JPMORGAN CHASE BANK, N.A. (SUCCESSOR BY MERGER TO BANK ONE, NA), APPELLANT
BLUEGRASS POWERBOATS; AND JAMES D. TAYLOR, APPELLEES
Released for Publication April 10, 2014
ON REVIEW FROM COURT OF APPEALS. CASE NO. 2009-CA-002006-MR. JESSAMINE CIRCUIT COURT NO. 03-CI-00635.
COUNSEL FOR APPELLANT: Dustin Elizabeth Meek, Katherine Ellen McKune, Tachau Meek PLV, Louisville, Kentucky.
COUNSEL FOR APPELLEES: F. J. Anderson, Barbara Anderson, Lexington, Kentucky.
This case is procedurally unusual and presents several questions about the trial court's authority to revisit its interlocutory orders and the existence and enforcement of arbitration agreements. But the dispositive question in this case is whether the trial court had the authority to set aside an order compelling arbitration under a purported arbitration agreement after the arbitrator had rendered a dispositive order, or instead was compelled to confirm the arbitration order. This Court holds that because the matter was not final and there was insufficient proof of the existence of a valid arbitration agreement, the trial court properly set aside its earlier order. For these reasons, the Court of Appeals is affirmed.
Bluegrass Powerboats, Inc. (Powerboats), a retailer of motorboats and watercraft supplies, was owned by Appellee James Taylor and his wife. Gregory Shearer, an employee of Powerboats, offered to buy the business from the Taylors, and they entered into an asset purchase agreement. Prior to completion of the sale, Taylor exited the business, and the next day, Shearer began operating the business as Bluegrass Marine.
To complete the financial transaction, Taylor opened a savings account with the Appellant, Chase Bank, in which he deposited a check from Shearer for $123,102, the purchase price of the former Powerboats. The next day, he visited the bank and was told that the money had been credited to his account, and he withdrew $9,000 in the form of a certified check. Two days later, the bank sent Taylor a letter stating that the check he had deposited had been returned for insufficient funds, and that his account had been debited $123,102, the amount of the deposited check. Because he had already withdrawn money, the debit left Taylor overdrawn on the account. The record does not reveal how this affected the business, and that is not relevant to this action. It is apparent, however, that Taylor never got paid the $123,102 for his business.
Taylor then sued Chase Bank in Jessamine Circuit Court because the bank had failed to pay or return an NSF check by midnight of the day the check was deposited when the check was drawn on the same bank, as required by the Uniform Commercial Code. He claimed the full amount of his loss.
Chase responded to the complaint by claiming that the dispute was subject to an arbitration agreement and that the court should stay all court proceedings and order the case to arbitration. The trial court conducted a hearing based on competing affidavits alone regarding Chase's usual business practice in opening accounts, the fact that Chase had no supporting paperwork to show that Taylor had seen and signed a signature card referring to a booklet that invoked the Federal Arbitration Act, and that Taylor denied ever seeing such a card or receiving the booklet. Nonetheless, based on this, the court concluded
that Taylor had signed the signature card and that there was an arbitration agreement, and referred the case to arbitration.
Taylor then moved the court to vacate the order to arbitrate, or to make its order final and appealable. ...