Balasiori v. Darcars of Auth Way, Inc.

FOTEIN BALASIORI v. DARCARS OF AUTH WAY, INC.

FOTEIN BALASIORI v. SANTANDER CONSUMER USA, INC., et al.

No. 957

No. 1837

COURT OF SPECIAL APPEALS OF MARYLAND

September Term, 2016

August 9, 2018

Circuit Court for Prince George's County

Case No. CAL16-07226

Circuit Court for Howard County

Case No. 13-C-16107507

UNREPORTED

CONSOLIDATED CASES

Leahy, Shaw Geter, Kenney, James A., III (Senior Judge, Specially Assigned), JJ.

Opinion by Kenney, J.

*This is an unreported opinion, and it may not be cited in any paper, brief, motion, or other document filed in this Court or any other Maryland Court as either precedent within the rule of stare decisis or as persuasive authority. Md. Rule 1-104.

On March 31, 2014, appellant, Fotein Balasiori, purchased a vehicle from appellee, Darcars of Auth Way, Inc. ("Darcars" or "dealer"), an automobile dealership in Prince George's County, and financed the purchase with appellee, Santander Consumer USA, Inc. ("Santander" or "lender"). In this consolidated appeal, appellant challenges the orders of two circuit courts compelling arbitration of a dispute arising out of that transaction. She asks a single question, which we have rephrased as follows:¹

Did the Circuit Courts for Prince George's County and Howard County err when they ordered appellant to arbitrate her dispute that her signature was forged on a financing document with Darcars and Santander?

For the reasons that follow, we affirm both judgments.

FACTUAL AND PROCEDURAL BACKGROUND

To purchase the vehicle, appellant signed a Buyer's Order and a Retail Installment Sales Contract ("RISC"). We will refer to that RISC as the "First RISC." In general, the Buyer's Order, in addition to other terms, set forth the purchase price; the RISC provided the financing terms. When her monthly payments for the purchase were higher than what she had expected, appellant requested and received a copy of the financing paperwork from Santander. Alleging that her signature on the RISC document transmitted byDarcars to Santander was forged and that its terms were materially less favorable than those that she had agreed to, appellant sued both Darcars and Santander. We will refer to that RISC as the "Second RISC."

Appellant, on March 9, 2016, filed suit against Darcars and Santander in the Circuit Court for Prince George's County, alleging that Darcars had forged appellant's signature on the RISC assigned to Santander. Her complaint advanced claims for fraud and violation of the Maryland Consumer Protection Act, and requested a declaratory judgment.

Darcars responded with a "Motion to Dismiss and/or in the Alternative to Compel Arbitration" on May 4, 2016 ("May 4th motion"), along with a supporting memorandum, contending that, under an arbitration provision in the Buyer's Order, the dispute must be submitted to arbitration. Attached to the motion was a copy of the Buyer's Order.²

Two days later, Santander³ filed a "Petition to Compel Arbitration and to Stay Pending Proceedings," with the Buyer's Order and Second RISC attached, in the CircuitCourt for Howard County.⁴ And, on May 9, 2016, Santander notified the Circuit Court for Prince George's County of its petition for arbitration in Howard County, and filed a motion to stay the Prince George's County proceedings and to extend its time to answer appellant's complaint ("May 9th motion").

Appellant opposed both motions. In response to Darcar's motion, she challenged the inclusion of the Buyer's Order in the motion, arguing that, without verification or affidavit, it was not sufficient to compel arbitration or to convert the motion to dismiss into a motion for summary judgment. As to Santander's motion to stay the proceeding and extend its time to answer, appellant asserted that, because the RISC that Darcars sent to Santander (the Second RISC) was a forgery, there was no agreement to arbitrate between her and Santander. Therefore, there was no reason to stay the Prince George's proceeding.

The Circuit Court for Prince George's County, in an order entered on June 13, 2016, granted Darcar's "Motion to Dismiss and/or in the Alternative to Compel Arbitration," and "ordered, that [Darcars] and [appellant] shall proceed to arbitration on any claims alleged." Appellant filed a timely notice of appeal to this Court.⁵ In an orderentered on August 2, 2016, the circuit court granted Santander's May 9th motion to stay the proceedings pending a result in Howard County.

In the Howard County case, appellant moved to stay the case pending the outcome of the appeal in the Prince George's County case. Santander opposed appellant's motion and filed a "Cross-Motion for Summary Judgment to Compel Arbitration." Appellant opposed the cross-motion and requested a hearing.

