Mecke v. Bluegreen Vacations Corporation

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF MISSOURI

SOUTHERN DIVISION

DENISE MECKE, )

)

Plaintiff, )

)

vs. ) Case No. 6:23-cv-03047-MDH

)

BLUEGREEN VACATIONS CORP., )

et. al., )

)

Defendants. )

ORDER

Before the Court is Defendants Bluegreen Vacations Corporation, Bluegreen Vacations

Unlimited, Inc., Dusty Tonkin, Yolanda Armalin, Susan Saturday, Lynn Brown, Russell Cox,

Steve Coen, Howard Kitchen, Heather Pilkinton, and Kathy Jo Conque’s (collectively

“Defendants’”) Motion to Compel Arbitration. Also before the Court is Plaintiff Denise Mecke’s

Motion for a Hearing on Defendants’ Motion to Compel Arbitration. For reasons herein,

Defendants’ Motion is GRANTED. Plaintiff’s Complaint is, accordingly, DISMISSED. Further,

Plaintiff’s Motion for a Hearing is MOOT.

BACKGROUND

Defendant Bluegreen Vacations Unlimited (“Defendant Bluegreen”) sells and manages

timeshare properties throughout the United States. Plaintiff worked for Defendant Bluegreen in a

variety of positions from 2002 until 2010, at which point Plaintiff voluntarily ended her

employment because, she contends, she observed certain sales practices she found to be unethical.

Nonetheless, in March 2011, Plaintiff sought reemployment with Defendant Bluegreen, who then

rehired Plaintiff on April 1, 2011 as sales representative. When Defendant Bluegreen rehired

Plaintiff, Plaintiff signed, among other documents, an Arbitration Agreement (“the Agreement”),

requiring Plaintiff to arbitrate, rather than pursue in court, a variety of disputes that may arise

between Plaintiff and Defendant as well as others. In pertinent part, the Agreement provides as

follows.

This Arbitration Agreement, between the undersigned Individual and Bluegreen

(Bluegreen or the Company) is intended to provide the exclusive means of resolving all

Disputes, as defined below, which may arise between them. In consideration for their

mutual promises, both parties, by entering into this Agreement, give up their right to trial

by court or by jury…This Agreement is to be enforced under the Federal Arbitration Act

(“FAA”).

Disputes subject to arbitration are all Disputes between the parties, which may otherwise

be brought in a court or before a governmental agency, arising out of or related to the

Individual’s application for employment, employment, or termination of employment with

the Company. Also subject to arbitration are disputes involving any person or entity whose

liability or right of recovery derives from a Dispute covered by this Agreement (e.g.

partner, agent, subsidiary or parent corporation, affiliate, shareholder, successor or assign

of a party).

Such Disputes include, but are not limited to, claims of…wrongful

termination…defamation…violation of public policy, negligent retention, negligent

supervision, negligent entrustment…retaliation…any other tort, contract, equitable,

statutory, or constitutional claim, breaches of any duty owed by an employee to an

employer, and claims against an employee, officer, director or agent of the Company who

has agreed to arbitrate a claim which would directly or indirectly subject either party to

liability…Further, Disputes include claims related to…whistleblowing activity…

The Agreement further indicates that “rules governing arbitration proceedings are contained in the

Company’s Arbitration Rules, which are incorporated herein by reference.” The Arbitration Rules

(“the Rules”), which Plaintiff alleges she never reviewed, also indicate that the Rules “are

expressly incorporated into the parties’ Arbitration Agreement.” Rule Fifteen provides that

“Bluegreen Corporation may revise these procedures as it deems necessary consistent with the

interests of fairness and due process.” Any such modification, however, will not apply to “any

claim which has been submitted to arbitration prior to the date on which the revision is

communicated to the parties.” The Arbitration Rules include no rule allowing other parties subject

to the Arbitration Agreement, like Plaintiff, to modify any arbitration rule or procedure. Nor do

the rules provide that Defendant Bluegreen must provide Plaintiff with any notice of any unilateral

modification.

