Mandatory individual arbitration agreements as a means of defeating class action lawsuits are a hot topic of late, and a recent decision from the Illinois Appellate Court has clarified the standard of proof and standard of decision parties and trial courts must meet to resolve disputes over the existence and enforceability of those agreements.
In Sturgill v. Santander Consumer USA, Inc., 2016 IL App (5th) 140380, Franklin Sturgill brought a putative class action lawsuit against Santander, a financing company, alleging the company failed to deliver the certificate of title to his truck within the time provided by law following the satisfaction of a lien placed on it at the time of purchase. In line with a litigation trend that has skyrocketed since the U.S. Supreme Court decision in AT&T Mobility v. Concepcion, 563 U.S. 333 (2011), Santander moved to compel individual arbitration and dismiss or stay the suit. Santander claimed that Sturgill agreed to mandatory arbitration as a term of the financing agreement with Santander’s predecessor in interest. Sturgill contested whether Santander had inherited the right to compel arbitration and argued that, either way, the arbitration provision did not apply because his cause of action arose after the installment contract was satisfied. Both Santander and Sturgill’s arguments depended on several unresolved factual and legal questions. The trial court thus ordered limited discovery to address those issues, but when the parties failed to comply, the court summarily denied the motion to compel arbitration.