WPCO Ӭ h@ j@gIW2^+г B6 Uܴ GVĮ1- h34tAM pfew_; dibm1v帉.AouۨKz}/p&˒7@i/Eq#z5og ͑׉Tlf :__F.N&cG߰YJS,4{Y+ 0+ 0, 0q- 0S. 05/ 00 00 01 022 02 0:3 0Y3 0_F4 0 4 05 017 B*79 D/a9 09 D/; 0; 06< 0< 0:= 0^ > 0<i> 1e>U6 ? 0@?U>-@U*k@ 1u@ B A 72'A 0YA D5A D-2B 0K_B 0cB AS C`C 0&D 0DD AEU@E4E3-H-H-H-H[`L\\IB01S01\CLERK1NAS,,,,0C1 (`$.8dd8    ("  Z6Times New Roman RegularEb0B0111S C:\PROGRA~1\COREL\WORDPE~1\TEMPLATE\CUSTOM~1\REVISE~1.WPTC:\Program Files\Corel\WordPerfect Office 2000\Template\Custom WP Templates\revised standard opinion.wpt3|x U(I Z6Times New Roman RegularLevel 1Level 2Level 3Level 4Level 5Level 1Level 2Level 3Level 4Level 5Level 1Level 2Level 3Level 4Level 5Level 1Level 2Level 3Level 4Level 5 x R$      3  9Ԁ  _Whilemostcourtshaveheldthatthequestionofwhetheranarbitrationprovisionisvalidistobedecidedby  acourt,atleastonejurisdictionhasfoundthattobeaquestionforthearbitrator.See,e.g.,InRe_Conseco_ԀFin.Servicing t Corp.,19S.W.3d562(Tex.App.2000).In_In_Ԁre_Conseco_,theTexascourtheldthat whetherthetermsandconditions 8 ofanarbitrationagreementarethemselvesunconscionableisamattertobesubmittedtothedesignatedarbitrator.19 L S.W.3dat569.TheCourtexplainedthatitwas sympathetictotheplaintiffscomplaintsregardingthearbitration  clause,butits handsaretiedbyprecedent.Id.TheCourtwentontosaythat [_i]f_Ԁwewerewritingonablankslate,  wewouldinsteadfollowtheUnitesStatesSupremeCourtsholdingthatgenerallyapplicablecontractdefenses,such H  asfraud,duress,orunconscionability,maybeappliedtoinvalidatearbitrationagreements[byacourt]without  \ contraveningtheenforcementprovisionsoftheFAA.Id.n.3(quotingDoctorsAssoc.,Inc.v._Casarotto_,517U.S.   681,687(1996).XEX9*+ (_2623  ..*G+G (_25   /%` ` hp x /23  ../%` ` hp x /   *8+8 (_24  ," hp x ,23  ..," hp x ,  *5+5 (_23 ` ) hp x )23  ..) hp x ) ` *2+2 (_22  &hhp x &23  ..&hhp x &  */+/ (_21  #p x #23  ..#p x #  *,+, (_20 h  p x 23  .. p x h *)+) (_19  pp x 23  ..pp x   *&+& (_18   x 23  .. x   *AA (_17  5+ ` hp x 523  Ԁ5+ ` hp x 5  *GG (_16   /%` ` hp x /23  Ԁ/%` ` hp x /   *88 (_15  ," hp x ,23  Ԁ," hp x ,  *55 (_14 ` ) hp x )23  Ԁ) hp x ) ` *22 (_13  &hhp x &23  Ԁ&hhp x &  *// (_12  #p x #23  Ԁ#p x #  *,, (_11 h  p x 23  Ԁ p x h *)) (_10  pp x 23  Ԁpp x   (&& &_9   x 23  Ԁ x   (AA &_8  5+ ` hp x 523  5+ ` hp x 5  (GG &_7   /%` ` hp x /23  /%` ` hp x /   (88 &_6  ," hp x ,23  ," hp x ,  (55 &_5 ` ) hp x )23  ) hp x ) ` (#$  0  (22 &_4  &hhp x &23  &hhp x &  (// &_3  #p x #23  #p x #  - -(,, &_2 h  p x 23   p x h ()) &_1  pp x 23  pp x   &&& $_   x 23   x   0AA.Normal  5+ ` hp x 55+ ` hp x 5  <AA:Definition T  5+ ` hp x 55+ ` hp x 5  <AA:Definition L , 5+ ` hp x 5  5+ ` hp x 586Definition(hh&H1  5+ ` hp x 5      5+ ` hp x 5  (]]&H2  5+ ` hp x 5  5+ ` hp x 5  (]]&H3  5+ ` hp x 5  5+ ` hp x 5  (]]&H4  5+ ` hp x 5 XXX 5+ ` hp x 5  (]]&H5  5+ ` hp x 5  5+ ` hp x 5  (]]&H6  5+ ` hp x 5  5+ ` hp x 5  2DD0Address  5+ ` hp x 55+ ` hp x 5  8MM6Blockquote , , 5+ ` hp x 5   5+ ` hp x 5,*CITE,dl*CODEKQ<6X9`(Courier NewKSS\  `&Times New RomanS42Emphasis64Hyperlink    <:FollowedHype    4go2Keyboard KQ<6X9`(Courier NewKSS\  `&Times New RomanS <:Preformatted  /%  ,Kk %#/KQ<6X9`(Courier NewKSS\  `&Times New RomanS/%  ,Kk %#/  <:zBottom of 7G(X7    5+ ` hp x 5?T%2A`Arial?  SS\  `&Times New RomanS7Z(X75+ ` hp x 5  &  d dF)1dxd<:zTop of For7I(X7    5+ ` hp x 5?T%2A`Arial?  