Plaintiff does not dispute that she initialed and signed the Agreement. Plaintiff’s final

signature on the Agreement, also signed by a representative of Defendant Bluegreen, appears just

below bold and underlined text that appears in capital letters, reading “this contract contains a

binding arbitration provision which may be enforced by the parties.” The final section of the

Agreement states that, by signing, both parties agree that they have carefully read the Agreement,

had “an opportunity to examine the Arbitration Rules”, and understand that signing the Agreement

means “both parties waive their right to trial by court or jury.” After signing the Agreement and

beginning her work as a sales representative, Plaintiff alleges that she observed some coworkers

engage in sales practices she believed to be deceptive and at odds with company policy. Plaintiff

made audio recordings of some of her coworkers engaged in practices Plaintiff found to be

deceptive. Plaintiff provided some of these recordings to supervisors. On an August 3, 2022 phone

call, Defendant Armalin advised Plaintiff she had been terminated for “breach of confidentiality

by covertly recording reps.” (Doc. 1 at ¶ 83).

Plaintiff believes her termination to be wrongful and has alleged altogether ten counts

against eleven defendants, each involved in the circumstances surrounding Plaintiff’s discharge.

Specifically, Plaintiff’s Complaint alleges under Count One Unlawful Discharge in Violation of

RSMO § 285.575 (Missouri’s whistleblower protection act); Count Two Wrongful Discharge and

Retaliation in Violation of Public Policy; Count Three Unfair Competition; Count Four Fraud;

Count Five Negligent, Retention, and/or Supervision of Unfit Employees; Count Six Quantum

Meruit; Count Seven Tortious Interference with Business Expectancy; Count Eight Defamation;

Count Nine Civil Conspiracy; and Count Ten Declaratory Judgment. Plaintiff further alleges that,

Each Defendant is sued individually and as a partner, agent, and/or employee of Defendants

Bluegreen acting within the course and scope of said partnership, agency, and/or employment,

with the knowledge, permission, and/or consent of the other co-Defendants…Defendants

Bluegreen are liable to the Plaintiff for the acts of the individual Defendants under the legal

doctrine of respondeat superior. (Doc. 1 at ¶ 14).

In the present motion, Defendants ask this Court to dismiss Plaintiff’s Complaint and

compel this matter to arbitration pursuant to the terms outlined in the Agreement. In the alternative,

Defendants ask that this Court compel arbitration, but stay this matter pending a resolution in

arbitration. Plaintiff, on the other hand, does not argue that she did not sign the Agreement, nor

does Plaintiff argue the present dispute as alleged in the Complaint somehow falls outside the

scope contemplated by the Agreement. Rather, Plaintiff argues the Agreement is unenforceable

because it lacked consideration and is unconscionable.

STANDARD

A party who has not agreed to arbitrate a dispute cannot be forced to do so. AT&T

Technologies, Inc. v. Communications Workers of America, 475 U.S. 643, 648 (1986). The validity

of an arbitration agreement is determined by reference to state law. See Perry v. Thomas, 482 U.S.

483, 493-94 n. 9 (1987). Because Plaintiff worked for Defendant in Missouri and resided in

Missouri, Missouri law controls the validity of Defendant’s arbitration agreement. Under Missouri

law, the Court must engage in a three-step process, deciding: 1) whether a valid contract exists; 2)

whether the specific dispute falls within the scope of the arbitration agreement; and 3) the court

must then determine if the agreement is subject to revocation based upon contract principles, such

as whether it is procedurally or substantively unconscionable. Whitworth v. McBride & Son

Homes, Inc., 344 S.W.3d 730, 736 (Mo. App. W.D. 2011), citing Nitro Distributing, Inc. v. Dunn,

194 S.W.3d 339, 345 (Mo. banc 2006). “Whether an arbitration agreement is valid is a matter of

state contract law.” Faber v. Menard, Inc., 367 F.3d 1048, 1052 (8th Cir. 2004).

DISCUSSION

I. Federal Arbitration Act (“FAA”) Controls

As a preliminary matter, this Court finds that the FAA applies to the enforcement of the

Agreement. The plain language of the Agreement makes clear the Parties’ intent that the FAA

would govern enforcement of the Agreement: “This Agreement is to be enforced under the Federal

Arbitration Act (“FAA”).” Neither party appears to contest this point.

The FAA provides that written arbitration agreements “shall be valid, irrevocable, and

enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.”

