Tyus v. Virginia College et al (JOINT ASSIGN)(MAG+)

Filing 32

MEMORANDUM OPINION AND ORDER: It is ORDERED that Plaintiff shall submit this dispute to arbitration in the manner provided in the applicable arbitration clause in accordance with 9 U.S.C. §§ 34. It is further ORDERED that Ms. Tyus shall fi le a jointly prepared report regarding the status of the arbitration proceedings on or before 10/2/2015, and every ninety (90) days thereafter, until this matter is resolved. It is further ORDERED that Virginia Colleges Motion for Reconsideration is DENIED as moot as further set out in the opinion and order. Signed by Chief Judge William Keith Watkins on 8/4/2015. (dmn, )

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
NORTHERN DIVISION
BRITTNEY TYUS,
Plaintiff,
v.
VIRGINIA COLLEGE and
EDWARD DAVIS,
Defendants.

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CASE NO. 2:15-CV-211-WKW
[WO]

MEMORANDUM OPINION AND ORDER
Plaintiff Brittney Tyus, a former nursing student, filed suit on March 31,
2015, against Defendants Virginia College, LLC, and Dr. Edward Davis, alleging
that she had been the victim of sexual harassment in violation of Title IX of the
Education Amendments of 1972. In lieu of an answer, Virginia College filed a
motion to compel arbitration. Virginia College alleged that Ms. Tyus completed
enrollment and tuition agreements incorporating arbitration provisions and standalone arbitration agreements when she enrolled in the school.1 Virginia College

1

Virginia College initially offered copies of two electronically signed enrollment and
tuition agreements, each of which included an arbitration provision, and two stand-alone
arbitration agreements as grounds for its motion to compel arbitration. As litigation proceeded,
Virginia College discovered a third set of agreements purportedly executed by Ms. Tyus.
Virginia College asserts that Ms. Tyus completed the three enrollment and tuition agreements
and the three stand-alone arbitration agreements during the course of three separate periods of
enrollment with the school.

asserted that these agreements and the Federal Arbitration Act (“FAA”), 9 U.S.C.
§§ 1–16, require that Ms. Tyus’s claims be submitted to binding arbitration.
Pursuant to the FAA, a written arbitration provision in a “contract
evidencing a transaction involving commerce” is “valid, irrevocable, and
enforceable, save upon such grounds as exist at law or in equity for the revocation
of any contract.” 9 U.S.C. § 2. If a party is “aggrieved by the alleged failure,
neglect, or refusal of another to arbitrate under a written agreement,” it may
petition a federal district court “for an order directing that such arbitration proceed
in the manner provided for in [the] agreement.” Id. § 4. A party is entitled to a
trial on whether an arbitration agreement exists, if the party seeking to avoid
arbitration carries his or her burden of placing “the making of the agreement for
arbitration . . . in issue.” Id.
Here, Ms. Tyus created a genuine issue as to the making of the agreements
to arbitrate by unequivocally denying that she executed the agreements and
offering “some evidence . . . to substantiate [her] denial.” T & R Eners. v. Cont’l
Grain Co., 613 F.2d 1272, 1278 (5th Cir. 1980)2 (quoting Almacenes Fernandez v.
Golodetz, 148 F.2d 625, 628 (2d Cir. 1945)). Specifically, Ms. Tyus asserted that,
during each of her enrollment meetings, she sat across the desk from the

2

In Bonner v. City of Prichard, the Eleventh Circuit adopted as binding precedent all
decisions of the former Fifth Circuit issued prior to October 1, 1981. See 661 F.2d 1206, 1209
(11th Cir. 1981) (en banc).
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Enrollment Specialists as they executed the various enrollment agreements on their
computers.

