State ex rel. Gayle Vincent, et al. v. Honorable Nancy Schneider, Judge

Summary

The Supreme Court of Missouri reviewed a mandamus action concerning a trial court order compelling arbitration of home purchasers' claims against a builder. The court held that the contractual method for selecting an arbitrator and the provision shifting arbitration fees to the purchasers were unconscionable and unenforceable, while the remainder of the arbitration provision could be enforced. The writ was quashed, and the case was ordered to proceed with an arbitrator appointed by the trial court under Missouri law.

Holdings

1. Relators failed to prove that the home-purchase contracts were contracts of adhesion; the preprinted nature of the contracts and the fact that the arbitration provision had not been negotiated were insufficient without proof that relators could not obtain more attractive contracts elsewhere or were forced to purchase from McBride.
2. The provision requiring the president of the Homebuilders Association of Greater St. Louis to select the arbitrator was unconscionable and unenforceable because it placed selection in the hands of an individual in a position of bias.
3. The provision shifting all arbitration fees and costs to the purchasers was substantively unconscionable at the time the contracts were made and was unenforceable.
4. The arbitration clause was not invalidated for lack of mutuality of obligation because consideration supported the contract as a whole; there is no additional requirement that the arbitration obligation itself be mutual.
5. The unconscionable arbitrator-selection and cost-shifting provisions could be severed or replaced without invalidating the remainder of the arbitration provision.

Questions Presented

1. Whether the home-purchase contracts were contracts of adhesion such that the arbitration provisions were unenforceable under Missouri law.
2. Whether the arbitration provisions were substantively unconscionable because the arbitrator-selection method placed selection in the hands of a potentially biased individual.
3. Whether the cost-shifting provision requiring purchasers to bear arbitration fees and costs was substantively unconscionable.
4. Whether the arbitration clause was unenforceable for lack of mutuality because only McBride could elect arbitration.
5. Whether the unconscionable portions of the arbitration provisions could be severed while enforcing the remainder of the arbitration agreement.

Disposition

quashed