9 U.S.C. § 2. Thus, the FAA places arbitration agreements “upon the same footing as other

contracts.” Volt Information Sciences, Inc. v. Bd. of Trustees of Leland Stanford Junior Univ., 489

U.S. 468, 474 (1989) (citation omitted). Not only does the FAA require the enforcement of

arbitration agreements, but it “declare[s] a national policy favoring arbitration.” Nitro-Lift Techs.,

L.L.C. v. Howard, 568 U.S. 17, 20 (2012) (quoting Southland Corp. v. Keating, 465 U.S. 1, 10

(1984)). To the extent any conflict exists between the FAA and any relevant Missouri statute, the

FAA preempts Missouri law. Sturgeon v. Allied Pros. Ins. Co., 344 S.W.3d 205, 212 (Mo. Ct.

App. 2011); Standard Sec. Life Ins. Co. v. West, 127 F. Supp. 2d 1064, 1067 (W.D. Mo. 2000).

II. The Agreement is Enforceable Under Missouri Contract Law

Under Eighth Circuit precedent, the first substantive question to address is whether the

Agreement is a valid, enforceable contract under Missouri contract law. Faber v. Menard, Inc.,

367 F.3d 1048, 1052 (8th Cir. 2004). If enforceable, then this Court must look to whether the

specific dispute at issue falls within the scope of the Agreement.1 As to the first issue, Plaintiff

argues the Agreement is unenforceable because it lacks consideration and because it is

unconscionable.

a. Consideration Supports the Agreement

In Missouri, legal consideration is essential for the formation of any contract, including

one for arbitration. Kunzie v. Jack-In-The-Box, Inc., 330 S.W.3d 476 (Mo. App. E.D. 2010).

Consideration is created by “either a promise (to do or refrain from doing something) or the transfer

or giving up of something of value to the other party.” Morrow v. Hallmark Cards, Inc., 273

S.W.3d 15, 25 (Mo. App. W.D. 2008). Plaintiff argues that the Agreement lacks consideration

and proves therefore unenforceable. Plaintiff’s position, however, ignores the plain language of

the Agreement. The Agreement provides, “In consideration for their mutual promises, both parties,

by entering into this Agreement, give up their right to trial by court or by jury.” This Court has

previously held “parties’ mutual promise to arbitrate constitutes sufficient consideration if that

promise was binding upon both sides.” James v. Menard, Inc., 2021 WL 4129762, at *2 (W.D.

1 The parties appear to agree that the allegations within Plaintiff’s Complaint fall within the scope of the

Agreement. To the extent Plaintiff suggests the Complaint’s allegations fall outside the scope of the

Agreement because the Agreement does not extend beyond Plaintiff’s employment with Defendant

Bluegreen (Doc. 5 at 5), such an argument is without merit. The Agreement’s plain language is

unambiguous that the Agreement contemplates disagreements about, inter alia, termination of employment.

It makes no sense that the Agreement would specifically contemplate disagreements about termination and

become invalidated upon an employee’s termination.

Mo. Sept. 9, 2021). Further, the Missouri Supreme Court has specifically found that contract

provisions providing the ability to unilaterally modify arbitration rules do not render illusory

promises to mediate, where those provisions specifically allow only for prospective rather than

retroactive modifications. See Baker v. Bristol Care, Inc., 450 S.W.3d 770, 776–77 (Mo. 2014)

(mutual promises to arbitrate not illusory where unilateral modification provision allows for only

prospective rather than retroactive changes.). In the present matter, Rule Fifteen’s stipulation that

no rule modifications will apply to matters already submitted to arbitration by either party is

sufficient to show that any changes Defendant Bluegreen may pursue cannot apply retroactively.

It is also plain under Missouri law that the Rules constitute part of the contract that binds the

parties. See Bowers v. Asbury St. Louis Lex, LLC, 478 S.W.3d 423, 428-29 (Mo. Ct. App. 2015)

(arbitration rules expressly incorporated into contract language evidence the parties’ intent to read

the documents together as one).

b. The Agreement is Not Unconscionable

Plaintiff argues the Agreement is unenforceable also because it is unconscionable. Under

Missouri law, a contract is unconscionable only when it is found to be both procedurally as well

as substantively unconscionable. Cicle v. Chase Bank USA, 583 F.3d 549, 554 (8th Cir. 2009).

Examination of whether a contract is procedurally unconscionable emphasizes the process

surrounding the formation of the contract, while a contract that is substantively unconscionable is

unduly harsh in its terms. Id. A court will hold a contract to be unconscionable only upon finding

“an inequality so strong, gross, and manifest that it must be impossible to state it to one with

common sense without producing an exclamation at the inequality of it.” Smith v. Kriska, 113

S.W.3d 293, 298 (Mo. Ct. App. 2003).

