In a recent decision with practical implications for litigators and transactional counsel alike, the Supreme Court of Missouri held that filing a motion to dismiss for failure to state a claim did not constitute a waiver of the right to compel arbitration—provided that right is timely asserted thereafter.
The case, Lange v. GMT Auto Sales, Inc. (No. SC100608), arose from a putative class action brought by a consumer alleging violations of the Missouri Merchandising Practices Act related to administrative fees charged in connection with camper sales. GMT initially responded to the petition with a motion to dismiss under Rule 55.27(a)(6), arguing the Lange’s claims were legally insufficient as pleaded. After the circuit court denied motion, GMT moved to compel arbitration, citing an arbitration clause in a retail installment contract signed at the time of sale. Shortly thereafter, GMT timely filed its answer to the petition and raised the arbitration provision as an affirmative defense,
The Supreme Court reversed the Eastern District Court of Appeals, which had found that GMT’s filing of the initial motion amounted to a waiver of arbitration. Emphasizing longstanding Missouri precedent, the Court explained that waiver of a contractual right—including the right of arbitration—requires a finding of conduct that “clearly and unequivocally” demonstrates an intent by the party to relinquish that right. Filing a motion to dismiss for failure to state a claim, the Court reasoned, does not ask a court to decide the merits of the plaintiff’s claim and thus is not inherently inconsistent with a later demand for arbitration.
Importantly, the Court distinguished a motion to dismiss from a motion for judgment on the pleadings, the latter of which does seek resolution on the merits and may more readily support the finding of waiver.
The majority opinion also reaffirmed that arbitration is an affirmative defense that should be raised in a timely responsive pleading. Again, GMT did so in its answer, filed within days after filing its motion to compel arbitration.
In dissent, Judge Robin Ransom—joined by Judges Powell and Wilson—contended that GMT’s motion to dismiss was not limited to procedural or jurisdictional grounds but instead sought a substantive ruling in its favor, citing statutory authority and challenging the legal sufficiency of the consumer’s MMPA claims. The dissent viewed GMT’s arguments as a strategic choice in which GMT asked the circuit court to substantively rule in its favor on the merits and dismiss plaintiff’s claims with prejudice. The dissent reasoned GMT’s actions demonstrated a clear intent to litigate rather than arbitrate, sufficient to establish waiver.
The decision offers clear guidance for litigators navigating the interplay between initial motion practice and enforcement of arbitration clauses. A motion to dismiss may not by itself waive the right to arbitrate—but as the Court’s opinion and dissent make clear, how and when a party acts can carry significant consequences.
Stay tuned for future insights on emerging developments in Missouri appellate law.