SS\  `&Times New RomanS7Z(X75+ ` hp x 5  F)2dxd0KS.SampleKQ<6X9`(Courier NewKSS\  `&Times New RomanS0.Strong 8dl6TypewriterKQ<6X9`(Courier NewKSS\  `&Times New RomanS42Variable: 8HTML MarkupB      2 0CommentB   !"#$% 35;AGMSY_11.1.1.1.1.1.1.1.<6X9`(Courier New(|I2$ !.8[dXXd8         0  9Ԁ\  `&Times New Roman%2A`Arial3#37=CIQYag1.a.i.(1)(a)(i)1)a) dUi)(|3Il$ !.8[dXXd8     VVVV)!dxdx)!dxdx( $ Figure  1  (;3$2#  0  .3  0  ^_X`YE<<CLevel 1Level 2Level 3Level 4Level 5(|3Il$ !.8[dXXd8     ($$   1  X[Z&OLE 2.0 Box <=8C HKKKK(I Z(Times New Roman  * R$      1  9Ԁ  _TayloralsonamesDouglasButlerasadefendantinhercomplaintasarepresentativeofCityAuto.No  separateallegationsweremadeagainstButler;heandCityAutowerereferredtocollectivelyas defendants.TheCourt t ofAppealstreatedthedefendantscollectively.OnappealtothisCourt,onlyCityAutofiledanapplicationfor 8 permissiontoappeal. ) R$      4  9Ԁ  _Aminorityofcourtsreachtheoppositeconclusion,holdingthatagreementstoarbitratewhichreservecertain  judicialremediestoonepartyarenotunconscionable.Seee.g.,Stoutv.J.D._Byrider_,228F.3d709(6thCir.2000) t (upholdinganarbitrationagreementwhichexemptedfromarbitrationdisputesregardingbuyersfailuretopaybecause 8 buyerfailedtoshowtheagreementtobeoneofadhesionorsufficientlyonesidedastobeunconscionable);_Conseco_ L Fin.Serv.Corp.v.Wilder,47S.W.3d335(Ky.Ct.App.2001)(holdingthatthearbitrationagreementwasnot  unconscionableeventhoughtitallowedthelendertopursuejudicialenforcementofthesecurityagreement).Wefind  themajorityviewtobemorepersuasive. Q R$      2  9Ԁ  _Thedissentcontendsthattheissueofunconscionabilitywaswaivedbecauseitwasnotraiseduntilthecase  wasbeforethisCourt,andthereforeshouldnotbeconsidered.Themajorityagreeswiththedissenttotheextentthat t thepleadingsarevagueandunclearastotheissuesraisedbythepleadings.However,thisappealrequiresustointerpret 8 theprovisionsofthecontract,andthemajorityisoftheopinionthatwewouldnotbedoingjusticeinthiscasewerewe L toconsideronlythedutiesandobligationsofMs.Taylorunderthecontractandnotlooktotherightsandremedies  availabletothedefendant. !.8[dd8     __   [8EXXdd8  @ T[INTHESUPREMECOURTOFTENNESSEE  @%ATJACKSON#[T)#Ԉ &   April7,2004Session L XEX[#[XXE # SHARONTAYLORv.DOUGLASBUTLERandCITYAUTOSALES XEX[ J #[XXE#XEX[ AppealbypermissionfromtheCourtofAppeals,WesternSection  J Ѐ#[XXE#XEX[ChanceryCourtforShelbyCounty  6 @@No.CH0202873Hon.D.J._Alissandratos_,Judge  " @@*AV) ` dE<` A   @@TTNo.W200201275SCR11CV XEXXXEԀFiledAugust31,2004 #XEXX XE##[XXEz#XEX[ #[XXE`#XEX[Ԁ#[XXE#XEX[   AV) ` dE<h` A #[XXE#XEX[ i    =[dd=  Wegrantedpermissiontoappealinthiscasetodeterminewhetheraclaimforfraudulent P inducementtoacontractmustbesubmittedtoarbitrationwhenthecontractsarbitrationclause < covers allclaims,demands,disputesorcontroversiesandstatesthatitisgovernedbytheFederal (x ArbitrationAct( FAA).Weholdthatpartiesmayagreetoarbitrateclaimsoffraudulent d inducementdespiteprohibitionofarbitrationofsuchclaimsunderTennesseelaw,andbecausethe P partiesinthiscasespecificallyagreedthattheFAAgovernsthearbitrationclause,theyagreedto < arbitratetheclaimforfraudulentinducementofthecontract.However,wealsofindthatthe ( arbitrationclauseinthiscaseisunconscionableandthereforevoidbecauseitreservestherightto  ajudicialforumforthedefendantswhilerequiringtheplaintifftosubmitallclaimstoarbitration.  Forthesereasons,thetrialcourtsdismissalofthecomplaintisoverruled,andthedecisionofthe  CourtofAppealsisaffirmed.   