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Baker v. CMH Homes Inc.

United States District Court, W.D. Washington, Tacoma

July 1, 2019

DOUGLAS R BAKER and MARIA KAY DUPUIS-BAKER, as a married couple, Plaintiffs,
v.
CMH HOMES, INC., a Tennessee corporation, dba CLAYTON HOMES, #742, Defendant.

          ORDER ON DEFENDANT'S MOTION TO COMPEL ARBITRATION AND STAY PROCEEDINGS

          ROBERT J. BRYAN, UNITED STATES DISTRICT JUDGE

         THIS MATTER comes before the Court on Defendant CMH Homes, Inc.'s (“CMH”) Motion to Compel Arbitration and Stay Court Proceedings (“Motion to Compel Arbitration”). Dkt. 14. The Court has considered the motion, documents filed in support of and in opposition to the motion, and the remainder of the record herein.

         For the reasons set forth below, the Court should deny Defendant's Motion to Compel Arbitration (Dkt. 14).

         I. BACKGROUND

         This case is an alleged breach of contract and construction dispute, including a Consumer Protection Act violation claim arising from the alleged breach. Dkt. 14, at 2. In February 2016, Plaintiffs and CMH apparently contracted for the purchase of land and a manufactured home; a sales agreement was executed on August 26, 2016.[1] Dkts. 14, at 2; 18, at 2. CMH contends that, as part of the contract sales agreement, the Parties executed a Binding Dispute Resolution Agreement (“BDRA”) on March 9, 2016. Dkt. 14, at 2.

         The BDRA provides, in part: “The Parties agree to mandatory, binding arbitration (‘Arbitration') of all Claims that are not resolved in Mediation …. Any Party to this Agreement may commence arbitration at any time following Mediation[.]” Dkt. 14, at 3; see generally Dkt. 15-2. “This Agreement will survive and continue in full force and effect notwithstanding assignment, assumption, rescission, cancellation, termination, amendment, payment in full, discharge in bankruptcy, or other expiration or conclusion of the Contract or any other contract or transaction between the Parties, unless otherwise agreed to in writing by the Parties.” Dkt. 15-2, at 3.

         The BDRA continues:

NOTICE: BUYER UNDERSTANDS THAT THIS DISPUTE RESOLUTION AGREEMENT IS AN IMPORTANT AGREEMENT AND THAT THE TERMS OF THIS AGREEMENT AFFECT BUYER'S LEGAL RIGHTS. BY SIGNING THIS AGREEMENT, BUYER ACKNOWLEDGES THAT BUYER HAS READ, UNDERSTANDS AND AGREES TO BE BOUND BY THIS AGREEMENT. BUYER AND SELLER FURTHER INTEND TO DIRECTLY BENEFIT AND BIND ALL BENEFICIARIES TO THIS AGREEMENT. IF BUYER DOES NOT UNDERSTAND ANY OF THE TERMS OR
PROVISIONS OF THIS AGREEMENT, INCLUDING ADVANTAGES OR DISADVANTAGES OF ARBITRATION, THEN BUYER SHOULD SEEK INDEPENDENT LEGAL ADVICE BEFORE SIGNING THIS AGREEMENT. THE PARTIES HEREBY WAIVE THEIR RIGHTS, IF ANY, TO TRIAL BY JUDGE OR JURY, WHERE APPLICABLE. THE PARTIES HAVE ENTERED INTO THIS AGREEMENT KNOWINGLY, WILLINGLY AND VOLUNTARILY.

Dkt. 14, at 3-4 (emphasis in original).

         On March 11, 2019, Plaintiffs filed this suit in Pierce County Superior Court, and CMH removed the case to this Court. Dkt. 1.

         On May 17, 2019, CMH filed the instant Motion to Compel Arbitration. Dkt. 14. CMH argues that the Court should compel arbitration of the Parties' dispute consistent with the terms of the BDRA. See Dkt. 14.

         On June 10, 2019, Plaintiffs filed a response in opposition to CMH's instant Motion to Compel Arbitration. Dkt. 18. Plaintiffs argue that the BDRA is unenforceable for two reasons. Dkt. 18. First, the final sales agreement signed by the Parties on August 26, 2018, contained an integration clause representing the full and complete manifestation of the Parties' intent-and the sales agreement did not incorporate, reference, or otherwise include the BDRA. Dkt. 18, at 2-3. Second, the BDRA is unenforceable for lacking consideration. Dkt. 18, at 3.

         Plaintiffs allege that the BDRA “was not for the purchase of the modular home but rather for financing through CMH Homes. That financing never came to fruition, as Plaintiffs elected to secure private financing.” Dkt. 18, at 2 (citation omitted). Plaintiffs continue, “The Sales Agreement that is the subject of this action, which was executed [on February 21, 2017], did not include an arbitration clause; it did, however, include an integration clause[.]” Dkt. 18, at 2; see generally Dkt. 19. The integration clause provides: “COMPLETE AGREEMENT. This Sales Agreement is the complete agreement between Buyer and Seller and there are no other agreements or ...


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