Missouri Court Bars Arbitration for Failure to Include Mandatory Statutory Notice

Key Facts

In Tri-Star Imports, Inc. d/b/a Mercedes-Benz of St. Louis v. Jackson Lewis, P.C., et al., the Missouri Court of Appeals, Eastern District, affirmed the trial court’s refusal to compel arbitration of a legal malpractice claim against a law firm.

The client retained the law firm in 2018 in connection with two hostile-work-environment matters. The engagement agreement contained an arbitration clause within a “Dispute Resolution” section, stating that arbitration “shall be in accordance with the Uniform Arbitration Act of Missouri.”

After the client later filed a legal malpractice action, the firm moved to dismiss or stay and compel arbitration. Although the agreement referenced the Missouri Uniform Arbitration Act (“MUAA”), the firm argued the Federal Arbitration Act (“FAA”) should govern because the representation involved interstate commerce, including out-of-state parties, work performed in Texas, and interstate communications and payments.

The trial court denied the motion, finding the MUAA applied and the arbitration clause failed to comply with the MUAA’s mandatory notice provision. The Eastern District affirmed.

The Court’s Holdings

1. The MUAA Governed the Arbitration Clause

The court acknowledged that the FAA generally governs arbitration agreements involving interstate commerce. But it emphasized that parties may expressly agree to apply state arbitration law instead.

Here, the agreement specifically stated that arbitration would proceed “in accordance with” the MUAA. Relying on Missouri precedent and the United States Supreme Court’s decision in Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University, 489 U.S. 468 (1989), the court held that, when parties expressly agree to abide by state rules of arbitration, the FAA will not preempt enforcement and state law will govern, even when the contract involves interstate commerce.

2. The Missing MUAA Notice Rendered the Clause Unenforceable

Section 435.460 of the MUAA requires contracts subject to the statute to contain a conspicuous warning adjacent to or above the signature line stating:

“THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.”

The warning must appear in ten-point, all-capital letters.

The court found the required notice appeared nowhere in the engagement agreement. Because the statute uses mandatory language (“shall”), the court held the omission rendered the arbitration provision unenforceable.

Why This Matters

For Lawyers and Law Firms

The case is an important drafting reminder. Parties typically don’t choose to apply the state law arbitration statute over the FAA. But when an agreement expressly selects the MUAA, the statutory signature-page notice is mandatory.

If the goal is to rely on the FAA, drafters should avoid language incorporating the MUAA unless they intend to comply with the Act’s formal requirements.

The opinion also contains an important ethical reminder. Although the court did not decide whether attorney-client agreements requiring arbitration of malpractice claims are enforceable generally, it specifically referenced Missouri lawyers’ professional obligations to ensure clients are fully informed about the scope and effect of arbitration provisions.

For Businesses

Many commercial agreements contain arbitration provisions selecting Missouri law. Businesses should review whether their agreements expressly invoke the MUAA and, if so, whether the required statutory notice appears in the proper location and format. Failure to comply with the statute may result in a court refusing to compel arbitration altogether.

Practical Drafting Checklist

When preparing Missouri arbitration agreements, consider the following:

• If the agreement invokes the MUAA, include the statutory warning immediately adjacent to or above the signature block in ten-point, all-capital letters.
• If the agreement is intended to be governed by the FAA, ensure the drafting consistently reflects that intent and does not incorporate the MUAA by reference.
• Provide a clear explanation of the arbitration provision, including the claims covered, forum selection, arbitrator qualifications, and allocation of costs and fees.

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