Tenn.R.App.P.11AppealbyPermission;JudgmentoftheCourtofAppealsisAffirmed.  L    WilliamM.Barker,J.,deliveredtheopinionofthecourt,inwhichFrankF.Drowota,III,C.J., ("x! andE.RileyAndersonand_Adolpho_ԀA.Birch,Jr.,JJ.joined.JaniceM.Holder,J.,fileda #d" concurringanddissentingopinion. $P# JosephD.Barton,_Millington_,Tennessee,fortheappellant,CityAutoSales. &"& SamF.Cole,Jr.,Memphis,Tennessee,fortheappellee,SharonTaylor. (#(  `+&+ _y  OPINION    FACTUALBACKGROUND      OnJune4,1998,SharonTaylor( Taylor)purchasedacarfromCityAutoSales( City ` Auto).c +#  1      ׀Thepartiessignedacontractentitled AsIsUsedVehicleRetailBuyersOrder( Buyers L  Order).TheBuyersOrderprovidedthatthetotalcostofthevehiclewas$10,058.00.Taylorwas 8  tomakeacashdownpaymenttoCityAutointheamountof$1,310.00andfinancetheremainder. $ t TheBuyersOrdercontainedanarbitrationprovisionwhichstatedthat allclaims,demands,disputes  ` orcontroversiesofeverykindornaturebetween[theparties]arisingfromthe[saleofthevehicle]  L  shallbesettledbybindingarbitrationconductedpursuanttotheprovisionsoftheFederalArbitration  8  Act,9U.S.C.Section12etseq. $    Taylorsoldhercarfor$1,000.00andusedtheproceedstherefromaspartofherdown   payment;shethensignedashorttermpromissorynoteagreeingtopaytheremainderofthedown   paymentoverthefollowingthreemonths.CityAutodeliveredthevehicletoTayloronthedaythe   BuyersOrderwassigned.TaylorclaimsthatCityAutotoldheratthetimeofdeliverythatherlong p termfinancinghadbeenapproved.Itisundisputed,however,thatatthetimeofdelivery,Taylor \ signedaseparate SpotDeliveryAgreement.ThisagreementstatedthatCityAutowasgiving H Taylorimmediatepossessionofthecar pendingthepurchaseoftheinstallmentsaleagreementby 4 afinancinginstitution.Theagreementalsoprovidedthat,ifproperfinancingcouldnotbeobtained  p withinthreedays,CityAutowouldhavetheoptionto immediatelyrescindthesale.Additionally,  \ intheeventthatTaylordidnotimmediatelyreturnthevehicle,CityAutowould havetherightto H takeimmediatepossessionofthevehicle. 4   Approximatelyoneweekafterthesale,CityAutonotifiedTaylorthatherapplicationfor   financinghadnotbeenapproved.WhenTaylordidnotreturnthevehicle,CityAutorepossessed  thecaralongwithpersonalitemsbelongingtoTaylorthatwereinsidethevehicleatthattime.City  AutoretainedpossessionofTaylorspersonalbelongingsalongwiththe$1,000.00downpayment.    TaylorfiledsuitagainstCityAutoallegingaviolationoftheTennesseeConsumerProtection X  Act( TCPA),arguingthatCityAutoimproperlyobtainedher$1,000.00downpaymentandher D! personalpropertythatwasinthecarbyusingdeceptivetacticsinviolationoftheTCPA.Tayloralso 0"  allegedthatshewastoldthattheSpotDeliveryAgreementwas simplyaformalityanddidnot #l! changethefactthatshehadalreadybeenapprovedforfinancingonthesaleofthecar.CityAuto $X" respondedbyfilingamotiontodismiss. $D #   %0!$   ThetrialcourtgrantedCityAutosmotiontodismissthecomplaint,holdingthatTaylorwas   boundbythearbitrationprovisionintheBuyersOrder.TheCourtofAppealsreversedthetrial  court,holdingthataplaintiffcannotbecompelledtoarbitrateaclaimpursuanttoanarbitration  provisionthatwasfraudulentlyinduced. t   WegrantedCityAutosapplicationtoappealtodeterminewhetherpartiescanbeboundto L  arbitrateaclaimforfraudulentinducementwhenthearbitrationclausespecificallystatesthatitis 8  governedbytheFAA.Onappeal,Tayloralsoraisestheissueofwhetherthearbitrationagreement $ t isunconscionablebecauseitreservesforCityAutotherighttopursuejudicialremedieswhile  ` limitingTaylortoarbitration.  