Sightler v. Remington College
Filing
12
ORDER granting in part and denying in part 7 Motion to compel arbitration. The parties are DIRECTED to jointly notify the Court of the status of the arbitral proceedings on October 16, 2015, and every ninety (90) days thereafter. Signed by Judge Roy B. Dalton, Jr. on 7/20/2015. (VMF)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
JUSTIN SIGHTLER,
Plaintiff,
v.
Case No. 6:15-cv-273-Orl-37GJK
REMINGTON COLLEGE,
Defendant.
ORDER
This cause is before the Court on the following:
1.
Defendant’s Motion to Dismiss and to Compel Arbitration (Doc. 7), filed
March 20, 2013;
2.
Plaintiff’s Response to Defendant’s Motion to Dismiss and to Compel
Arbitration (Doc. 8), filed April 3, 2015; and
3.
Defendant’s Reply in Support of Motion to Dismiss and Compel Arbitration
(Doc. 11), filed April 24, 2015.
Upon consideration, the Court finds that the motion is due to be granted in part and denied
in part.
BACKGROUND
On December 2, 2013, Defendant Remington College expelled Plaintiff Justin
Sightler from its “accelerated registered nursing program,” allegedly because Plaintiff
repeatedly fell asleep during “clinicals.” (Doc. 1, ¶¶ 6, 22.) Plaintiff claims that the sleeping
incidents were the result of his fatigue-inducing “chronic condition,” which Defendant
knew about and failed to accommodate. (Id. ¶¶ 8, 28–29, 34.) Plaintiff accordingly brings
this disability-discrimination action against Defendant under the Americans with
Disabilities Act (“ADA”), 42 U.S.C. § 12101, and the Rehabilitation Act, 29 U.S.C. § 701.
(Id. ¶¶ 1, 24–36.)
Defendant moves to compel arbitration and dismiss this action. (Docs. 7, 11.)
Plaintiff opposes. (Doc. 8.) The matter is ripe for adjudication.
STANDARDS
Under the Federal Arbitration Act (“FAA”), “courts must rigorously enforce
arbitration agreements according to their terms.” Am. Express Co. v. Italian Colors Rest.,
133 S. Ct. 2304, 2309 (2013) (citation and internal quotation marks omitted). Upon the
motion of any party to a valid arbitration agreement, courts must stay litigation of all claims
that fall within the agreement’s scope and compel arbitration according to the agreement’s
terms. See 9 U.S.C. §§ 3–4. Arbitration agreements are presumptively valid and
enforceable. See id. § 2.
However, arbitration under the FAA is ultimately “a matter of consent, not
coercion,” Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Jr. Univ., 489 U.S. 468,
479 (1989), and parties opposing arbitration can challenge the formation and validity of a
contract containing an arbitration clause. Specifically, the U.S. Court of Appeals for the
Eleventh Circuit recognizes “three distinct types of challenges to a contract containing an
arbitration clause”: (1) challenges to the formation, or “the very existence,” of the contract;
(2) challenges “to the validity of the arbitration clause standing alone”; and (3) challenges
“to the validity of the contract as a whole.” Wiand v. Schneiderman, 778 F.3d 917, 924
(11th Cir. 2015). Courts resolve challenges to contract formation, see Granite Rock Co.
v. Int’l Bhd. of Teamsters, 561 U.S. 287, 296 (2010), as well as challenges to the validity
2
of the arbitration provision standing alone, see Prima Paint Corp. v. Flood & Conklin Mfg.
Co., 388 U.S. 395, 403–04 (1967). Arbitrators resolve challenges to the validity of the
contract as a whole. Id.
There is thus a two-step process required in considering the arbitrability of
any contract containing an arbitration clause: 1) resolution of any formation
challenge to the contract containing the arbitration clause, in keeping with
Granite Rock; and 2) determination of whether any subsequent challenges
are to the entire agreement, or to the arbitration clause specifically, in
keeping with Prima Paint.”
Solymar Invs., Ltd. v. Banco Santander S.A., 672 F.3d 981, 990 (11th Cir. 2012).
DISCUSSION
Defendant moves to compel arbitration pursuant to the “Enrollment Agreement”
attached to its motion. (Docs. 7, 7-1.) The Enrollment Agreement is a standardized
contract that the parties signed before Plaintiff began his nursing program, and its
provisions address issues ranging from tuition fees and disciplinary procedures to, more
pertinently, the mandatory arbitration of “discrimination” claims. (See Doc. 7-1, pp. 7–8.)
