Pope v. EZ Card and Kiosk LLC et al

Filing 46

OPINION AND ORDER granting 21 Motion to Compel; granting 21 Motion to Stay; granting 21 Motion to Dismiss. This case is ADMINISTRATIVELY CLOSED. Signed by Judge Kenneth A. Marra on 9/11/2015. (ir) NOTICE: If there are sealed documents in this case, they may be unsealed after 1 year or as directed by Court Order, unless they have been designated to be permanently sealed. See Local Rule 5.4 and Administrative Order 2014-69.

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 15-61046-CIV-MARRA
JOHN EDWARD POPE, individually and on
behalf of all others similarly situated,
Plaintiff,
vs.
EZ CARD & KIOSK LLC (a division of
GENERAL PAYMENT SYSTEMS, INC.); and
THE CENTRAL BANK OF KANSAS CITY,
Defendants.
_____________________________________/
OPINION AND ORDER
This cause is before the Court upon Defendant Central Bank of Kansas City’s Motion to
Compel Arbitration and Stay or Dismiss Proceedings (DE 21).1 The Motion is fully briefed and
ripe for review. The Court has carefully considered the Motion and is otherwise fully advised in
the premises.
I. Background
John Edward Pope (“Plaintiff” “Pope”) filed a class action Complaint against Defendants
EZ Card & Kiosk, LLC (“EZ Card”) and Central Bank of Kansas City (“Central Bank”)
(collectively, “Defendants”) for a violation of the Electronic Funds Transfer Act, 15 U.S.C. §
1693 et seq. (count one), a violation of the Florida Deceptive and Unfair Trade Practices Act,
Florida Statute § 501.201 et seq. (count two), conversion (count three) and unjust enrichment
(count four). The Complaint alleges the following:
Plaintiff was arrested by the Fort Lauderdale police in November of 2014 and was jailed
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Defendant EZ Card & Kiosk, LLC filed a Notice of Joinder of the motion. (DE 31.)

overnight. When booked, the Broward County Jail (the “Jail”) confiscated $178 in cash from
Plaintiff. Plaintiff was released 17 hours later. When released, the Jail did not return Plaintiff’s
cash, but gave him a prepaid debit card issued by EZ Card and the Bank of Kansas City. (Compl.
¶ 1.) The Jail did not give Plaintiff the option of receiving his cash back and the prepaid card
required Plaintiff to pay EZ Card and the Bank of Kansas City to access his own money. (Compl.
¶ 2.) Defendants required Plaintiff to “pay various exorbitant, unreasonable fees to retrieve the
money” taken from him. (Compl. ¶ 4.) Plaintiff used the card to purchase food and other items.
(Compl. ¶ 39.)
When Plaintiff was released from custody, the debit card he received had a balance of
approximately $128, which was based upon the $178 cash that the Jail confiscated from him the
day he was arrested, minus the cost of the bond, the booking fee, the uniform fee and the daily
subsistence fee that the Jail charged him. (Compl. ¶ 34.) Released individuals have no choice but
to accept the EZ Card debit card in lieu of cash or check. These individuals do not voluntarily
engage with the company, enroll in the program or take any affirmative steps to form a
contractual relationship with either Defendant. (Compl. ¶ 22.) Plaintiff did not assent to
receiving the card over cash and never assented to any terms of contract with Defendants.
(Compl. ¶ 35.) The fees applicable to Plaintiff’s debit card included: (1) a monthly maintenance
charge of $4.95; (2) an ATM balance inquiry fee of $1.99; (3) an ATM withdrawal fee of $2.99;
(4) a point of sale fee of $0.99; (5) a card replacement fee of $5.95 and (6) a fee of $4.00 to
receive a paper statement. (Compl. ¶ 37.)
Defendant Central Bank has submitted a declaration by Trent Sorbe, the president of the
Central Payment Division of Central Bank of Kansas City. (Sorbe Decl. ¶ 1, DE 22.) The
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cardholder agreement states that “[b]y retaining and using the Card, you agree to be bound by the
terms and conditions contained in this Agreement. (Cardholder Agreement, Ex. A, Sorbe Decl.,
DE 22.) A similar provision appears on the back of the debit card issued by Central Bank. (Ex.
B, Sorbe Decl. DE 22.)
At the top of the cardholder agreement is a statement reading “THIS AGREEMENT
CONTAINS AN ARBITRATION PROVISION,” which directs the cardholder to the arbitration
provision. (Cardholder Agreement.) The arbitration provision defines an arbitrable claim as:
any claim, dispute or controversy between you and use arising from or relating to the
Card or Agreement . . . including the validity, enforceability or scope of this Arbitration
Provision or the Agreements. “Claim” includes claims of every kind and nature,
including but not limited to initial claims, counterclaim, cross-claims and third-party
claims and clams based upon contract, tort, fraud and other intentional torts, statutes,
regulations, common law and equity. The term “Claim” is to be given the broadest
possible meaning that will be enforced and includes, without limitation, any claim,
dispute or controversy that arises from or relates to (i) your Card; (ii) the amount of
available funds in your Card account; (iii) advertisements, promotions or oral or written
statements related to your Card, goods or services purchased with your Card; (iv) the
benefits and services related to your Card; and (v) your enrollment for any Card.
(Cardholder Agreement § E.4(c)).
The Cardholder Agreement provides that any claims “shall be referred to either the
Judicial Administration and Mediation Services (“JAMS”) or the American Arbitration
Association (“AAA”), as selected by the party electing to use arbitraiton.” (Id. at § E.4(c).) The
Agreement gives the cardholder the opportunity to opt-out of arbitration as well as the ability to
avoid arbitration by filing in small claims court. (Id. at § § E.4(b) and (c).)
The Agreement gives the cardholder the option to cancel the debit card and receive a
check refund for the balance. The Cardholder Agreement provides:

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Amendment, Cancellation and Expiration
. . . . You may cancel this Agreement by returning the Card to us. Your termination of
this Agreement will not affect any of our rights or your obligations arising under this
Agreement prior to termination.
In the event that your Card Account is cancelled, closed, or terminated for any reason,
you may request the unused balance to be returned to you via a check to the mailing
address we have in our records. There may be a fee for this service. See Section A(3)
(Fee Schedule) of this Agreement for more information regarding fees. . . .
(Cardholder Agreement § E.2.)
The fee schedule in the Cardholder Agreement reflects no charge to the customer if the
account is closed and a check is issued at the customer’s request. (Id. at § A.3.)
Plaintiff states he was not given an opportunity to reject the debit card or receive his
money back in the form of cash or check. (Pl. Decl. ¶ 8, DE 35.) He does not recall receiving a
Cardholder Agreement or terms or conditions with the debit card. (Id. at ¶ 9.) No one talked to
him about the Cardholder Agreement or the terms and conditions of the debit card and he never
agreed to arbitrate claims against Defendants. (Id. at ¶ 12.)
Defendants have submitted records from the Jail which indicate that Plaintiff signed a
Withdrawal Receipt and Inmate Bank Account Refund Options form and elected to received
funds remaining on his Jail account via debit card. (Emanauel McCray Decl. ¶ 6, DE 39.) The
refund options form provided to Plaintiff provided two options: Option one provided for
repayment by debit card and identified specific fees associated with that card. Option two
provided a refund in the form of a check. (Refund option form, DE 39.) Plaintiff selected the
“debit card” option. (Id.) It is the Jail’s policy and procedure to provide all inmates who elect a
debit card in lieu of a check with copies of the Withdrawal Receipt, Inmate Bank Account
Refund Options form and the EZ Exit Release Card Cardholder Agreement. (McCray Decl. ¶ 5.)
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In reply, Plaintiff submitted another declaration. (Pl. Sec. Decl., DE 45-1.) At the time of
Plaintiff’s arrest, he did not have a bank account, debit card or credit card. (Id. at ¶ ¶ 5-7.) Other
than the $178.00 in cash that the Jail confiscated, he had no other money. (Id. at ¶ 8.) Had he left
the Jail without the debit card, Plaintiff would have had no access to money until he received a
check. (Id. at ¶ 9.) While he does not recall signing the Withdrawal Receipt or the Inmate Bank
Account Refund Options form, he does not challenge the authenticity of his signature. (Id. at ¶
11.)
Defendants move to compel arbitration on the basis of Plaintiff’s acceptance and use of
the debit card. Plaintiff responds that there was no mutual assent or consideration between him
and Defendants. Plaintiff also claims issues of fact preclude any finding that Plaintiff agreed to
arbitrate as a matter of law. In reply, Defendants point out that Plaintiff agreed to the terms and
conditions of the Cardholder Agreement when he voluntarily elected to receive repayment
through the issuance and use of the debit card and therefore the agreement was supported by
consideration. In his sur-reply, Plaintiff argues that he was not offered a genuine alternative to
the debit card and his receipt of the Cardholder Agreement does not settle issues of fact.
II. Discussion
The Supreme Court has articulated a strong federal policy favoring arbitration
agreements. See Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983).
One of the purposes of the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1 et seq., is to “ensure
judicial enforcement of privately made agreements to arbitrate.” Dean Witter Reynolds, Inc. v.
Byrd, 470 U.S. 213, 219 (1985). As such, arbitration agreements must be “rigorously enforce[d]”
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by the courts. Id. at 221. Because arbitration is a matter of contract, however, the FAA's strong
pro-arbitration policy only applies to disputes that the parties have agreed to arbitrate.
Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 57 (1995). “[A] party plainly cannot
