Hall et al v. Armis, LLC et al

Filing 46

OPINION AND ORDER by Magistrate Judge Jodi F Jayne ; directing court clerk to take action; granting in part and denying in part 9 Motion to Compel Arbitration (kah, Chambers)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OKLAHOMA
MARK HALL, an individual, and
REBEKAH HALL, an individual,
Plaintiffs,
v.
ARMIS, LLC, a foreign corporation, and
HOMESAFE, LLC, a foreign corporation,
Defendants.

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Case No. 24-CV-402-JFJ

OPINION AND ORDER
Before the Court is the Motion to Compel Arbitration and to Dismiss (ECF No. 9), filed
by Defendants Armis, LLC (“Armis”), and HomeSafe, LLC (“HomeSafe”) (collectively
“Defendants”), against Plaintiffs Mark and Rebekah Hall (collectively “Plaintiffs”). The parties
have consented to a magistrate judge presiding over the case. ECF No. 27.
For reasons set forth below, Defendants’ motion is GRANTED IN PART and DENIED IN
PART. The Court concludes that Plaintiffs’ claims must be compelled to arbitration. In its
discretion, the Court elects to stay the case pending resolution of the arbitration proceeding. The
Court denies the motion in all other respects, without prejudice to re-urging upon lifting of the
stay.
I.

Facts
On April 25, 2022, Defendant HomeSafe marketed and sold a month-to-month home

protection plan to Plaintiffs for their personal residence. Defendant Armis is the administrator and
obligor of the plan.

A.

HSC

The home protection plan is governed by a Home Service Contract (“HSC”). The HSC is
comprised of a “Declarations Page,” the “Total Home Plan Agreement – Month to Month,” and a
“Payment Plan Agreement.” See ECF No. 9-1. The HSC provides that Plaintiffs will make
monthly payments in the amount of $79.00 in exchange for repair or replacement coverage of their
home’s major systems and appliances, as outlined in the contract’s terms and conditions. Id. at
D1. See also id. §§ E-F (listing covered systems and appliances). The HSC includes arbitration,
forum-selection, and severability provisions. Id. § L.
The Declarations Page contains the names, street address, phone number, and email address
of Plaintiffs. Id. at D2. It is electronically signed by “Saiel Blyden,” who is designated as the
“Phone Authorized Agent” for “Purchaser” – i.e., Plaintiffs. Id. It also has a signature line for
“Vendor” with “HOMESAFE” typed above it. Id. The Payment Plan Agreement contains the
same identifiable information as the Declarations Page but also includes Plaintiffs’ credit card
information. Id. at F2. The Payment Plan Agreement again includes the electronic signature of
Saiel Blyden as the “Phone Authorized Agent” above “Purchaser Signature,” and the typed word
“HOMESAFE” above “Seller Signature.” Id.
The HSC contains the following provision governing arbitration and venue:
Any legal dispute between YOU and US relating to this CONTRACT may be
resolved by arbitration. To begin arbitration, either YOU or WE must make a
written demand for arbitration within sixty (60) days of OUR final decision. The
arbitration will take place before a single arbitrator. It will be administered in
keeping with the Conditionally Binding Arbitration Rules (“Rules”) of the Better
Business Bureau (“BBB”) in effect when the Claim is filed. . . . In the event of
litigation involving this CONTRACT, venue shall be in the courts of Jefferson
County, Colorado. . . . YOU or WE specifically agree to waive and forever give up
the right to have any disputes resolved by a trial by jury.
ECF No. 9-1 § L. The HSC also contains a severability provision: “All provisions of this
Agreement shall be considered as separate terms and conditions, and in the event any one shall be
2

held illegal, invalid or unenforceable, all other provisions hereof shall remain in full force and
effect . . . .” Id.
B.