L   C  ANALYSIS  $     I.ArbitrationofClaimforFraudulentInducement     TheFAAappliesto awrittenprovisioninanymaritimetransactionoracontractevidencing   atransactioninvolvinginterstatecommercetosettlebyarbitrationacontroversythereafterarising p outofsuchcontractortransaction.9U.S.C.2(1994).ThepurposeoftheFAAis toensurethe \ enforceability,accordingtotheirterms,ofprivateagreementstoarbitrate.Mastrobuonov. H ShearsonLehmanHutton,Inc.,514U.S.52,57(1995)(quotingVoltInfo.Sci.,Inc.v.Bd.ofTr.of 4 LelandStanfordJuniorUniv.,489U.S.468,476(1989)).Generally,arbitration shouldnotbe  p deniedunlessitmaybesaidwithpositiveassurancethatthearbitrationclauseisnotsusceptibleof  \ aninterpretationthatcoverstheasserteddispute.Doubtsshouldberesolvedinfavorofcoverage. H UnitedSteelworkersofAm.v.Warrior&GulfNavigationCo.,363U.S.574,58283(1960). 4   AstheUnitedStatesSupremeCourthasstated,   8  Arbitrationunderthe[FAA]isamatterofconsent,notcoercion,andpartiesare  generallyfreetostructuretheirarbitrationagreementsastheyseefit.Justasthey  maylimitbycontracttheissueswhichtheywillarbitrate,sotoomaytheyspecifyby l contracttherulesunderwhichthatarbitrationwillbeconducted.X    VoltInfo.Sci.,Inc.,489U.S.at479(citationsomitted).Therefore,thequestionbecomes whatthe 0"  contracthastosayaboutthearbitrabilityofpetitionersclaim.Mastrobuono,514U.S.at58;see #l! alsoFrizzellConst.Co.v.Gatlinburg,L.L.C.,9S.W.3d79,84(Tenn.1999). $X"   Inthiscase,thearbitrationclausegoverns allclaims,demands,disputesorcontroversies %0!$ ofeverykindornaturebetween[theparties]arisingfromthe[saleofthevehicle].Thearbitration &"% clausealsostatesthatarbitrationshallbe conductedpursuanttotheprovisionsoftheFederal '#& ArbitrationAct,9U.S.C.Section12etseq.Furthermore,itcontainstheprovisionthattheparties (#'  agreethatanyquestionregardingwhetheraparticularcontroversyissubjecttoarbitrationshallbe )$( decidedbythearbitrator. |*%)  h+&*   WhenacontractiscontrolledbytheFAAandcontainsabroadarbitrationclause,claimsof  fraudulentinducementaresubjecttoarbitration.PrimaPaintCorp.v.Flood&ConklinMfg.Co.,  388U.S.395,40304(1967).Specifically,theUnitedStatesSupremeCourtheldthatthelanguage  oftheFAA doesnotpermitthefederalcourttoconsiderclaimsoffraudintheinducement t generally.Id.at404.Instead,thecourtmayaddressallegationsoffraudonlyiftheyaredirected ` tothearbitrationclauseitself.Id.at40304. L    Inthecaseundersubmission,theCourtofAppealsfoundthattheclaimoffraudinthe $ t inducementwasnotsubjecttoarbitrationdespitetheholdinginPrimaPaint.TheCourtofAppeals  ` relieduponCityofBlainev.JohnColemanHayes&Assoc.,Inc.,818S.W.2d33(Tenn.Ct.App.  L  1991)andFrizzell,9S.W.3dat85,aswellastwounreportedcases.  8    InCityofBlaine,theCourtofAppealsrejectedthemajorityopinioninPrimaPaintandheld   thattheissueoffraudulentinducementcouldnotbesubmittedtoarbitrationundertheTennessee   UniformArbitrationAct.818S.W.2d33,3738(Tenn.Ct.App.1991).Whilerecognizingthatthe   FAAprovidesforarbitrationofclaimsoffraud,theCourtofAppealsinterpretedtheTennessee   arbitrationstatuteasrequiringjudicialdeterminationontheissuesofrescissionofthecontract p includingfraudintheinducement.Id.Specifically,theCourtfoundthattherewasnocontractto \ arbitrateifthecontractwereprocuredbyfraud.Id.at37. H   ThisCourthasalsoheldthatclaimsoffraudintheinducementaretoberesolvedbythe  