THOMPSON V. LITHIA CHRYSLER JEEP DODGE OF GREAT FALLS
343 Mont. 392, 185 P.3d 332 (2008)
NATURE OF THE CASE: Thompson (P) appealed from the order of the District Court granting
Lithia's (D) motions to compel arbitration of P's claims related to a 2005 transaction for a
truck.
FACTS: P went to D with the intention of purchasing a new vehicle. P identified a 2005
Dodge Ram 1500, which had a sales price of $39,224. P made a cash down payment of $2,000 on
the Dodge truck, traded in their 2000 GMC Sierra 2500 (GMC truck), which had a trade-in
value of $23,612 (offset by a $22,100 loan pay-off for a net trade-in allowance of $ 1,512),
and offered to finance the remainder. P signed a Retail Installment Contract that contained
a number of terms and conditions, including a series of arbitration provisions. P also
signed a Vehicle Buyer's Order which contained a 'Notice to Purchaser' which stated that the
Retail Installment contract was not valid until accepted by the bank or finance company to
which it will be assigned. The Order likewise addressed arbitration, stating that 'any
controversy or claim arising out of or relating to this order, or breach thereof, shall be
settled by arbitration.' The rates quoted on the papers were 3.9%. P was permitted to take
the truck home, and they operated it for a little over a week. D then contacted them and
told them that they would need to sign new finance papers with a higher annual percentage
rate of 4.9 percent. P refused to accept a higher rate and D informed them that they would
have to return the Dodge truck if they failed to sign. They brought the truck back and
attempted to recover the GMC truck they had offered in trade, but Lithia informed them that
it had already been sold and that Lithia refused to return P's $ 2,000 cash down payment. P
alleges that D refused to accept the Dodge truck at this point, but they left the truck with
its keys at the dealership. P then contacted Daimler Chrysler Services North America to
verify that the Contract and Order were not enforced. DCFS informed them that there was no
record of a loan. Later, Lithia submitted financing papers to DCFS, which accepted the loan.
P's counsel received a letter from D's counsel stating that although the contract signed by
P contained a provision 'allowing the dealership the right to rescind the contract' in the
event the dealership could not sell the loan for the quoted rate, D decided, rather than
rescind the transaction, to execute a 'rate buy down concession.' According to the letter,
the 'rate buy down concession' occurred when 'the dealership paid money towards the loan on
P's behalf so that the interest rate reflected on the original contract could be maintained.
P sued D for (1) Fraud; (2) Conversion; (3) Damage of Chattel with Malice; (4) Negligence;
(5) Violation of the Montana Consumer Protection Act; and (6) Punitive Damages. D filed a
motion to stay the proceedings and compel arbitration on April 18, 2006. The court granted
D's motions to compel arbitration and to stay the proceedings. The District Court concluded
that because Ps were challenging the contract as a whole, and not just the arbitration
clause, case law required that the matter be heard by the arbitrator.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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