Purchase of HSC

On April 25, 2022, a HomeSafe agent called Plaintiffs on the telephone for the purpose of
selling them a home protection plan. ECF No. 17-1 ¶¶ 3-4, 7 (Affidavit of Rebekah Hall (“Hall”)).
The call was Plaintiffs’ only interaction with HomeSafe prior to purchasing the plan. Id. ¶ 7. Hall
asked the HomeSafe agent during their conversation if HomeSafe was American Home Shield,
and the agent stated that it was. Id. ¶ 6. The HomeSafe agent discussed the monthly financial
obligation and the covered systems and appliances under the plan. Id. ¶¶ 10-11. The agent never
discussed appointing a “Phone Authorized Agent” for Plaintiffs. Id. ¶¶ 16-17. Plaintiffs do not
know Saiel Blyden and never authorized him or anyone else to serve as their agent. Id. ¶¶ 18-19.
The agent did not discuss the arbitration, forum-selection, or jury trial waiver provisions. Id. ¶¶
12-14. Had the agent discussed these provisions, Plaintiffs would not have entered into the HSC.
Id. ¶ 15. The agent did not offer Plaintiffs the opportunity to review the HSC, and Plaintiffs did
not receive a copy before purchasing the plan. Id. ¶¶ 8-9.
Leo Schonhoff (“Schonhoff”), President of HomeSafe, submitted an affidavit explaining
their sales process. HomeSafe employs individual marketing agents to sell home service plans
administered by Armis by telephone. ECF No. 23-1 at Ex. 1 ¶ 4. If a consumer wants to purchase
a plan, the agent obtains payment information from the consumer and signs a home service contract
on their behalf. Id. As part of its regular business practices, HomeSafe records all sales calls;
sends consumers a copy of any purchased home service plan via email and mail on or immediately
after the purchase date; and maintains records of these transmittals. Id. ¶¶ 5, 7.

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In this case, Hall spoke with a HomeSafe agent named Saiel Blyden (“Blyden”). Id. ¶ 6.
A transcript of the sales call between Blyden and Hall reflects that Blyden went over the covered
systems and appliances, monthly financial obligation, and related service fees, but did not discuss
the arbitration, forum-selection, and jury trial waiver provisions. ECF No. 23-1 at Ex. 1-A. Hall
later asked Blyden, “Is it the Home Shield, is that what it is?” Blyden answered, “Yes mam. It’s
HomeSafe. So you’re with us with Car Shield. We just cover the home side as well.” Hall replied,
“Ok. He is going to grab a card.” Id. Plaintiffs then provided their credit card information to
Blyden. Id.
C.

Receipt of HSC

According to Schonhoff, HomeSafe’s business records reveal that HomeSafe emailed
Plaintiffs a copy of the HSC at 6:06 P.M. on April 25, 2022, the day of purchase. ECF No. 23-1
at Ex. 1 ¶ 8. Such records further reveal that HomeSafe sent Plaintiffs a copy of the HSC via first
class mail on April 29, 2022, four days after the sale. Id. ¶ 9. Plaintiffs did not file an affidavit
denying or disputing receipt of the April 25, 2022, email, or the April 29, 2022, first-class mailing,
despite being permitted to file a surreply brief.1 Plaintiffs also did not seek leave to file any further
evidence regarding their non-receipt of the HSC, despite direct questioning about this issue during
oral argument.
In an affidavit submitted prior to Defendants’ submission of Schonhoff’s declaration, Hall
stated that Plaintiffs “did not receive a written copy of the Plan before it was purchased.” ECF No.
17-1 at ¶ 8 (emphasis added). Hall also stated that Plaintiffs “demanded a copy” of the HSC from
Armis when the dispute arose regarding the claim that is the subject of this lawsuit. Id. ¶ 23.

1

Plaintiffs’ surreply did not raise any factual challenge to Schonhoff’s declaration or the sales call
transcript. See ECF No. 28.
4

Plaintiffs admit they received a copy of the HSC from Armis sometime after filing their second
claim, but they did not provide an exact or even approximate date of receipt. Id. ¶ 24.
D.