p courtsandnotbyanarbitratorwhenthecontractisgovernedbyTennesseelaw.FrizzellConstr.Co.,  \ 9S.W.3dat84.InFrizzell,thearbitrationclausepurportedtogovern [a]llclaims,disputesandor H othermattersinquestionsarisingoutof,orrelatingto,thisAgreement.Id.at81.Inadditiontothis 4 arbitrationclause,thecontractcontainedaclausestatingthatTennesseelawwouldformthebasis   fordecidingquestionsconcerningthecontractsscopeandinterpretations.Weheldthat:   8  BystatingthatthecontractistobegovernedbyTennesseelaw,thepartieshave  indicatedtheirintentiontoarbitratealldisputes arisingoutof,orrelatingtotheir  agreement!butonlytotheextentallowedbyTennesseelaw....Therefore,because l Tennesseelawcontemplatesjudicialresolutionofcontractformationissues,we X  concludethatthepartieshaveindicatedtheirintentionnottosubmitsuchissuesto D! arbitration.0"    Id.at85. $X"   ThecaseundersubmissiondiffersfromCityofBlaineandFrizzellinthatbothCityofBlaine %0!$ andFrizzellspecificallyprovidedthatthelawsofTennesseewouldgovernthearbitrationofthe &"% contract.Incontrast,thearbitrationagreementinthiscaseclearlystatesthatitistobegovernedby '#& theFAAandnottheTennesseeUniformArbitrationAct.Thisdistinctionisimportantconsidering (#' thelonghistoryinthefederalcourtsofallowingarbitrationoffraudulentinducementclaimsunder )$( theFAA,seePrimaPaint,388U.S.at40205,eventhoughTennesseelawprohibitsthearbitration |*%) ofsuchclaims,seeFrizzell,9S.W.3dat84. h+&* Ї  InFrizzell,westressedthat,indecidingwhetheraclaimoffraudulentinducementissubject  toarbitration,courtsmustfocusuponthespecifictermsofthecontractatissue.9S.W.3dat84.We  heldthatifthepartiesagreedtoarbitratetheclaimoffraudulentinducement,thendespitesucha  prohibitionunderTennesseelaw,theclaimmustbesubmittedtoarbitration.Id.Theconverseis t equallytrue!ifthepartiesdidnotagreetoarbitratetheclaimoffraudulentinducement,thenthey ` couldnotbecompelledtoarbitratetheclaimdespitethefactthattheclaimcouldbearbitratedunder L  theFAA.Id. 8    ItisundisputedthatTaylorsignedacontractthatspecificallystatedthat allclaims,  ` demands,disputesorcontroversiesofeverykindornaturebetween[theparties]arisingfromthe  L  [saleofthevehicle]shallbesettledbybindingarbitrationpursuanttotheprovisionsoftheFederal  8  ArbitrationAct.(Emphasisadded).Therefore,becauseTaylorknowinglysignedthecontract,she $  agreedtoarbitrateaclaimoffraudulentinducement.     II.WastheArbitrationProvisionUnconscionable?h +#  2           Tayloralsoarguesthatthearbitrationagreementisvoidbecauseitisunconscionable.She p maintainsthatevenifthecontractwasnotinducedbyfraud,thetermsofthearbitrationprovision \ areunconscionablebecausethecontractreservesforCityAutotherighttolitigateclaimsitmayhave H againstTaylorwhilerequiringTaylortosubmitanyofherclaimstoarbitration. 4    XEXXXEA.WhoDeterminesWhethertheArbitrationClauseIsUnconscionable?  \   InPrimaPaint,theUnitedStatesSupremeCourtheldthatwhileclaimsoffraudaretobe 4 submittedtoanarbitrator,claimsthatspecificallyattacktheformationofthearbitrationprovision   ofacontractaretobejudiciallydetermined.   8  Under[section]4[oftheFAA],withrespecttoamatterwithinthejurisdictionofthe  federalcourtssavefortheexistenceofanarbitrationclause,thefederalcourtis  instructedtoorderarbitrationtoproceedonceitissatisfiedthatthemakingofthe l agreementforarbitrationorthefailuretocomply(withthearbitrationagreement)is X  notinissue.Accordingly,iftheclaimisfraudintheinducementofthearbitration D! clauseitself!anissuewhichgoestothemakingoftheagreementtoarbitration! 