Plaintiff argues the Agreement is procedurally unconscionable because it was: 1) non-

negotiable; 2) difficult for Plaintiff to understand in its entirety thereby reflecting unequal

bargaining power; and 3) executed in a high-pressure environment. Plaintiff also contends the

terms of the Agreement are substantively unconscionable because:1) Defendant Bluegreen alone

can modify the Arbitration Rules; 2) the Agreement places a disproportionate financial burden on

Plaintiff; and 3) prevents Plaintiff from filing a class action suit against Defendant. Even taking

Plaintiff’s contentions as true, however, it is clear the terms of the Agreement and the process by

which it was signed do not evidence a level of unconscionability that would render the Agreement

unenforceable under Missouri law.

As to Plaintiff’s first two arguments regarding procedural unconscionability, Missouri Courts

are clear that a contract is not procedurally unconscionable simply because its terms are non-

negotiable and one party has more bargaining power than the other. See Grossman v.

Thoroughbred Ford, Inc., 297 S.W.3d 918, 921 (Mo. Ct. App. 2009) (courts look not simply to

negotiability and relative bargaining power but to enforcing reasonable expectations). While lack

of negotiability and relative bargaining power may be factors to consider under Missouri law,

neither is dispositive in determining unconscionability. Further, the case Plaintiff cites for support

of the proposition that non-negotiability supports a finding of unconscionability is meaningfully

distinguishable. In Brewer, the contract at issue was a $2,215 loan from a title loan company that

charged the plaintiff 300 percent annual interest. Brewer v. Missouri Title Loans, 364 S.W.3d 486,

487 (Mo. 2012). In the present matter, Plaintiff does not contend, nor does the record otherwise

indicate, that Plaintiff was somehow forced into accepting a job with Defendant Bluegreen. Rather,

Plaintiff’s argument makes clear that she specifically sought re-employment with Defendant

Bluegreen and was re-hired on the spot. (Doc. 5 at 1). There is simply no indication that Defendant

was somehow deprived of meaningful choice in terms of her decision to seek and accept

employment with Defendant Bluegreen, regardless of whether the Agreement constitutes a

condition of such employment.

A meaningful distinction exists between the decision to, on one hand, accept at-will

employment, and on the other, pursue a payday loan with 300 percent interest, as the Plaintiff did

in Brewer. As to Plaintiff’s final procedural unconscionability argument, that Plaintiff signed the

contract in a high-pressure environment, it is clear that this does not automatically support a finding

of unconscionability. While certain high-pressure sales tactics may suggest unconscionability,

Plaintiff makes no such allegations. See Cicle v. Chase Bank USA, 583 F.3d 549, 555 (8th Cir.

2009) (high-pressure sales tactics designed to coerce may indicate procedural unconscionability).

Instead, Plaintiff contends that she was simply “rushed through her hiring paperwork.” (Doc. 5 at

1). This position, even if true, is insufficient to support a finding of unconscionability.

In terms of Plaintiff’s arguments for substantive unconscionability, the Missouri Supreme

Court, as discussed more fully above, has already found that a contract provision that allows only

one party to prospectively modify arbitration rules is not grounds for unenforceability. See Baker

v. Bristol Care, Inc., 450 S.W.3d 770, 776–77 (Mo. 2014) (mutual promises to arbitrate not illusory

where unilateral modification provision allows for only prospective rather than retroactive

changes.).2 Accordingly, this indicates that, under Missouri law, any provision that allows

prospective rather than retroactive unilateral modification is not so one sided as to render the

arbitration agreement unenforceable.

2 Though Baker involved a challenge to whether consideration supported the contract, there is no indication

Missouri courts would decide the matter differently if the argument instead focused on substantive

unconscionability. If a contract provision that allows only one party to prospectively change arbitration

rules survives a consideration argument, the same provision is thereby not evidence of substantive

unconscionability.