Claims Submitted Under HSC/Monthly Renewal of HSC

According to Armis’ records, Plaintiffs made four total claims under the HSC, only one of
which is the subject of this lawsuit. First, on July 21, 2022, Plaintiffs submitted a claim for a
broken refrigerator, and Armis sent Plaintiffs a check for $771.59 on July 26, 2022. ECF No. 231 at Ex. 1 ¶ 12. Second, on December 1, 2022, Plaintiffs submitted a claim for repairs to their
home’s electrical panel, and Armis sent Plaintiff a check for $404.86 on May 17, 2023. Id. ¶ 13.
Third, on May 18, 2023, Plaintiffs submitted a claim for repairs to their home’s HVAC systems,
and Armis sent Plaintiffs a check for $585.00 on September 25, 2023. Id. ¶ 14. Finally, on March
18, 2024, Plaintiffs submitted a claim for an oven repair, and Armis sent Plaintiffs a check in the
amount of $257.66 on March 21, 2024. Id. ¶ 15. As of November 2024, well after Plaintiffs’
admitted receipt of the HSC and receipt of multiple financial benefits, Plaintiffs have continued to
renew the HSC monthly. Id. ¶ 16.2
E.

Current Lawsuit and Pending Motions

On July 19, 2024, nearly four months after receipt of payment on the fourth claim, Plaintiffs
initiated this lawsuit in state court. The lawsuit relates only to the second claim submitted by
Plaintiffs on December 1, 2022, for repairs to their electrical system. Plaintiffs contend the
$404.86 payment was insufficient, and that Defendants breached the agreement and acted in bad
faith in relation to this claim.

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Plaintiffs aver they submitted only three claims. See ECF No. 17-1 ¶ 20. This factual dispute is
not material to resolving this motion.
5

Defendants removed the case to federal court and filed the instant motion to compel
arbitration and to dismiss.3 Defendants request that this Court compel arbitration and then dismiss
the case for improper venue, such that any proceedings following remand would proceed in
Colorado. Alternatively, if the Court reaches the merits, Defendants seek dismissal of HomeSafe
based on Plaintiffs’ failure to state a claim against that entity.
II.

Motion to Compel Arbitration
Defendants argue that Plaintiffs’ claims are subject to the HSC’s arbitration provision,

because Plaintiffs accepted all terms of the HSC through their acceptance of benefits and other
conduct acquiescing to such terms. Plaintiffs contend they did not agree to the arbitration provision
at the time of purchase, and that it must be severed from the HSC. Alternatively, Plaintiffs argue
the arbitration provision is unenforceable due to fraud and unconscionability. Finally, Plaintiffs
argue, even if the arbitration provision is enforceable, Defendants failed to make a timely

3

While briefing this motion, Defendants argued the HSC is governed by the Oklahoma Service
Warranty Act, Okla. Stat. tit. 15, §§ 141.1-141.35, which precludes tort claims stemming from a
breach of service warranty contract. ECF No. 23 at 6 (citing Okla. Stat. tit. 15, § 141.24(B)).
Plaintiffs then filed a notice of constitutional question pursuant to Federal Rule of Civil Procedure
5.1(a)(1)(A), challenging whether the Oklahoma Service Warranty Act is an unconstitutional
special law in violation of Article V, § 46 of the Oklahoma Constitution. ECF No. 29. On
December 12, 2024, the Court certified Plaintiffs’ constitutional challenge to the Oklahoma
Attorney General. ECF No. 32. On January 8, 2025, Defendants filed a “Notice of Correction of
Reply Brief,” asserting the HSC is instead governed by the Oklahoma Home Service Contract Act,
Okla. Stat. tit. 36. §§ 6750-6755, which does not expressly prohibit bad-faith tort claims. ECF No.
40. Defendants still dispute whether a bad-faith claim can be based on a breach of a home service
contract, but do not ask the Court to make this determination in deciding the present motion. ECF
No. 40 at 3. The Court withdrew its certification of constitutional question on February 13, 2025,
after Plaintiffs’ counsel agreed the constitutional challenge was moot given the filing of
Defendants’ corrected reply brief. The Court therefore rules on Defendants’ motion without
deciding whether the Oklahoma Home Service Contract Act precludes bad-faith claims.
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arbitration demand. The Court held oral argument on January 13, 2025, and the motion to compel
arbitration is ripe for determination.4
For reasons explained below, the Court finds no genuine dispute of material fact and
concludes that Defendants are entitled to compel arbitration as a matter of law.
A.

