Crystal Smith v. Cappaert Manufactured Housing, Inc.

NOT DESIGNATED FOR PUBLICATION

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

06-0298

CRYSTAL SMITH, ET AL.

VERSUS

CAPPAERT MANUFACTURED HOUSING, INC., ET AL.

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APPEAL FROM THE
TWELFTH JUDICIAL DISTRICT COURT,
PARISH OF AVOYELLES, NO. 2005-7412,
HONORABLE WILLIAM J. BENNETT, DISTRICT JUDGE

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JIMMIE C. PETERS
JUDGE

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Court composed of Chief Judge Ulysses Gene Thibodeaux and Judges Jimmie C.
Peters and J. David Painter.

AFFIRMED.

Fred A. Pharis
Attorney at Law
831 DeSoto Street
Alexandria, LA 71301
(318) 445-8266
COUNSEL FOR PLAINTIFFS/APPELLEES:
Crystal Smith, et al.

Walter K. Jamison, III
Marjorie B. Breaux
Attorneys at Law
303 W. Vermilion, Suite 210
Lafayette, LA 70501
(337) 234-7000
COUNSEL FOR DEFENDANT/APPELLANT:
Cappaert Manufactured Housing, Inc.

SUMMARY DISPOSITION

PETERS, J.

The appeal arises from a suit in redhibition and for property and personal injury

damages filed by a number of plaintiffs against Cappaert Manufactured Housing, Inc.,

Chatelain’s Bayou Housing, Inc., and Ed’s Mobile Homes, Inc. The manufacturer of

the homes at issue, Cappaert Manufactured Housing, Inc., appeals the trial court’s

denial of its dilatory exception of prematurity, which exception was based on an

assertion that the claims were required to first be submitted to arbitration.

We affirm the judgment below for the reasons set forth in the trial court’s

written reasons for judgment, which we quote in part and adopt as our own as

follows:

In this proceeding, defendant Cappaert contends that plaintiffs’
claims are premature because they are subject to a binding arbitration
agreement. . . .
It is apparent that nine of the homes that are the subject of this
lawsuit were manufactured by Cappaert.
It is apparent that the claimants, Donnie Chesne, Leroy and
Brenda Lemoine, Kevin and Charlotte Dauzat, Betty Chesne, Marcus
Daigrepont and Crystal Smith signed “Binding Arbitration Agreements”
in connection with the purchase of their mobile homes. It is also
apparent that Gary and Barbara Thronson, and Rodney and Judy St.
Romain did not sign such arbitration agreements. Plaintiff, Will
Doucet[,] signed a registration card that referred to binding arbitration.
All of these claimants purchased their mobile homes from Chatelain’s
Bayou Housing, Inc., with the exception of Rodney and Judy St.
Romain, who purchased their home from Ed’s Mobile Homes Inc.
The parties have stipulated, and testimony established, that no
representative from Cappaert, (including Ms. Dianne Wright who pre-
signed the arbitration agreements on behalf of Cappaert), was present at
any of the sales in question.
The parties also stipulated that warranty and non-warranty items
in each home were repaired pursuant to the Homeowner’s Manu[a]l.
....
Cappaert comes before the court with a Dilatory Exception of
Prematurity, arguing that many of the plaintiffs’ claims are premature
because they are subject to binding arbitration agreements. However,
the plaintiffs argue that the Third Circuit Court of Appeals has recently
addressed this issue in their favor. In a string of cases, the Third Circuit