0"  thefederalcourtmayproceedtoadjudicateit.#l!   PrimaPaint,388U.S.at40304(internalfootnoteomitted). $D #  %0!$   Generally,whetheravalidagreementtoarbitrateexistsbetweenthepartiesistobe  determinedbythecourts,andifacomplaintspecificallychallengesthearbitrationclauseongrounds  suchasfraudorunconscionability,thecourtispermittedtodetermineitvaliditybeforesubmitting  the#XEXX XEeD# XEXXXEremainderofthedisputetoarbitration.4Am.Jur.2dAlternativeDisputeResolution74(2002 t Supp.);#XEXX XEK# XEXXXEԀ#XEXX XEK# XEXXXEseealsoBurdenv.CheckintoCashofKentucky,LLC,267F.3d483(6thCir.2001);N& ` DFashions,Inc.v.DHJIndus.,Inc.,548F.2d722(8thCir.1977);Am.SafetyEquip.Corp.v.JP L  Maguire&Co.,391F.2d821(2ndCir.1968);Hartv.McChristian,42S.W.3d552(Ark.2001); 8  Simpsonv.Cohen,812So.2d588(Fla.App.2002). +#  3       $ t   Indeterminingwhetherthereisavalidagreementtoarbitrate, courtsgenerally...should  L  applyordinarystatelawprinciplesthatgovernformationofcontracts,FirstOptionsofChicago,  8  Inc.v.Kaplan,514U.S.938,944(1995).AstheUnitedStateSupremeCourtnotedinAlliedBruce $  TerminixCos.v.Dobson:   8  Section2[oftheFAA]givesStatesamethodforprotectingconsumersagainstunfair   pressuretoagreetoacontractwithanunwantedarbitrationprovision.Statesmay   regulatecontracts,includingarbitrationclauses,undergeneralcontractlawprinciples p andtheymayinvalidateanarbitrationclause uponsuchgroundsasexistatlawor \ inequityfortherevocationofanycontract.9U.S.C.2.H   513U.S.265,281(1995). [G]enerallyapplicablecontractdefenses,suchasfraud,duress,or  p unconscionability,maybeappliedtoinvalidatearbitrationagreementswithoutcontraveningthe  \ enforcementprovisionsoftheFAA.DoctorsAssoc.,Inc.v.Casarotto,517U.S.681,687(1996). H   Asdiscussedabove,Taylorsclaimoffraudintheinducementissubjecttoarbitrationunder   theFAAbecausethatclaimattacksthevalidityofthecontractasawhole.However,herclaimthat   thearbitrationprovisionisunconscionableisamattertobedecidedbythecourtsandnotthe  arbitrator,becauseitspecificallychallengesthevalidityoftheagreementtoarbitrateirrespectiveof  thevalidityofthewholecontract.    B.IstheArbitrationProvisionintheContractUnconscionable? X    D! #XEXX XE%L#  Inherbriefonappeal,Taylorfocusesonthefollowingprovisioncontainedinthearbitration   agreementoftheBuyersOrder: Dealer,howevermaypursuerecoveryofthevehicleunderthe  TennesseeUniformCommercialCodeandCollectionofDebtduebystatecourtaction.Taylor  assertsthatthisprovisionrendersthecontractunconscionablebecauseCityAutohasretainedfor t itselflegalremediesbeyondarbitrationwhilerestrictingTaylortothoseremediesavailableunder ` theFederalArbitrationAct. L    Thequestionofwhetheracontractorprovisionthereofisunconscionableisaquestionof $ t law.SeeLewisRefrigerationCo.v.SawyerFruit,Vegetable&ColdStorageCo.,709F.2d427,435  ` n.12(6thCir.1983).  L    Ifacontractortermthereofisunconscionableatthetimethecontractismade,acourtmay $  refusetoenforcethecontract,ormayenforcetheremainderofthecontractwithoutthe   unconscionableterm.SeeRestatement(Second)ofContracts208(1981). Thedeterminationthat   acontractortermisorisnotunconscionableismadeinthelightofitssetting,purposeandeffect.   