FAA Applies to Motion

Defendants seek to compel arbitration under the Federal Arbitration Act (“FAA”), 9 U.S.C.
§ 1-16, and the Oklahoma Uniform Arbitration Act (“OUAA”), Okla. Stat. tit. 12, §§ 1851-1881.
The FAA “applies to all arbitration agreements involving commerce, and creates a body of federal
substantive law of arbitrability, applicable to any arbitration agreement within the coverage of the
Act.” Comanche Indian Tribe of Okla. v. 49, L.L.C., 391 F.3d 1129, 1131 (10th Cir. 2004) (cleaned
up). This includes federal cases where a court exercises diversity jurisdiction. See Allied-Bruce
Terminix Cos. v. Dobson, 513 U.S. 265, 271 (1995) (noting Congress intended the FAA to apply
in diversity cases).

The phrase “involving commerce” is “broadly construed so as to be

coextensive with congressional power to regulate under the Commerce Clause.” Comanche Indian
Tribe, 391 F.3d at 1132 (quotation omitted). The requirement “reaches not only the actual physical
interstate shipment of goods but also contracts relating to interstate commerce.” Id. (quoting
Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 401 n.7 (1967)).
Applying the above standards, the Court finds the FAA governs the motion to compel
arbitration filed in this diversity action. The HSC is a service contract between citizens of different

4

Although Defendants raise the forum-selection clause for other purposes, Defendants do not seek
to enforce the clause for purposes of their motion to compel arbitration. Instead, both parties urge
this Court to decide the motion in this Oklahoma venue. See ECF No. 9 at 3-5; ECF No. 17 at 516; ECF No. 23 at 1-10.
7

states that covers the expenses of repairing or replacing a home’s major systems and appliances.
This clearly qualifies as a contract “involving commerce” for purposes of the FAA.5
B.

Legal Standards Governing Motions to Compel Arbitration Under FAA

Under the FAA, a written arbitration provision is deemed “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. A party “aggrieved” by the “failure, neglect, or refusal of another to arbitrate” may
seek relief from a federal district court. Id. § 4. The federal court “shall hear the parties, and upon
being satisfied that the making of the agreement for arbitration or the failure to comply therewith
is not in issue, the court shall make an order directing the parties to proceed to arbitration in
accordance with the terms of the agreement.” Id.
A district court employs a two-step process in determining whether to enforce an arbitration
agreement pursuant to 9 U.S.C. § 4. Cavlovic v. J.C. Penney Corp., 884 F.3d 1051, 1057 (10th
Cir. 2018). First, it determines whether a valid arbitration agreement exists that provides the
movant the right to compel arbitration. Id. Second, it determines the question of substantive
arbitrability, which refers to whether the dispute falls within the scope of the agreement. Id.6 See
also infra Section II.E. (explaining difference between substantive and procedural arbitrability).
In applying the two-step test, a court applies ordinary state-law contract principles. First
Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944 (1995). A federal court sitting in diversity

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The Court would apply the same analysis and reach the same conclusion if it applied the OUAA.
See Wohlford v. Am. Auto Shield, LLC, No. CIV-22-520, 2023 WL 1107891, at *2 (W.D. Okla. Jan.
30, 2023) (noting the standards under both acts are “substantially the same”).
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Before reaching the second step, a court may sometimes have to decide the “gateway question”
of whether the agreement delegates the issue of substantive arbitrability to the arbitrator. Brayman
v. KeyPoint Gov’t Sols., Inc., 83 F.4th 823, 832 (10th Cir. 2023). Here, neither party contends the
HSC delegates the issue of substantive arbitrability, and there is no need to conduct this “gateway”
analysis.
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applies the choice of law rules of the forum state. Barrett v. Tallon, 30 F.3d 1296, 1300 (10th Cir.
1994). When, as here, the contract contains no choice of law provision, the contract “is to be
interpreted according to the law and usage of the place where it is to be performed.” Okla. Stat.
tit. 15, § 162. In this case, the place of performance of the HSC is Oklahoma, and the Court applies
Oklahoma contract law to the motion.7
Courts generally treat motions to compel arbitration akin to motions for summary
judgment. Bellman v. i3Carbon, LLC, 563 F. App’x 608, 612 (10th Cir. 2014). The movant “bears
the initial burden of presenting evidence sufficient to demonstrate the existence of an enforceable
agreement; if it does so, the burden shifts to the [nonmovant] to raise a genuine dispute of material
fact regarding the existence of an agreement.” Id. The nonmovant is given “the benefit of all
reasonable doubts and inferences that may arise.” Hancock v. Am. Tel. & Tel. Co., 701 F.3d 1248,
1261 (10th Cir. 2012) (quotation omitted). When “a quick look at the case” reveals “no material
disputes of fact,” a court can “decide the arbitration question as a matter of law through motions
practice and viewing the facts in the light most favorable to the party opposing arbitration.”
Howard v. Ferrellgas Partners, L.P., 748 F.3d 975, 978 (10th Cir. 2014).8
C.