held that arbitration agreements signed pursuant to the purchase of a
mobile home do not necessarily apply to personal injury claims and may
be entirely void in some situations. See Dennis v. CMH Manufacturing,
Inc. CMH Homes, Inc. et al., 99-1626 (La. App. 3 Cir. 11/2/00); 773
So.2d 818[, writ denied, 00-3325 (La. 2/2/01), 784 So.2d 645];
Rodriguez v. Ed’s Mobile Homes of Bossier City, La., 04-1082, (La.
App. 3. Cir. 12/8/04), 889 So.2d 461[, writ denied, 05-83 (La. 3/18/05),
896 So.2d 1010], and Abshire v. Belmont Homes Inc., [04-1200
(La.App. 3 Cir. 3/2/05), 896 So.2d 277, writ denied, 05-862 (La.
6/3/05), 903 So.2d 458].
In Dennis, the plaintiffs purchase[d] a mobile home, and pursuant
to their purchase, signed an arbitration agreement agreeing to arbitrate
“any and all claims.” The plaintiffs later attempted to bring redhibition
and personal injury claims attributable to mold and algae that grew
inside of the ductwork in their homes. The Third Circuit held that while
the arbitration agreement was valid as to the redhibition and
manufacturing claims because they arose out of the contract or existed
between the parties when they signed the agreement to submit, the
plaintiffs’ personal injury claims were not subject to the arbitration
agreement because they did not arise out of the contract and did not exist
when they signed the arbitration agreement.
In Rodriguez, the court held that the entire arbitration agreement
was invalid due to lack of consent. The court noted that the plaintiffs
felt that they had to sign the agreement to purchase the home, an
assumption that was incorrect and of which the manufacturers should
have been aware. Additionally, plaintiffs testified that when they signed
the original agreement and made their down payment, no one mentioned
an arbitration agreement; only later were they told that they had to sign
this “legal stuff” to receive their trailer. Id. at 464. Further, the court
found that the manufacturer “knew or should have known that the
arbitration agreement [could not] be part of the consideration of the
original contract. A party cannot[,] unilaterally, assign additional
consideration for the perfection of a sale.” Id.
The Third Circuit most recently spoke out against the validity of
“Binding Arbitration Agreements” in Abshire. In Abshire, the court
again held that the arbitration agreement, signed by the buyers, was also
invalid for lack of consent. Specifically, the court said:
Although the plaintiffs signed the arbitration agreement at
the same time as they signed the purchase agreement, there
is no evidence that the arbitration agreement was part [of]
the consideration of the original purchase agreement. In
any event, as in Rodriguez, Belmont Homes, the third[-
]party manufacturer who was not a party to the purchase
agreement, could not unilaterally assign additional
consideration for the perfection of the sale. Additionally,
the provision of a warranty by Belmont Homes has not
been shown to constitute cause or consideration for the
arbitration agreement because La. R.S. 51:911.25 provides

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mandatory warranty rights in connection with
manufactured homes, and Belmont Homes has failed to
show that its warranty provided the plaintiffs with even
greater rights than provided in La. R.S. 51:911.25.
Importantly, under La. R.S. 51:911.25(C), a ‘buyer may not
waive his rights under this Part and any such waiver is
hereby prohibited as contrary to public policy and shall be
unenforceable and void.’ Id. at 285.
Cappaert asserts that Dennis and its progeny should not be applied
in the case at bar because they are negatively impacted by Aguillard v.
Auction Management Corp., [04-2804, 04-2857 (La. 6/29/05), 908
So.2d 1], a case that encourages the upholding of binding arbitration
agreements. This court disagrees. In Aguillard, the Louisiana Supreme
Court held that the Third Circuit incorrectly determined that an
arbitration clause was adhesionary, and specifically abrogated those
cases in the Circuit courts that reached the same conclusion. Dennis,
Rodriguez, and Abshire were not discussed or even mentioned in
Aguillard. This court believes that if the Supreme Court had intended
to abrogate the Dennis, Rodriguez, and/or Abshire [cases], they would
have explicitly done so. Further, these cases can be distinguished from
Aguillard because the arbitration agreements in Dennis, Rodriguez, and
Abshire were held to be invalid for reasons other than adhesion. While
there is no mention of adhesion in Dennis, Rodriguez specifically holds
that the arbitration agreement in that case is invalid due to lack of the
purchasers’ consent, rather than adhesion as the trial court had held.
Additionally, in Abshire, the Third Circuit specifically chose not to
address the issue of adhesion, as the contract was invalid on other
grounds.
It is this court’s conclusion that these cases have not been affected
by Aguillard; they bear factual and legal similarities to the case at bar,
and there is no doubt that they are controlling.
All of the plaintiffs specifically mentioned above also testified at
the hearing. Their testimony revealed that, with the exception of Crystal
Smith, none of the plaintiffs who signed the arbitration agreements read
them. This court acknowledges that, based in part on the Louisiana
Supreme Court’s ruling in Aguillard, a claimant cannot argue that an
arbitration agreement bearing the party’s signature is invalid because the
party failed to read the document. However, the claimant’s errors of
consent in the case at bar go far beyond that fact.
All claimants testifying said there was no representative of
Cappaert present when plaintiffs signed the agreements, and again with
the exception of Ms. Smith, all stated that there was no discussion of the
arbitration agreement during the sale. At the hearing, Ms. Sue
Chatelain, owner of Chatelain’s Bayou Housing, Inc., testified while she
discussed arbitration with some of the plaintiffs, she had no recollection
of which plaintiffs she discussed the matter with or what she told them.
However, according to Ms. Chatelain’s own testimony, she does not
exactly know what arbitration means, as it has never been fully