“Under normal circumstances, an arbitration provision within a contract admittedly
signed by the contractual parties is sufficient to require the district court to send any
controversies to arbitration.” Chastain v. Robinson-Humphrey Co., Inc., 957 F.2d 851,
854 (11th Cir. 1992). Here, however, Plaintiff argues that the Court should not compel
arbitration because “the execution of the arbitration clause, as well as the entire
agreement, was done through fraudulent behavior by the Defendant” and because
compelling arbitration would prevent him from effectively vindicating his rights under the
ADA and the Rehabilitation Act. (See Doc. 8, pp. 1–4.) The Court will address each
argument in turn.
3
I.
Fraud
Plaintiff’s fraud argument turns on his claim that he “never properly executed” the
Enrollment Agreement. (See id. at 2.) As Plaintiff reads the Enrollment Agreement, proper
execution requires a two-step process: first, the student must sign and initial the
Enrollment Agreement, then second, he must attend a post-signing “follow up
consultation” with a Campus Representative, who explains “the nature and intricacies” of
the document’s provisions. (See id. at 1, 3.) Plaintiff concedes that he “signed and
initialed” the Enrollment Agreement, but he maintains that he never attended a follow-up
consultation and thus “never properly executed” the contract. (See id. at 2–3.) On that
basis, Plaintiff argues that the entire Enrollment Agreement—including the arbitration
provision therein—is unenforceable. (Id. at 2, 4.)
Contradicting Plaintiff’s argument, the Enrollment Agreement contains a Campus
Representative’s signed certification that Plaintiff consulted her on November 15, 2012.
(Doc. 7-1, p. 9.) Plaintiff boldly asserts that the certification is “fraudulent”—specifically,
that its inclusion in the Enrollment Agreement constitutes fraud in the inducement.
(Doc. 8, pp. 3–4.)
The Court is not persuaded. As a threshold matter, the Plaintiff’s claim is
essentially a fraud-in-the-factum claim, not a fraud-in-the-inducement claim. Fraud in the
factum consists of fraud that “occurs within the instrument itself” and concerns “the very
nature of the agreement.” Leasing Serv. Corp. v. River City Constr., Inc., 743 F.2d 871,
877 (11th Cir. 1984). Forging a party’s signature, for example, is a type of fraud in the
factum. Solymar, 672 F.3d at 995. By contrast, “[f]raud in the inducement consists of one
party’s misrepresenting a material fact concerning the subject matter of the underlying
4
transaction and the other party’s relying on the misrepresentation to his, her, or its
detriment in executing a document or taking a course of action.” Id. at 994 (citation,
alteration, and internal quotation marks omitted). Here, Plaintiff claims that the Campus
Representative falsely certified that he had “properly executed” the Enrollment
Agreement, not that she made some material misrepresentation that induced him into
actually doing so. (See Doc. 8, pp. 2–4.) Accordingly, Plaintiff’s argument substantively
aligns with a fraud-in-the-factum claim, and the Court will treat it as such. 1 See Solymar
Investments, Ltd., 672 F.3d at 994 (implicitly encouraging courts to disregard the
“trappings” and labels of fraud claims and instead to resolve them according to their
substance).
A fraud-in-the-factum claim is a contract-formation challenge, so the Court—not
an arbitrator—must resolve it. See id. at 994 & n.13. To do so, the Court looks to the
evidence submitted by the challenging party, as a party “cannot place the making of the
arbitration agreement in issue simply by opining that no agreement exists. Chastain v.
Robinson-Humphrey Co., Inc., 957 F.2d 851, 855 (11th Cir. 1992). To succeed on a
fraud-in-the-factum claim, the party denying the existence of a contract “must substantiate
the denial of the contract with enough evidence to make the denial colorable.” See id.
Here, the Court finds that Plaintiff has failed to substantiate his fraud-in-the-factum
claim on two levels. First and foundationally, Plaintiff fails to cite any provision of the
Enrollment Agreement that addresses “proper execution” or a post-signing “follow-up
1
To the extent that Plaintiff intended to raise a fraud-in-the-inducement claim, that
claim would necessarily implicate “the entire agreement” (Doc. 8, p. 3), and thus it would
require arbitral resolution. See Prima Paint, 388 U.S. at 403–04.