Existence of Valid, Mandatory Arbitration Agreement

Under Oklahoma law, a valid, legally enforceable contract requires: (1) parties capable of
contracting; (2) mutual consent, i.e., a meeting of the minds; (3) a lawful object; and (4) sufficient
consideration. Okla. Stat. tit. 15, §§ 2, 51; Boles v. CarShield, LLC, No. 22-cv-00034-WPJ-MTS,

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Both parties apply Oklahoma law in their briefs.

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Here, the Court finds no material disputes of fact. When “material disputes of fact do exist,” the
FAA “calls for a summary trial – not death by discovery.” Id. (explaining “[p]arties should not
have to endure years of waiting and exhaust legions of photocopiers in discovery . . . merely to
learn where their dispute will be heard”). See also id. at 977 (“The object is always to decide
quickly – summarily – the proper venue for the case, whether it be the courtroom or the conference
room, so the parties can get on with the merits of their dispute.”).
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2023 WL 8851626, at *4 (N.D. Okla. Dec. 21, 2023). Relevant to this case, Oklahoma law
provides that “[p]erformance of the conditions of a proposal, or the acceptance of the consideration
offered with a proposal, is an acceptance of the proposal.” Okla. Stat. tit. 15, § 70. Further, “[a]
voluntary acceptance of the benefit of a transaction is equivalent to a consent to all obligations
arising from it so far as the facts are known, or ought to be known to the person accepting.” Id.
§ 75.
1.

Plaintiffs Agreed to Arbitration Provision Through Acts, Conduct, and
Acquiescence

Applying Oklahoma contract law, Oklahoma federal courts have held that “acceptance of
an arbitration agreement may be shown by acts, conduct, or acquiescence to the terms of the
contract.” Wohlford v. Am. Auto Shield, LLC, No. CIV-22-520, 2023 WL 1107891, at *5 (W.D.
Okla. Jan. 30, 2023) (quotation omitted); Boles, 2023 WL 8851626, at *6. In Wohlford, the plaintiff
purchased a month-to-month vehicle service contract (“VSC”) via telephone. 2023 WL 1107891,
at *1. The VSC, which contained an arbitration provision, was signed by a “Phone Authorized
Agent.” Id. at *4. The defendants presented undisputed evidence that the plaintiff received a copy
of the agreement at some point after the purchase. See id. at *3 & n.6. After the defendants moved
to compel arbitration, the plaintiff argued that arbitration should not be compelled because he did
not physically sign the VSC, was unaware of the VSC’s arbitration provision, and lacked an intent
to arbitrate. Id. at *4. The Wohlford court rejected these arguments and found a valid agreement.
The court explained that neither the FAA nor Oklahoma law requires a physical signature to accept
a contract; instead, acceptance can be shown through performance or the receipt of benefits. Id.
at *5 (citing Okla. Stat. tit. 15, §§ 70, 75). The court found the plaintiff accepted the terms of the
VSC “by making payments under the VSC, not cancelling the VSC, and by submitting a repair
claim under the VSC,” despite not signing the agreement or being aware of the arbitration

