The Missouri Supreme Court recently issued its opinion in Connie Lange v. GMT Auto Sales, Inc., 708 S.W.3d 147 (Mo. banc 2025), a case that involves whether GMT waived its right to arbitration by filing a motion to dismiss prior to invoking its right to arbitration. In a 4-3 decision, the Honorable Judge Kelly C. Broniec affirmed the circuit court’s judgment confirming an arbitration award to plaintiff after plaintiff sued in the circuit court, expanding on Missouri’s arbitration rules in light of the United States Supreme Court’s decision in Morgan v. Sundance, Inc., 596 U.S. 411 (2022). There, the Supreme Court of the United States vacated the 8th Circuit’s decision, holding that U.S. federal courts may not create special procedural rules to favor (or disfavor) arbitration.
As held in Sundance, an application for arbitration must be considered in the “usual manner required by law,” meaning that the Missouri Supreme Court must “consider whether GMT waived its right to arbitration under the normal analysis for waiver of contractual rights.” The “normal analysis” is whether a party waived its rights under a contract through either an express or implied waiver. Both Lange and GMT agree that GMT did not expressly waive its right to arbitration, but Lange insists that it was impliedly waived. In order to implicitly waive a contractual right, a party’s conduct must “clearly and unequivocally show a purpose to relinquish the right.” Lange, 708 S.W.3d at 152.
In Missouri, the right to arbitrate is an affirmative defense that should be raised in a responsive pleading. Id. Courts have found that a defendant’s failure to raise arbitration as an affirmative defense is an intent to litigate rather than arbitrate and thus is considered an implied waiver of the right to arbitration. See Johnson Assocs. Corp. v. HL Operating Corp., 680 F.3d 713, 718 (6th Cir. 2012). In Lange, GMT first filed a Motion to Dismiss for failure to state a claim under Missouri Supreme Court Rule 55.27(a)(6). GMT’s Motion to Dismiss failed to reference the arbitration provision and simply requested the circuit court dismiss all of the plaintiff’s claims. GMT’s motion was overruled, and six days later, GMT moved to compel arbitration prior to filing a responsive pleading to Plaintiff’s Petition. Four days later, GMT then filed its Answer to the plaintiff’s Petition and raised arbitration as an affirmative defense.
Ultimately, the majority found that because GMT invoked its right to arbitration prior to filing its responsive pleading, in which it also raised such a defense, GMT did not “clearly and unequivocally show a purpose to relinquish its right to arbitrate by filing the motion to dismiss prior to timely filing its responsive pleading.” Lange, 708 S.W.3d at 153. In essence, the Court found that the right to arbitrate is an affirmative defense a party cannot waive unless it is omitted in responsive pleadings to the petition.
However, the Honorable Judge Robin Ransom dissented. Logically, Judge Ransom believed that GMT did waive its right to arbitrate by filing a motion to dismiss before invoking its right to arbitration. In short, Judge Ransom argued that GMT sought a final judgment on the merits by filing its motion to dismiss and, therefore, acted inconsistently with its right to arbitrate under the Sundance holding. Judge Ransom relies on caselaw supporting a finding that a party who “proceeds in a judicial forum for the resolution of an otherwise-arbitrable dispute acts inconsistently with the right to arbitrate.” Id. at155. Such conduct amounts to a waiver.
GMT, according to Judge Ransom, sought for the circuit court to “substantively rule in its favor on the merits.” Id. Such an act, being inconsistent with its right to arbitrate, is effectively a waiver.
In light of this ruling, it seems that Missouri allows a defendant to file a Motion to dismiss on substantive grounds of a case without it constituting a waiver of the right to arbitrate the same action. This allows defendants a potential end to a claim in state court prior to invoking their right to arbitrate. As long as a defendant invokes the right to arbitrate in its affirmative defenses in its responsive pleading, a defendant should preserve the right to arbitrate whether it filed a substantive motion to dismiss or not.
Defendants should consider taking the opportunity to file a motion to dismiss, if warranted, before invoking their right to arbitrate. This way, unscrupulous claims brought by plaintiffs may end sooner rather than later, and before exhausting additional resources on arbitrating such claims.