In an order entered on October 3, 2016 without a hearing, the Circuit Court for Howard County granted Santander's cross-motion for summary judgment and the motion to compel arbitration of the dispute between appellant and Santander. Appellant filed a timely appeal, and this Court granted appellant's request to consolidate the two cases for appellate review.

We shall include additional details in our discussion.

STANDARD OF REVIEW

When confronted with a petition to compel arbitration, and a party who "denies existence of an arbitration agreement," the trial court "shall proceed expeditiously to determine if the agreement exists." Md. Code Ann. (1973, 2013 Repl. Vol.), § 3-207 of the Courts and Judicial Proceedings Article ("CJP"). As stated by the Court of Appeals:

The trial court's conclusion as to whether a particular dispute is subject to arbitration is a conclusion of law, which we review for legal correctness. When reviewing a trial court's decision compelling arbitration, our role extends only to a determination of the existence of an arbitration agreement.

Ford v. Antwerpen Motorcars Ltd., 443 Md. 470, 476 (2015) (reviewing the trial court's granting motion to compel arbitration) (cleaned up).⁶

As to the conversion of a motion to dismiss to a motion for summary judgment, we have written:

Ordinarily, in reviewing the dismissal of a complaint on a motion to dismiss, "we look only to the allegations in the complaint and any exhibits incorporated in it and assume the truth of all well-pled facts in the complaint as well as the reasonable inferences that may be drawn from those relevant and material facts." Smith v. Danielczyk, 400 Md. 98, 103-04 (2007). Maryland Rule 2-322(c) provides, however, that if, on a motion to dismiss for failure to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Maryland Rule 2-501, which governs motions for summary judgment. Thus, Maryland Rule 2-322(c) gives the trial court discretion to convert a motion to dismiss to a motion for summary judgment by considering matters outside the pleading.

Worsham v. Ehrlich, 181 Md. App. 711, 722-23 (2008) (cleaned up).

When a motion to dismiss has been converted to a motion for summary judgment, we review the grant of the motion for summary judgment de novo and determine whether the trial court was legally correct. Laing v. Volkswagen of Am., Inc., 180 Md. App. 136, 152-53 (2008); Livesay v. Baltimore Cty., 384 Md. 1, 9 (2004). The relevant inquiry is:

[W]hether the parties properly generated a dispute of material fact and, if not, whether the moving party is entitled to judgment as a matter of law. This Court considers the record in the light most favorable to the nonmoving party and construe[s] any reasonable inferences that may be drawn from the facts against the moving party.

Zilichikhis v. Montgomery Cty., 223 Md. App. 158, 176 (2015) (quoting Blackburn Ltd. P'ship v. Paul, 438 Md. 100, 107-08 (2014)); see also Md. Rule 2-501(f).

DISCUSSION

We begin by setting out the arbitration provisions in both the Buyer's Order and the two RISCs. The Buyer's Order, which appellant does not dispute having signed, provides in pertinent part:

Buyers(s) . . . and Dealer agree that if any Dispute arises, the Dispute will be resolved by binding arbitration under the applicable rules of an alternative dispute resolution agency by a single arbitrator who shall be an attorney or retired judge, with the arbitrator rendering a written decision with separate findings of fact and conclusions of law.

* * *

The parties understand that they are waiving their rights to jury trial and class consideration of all claims and disputes between them not specifically exempted from arbitration in this Agreement. See additional arbitration terms in paragraph 13 on reverse.⁷

The First RISC, which appellant acknowledges signing, reflects a purchase price of $13,528.00; a financed amount of $13,213.75 with an interest rate of 24%; and a 60-month term. The monthly payment is $383.86. The allegedly forged Second RISCassigned by Darcars to Santander reflects a sales price of $15,073.24; a financed amount of $14,759.00 with an interest rate of 24%; and a 72-month term. The monthly payment under the Second RISC is $392.37.

Both RISCs contain an identical arbitration clause, which states:

1. EITHER YOU OR WE MAY CHOOSE TO HAVE ANY DISPUTE BETWEEN US DECIDED BY ARBITRATION AND NOT IN COURT OR BY JURY TRIAL.

* * *

Any claim or dispute, whether in contract, tort, statute or otherwise (including the interpretation and scope of this Arbitration Clause, and the arbitrability of the claim or dispute), between you and us or our employees, agents, successors or assigns, which arises out of or relates to your credit application, purchase or condition of this vehicle, this contract, or any resulting transaction or relationship (including any such relationship with third parties who do not sign this contract) shall, at your or our election, be resolved by neutral, binding arbitration and not by court action.

Both RISCs provide that the arbitration be governed by the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1...