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provision prior to purchase. Id. See also Boles, 2023 WL 8851626, at *5-6 (citing Wohlford,
employing nearly identical reasoning, and concluding plaintiffs accepted terms of arbitration
provision through their conduct after receipt of the agreement).
The Court finds the reasoning in Wohlford and Boles persuasive and directly applicable
here. Defendants met their burden of showing that, based on their business records and standard
business practices, HomeSafe emailed and mailed a copy of the HSC to Plaintiffs on or near the
time of purchase on April 25, 2022. As in Wohlford and Boles, the evidence shows that, although
Plaintiffs did not physically sign the agreement, they acquiesced to all terms of the HSC through
their conduct. Specifically, Plaintiffs purchased the HSC; renewed it monthly for several years
and continue to do so; filed at least three claims under the HSC; admittedly received financial
benefits from those claims; and filed suit seeking to enforce the provisions of the HSC requiring
payment. Plaintiffs could have chosen to cancel or non-renew the HSC at any time for any reason.
ECF No. 9-1 §§ B(2), K(3). Instead, Plaintiffs continued submitting claims and demanding
performance under the HSC, and they cannot avoid their corresponding obligations, including the
agreement to arbitrate.9
Plaintiffs have failed to create any genuine questions of material fact regarding the
existence of an arbitration agreement. Plaintiffs’ arguments and factual averments focus on the
parties’ conduct prior to Plaintiffs’ purchase of the HSC. Specifically, Plaintiffs contend (1) the

9

As discussed at the hearing, there is a difference between this case and the Wohlford and Boles
decisions. The contracts in those cases included a provision that states, “BY MAKING YOUR
FIRST PAYMENT . . . , YOU ACKNOWLEDGE THAT YOU HAVE READ THIS
AGREEMENT, INCLUDING THE ARBITRATION PROVISION . . . , AND YOU AGREE TO
BE BOUND BY THE TERMS OF THIS CONTRACT.” Wohlford, 2023 WL 1107891, at *4;
Boles, 2023 WL 8851626, at *2. While this type of provision would have been helpful to
Defendants’ position, its absence is not fatal. The crucial reasoning in Wohlford and Boles is that
the plaintiffs accepted the terms of the arbitration provision by repeatedly renewing the contract
and making claims under the contract. That reasoning applies equally here.
11

HomeSafe agent failed to inform them of the arbitration provision or their waiver of jury trial
rights; (2) Plaintiffs failed to authorize Blyden to sign as their agent; and (3) Plaintiffs failed to see
or review the HSC before making the purchase. See ECF No. 17-1 ¶¶ 8-19. See also ECF No. 17
at 8 (arguing in their response brief that they were not provided a copy of the HSC at the time of
contracting). Accepting these facts and arguments as true, they are not material to the existence
of a valid agreement, where Plaintiffs accepted the HSC through post-purchase acts, conduct, and
acquiescence. As explained above, acceptance occurred based on Plaintiffs’ receipt of the HSC
combined with the continued renewal of the contract, filing of multiple claims, and receipt of
financial benefits. Any factual disputes regarding what did or did not occur prior to purchase are
not material.
It is unclear whether Plaintiffs attempt to create a dispute of fact regarding the precise date
of their receipt of the HSC, or if they contend this fact is material to the legal analysis. The Court
addresses this out of an abundance of caution. Defendants presented undisputed evidence, attached
to the reply brief, that Armis sent the HSC to Plaintiffs by email and first-class mail on or around
the date of purchase. This is consistent with its regular business practices. Despite an opportunity
to do so in a surreply, or following specific questioning on this issue during oral argument,
Plaintiffs failed to submit evidence denying receipt of the email or first-class mail or otherwise
attempting to refute Defendants’ evidence. In fact, in their surreply, Plaintiffs failed to make any
arguments at all about the timing of their receipt of the HSC, i.e., when they first had the
opportunity to review the arbitration provision. Plaintiffs’ silence in response to this specific
evidence indicates Plaintiffs checked their records and cannot refute Defendants’ statements, or
intentionally avoided attempting to do so. In either event, there is no genuine question presented
for trial. The Court therefore finds Plaintiffs received the HSC, by email and mail, on or around