5
consultation” with a Campus Representative (see Doc. 8), and in the Court’s review, no
such provision exists (see Doc. 7-1). In fact, execution of the Enrollment Agreement
appears to require only a signature and a date, and, by its express terms, the Enrollment
Agreement becomes binding as soon as the student and the Campus Director execute it.
(See id. at 10.) The Campus Representative plays only a pre-execution advisory role, and
while the Enrollment Agreement contains a space for her to certify that the student
attended a pre-execution consultation, that certification is not expressly essential to
execution. (See id. at 9–10.) In short, the central premise of Plaintiff’s claim—that “proper”
execution of the Enrollment Agreement requires a follow-up consultation with a Campus
Representative—lacks support and appears to either mischaracterize or misconstrue the
Enrollment Agreement.
Second, even if executing the Enrollment Agreement required a meeting with a
Campus Representative, Plaintiff has not substantiated his claim that no such meeting
occurred. As addressed above, a Campus Representative signed the Enrollment
Agreement and certified that she met with Plaintiff on November 15, 2012. (Id. at 9.)
Consistent with her certification, all of Plaintiff’s initials in the Enrollment Agreement are
dated November 15, 2012, as is his signature. 2 (Id. at 1–10.)
2
Also relevant but omitted from Plaintiff’s briefing (see Doc. 8), by signing the
Enrollment Agreement—which, again, he admits to doing—Plaintiff certified that he had
met with the Campus Representative prior to executing the Enrollment Agreement.
(Doc. 7-1, p. 9 (“The Student acknowledges by execution of . . . this Agreement that the
Student . . . [r]eviewed this Agreement with a Campus Representative prior to [its]
execution . . . .”).) State law governs contract-formation disputes, see Solymar,
672 F.3d at 991, and Florida law presumes that a party signing a contract read and
understood the contract’s provisions, see, e.g., Univ. of Miami v. Intuitive Surgical, Inc.,
166 F. App’x 450, 453 (11th Cir. 2006). Plaintiff offers no explanation for why he certified
that the meeting occurred if, in fact, it did not. (See Doc. 8.)
6
To discredit the Campus Representative’s certification, Plaintiff relies entirely on
the irregular appearance of several dates in the Enrollment Agreement. (See Doc. 8,
pp. 2–3.) Specifically, in the November 15, 2012 dates accompanying Plaintiff’s signature
and initials, the “1” digit in the number “15” appears to have been added after the “5”
digit. 3 (See Doc. 7-1, pp. 1–8.) Plaintiff maintains that he signed and dated the Enrollment
Agreement on November 5, and he speculates that the Campus Representative added
the “1” digit to his dates ten days later so that they corresponded to her allegedly
fraudulent November 15 certification. (See Doc. 8, pp. 2–3.)
The problem with Plaintiff’s argument is that it lacks evidentiary support. Plaintiff’s
filings are unverified (see Docs. 1, 8), and he has not submitted a supporting affidavit or
any other evidence to corroborate his contention that the Campus Representative
fraudulently altered the dates of his signature and initials. Further, the Enrollment
Agreement does not, on its own, substantiate Plaintiff’s argument because, while the
dates therein appear to have been altered, the reason for their alteration is not self-evident
and could be entirely innocuous. Ultimately, Plaintiff bears the burden of producing at
least “some evidence” to substantiate his claim that he never consulted with the Campus
Representative, see Chastain, 957 F.2d at 854, and, on the present record, the Court
cannot find that Plaintiff has met that burden. See Madura v. Countrywide Home Loans,
Inc., 344 F. App’x 509, 514 n.7 (11th Cir. 2009) (observing that a plaintiff could not prevail
on his fraud-in-the-factum forgery claim because he failed to provide supporting
evidence).
3
The “1” digit is typically smaller and darker than the other digits in the dates, and
the spacing around it is tighter. (See Doc. 7-1, pp. 1–8.)
7
In sum then, Plaintiff has not substantiated his claim that a meeting with a Campus
Representative was necessary to the Enrollment Agreement’s execution, nor has he
substantiated his claim that, if a meeting were necessary, no such meeting occurred.
(See Doc. 8.) Accordingly, the Court rejects Plaintiff’s fraud argument. 4
II.