Ms. Tyus alleged that the Enrollment Specialists completed the

documents without her knowledge or consent. In addition to her affidavit detailing
her recollection of the enrollment meetings, Ms. Tyus offered as evidence the
affidavit of a fellow nursing student who similarly described a one-sided
enrollment process, whereby a different Enrollment Specialist completed the
online process without the student’s knowledge as to the agreements being
executed. (Doc. # 8, Ex. B.)
Because Ms. Tyus carried her burden by placing the existence of the
arbitration agreements into issue, the action proceeded to a bench trial on whether
a binding arbitration agreement exists as required under § 2 and whether Ms. Tyus
assented to binding arbitration under Alabama law. During trial, it was the burden
of Virginia College to prove the existence of an agreement to arbitrate by a
preponderance of the evidence. This opinion constitutes the court’s findings of
fact and conclusions of law.
I.

JURISDICTION AND VENUE

Subject-matter jurisdiction is proper pursuant to 28 U.S.C. § 1331. Personal
jurisdiction and venue are uncontested.

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II.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

Having heard the evidence and considered the arguments of counsel and the
relevant law, the court makes the following findings of fact and conclusions of law.
A.

Findings of Fact
Ms. Tyus and Virginia College’s relationship began on May 20, 2013, when

she accessed the Virginia College website from a computer in Crossville,
Tennessee, and created an account.3 To begin the process, Ms. Tyus first selected
whether she was interested in exploring Virginia College’s online educational
opportunities or an on-campus experience. After making her selection, Ms. Tyus
was directed to the “Create a New Account” page of Virginia College’s Student
Enrollment Portal, at which point she entered her name, email address, and phone
number, created a password, and hit “Register.” (Doc. # 28, at Ex. 6.)
Ms. Tyus was then provided instructions for verifying her new account.
Following these instructions, Ms. Tyus went to her personal email account and
accessed an “account verification email” sent by Virginia College. By clicking on
a link in the body of the email, Ms. Tyus verified her new account and was
permitted to log back into the Student Enrollment Portal and continue the
enrollment process by creating a profile.
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Virginia College’s online platform maintains a running log of all activity initiated with
regard to a student’s account. The platform begins recording activity from the time a prospective
student first registers an account. In addition to documenting the date, time, and nature of the
activity completed, the platform records the identity of the person undertaking the activity.
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The “My Profile” page of Virginia College’s Student Enrollment Portal
provides a list of items that must be accomplished before a student is deemed
“Ready for the Enrollment Process.” (Doc. # 28, at Ex. 6.) The first task listed is
described as an “Electronic Signature Consent.” When Ms. Tyus clicked on this
task, she was directed to a page consisting of a blank “Electronic Signature (ESign) Consent Form.” The top of the page instructed Ms. Tyus to “review the
following document” and informed her that she “must agree to the use of an
electronic signature to use the enrollment portal.”4 (Doc. # 28, at Ex. 6.) The
Electronic Consent Form includes the following language:
By providing your consent, you are consenting to having the
following transactions and records conducted and maintained in an
electronic form:
1.
2.
3.

Application documents and contracts.
Enrollment documents and contracts.
Financial Planning documents and contract.

(Doc. # 28, at Ex. 6.) Ms. Tyus typed her name and the date at the bottom of the
Electronic Consent Form and then clicked on a box, evidencing her understanding
and assent to the form’s terms.
Though Ms. Tyus testified during the trial that she either did not complete
the Electronic Consent Form or that she did not remember completing the
4

While the legal effect of an electronic signature has not been contested by Ms. Tyus, the
court notes that Alabama has enacted the Uniform Electronic Transactions Act, a provision of
which states that, “[i]f a law requires a signature, an electronic signature satisfies the law,” Ala.
Code § 8-1A-7, as long as both parties to the transaction “agreed to conduct transactions by
electronic means.” § 8-1A-5(b).
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Electronic Consent Form, the evidence establishes that the Electronic Consent
Form and the other tasks listed on the Enrollment Portal’s “My Profile” page were
all completed from a computer on the military base in Crossville, Tennessee, on
May 20, 2013. Ms. Tyus’s testimony establishes that she was stationed at the
military base located in Crossville, Tennessee, at that time, and that she used a
computer on the military base to create her account and begin the enrollment
process on May 20, 2013.