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the date of purchase on April 25, 2022. See Wohlford, 2023 WL 1107891, at *3 n.6 (reasoning that
the plaintiff “had the opportunity to demonstrate to the Court he was not timely provided the VSC
and has failed to do so”); Ivy Bridge v. Nature's Sunshine Prods., Inc., No. 2:21-CV-495, 2022 WL
604857, at *4 (D. Utah Mar. 1, 2022) (rejecting plaintiffs’ argument that there was no valid and
enforceable arbitration agreement where defendant submitted declaration that documents were
emailed to plaintiffs and plaintiffs did not submit a declaration stating the documents were not
received). As in Wohlford and Boles, Plaintiffs knew or should have known of the arbitration
provision based on receipt of the HSC in April 2022.
Hall’s original affidavit does not address the issue of receipt and does not create a genuine
question of material fact. As an initial matter, the affidavit was submitted prior to Defendants’
submission of direct evidence regarding HomeSafe’s emailing and mailing of the HSC in April of
2022. Plaintiffs have not denied receipt of these documents, despite opportunities to do so. Even
in the original affidavit, Hall carefully does not aver when Plaintiffs first received the HSC. Nor
does Hall provide a specific date as to when Plaintiffs first reviewed the HSC. Hall merely states
they did not receive the HSC before purchase; that they demanded the HSC after filing their second
claim; and that they first reviewed the HSC at some time after making the second claim. ECF No.
17-1 ¶¶ 8, 23-24. See also ECF No. 17 at 3 (arguing that Plaintiffs did not review the HSC until
after filing their second claim). Even giving Plaintiffs the benefit of reasonable inferences, these
vague statements do not adequately contradict Defendants’ evidence demonstrating mailing and
presumed receipt on or around April 2022.
2.

Arbitration Provision Is Mandatory

Plaintiffs argue that the arbitration provision here is permissive because the provision states
that a dispute “may” be resolved by arbitration. ECF No. 17 at 15.

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As discussed at the hearing, the contracts in Wohlford and Boles included an “Individual
State Variance Requirement” for Oklahoma, which stated that, “[w]hile arbitration is mandatory,
the outcome of any arbitration shall be non-binding . . . , and either party shall, following
arbitration, have the right to reject the arbitration award and bring suit in the district court.”
Wohlford, 2023 WL 1107891, at *3; Boles, 2023 WL 8851626, at *4. This supplemental language’s
use of the word “mandatory” supported the conclusion that the arbitration provisions were
mandatory, rather than permissive, despite use of the word “may” in the contracts. See Wohlford,
2023 WL 1107891, at *3; Boles, 2023 WL 8851626, at *4. Here, the HSC mentions a presumably
similar state variance requirement, but the variance is not attached to the HSC. See ECF No. 9-1
§ L (“Please refer to the ‘Individual State Variance Requirement’ at the end of YOUR CONTRACT
for any added requirements in YOUR state.”).
While the variance language would support a finding that the HSC’s arbitration provision
is mandatory, such language is not required for such finding. Interpreting similar provisions, which
were also unaccompanied by any supplemental language, courts have routinely held that
arbitration provisions are mandatory despite use of the word “may.” See Mbau v. Baker Hughes,
Inc., No. 18-CV-101-JED-FHM, 2018 WL 3484041, at *2 (N.D. Okla. July 19, 2018) (collecting
cases). Instead, courts have held that the most logical reading of these provisions is that arbitration
becomes mandatory once either party elects to request it. See Mbau, 2018 WL 3484041, at *2
(finding arbitration clause that stated parties “may elect” to submit a dispute to arbitration becomes
mandatory once arbitration is initiated); Pueblo of Isleta v. Grisham, No. 17-654, 2019 WL
1429586, at *15 (D.N.M. Mar. 30, 2019) (explaining that use of “may” in arbitration provision
“simply means” that arbitration is “mandatory once either party invokes it”) (collecting cases);
Smith v. AHS Okla. Heart, LLC, No. 11-CV-691-TCK-FHM, 2012 WL 3156878, at *1 (N.D. Okla.