Relevantfactorsincludeweaknessesinthecontractingprocesslikethoseinvolvedinmorespecific   rulesastocontractualcapacity,fraud,andotherinvalidatingcauses....Restatement(Second)of p Contract208,cmt.a(1981). \   Enforcementofacontractisgenerallyrefusedongroundsofunconscionabilitywherethe 4  inequalityofthebargainissomanifestastoshockthejudgmentofapersonofcommonsense,and  p wherethetermsaresooppressivethatnoreasonablepersonwouldmakethemontheonehand,and  \ nohonestandfairpersonwouldacceptthemontheother.Haunv.King,690S.W.2d869,872 H (Tenn.Ct.App.1984)(quotingInreFriedman,407N.Y.S.2d999(1978));seealsoAquascene,Inc. 4 v.NoritsuAm.Corp.,831F.Supp.602(M.D.Tenn.1993).Anunconscionablecontractisonein   whichtheprovisionsaresoonesided,inviewofallthefactsandcircumstances,thatthecontracting   partyisdeniedanyopportunityformeaningfulchoice.Id.    WhileTennesseehasyettoaddresstheissueofwhetheranarbitrationprovisionina  consumercontractwhichreservesarighttoaccesstothecourtsonlyforthemerchantandnotthe l consumerisvoidableonthebasisofunconscionability,anumberofotherjurisdictionshave X  addressedsuchonesidedarbitrationprovisions. D!   Forexample,theSupremeCourtofWestVirginiaheldthat: #l! 8  [W]hereanarbitrationagreemententeredintoaspartofaconsumerloantransaction $D # containsasubstantialwaiveroftheborrowersrights,includingaccesstothecourts, %0!$ whilepreservingthelendersrighttoajudicialforum,theagreementis &"% unconscionableand,therefore,voidandunenforceableasamatteroflaw.'#&   Arnoldv.UnitedCos.LendingCorp.,511S.E.2d854,862(W.Va.1998). )$(   |*%)   TheCourtinArnoldstatedthat [a]determinationofunconscionabilitymustfocusonthe   relativepositionsoftheparties,theadequacyofthebargainingposition,themeaningfulalternatives  availabletotheplaintiff,andtheexistenceofunfairtermsinthecontract.Id.at861(quotingArts  FlowerShop,Inc.v.Chesapeake&PotomacTel.Co.,413S.E.2d670(W.Va.1991)).Applying t thistest,theCourtnotedthat therelativepositionsoftheparties,anationalcorporatelenderonone ` sideandelderly,unsophisticatedconsumersontheother,weregrosslyunequal.Id.(footnote L  omitted).Additionally,therewas noevidencethattheloanbrokermadeanyotherloanoption 8  availabletotheArnolds.Finally,theCourtfoundthat thetermsoftheagreementare $ t unreasonablyfavorabletoUnitedLending.Basedonthesereasons,theCourtfoundthe  ` arbitrationagreementtobeunconscionable.  L    Similarly,theMontanaSupremeCourtvoidedasunconscionableanarbitrationprovision $  containedinacontractforadvertisementinatelephonedirectorythatreservedtherighttoajudicial   forumforthePublisherforcollectionofamountsduewhilelimitingtheconsumertoarbitrationof   allclaims.Iwenv.U.S.WestDirect,977P.2d989(Mont.1999).TheMontanaCourtheld:   8  [T]hiscasepresentsaclearexampleofanarbitrationprovisionthatlacksmutuality p ofobligation,isonesided,andcontainstermsthatareunreasonablyfavorabletothe \ drafter.BecauseU.S.Directpresentedthisagreementonatakeitorleaveitbasis, H itisalsoacontractinwhichtherewasnotmeaningfulchoiceonthepartofthe 4 weakerbargainingpartyregardingacceptanceoftheprovisions....[D]isparitiesin  p therightsofthecontractingpartiesmustnotbesoonesidedandunreasonably  \ favorabletothedrafter,astheyareinthiscase,thattheagreementbecomes H unconscionableandoppressive.4   Id.at996;seealsoWilliamsv.AetnaFin.Co.,700N.E.2d859(Ohio1998),cert.denied,526U.S.   1051(1999)(refusingtoenforceanarbitrationclauseinaconsumerloancontractwhichpreserved  forthefinancecompanythejudicialremedyofforeclosureonthedebtorsmortgagebutrestricted  thedebtorsremediessolelytoarbitration);Lytlev.CitiFinancialServs.,Inc.,810A.2d643(Pa.  