Accordingly, the court finds that Ms. Tyus did

complete the Electronic Consent Form and merely fails to remember that she did
so, as any alternative theory of events proves untenable.
After completing the various tasks required to create a profile, Ms. Tyus
logged out of the Virginia College Student Enrollment Portal, and the school
began taking action to continue Ms. Tyus’s enrollment. For example, Virginia
College assigned her an Enrollment Specialist, Ms. Juanita Patrick, who began
emailing Ms. Tyus to set up a time for an in-person enrollment meeting. Similarly,
a different Virginia College employee began uploading Ms. Tyus’s military
documentation.
On June 26, 2013, Ms. Tyus had her first in-person enrollment meeting with
Ms. Patrick. Ms. Tyus testified that, during her time on campus, Ms. Patrick
provided her with information about the nursing program and took her on a tour of
the facilities. Ms. Tyus did not remember completing enrollment documents and
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suggested that it would have been unnecessary for her to complete enrollment
documents at that time because she was not going to be able to attend classes until
a later quarter. In addition, Ms. Tyus firmly testified that she did not execute any
arbitration agreements during this initial enrollment meeting.
The court, however, credits the testimony of Ms. Patrick who spoke in
greater detail and clarity as to the specific events that occurred during Ms. Tyus’s
June 26, 2013 visit.

Specifically, she testified that Ms. Tyus’s brother

accompanied her during a portion of this initial meeting and that Ms. Tyus
completed certain steps in the enrollment process that day prior to realizing that
she would be unable to begin her studies until she retook one of her entrance
exams. Moreover, Ms. Patrick’s testimony is corroborated by the June 26, 2013
entries of the student activity history log. The log shows that Ms. Tyus logged
into her student account using the password created in Crossville, Tennessee, and
over the course of several minutes added and saved several enrollment documents
to her account, including a tuition agreement and arbitration policy.
Due to Ms. Tyus’s testing needs, however, the enrollment process was not
completed on June 26, 2013, and Ms. Tyus restarted the process on September 17,
2013, when she met Ms. Patrick for a second enrollment meeting. During the
second enrollment meeting, Ms. Tyus again executed various enrollment
documents and saved them to her student account, including an arbitration policy
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and an enrollment and tuition agreement. After completing all the necessary
enrollment documents, Ms. Tyus then attended a meeting with a member of
Virginia College’s financial team to develop a personal funding plan that took into
account the various funding sources available to her, including a scholarship
provided through the Post 9/11 GI Bill.
By October 2013, Ms. Tyus had acquired and submitted all the necessary
enrollment and financial documentation, had begun making personal tuition
payments to Virginia College to supplement her outside funding sources, and had
begun taking classes. Ms. Tyus’s academic transcripts reveal that she took three
classes each academic quarter until the fall of 2014, making payments and
checking grades on her student portal throughout that time.
On September 12, 2014, Ms. Tyus attended a third enrollment meeting so
that she could continue her nursing courses during the upcoming academic terms.5
While Ms. Tyus maintains that she did not execute any agreement during this
enrollment meeting either, updated enrollment documents, including a new
enrollment and tuition agreement and a new arbitration policy, were added to her
student account. Ms. Tyus then continued to make payments to Virginia College
and attend classes for another three academic terms.

Ms. Tyus ultimately

voluntarily withdrew from Virginia College in June 2015, approximately two
5

Ms. Tyus’s Enrollment Specialist for her September 2014 enrollment with Virginia
College was Andrew Hill.
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months after filing this action and one month after Virginia College moved to
compel arbitration of her claims.
B.

