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Smith v. Credit Acceptance Corp.

Court of Special Appeals of Maryland

May 3, 2019

THOMAS B. SMITH, ET AL.
v.
CREDIT ACCEPTANCE CORPORATION

          Circuit Court for Baltimore City Case Nos. 24-C-17-003797

          Fader, C.J., Wright, Shaw Geter, JJ.

          OPINION

          Shaw Geter, J.

         This appeal arises from an order issued by the Circuit Court for Baltimore City to compel arbitration in a contract action for the purchase of an automobile. Following Appellee's voluntary dismissal of its action against Appellants in the District Court of Maryland for failure to make required payments under the same contract, Appellants filed a class action complaint in the Circuit Court for Baltimore City. Appellants alleged Appellee charged impermissible "convenience fees" and failed to sufficiently notify Appellants regarding the repossession and sale of the vehicle in contravention of Maryland's Credit Grantor Closed End Credit Provisions. Appellee then petitioned the circuit court to compel arbitration of Appellants' claim. Appellants opposed the motion, arguing Appellee waived its right to arbitration when it previously filed its claim in the District Court. On January 12, 2018, the circuit court granted Appellee's petition. Appellants timely appealed and present the following question for our review:

1. Whether the Maryland Court of Appeals in Cain v. Midland Funding, LLC, 452 Md. 141, 156 A.3d 807 (Md. 2017) limited the waiver of the right to arbitrate "related" claims as defined by Charles J. Frank, Inc. v. Associated Jewish Charities of Baltimore, Inc., 294 Md. 443');">294 Md. 443, 450 A.2d 1304 (Md. 1982) to include only those claims that are "dependent" on the claims raised in a prior action?

         BACKGROUND

         On November 15, 2013, Appellants, Thomas Smith and Timothy Smith, entered into a Retail Installment Contract (the "Contract") to purchase a 2003 Cadillac Escalade (the "Vehicle") from Anderson Automotive Group, Inc. (the "Dealership"). The Dealership assigned all of its rights, title, and interest, including its security interest, in and to the Contract and the Vehicle to Appellee, Credit Acceptance Corporation (hereafter, "Credit Acceptance").

         Within the Contract was an arbitration clause, which provided:

         AGREEMENT TO ARBITRATE

This Arbitration Clause describes how a Dispute (as defined below) may be arbitrated . . .
A "Dispute" is any controversy or claim between [Appellants] and [Credit Acceptance] arising out of or in any way related to this Contract, including, but not limited to, any default under this Contract, the collection of amounts due under this Contract, the purchase, sale, delivery, set-up, quality of the Vehicle, advertising for the Vehicle or its financing, or any product or service included in this Contract. "Dispute" shall have the broadest meaning possible, and includes contract claims, and claims based on tort, violations of laws, statute, ordinances or regulations or any other legal or equitable theories . . .
***
Either [Appellants] or [Credit Acceptance] may require any Dispute to be arbitrated and may do so before or after a lawsuit has been started over the Dispute . . .
If [Appellants] or [Credit Acceptance] elect to arbitrate a Dispute, neither [Appellants] nor [Credit Acceptance] will have the right to pursue that Dispute in court or ...

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