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explained to her. Thus, this court finds that even if Ms. Chatelain had
discussed arbitration with any of the clients, such discussion would not
have been sufficient given Ms. Chatelain’s admitted vague
understanding of the concept.
Testimony by Mr. Harold M[o]user, a consultant representative
for Cappaert, proved that the warranty provisions in the contracts in the
case at bar do not constitute any additional cause or consideration for the
arbitration agreements, because as in Abshire, Cappaert merely provided
a standard warranty as required by Federal law that affords the purchaser
with no additional rights. Mr. M[o]user testified that Cappaert provides
a standard one year warranty, in connection with the sale of their
manufactured homes, as required by Federal Law. He also testified that
no plaintiff paid for any of the warranty work performed, and that
Cappaert does not require that an arbitration agreement be signed before
they make repairs to a home because Federal Law does not require it.
In the case at bar, it is evident that there were errors of consent by
each claimant purchaser who signed the arbitration agreement. This
lack of consent makes the arbitration agreements invalid in each
instance where they were signed, as dictated by Dennis, Rodriguez, and
Abshire.
Also, as previously noted, Mr. Thronson and the St. Romains did
not sign arbitration agreements. Thus, their claims are not subject to
arbitration and can also be heard by this Court without first having [to]
submit to arbitration. Further, Will Doucet testified that he did not sign
an arbitration agreement; rather, he signed a registration card which
refers to binding arbitration. Doucet testified that arbitration was never
explained to him and he did not intend to enter into a binding arbitration
agreement. For reasons discussed above, this too is invalid for lack of
consent, and Mr. Doucet’s claims may also be heard by this court
without first being submitted to arbitration.[1]
For reasons assigned, this court is convinced that the plaintiffs’
suit is not premature, as they are not required to first submit to
arbitration. Consequently, Cappaert’s Exception of Prematurity is
denied.

This case is controlled by the jurisprudence as set forth in the trial court’s

written reasons for judgment. Because we find no manifest error in the trial court’s

factual findings and no error of law in its legal conclusions, we affirm the judgment

below in all respects.

DISPOSITION

1
See also St. Romain v. Cappaert Manufactured Housing, Inc., 05-140 (La.App. 3 Cir.
6/1/05), 903 So.2d 1186.

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For the foregoing reasons, we affirm the judgment below and assess costs of

this appeal to Cappaert Manufactured Housing, Inc.

AFFIRMED.

This opinion is NOT DESIGNATED FOR PUBLICATION. Uniform Rules—Courts of
Appeal, Rule 2-16.3.

We affirm the judgment below in a summary disposition in accordance with Uniform
Rules—Courts of Appeal, Rule 2-16.2(A)(2),(5), (6), and (8).

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