Conclusions of Law
Upon consideration of the facts, arrived at with the benefit of jointly

submitted exhibits, trial testimony, and the arguments of counsel, the court finds
that Ms. Tyus executed enrollment and tuition agreements containing arbitration
provisions and stand-alone arbitration agreements. While this conclusion of law is
sufficient to require Ms. Tyus to submit her claims to arbitration, the court will
also discuss why, pursuant to Alabama law, arbitration is required even if the
court had fully credited Ms. Tyus’s version of events.
While Virginia College is seeking to compel arbitration pursuant to the
FAA, state law generally governs whether an enforceable contract or agreement to
arbitrate exists. See Perry v. Thomas, 482 U.S. 483, 492 n.9 (1987) (“[S]tate law,
whether of legislative or judicial origin, is applicable if that law arose to govern
issues concerning the validity, revocability, and enforceability of contracts
generally.”). Thus, in determining whether a binding arbitration agreement arose
between the parties, courts apply the contract law of the particular state that
governs the formation of contracts. Applying Alabama law to the present action,
it is clear that, even if the court were to credit Ms. Tyus’s testimony that she did
not electronically sign the enrollment and tuition agreements or stand-alone
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arbitration agreements during any of her enrollment meetings, Ms. Tyus
manifested her assent to the agreements by attending classes, re-enrolling, and
paying tuition over the course of multiple academic semesters.
In a published opinion issued less than two months ago, the Alabama
Supreme Court provided clear guidance on the ability of a party to assent to
arbitration through actions manifesting ratification. Am. Bankers Ins. Co. of Fla.
v. Tellis, No. 1131244, 2015 WL 3935260 (Ala. 2015.)

In Tellis, five

homeowners filed suits against an insurer alleging breach of contract, fraud, unjust
enrichment, and negligence theories. Id. at *1. The insurer responded in each
case with a motion to compel arbitration, which the plaintiffs opposed in part on
the ground that “they had not signed any documents containing arbitration
provisions.” Id. While the insurer produced unsigned arbitration forms, which it
contended were normally incorporated as part of its insurance policies, the
plaintiffs “executed affidavits swearing that they never received or signed either
form—or any other document related to their [insurance] policies purporting to be
an arbitration provision when applying for insurance or at anytime thereafter until
the commencement of [the] litigation.” Id. at *3.
When the various trial courts denied the insurer’s motions to compel
arbitration, the cases were appealed, and the Supreme Court of Alabama
consolidated the actions. Id. at *1. On appeal, the insurer conceded that the
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plaintiffs had not signed arbitration agreements, but nonetheless argued that
Alabama case law supported the principle that “an arbitration provision in an
insurance policy can be effective even without the insured’s signature.” Id. at *3.
The insurer cited Southern United Fire Insurance Co. v. Howard, 775 So. 2d 156
(Ala. 2000).
In Howard, a plaintiff had filed suit against his insurer, the insurer’s
management company, and the company that managed the collection of premiums
on behalf of the insurer, alleging that the companies had misappropriated and
negligently caused his automobile insurance coverage to be wrongfully cancelled.
Id. at 160. The defendants each responded with a motion to compel arbitration on
the basis of an arbitration provision included in the plaintiff’s policy. Id. The trial
court denied the motions, determining that the plaintiff had called into question
whether a contract to arbitrate was formed by denying that he ever received a copy
of the policy. Id.
On appeal, the defendants argued that the plaintiff had “agreed to the
arbitration provision by, among other things, paying monthly premiums, renewing
the policy, and submitting a claim under the policy.” Id. at 161. The Alabama
Supreme Court agreed with the reasoning of the defendants, concluding that, by
paying premiums, renewing the policy, submitting a claim under the policy, and
failing to cancel the policy, the plaintiff had “manifested [his] acceptance [of the
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insured’s] offer to insure his car under the terms in its policy, which included the
arbitration provision.” Id. Despite the fact that the arbitration provision did not
appear in the insurance application and the plaintiff’s contention that he did not
sign or even remember receiving the insurance policy, the Alabama Supreme
Court explained that
Alabama’s general contract law permits assent to be evidenced by
means other than signature, and, thus, the contract of insurance and
the arbitration provision contained in it can be enforceable by the
parties in the absence of signatures, where the evidence establishes the
existence of the agreement. . . . [The plaintiff] accepted and acted
upon [the] insurance policy, which contained the arbitration provision,
by paying premiums, renewing the policy, and submitting a claim
under the policy. Therefore, because [the plaintiff] ratified the policy,
the absence of his signature does not render the policy, or the
arbitration provision contained in it, unenforceable.
Id. at 162–63.
After reviewing the precedent set by Howard, the Alabama Supreme Court
in Tellis concluded that Alabama case law supported the defendant’s position,
namely that a party can manifest its “assent to arbitration by accepting and acting
upon” an agreement containing an arbitration provision. 2015 WL 3935260, at *3.
The Alabama Supreme Court further explained that, while it was uncertain “what
parts of the insurance policy the policyholders acknowledged receiving,” the Court
had “enforced arbitration provisions in insurance policies where the plaintiffs
claimed never to have received the written policies containing the provisions.” Id.
at *4 (alteration in original). Ultimately, the Alabama Supreme Court held that
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although the policyholders did not execute stand-alone arbitration
agreements or necessarily even read or receive the insurance policies
containing the arbitration provisions, they have nevertheless
manifested their assent to those policies and, necessarily, the
arbitration provisions in them, by accepting and acting upon the
policies, inasmuch as they all affirmatively renewed their policies and
paid their premiums, thus ratifying the policies.
Id. at *5.
Here, Ms. Tyus makes three primary6 arguments as to why Tellis and
Howard do not control the present action. First, she argues that there exists a “vast
transactional difference in context between a homeowner’s insurance policy and an
educational setting.” (Doc. # 30, at 1.) Second, Ms. Tyus contends that her
situation is factually different from the plaintiffs in Tellis, because while they only
failed to receive the arbitration agreements, she never saw any agreement between
herself and Virginia College. Finally, Ms. Tyus asserts that Virginia College’s
actions amounted to fraud in that Virginia College failed to mention to her that an
arbitration provision or agreement existed. For the reasons provided below, each
of these arguments is without merit under binding law.

