Champion Chrysler v. Dimension Service Corp.

Champion Chrysler and several other auto dealers (the dealers) (plaintiffs) entered into profit-sharing agreements (PSAs) with Dimension Service Corporation (Dimension) (defendant) under which Dimension was to administer vehicle-service contracts with the dealers’ customers. Each of the dealers signed a separate PSA with Dimension. A dispute arose after the PSAs were signed between the dealers and Dimension. The dealers served a joint arbitration demand on Dimension pursuant to a mandatory-arbitration agreement in the PSA. The dealers alleged in six claims that Dimension failed to make payments as agreed in the PSAs. They filed a single demand for consolidated arbitration of the six claims because they were each pursuing claims for additional profit-share payments pursuant to the PSAs, which were all identical. Dimension objected to the consolidated arbitration, arguing that the PSAs did not authorize consolidation if all the parties were not in agreement as to consolidation. Dimension argued that in any case consolidation was a threshold question for courts, not arbitrators, to decide. The arbitration panel disagreed and held that the dealers’ claims would be consolidated for discovery and motion-practice purposes. The panel concluded the PSAs gave it broad authority to consolidate the claims. The PSAs specifically provided that the arbitrators need not observe judicial formality or strict rules of evidence and that their awards should be based on business consideration, not strict law. The panel further held that its conclusion was consistent with arbitration being an efficient, timely, and cost-effective alternative to litigation. The arbitration panel then resolved the dispute and rendered a final arbitration award. The dealers sought and were granted confirmation of the award by the Franklin County Court of Common Pleas. Dimension appealed.