The Tenth Circuit has determined that an arbitration agreement included as part of a set of agreements executed in connection with the purchase of a pickup truck applied to a dispute over a replacement set of agreements that the parties executed after the lender rejected the originally contemplated financing, despite the fact that the second set of agreements did not include or refer to the arbitration agreement.

Plaintiff and defendant Big Red Kia executed a retail purchase agreement (“RPA”) and a retail installment sale contract ( “RISC”) related to the purchase of the truck, pursuant to which Big Red was the creditor but assigned its rights to defendant Exeter Finance Corp. Plaintiff and Big Red also executed an agreement to arbitrate any disputes regarding the purchase and “any financing obtained in conjunction with the transaction, and any other dispute related to the purchase/lease transaction.” Two days after plaintiff took possession of the truck, Exeter declined to finance the full amount provided for in the loan, and Big Red and plaintiff executed new documents with somewhat different terms, including a new RPA and a new RISC, but not a new arbitration agreement. Two years later, plaintiff sued Big Red and Exeter for violations of various consumer protection laws in connection with the purchase, and defendants moved to compel arbitration. Plaintiff objected, arguing, inter alia, that the arbitration agreement did not apply to the second and operative RISC and RPA, but instead only applied to the original – and now rescinded – RISC and RPA. The district court agreed, leading to this appeal.

The appellate court reversed. Key to this outcome was the appellate court’s determination that the parties entered into one transaction, not two as plaintiff had argued and the district court found. The appellate court held that no transaction was completed the day the first set of agreements were executed, because the original RPA made the purchase contingent upon plaintiff obtaining satisfactory financing, which he failed to do until the second set of agreements were executed. This contingent nature, the appellate court concluded, “suggests the parties continued the same transaction” through the execution of the second RPA and RISC, making those agreements subject to the arbitration agreement. As a result, the appellate court found that plaintiff’s legal claims related to the transaction covered by the arbitration agreement and that arbitration should thus be compelled. Mooneyham v. BRSI, LLC, No. 165-6221 (10th Cir. March 17, 2017)