In Hewitt v. Auto Showcase of Bel Air, 2018 WL 2437240 (Md. App. 2018) (unpublished), the Court of Appeals enforced an arbitration clause in an automobile RISC despite rescission of the RISC due to a failure of financing.
Hewitt’s . . . argues that, once Auto Showcase repossessed the Vehicle, any consideration supporting the arbitration agreements ceased. Thus, the RISC should be unenforceable for lack of consideration. This is inconsistent with his later argument where he cites correctly Cheek’s rejection of the assertion that the consideration supporting the consideration for the underlying transaction is sufficient to support an arbitration clause. Cheek stated bluntly that, if it were to conclude that consideration from the underlying agreement was sufficient to support the arbitration agreement, we would be precluded from ever finding an arbitration agreement invalid for lack of consideration when performance of a contract has already occurred, no matter how illusory the arbitration agreement was. Cheek, 378 Md. at 160, 835 A.2d at 669. Cheek, in fact, disagreed with cases from our sister states when it concluded that consideration supporting an underlying contract can support simultaneously a nested arbitration clause and render it enforceable. Maryland law is clear that an arbitration agreement may be enforceable notwithstanding a finding of invalidity of the underlying contract.