be bound by an arbitration clause to which it does not consent.” BG Grp., PLC v. Republic of
Argentina, — U.S. —, 134 S. Ct. 1198, 1213 (2014) (Sotomayor, J. concurring).
For the purposes of a motion to compel arbitration, the Court may consider affidavits.
See Samadi v. MBNA America Bank, N.A., 178 Fed. App'x 863, 866 (11th Cir. 2006). In fact,
the party opposing a motion to compel arbitration has an affirmative duty of coming forward
with affidavits or deposition transcripts to show that the court should not compel arbitration. See
Sims v. Clarendon Ins. Co., 336 F. Supp. 2d 1311, 1314 (S.D. Fla. 2004). Federal substantive
law of arbitrability determines which disputes are within the scope of the arbitration clause.
Lawson v. Life of the South Ins. Co., 648 F.3d 1166, 1170 (11th Cir. 2011).
Here, the Court finds that Plaintiff consented to arbitration. The Jail gave him an option
to receive a check, but Plaintiff elected to take the debit card instead. Plaintiff signed a form
which provided him with a choice of his refund options. That form noted the fees associated
with the debit card and the option to receive instead a check, minus postage, from the Jail. Upon
choosing the debit card, the Jail’s procedure is to give individuals, such as Plaintiff, the
Cardholder Agreement which provided him with the option to receive his money via check as
well. Plaintiff used the card to purchase food and other items. Based on these facts, Plaintiff is
bound by the Cardholder Agreement and any claims he wishes to pursue are subject to
arbitration. See Krutchik v. Chase Bank USA, N.A., 531 F. Supp. 2d 1359, 1364-65 (S.D. Fla.
2008) (the “[p]laintiff failed to follow the specified procedure for rejecting the [ ] terms and
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continued using the credit card, his actions constitute a legal acceptance of the terms contained
within the cardmember agreement, including the arbitration provision, and the agreement is
binding”).
In arguing that he did not agree to arbitration, Plaintiff relies upon Regan v. Stored Value
Cards, Inc., No. 1:14-CV-01187-AT, 2015 WL 570524 (N.D. Ga. Jan. 13, 2015). The facts of
that case differ significantly. When the plaintiff in Regan was released the day after his arrest, he
was given a prepaid card and was not given an opportunity to reject the card. Id. at * 4. He was
not given a cardholder agreement before being given the card, was not told the cardholder
agreement was in his discharge paperwork and he did not sign the cardholder agreement. Id.
Given that Plaintiff chose the debit card over a check, Regan is inapposite.2
Plaintiff also contends that the Jail did not offer him a “genuine alternative” to the debit
card. Plaintiff states that the confiscated money represented all the money he had in the world
and waiting for a check to arrive in the mail was not an option. The Court finds, however, that
Plaintiff made a choice based upon his particular circumstances. These individual circumstances
do not render Plaintiff’s decision to accept the debit card, with its terms and conditions, including
arbitration, coerced or unconscionable.
III. Conclusion
Accordingly, it is hereby ORDERED AND ADJUDGED that Defendants’ Motion to

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Likewise, Plaintiff’s contention that the agreement was not supported by consideration
is equally unpersuasive. Plaintiff received the benefit of a debit card over a check, which gave
Plaintiff immediate access to the funds. See Real Estate World Florida Commercial, Inc. v.
Piemat, Inc., 920 So. 2d 704, 706 (Fla. Dist. Ct. App. 2006) (“the consideration required to
support a contract need not be money or anything having monetary value, but may consist of
either a benefit to the promisor or a detriment to the promisee.”)
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Compel Arbitration and Stay or Dismiss Proceedings (DE 21) is GRANTED. The case shall be
stayed pending completion of the arbitration and the clerk shall administratively close the case.
All pending motions are denied as moot.
DONE AND ORDERED in Chambers at West Palm Beach, Palm Beach County,
Florida, this 11th day of September, 2015.
______________________________________
KENNETH A. MARRA
United States District Judge

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