Effective Vindication
Plaintiff alternatively argues that the potential costs and fees associated with
arbitration are so much higher than those associated with litigation in federal court that
compelling arbitration would “defeat the remedial purpose” of the ADA and the
Rehabilitation Act. (See id. at 2–4.) The Court construes Plaintiff’s argument as an
“effective vindication” challenge to the validity of the Enrollment Agreement’s arbitration
provision, requiring Court resolution. See Prima Paint, 388 U.S. at 403–04 (holding that
challenges to the validity of the arbitration provision itself require court resolution).
The effective vindication doctrine permits courts to invalidate arbitration provisions
that “prevent the ‘effective vindication’ of a federal statutory right.” Italian Colors Rest.,
133 S. Ct. at 2310. One way an arbitration provision can prevent effective vindication of
a federal statutory right is by imposing costs and fees that make arbitration “prohibitively
expensive.” Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 91–92 (2000). The
effective vindication doctrine requires a case-by-case inquiry, and the “party seek[ing] to
4
Plaintiff’s fraud argument could have been clearer. For the sake of thoroughness,
the Court notes that there are theories of fraud in the factum that turn on whether a forged
portion of a contract renders the contract’s character or essential terms misleading.
See, e.g., Fed. Sav. & Loan Ins. Corp. v. Gordy, 928 F.2d 1558, 1566 (11th Cir. 1991).
To the extent that Plaintiff intended to proceed under such a theory, the Court rejects
Plaintiff’s argument for lack of evidence that he misunderstood or was misled by any part
of the Enrollment Agreement.
8
invalidate an arbitration agreement on the ground that arbitration would be prohibitively
expensive . . . bears the burden of showing the likelihood of incurring such costs.”
Id. at 92. To discharge that burden, the party seeking invalidation has “an obligation to
offer evidence of the amount of fees he is likely to incur, as well as of his inability to pay
those fees.” Musnick v. King Motor Co. of Fort Lauderdale, 325 F.3d 1255, 1260
(11th Cir. 2003).
Here, Plaintiff cites an American Arbitration Association fee schedule as evidence
that he “may incur cost[s] upward of $2,000.” (Doc. 8, p. 4 (citing Doc. 8-1).) However,
Plaintiff does not provide any evidence that he is likely to incur those costs, nor does he
provide any evidence of his inability to pay those costs. (See id.) As both are required to
prevail on an effective vindication challenge, Musnick, 325 F.3d at 1260, and neither has
been provided in this case (see Doc. 8), Plaintiff’s effective vindication challenge must
fail. See Anders v. Hometown Mortg. Servs., Inc., 346 F.3d 1024, 1028 (11th Cir. 2003)
(rejecting an effective vindication challenge for lack of supporting evidence).
CONCLUSION
For the reasons addressed above, the Court finds that Defendant’s motion to
compel arbitration of Plaintiff’s claims is due to be granted, subject to one caveat.
Defendant requests that the Court dismiss this action in addition to compelling arbitration.
(Doc. 7, p. 5.) However, the Eleventh Circuit directs that, “[u]pon finding that a claim is
subject to an arbitration agreement, the court should order that the action be stayed
pending arbitration,” not dismissed. Bender v. A.G. Edwards & Sons, Inc., 971 F.2d 698,
699 (11th Cir. 1992). The Court will therefore compel arbitration and stay this action during
the arbitration’s pendency.
9
Accordingly, it is hereby ORDERED AND ADJUDGED:
1.
Defendant’s Motion to Dismiss and to Compel Arbitration (Doc. 7) is
GRANTED IN PART AND DENIED IN PART.
a.
The motion is DENIED to the extent that Defendant seeks dismissal
of this action.
b.
2.
In all other respects, the motion is GRANTED.
Plaintiff is COMPELLED to arbitrate his claims pursuant to the terms of the
Enrollment Agreement (Doc. 7-1).
3.
This action is STAYED pending arbitration.
4.
The parties are DIRECTED to jointly notify the Court of the status of the
arbitral proceedings on October 16, 2015, and every ninety (90) days
thereafter. The parties are further DIRECTED to immediately notify the
Court upon conclusion of the arbitral proceedings.
DONE AND ORDERED in Chambers in Orlando, Florida, on July 20, 2015.
Copies:
Counsel of Record
10
11
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?