                    IN THE SUPREME COURT OF TENNESSEE
                                AT JACKSON
                                      April 7, 2004 Session

   SHARON TAYLOR v. DOUGLAS BUTLER and CITY AUTO SALES

              Appeal by Permission from the Court of Appeals, Western Section
                            Chancery Court for Shelby County
                   No. CH-02-0287-3     Hon. D. J. Alissandratos, Judge



                     No. W2002-01275-SC-R11-CV - Filed August 31, 2004



JANICE M. HOLDER, J., concurring in part and dissenting in part.


        I concur in the majority’s holding that Taylor’s claim for fraudulent inducement of the
contract must be submitted to arbitration because the contract’s arbitration provision covers “all
claims, demands, disputes or controversies” and specifically states that it is governed by the Federal
Arbitration Act. I write separately, however, because I disagree with the majority’s decision to
address the issue of unconscionability and with its conclusion that the arbitration provision in this
case is unconscionable.

       Unconscionability was not alleged in the pleadings, was not tried, and was not raised in the
Court of Appeals. This line of argument appears for the first time in Taylor’s brief to this Court.
Therefore, I would hold that the issue was waived.

       Moreover, even if the issue of unconscionability had not been waived, I disagree with the
majority’s conclusion that the arbitration provision in this case is unconscionable. The contract
requires Taylor to arbitrate all of her claims against City Auto, while providing that: “Dealer,
however may pursue recovery of the vehicle under the Tennessee Uniform Commercial Code and
Collection of Debt due by state court action.” The majority concludes that this arbitration agreement
is unreasonably favorable to City Auto and oppressive to Taylor. I am not persuaded by the
majority’s analysis.

        In my view, the mere fact that there are different forums available to the parties in this case
does not make the arbitration provision unconscionable. Other jurisdictions have held that an
arbitration provision granting one party the option to litigate its claims while binding the other party
to arbitrate all of its claims is not unconscionable. See, e.g., Harris v. Green Tree Fin. Corp., 183
F.3d 173, 183 (3d Cir. 1999); Pate v. Melvin Williams Manufactured Homes, Inc. (In re Pate), 198
B.R. 841, 844 (Bankr. S.D. Ga. 1996); Ex parte McNaughton, 728 So. 2d 592, 599 (Ala. 1998);
Conseco Fin. Servicing Corp. v. Wilder, 47 S.W.3d 335, 343-44 (Ky. Ct. App. 2001). A contract
is unconscionable where the “inequality of the bargain is so manifest as to shock the judgment of a
person of common sense, and where the terms are so oppressive that no reasonable person would
make them on the one hand, and no honest and fair person would accept them on the other.” Haun
v. King, 690 S.W.2d 869, 872 (Tenn. Ct. App. 1984) (quoting Brenner v. Little Red Sch. House,
Ltd., 274 S.E.2d 206, 210 (N.C. 1981)). Although the arbitration agreement requires Taylor to
arbitrate all of her claims while providing a judicial forum to City Auto for certain claims, in my
opinion this lack of symmetry does not rise to the level of being shocking or unfairly oppressive.
Instead, it is not unreasonable for Taylor to agree to forego arbitration of a claim, such as the
recovery of a vehicle, that can be decided expeditiously in a judicial forum. See Conseco Fin.
Servicing Corp., 47 S.W.3d at 343. Furthermore, there is no basis to presume that arbitration will
not afford Taylor an adequate opportunity to present her claims. See id. at 344. I am of the opinion
that the arbitration provision at issue should be enforced according to its terms. Therefore, I would
affirm the trial court’s dismissal of Taylor’s complaint.



                                                      _____________________________
                                                      JANICE M. HOLDER, JUSTICE




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