Plaintiff also argues the terms of the Agreement are substantively unconscionable because of

disproportionate financial burden on Plaintiff. In terms of fees, the Agreement indicates that: 1)

the party submitting a matter to arbitration must pay a $350 fee; 2) the expense of arbitration,

including the arbitrator’s fees and expenses, is covered entirely by Defendant Bluegreen; 3)

attorney’s fees and costs are covered by each party3; 4) any party seeking appeal must cover a

$450 filing fee; and 5) any party seeking a transcript must cover the cost of the transcript. The

Rules also indicate that, upon a finding by the arbitrator that a party has submitted a claim not

substantially justified by the law or facts, that party may be responsible for the expense of

arbitration. While this standard remains somewhat vague, any such finding would be, pursuant to

the Arbitration Rules, appealable. This provision also appears to be a reasonable deterrent against

either party asserting frivolous claims or defenses.

As Defendants argue, the fees outlined in the Arbitration Rules do not appear unduly one-

sided or disproportionate and further appear comparable to fees associated with filing a lawsuit in

federal or state court. This is particularly true as to fees associated with the expense of the

arbitration itself, separate from attorney fees, which are shouldered entirely by Defendant

Bluegreen, except in cases where the arbitrator finds the opposing party has asserted a claim or

defense that is not substantially justified by law or fact. This provision distinguishes the instant

matter from the fee scheme at issue in Vincent, which the Missouri Supreme Court found to be

unconscionable because it required homebuyers to cover all arbitration costs, rather than splitting

that cost with developers. State ex rel. Vincent v. Schneider, 194 S.W.3d 853, 860 (Mo. 2006). See

also Brewer v. Missouri Title Loans, 364 S.W.3d 486, 493 (Mo. 2012) (arbitration agreement’s

fee structure unconscionable where agreement fails to specify fees are covered by title loan

3 This provision also indicates that the arbitrator may not grant an award of attorney’s fees unless a statute

or contract at issue specifically allows for such an award.

company). Plaintiff fails to cite to any specific provision of the Agreement or the Rules in support

of her contention that, if unsuccessful in her claims, “she faces the required assumption of all the

costs, arbitrator fees and attorney fees for both parties.” (Doc. 5 at 8). The plain language of the

Agreement and the Rules seem to suggest the opposite: Defendant Bluegreen is responsible for all

arbitration fees unless Plaintiff’s claims are substantially unsupported by law or fact and the

arbitrator may not award attorney fees unless a specific statute or contract provision at issue

explicitly allows for the arbitrator to award such fees. Importantly, the Agreement’s language also

makes clear that these provisions apply with equal force to Defendant Bluegreen and any party

asserting a claim in arbitration against Defendant Bluegreen.

Finally, Plaintiff argues the Agreement is substantively unconscionable because it involves a

class-action waiver. This Court finds this argument unpersuasive. First, as Defendants argue, the

Agreement does not require Plaintiff to waive class action claims, but instead requires those claims

to be submitted to arbitration. Even if the Agreement did involve a class-action waiver, however,

this is not automatically grounds for finding unconscionability. AT&T Mobility LLC v.

Concepcion, 563 U.S. 333 (2011). Second, the relevance of Plaintiff’s class action argument

remains unclear, as Plaintiff does not seek class certification and appears to have alleged no facts

beyond those related to her own discharge. This sharply distinguishes Plaintiff’s case from each

of the cases Plaintiff cites in support. See Hennessey v. Kohl's Corp., 571 F. Supp. 3d 1060 (E.D.

Mo. 2021) (class action alleged); Woods v. QC Fin. Servs., Inc., 280 S.W.3d 90 (Mo. Ct. App.

2008) (same); Whitney v. Alltel Commc'ns, Inc., 173 S.W.3d 300 (Mo. Ct. App. 2005) (same);

Pleasants v. Am. Exp. Co., 541 F.3d 853 (8th Cir. 2008) (same). Plaintiff’s specific allegations in

this matter, which focus solely on Plaintiff’s individual situation, provide no occasion to review

the Agreement’s provisions regarding class action allegations.

CONCLUSION

For foregoing reasons, Defendants’ Motion to Compel Arbitration is GRANTED. It is clear

from the plain language of the Agreement as well as the Complaint that this entire controversy

falls within the entire scope of the Agreement and, as discussed above, the parties do not appear

to contest this point. Plaintiff’s Complaint is therefore DISMISSED. Accordingly, Plaintiff’s

Motion for a Hearing is MOOT.

IT IS SO ORDERED.

Dated: October 12, 2023 /s/ Douglas Harpool______

DOUGLAS HARPOOL

United States District Judge