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In her Response (Doc. # 30) to Virginia College’s Notice of Supplemental Authority
(Doc. # 21), Ms. Tyus also argued, for the first time, that her claims should not be compelled to
arbitration because the arbitration provisions at issue are unconscionable. Despite the fact that
Virginia College argued against a finding of unconscionability in its Motion to Compel
Arbitration (Doc. # 6) when it discussed court decisions that had found its arbitration provision
valid and enforceable, Ms. Tyus chose not to combat or in any way address those arguments,
instead exclusively challenging her assent to the agreements. And while Ms. Tyus affirmed her
unconscionability challenge orally during trial, she did so without offering any evidence or case
law in support of her assertion. Accordingly, Ms. Tyus has failed to timely plead or sufficiently
argue unconscionability.
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Ms. Tyus requests that this court cabin the reasoning employed by the
Alabama Supreme Court in Tellis and Howard to the insurance realm, arguing that
vast differences exist between Ms. Tyus’s educational enrollment and an insurance
transaction. Ms. Tyus fails, however, to give weight to the Alabama Supreme
Court’s clear intent to avoid narrowing its decision to arbitration provisions in
insurance agreements. The Alabama Supreme Court specifically ventured outside
the insurance arena, despite sufficient analogous case law, and explained that it
had, “on other occasions, considered similar cases involving financial agreements
other than insurance policies in which parties have challenged arbitration
provisions they alleged were subsequently added to the agreements without their
express consent or knowledge” and had “uniformly recognized that a signature or
express consent is not required to give effect to the new arbitration provisions.”
Tellis, 2015 WL 3935260, at *4. Moreover, while Ms. Tyus may not want to
characterize her agreement as a financial transaction, three of the agreements at
issue were entitled Enrollment and Tuition Agreements and obligated Ms. Tyus –
or others on her behalf – to pay more than $50,000 to Virginia College – an
obligation she does not dispute. In sum, Ms. Tyus has not provided sufficient
arguments to justify the conclusion that the Alabama Supreme Court would not
reach a similar holding to those arrived at in Howard and Tellis.

