an arbitration clause. Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443-444, 126 S.Ct. 1204, 163 L.Ed.2d 1038 (2006). Along these lines, Appellant argues that the arbitration clause is unconscionable because: 1) the arbitration clause prevents her from recovering "costs"; 2) the arbitration clause is one-sided and is one of adhesion; and 3) she was not told by Commonwealth Dodge the implications of signing the vehicle purchase agreement or the arbitration clause.
The doctrine of unconscionability is:
Conseco, 47 S.W.3d at 342 (internal citations omitted). Upon a review of Appellant's arguments, it is clear that the arbitration clause does not rise to the standard of unconscionability as defined by Conseco.
First, Appellant argues that the arbitration clause prevents her from recovering her litigation "costs," because it states, "EACH PARTY SHALL PAY ITS OWN
Second, Appellant argues that the arbitration clause is one-sided because the language "SUCH ARBITRATION SHALL BE CONDUCTED IN THE COUNTY IN WHICH THE DEALERSHIP IS LOCATED" allows Commonwealth Dodge to choose the forum for arbitration by moving the dealership to a different state, while she has no control over where the arbitration will occur. However, there is nothing in the record that Commonwealth Dodge has moved or is attempting to move. Nor is it reasonable to assume that Commonwealth Dodge would consider moving its dealership to another state simply to control the site of where arbitration would occur, either in this, or any other case. Finally, a reasonable interpretation of the clause fixes the venue for arbitration as the county in which the dealership was located at the time the contract was made. This argument is without merit.
Appellant also argues that the arbitration clause lacks mutuality because under the "Retail Installment Contract and Security Agreement," Commonwealth Dodge can sue Appellant in a court of law, but she is denied the reciprocal right. However, as stated in Conseco, "there is no inherent reason to require that the parties have equal arbitration rights." Conseco, 47 S.W.3d at 343 (holding that Conseco could seek court remedies for enforcement of its security interest in a mobile home without rendering the arbitration clause unenforceable). The potential for uneven remedies does not render the arbitration clause unconscionable.
Third, Appellant argues that the arbitration clause is one of adhesion and since she alleges violations of the Kentucky Consumer Protection Act, KRS Chapter 367, enforcing the clause would violate her jural rights. We noted in Conseco that alleged violations of the Kentucky Consumer Protection Act did not preclude arbitration. Conseco, 47 S.W.3d at 341 (stating plaintiffs "have advanced no reason to conclude that arbitration is inherently incompatible with the [Kentucky Consumer Protection Act's] purposes"). We agree with the conclusion drawn in Conseco.
Finally, Appellant argues that the arbitration clause is unconscionable because Commonwealth Dodge never told her that signing the vehicle purchasing agreement would result in a waiver of her right to trial by jury and appeal. But, "[i]t is the settled law in Kentucky that one who signs a contract is presumed to know its contents, and that if he has an opportunity to read the contract which he signs he is bound by its provisions, unless he is misled as to the nature of the writing
Thus, we conclude that the arbitration clause is not unconscionable and may be enforced by the Jefferson Circuit Court.
Appellant finally argues that even if the circuit court had subject matter jurisdiction to enforce the arbitration clause, she is entitled to intermediate relief because the arbitration clause does not cover all of the claims asserted in her complaint. However, the scope of the arbitration clause between Appellant and Commonwealth Dodge is extremely broad covering,
We find that all of the claims Appellant raises against Commonwealth Dodge stem from the sale of the vehicle or the associated negotiations leading to the sale, and thus are covered by the arbitration clause. Appellant is not entitled to intermediate relief.
For the above-stated reasons, the order of the Court of Appeals denying the petition for a writ of prohibition is affirmed.
All sitting. All concur.