Super.Ct.2002)(findingunenforceableanarbitrationagreementthatreservedaccesstothecourts l forCitiFinancial,absent businessrealitiesthatwouldcompelsuchaclause);Showmethemoney X  CheckCashers,Inc.v.Williams,27S.W.3d361(Ark.2000)(findingthatthearbitrationagreement D! lackedmutualitybecauseitprovidedforajudicialforumforonepartywhilerestrictingtheother 0"  partytoarbitration). d +#  4       #l!   $X"   Thearbitrationagreementinthiscaseiscomparabletothosethatwerefoundtobe   unconscionableintheaforementionedcases.CityAutohasajudicialforumforpracticallyallclaims  thatitcouldhaveagainstTaylor.Indeed,itishardtoimaginewhatotherclaimsitwouldhave  againstherotherthanonetorecoverthevehicleorcollectadebt.Atthesametime,Tayloris t requiredtoarbitrateanyclaimthatshemighthaveagainstCityAuto. `   ThecontractsignedbetweenTaylorandCityAutoisoneofadhesion,inthatitisa 8  standardizedcontractformthatwasofferedonessentiallya takeitorleaveitbasiswithout $ t affordingTaylorarealisticopportunitytobargain.SeeBlacksLawDictionary40(6thed.1990).  ` Wehavepreviouslydeterminedthatenforceabilityofcontractsofadhesion XEXXXEgenerallydependsupon  L  whetherthetermsofthecontractarebeyondthereasonableexpectationsofanordinaryperson,or  8  oppressiveorunconscionable.SeeBuraczynskiv.Eyring,919S.W.2d314,320(Tenn.1996).#XEXX XE}w# XEXXXEԀ $  Courtswillnotenforceadhesioncontractswhichareoppressivetotheweakerpartyorwhichserve   tolimittheobligationsandliabilityofthestrongerparty.Id.#XEXX XEx#ԀLookingatthearbitrationagreement   inthepresentcase,itisclearthatitisunreasonablyfavorabletoCityAutoandoppressivetoTaylor.   Forthesereasons,wefindthearbitrationclauseintheBuyersOrdertobeinvalidandunenforceable.     Generally,avoidagreementtoarbitrate,incorporatedinageneralcontract,istreatedasa \ separatecontract.4Am.Jur.AlternativeDisputeResolution77(Supp.2002)Iftheagreement H isnotapartofthesubstanceofthegeneralcontract,pertainstotheremedyonly,andiscollateralto 4 thecontractualmatters,itisseverablefromthemainbodyofthecontract.Id.InTennessee, [a]n  p agreementcanbeeitheranentirecontractoraseverablecontractaccordingtotheintentionofthe  \ parties,andthefactthatdivisiblepartsareincludedwithinthesamedocumentdoesnotpreclude H themfrombeingconsideredandenforcedasseparatecontracts.PenskeTruckLeasingCo.v. 4 Huddleston,795S.W.2d669,671(Tenn.1990).     BecausethearbitrationprovisionintheBuyersOrderonlyrelatestoremedyandiscollateral  toallothercontractmatters,wefindthatitisseverablefromtheremainingportionsofthecontract.    bXEXXXE  CONCLUSION  l #XEXXbXE#  Insummary,weholdthataclaimforfraudulentinducementwassubjecttoarbitrationinthis D! casebecausethepartiesagreedintheBuyersOrdertobegovernedbytheFAA,andtheFAA 0"  providesforarbitrationofclaimsforfraud.However,wealsofindthatthearbitrationclauseinthe #l! BuyersOrderisunconscionableandthereforevoidbecauseitreservestherighttoajudicialforum $X" forCityAutowhilerequiringTaylortosubmitallclaimstoarbitration.Forthesereasons,the $D # decisionoftheCourtofAppealstooverrulethetrialcourtsdismissalofthecomplaintisaffirmed, %0!$ andthecaseisremandedtothetrialcourtforfurtherproceedingsconsistentwiththisopinion. XEXXXE &"%   CostsofthisappealareassessedtoCityAutoSales. (#'    `     h     _____________________________ |*%)    `     h     WILLIAMM.BARKER,JUSTICE#XEXX XE##[XXE#