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As to the assertion that the present case is factually distinguishable from
Tellis because Ms. Tyus “alleges that she was not even aware that a contract or
agreement existed or was even necessary,” the court highlights Ms. Tyus’s own
contradictory testimony. For example, during trial, Ms. Tyus testified that she saw
the top portion of the Enrollment and Tuition Agreement when she was asked by
Ms. Patrick to confirm the accuracy of the initial information entered. The top of
the agreement reads, “Enrollment and Tuition Agreement.” (Doc. # 28, at Ex. B.)
Further, Ms. Tyus confirmed that on at least one occasion prior to the filing of her
lawsuit, she accessed the “My Documents” folder of her Student Enrollment
Portal, at which time she would have seen a clearly titled list of each of the
enrollment and financial agreements governing her relationship with Virginia
College, including one titled “Arbitration Policy.” The platform allowed Ms. Tyus
to click on any one of the documents to download a copy to her computer. Further,
as demonstrated by the Alabama Supreme Court in Tellis, Ms. Tyus was under a
duty to investigate the agreements under which she was operating. See Tellis, 2015
WL 3935260, at *4 (citing Alabama case law imposing a duty to investigate upon
contracting parties). Moreover, the Alabama Supreme Court went a step further in
Tellis and noted that it had “also enforced arbitration provisions in insurance
policies where the plaintiffs claimed never to have received the written policies
containing the provisions.” Id. (alteration in original).
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Lastly, Ms. Tyus argues that, even if her conduct in continuing to attend
school while possessing some limited knowledge of the enrollment agreements
manifested assent, another reason exists to find that she did not ratify the
agreements; she argues that the way in which Virginia College hurried her through
the enrollment process without pointing out the existence of the arbitration
provisions amounted to fraud. Again, however, Alabama case law forecloses this
argument.

In Johnnie’s Homes, Inc. v. Holt, the Alabama Supreme Court

explained that “[a] dealer is under no duty to disclose, or explain, an arbitration
clause to a buyer.” 790 So. 2d 956, 960 (Ala. 2001). Despite the plaintiff’s claim
that he and his wife were illiterate and semi-illiterate, respectively, and that the
defendant showed them only a single page while representing to them that the
agreement was a “standard contract,” the Alabama Supreme Court made clear that
the defendant “owed no special duty to notify [the plaintiff] that the agreement
contained an arbitration provision or to explain to him the substance of that
provision.”

Id.

Nevertheless, this court is troubled by the thin-as-tissue

requirements for assent to arbitration provisions in Alabama, but Alabama law
necessitates a determination that Ms. Tyus manifested her assent to the agreements
by attending classes, paying tuition, and re-enrolling.

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III. CONCLUSION
Based on the foregoing, Defendant Virginia College has proven by a
preponderance of the evidence that Plaintiff Brittney Tyus assented to binding
arbitration of her claims against Virginia College. Accordingly, it is ORDERED
that Plaintiff shall submit this dispute to arbitration in the manner provided in the
applicable arbitration clause in accordance with 9 U.S.C. §§ 3–4. It is further
ORDERED that Ms. Tyus shall file a jointly prepared report regarding the status of
the arbitration proceedings on or before October 2, 2015, and every ninety (90)
days thereafter, until this matter is resolved.
It is further ORDERED that Virginia College’s Motion for Reconsideration
(Doc. # 21) is DENIED as moot.
DONE this 4th day of August, 2015.
/s/ W. Keith Watkins
CHIEF UNITED STATES DISTRICT JUDGE

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