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June 6, 2012) (finding arbitration clause that stated parties “may submit” dispute to arbitration
meant that, “if one party elects to proceed to arbitrate the dispute, then the other party must also
submit to arbitration”). The Court’s conclusion is further supported by the HSC’s “Class Action
Waiver” provision, which states, “The parties expressly waive any ability to maintain any Class
Action in any forum. . . . THE PARTIES UNDERSTAND THAT THEY WOULD HAVE HAD
A RIGHT TO BE PARTY TO A CLASS OR REPRESENTATIVE ACTION, HOWEVER,
THEY UNDERSTAND AND

CHOOSE TO

HAVE ANY CLAIMS

DECIDED

INDIVIDUALLY, THROUGH ARBITRATION.” ECF No. 9-1 § L. Interpreting the plain
language of the agreement, the Court concludes the arbitration provision is mandatory when
invoked by either party, despite the absence of certain additional language relied on by the courts
in Wohlford and Boles.
3.

Court Rejects Plaintiffs’ Fraud/Unconscionability Defenses
a.

Fraudulent Inducement

Plaintiffs argue they were fraudulently induced into the arbitration provision, because
arbitration was not discussed when they purchased the HSC. ECF No. 17 at 8-13. Such argument
is premised upon a theory of constructive fraud.
“Constructive fraud is a breach of either a legal or equitable duty that does not necessarily
involve any moral guilt, intent to deceive, or actual dishonesty of purpose.” Key Fin., Inc. v. Koon,
371 P.3d 1133, 1138 (Okla. Civ. App. 2015). “It may be defined as any breach of a duty which,
regardless of the actor’s intent, gains an advantage for the actor by misleading another to his
prejudice.” Id. Constructive fraud can occur where a party has a duty to speak but remains silent.
Id. See also Bankers Trust Co. v. Brown, 107 P.3d 609, 613 (Okla. Civ. App. 2004) (“Constructive
fraud is ‘the concealment of material facts which one is bound under the circumstances to

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disclose.’”) (quoting Varn v. Maloney, 516 P.2d 1328, 1332 (Okla. 1973)). Silence regarding a
material fact does not, by itself, trigger the duty to speak. See Key Fin., Inc., 371 P.3d at 1138
(“[S]ilence as to a material fact is not necessarily, as a matter of law, equivalent to a false
representation; there must have been an obligation to speak.”). The duty to speak instead arises
only “when the offending party created a false impression concerning material facts that was relied
upon by the other party to his detriment and to the benefit of the offending party.” Sutton v. David
Stanley Chevrolet, Inc., 475 P.3d 847, 855 (Okla. 2020) (emphasis added). Stated differently, the
duty to speak “may arise from partial disclosure” only when the speaker “convey[s] a false
impression by the disclosure of some facts and the concealment of others,” because “such
concealment is in effect a false representation that what is disclosed is the whole truth.” Id.
(quotation omitted). In determining whether one had a duty to speak, “consideration must be given
to the situation of the parties and the matters with which they are dealing.” Silk v. Phillips Petrol.
Co., 760 P.2d 174, 179 (Okla. 1988).
Defendants are entitled to summary judgment on the issue of whether the arbitration
provision was fraudulently induced by Defendants’ silence.10 There is no evidence suggesting
Blyden created a false impression regarding the arbitration provision. Plaintiffs do not, and cannot,
point to any partial disclosures regarding the HSC’s arbitration provision. Hall concedes that
Blyden did not mention arbitration at all. See ECF No. 17-1 ¶ 12 (“HomeSafe never explained
arbitration or even mentioned the word ‘arbitration’ to us.”). Based on Blyden’s silence on the
issue of arbitration, Plaintiffs were not fraudulently induced into entering the HSC.

10

It is not disputed that the arbitration provision is material and undisclosed. The parties’ dispute
turns on whether Blyden had a duty to speak.
16

Plaintiffs argue that, once Blyden discussed “any material part” of the HSC, he “had a duty
to discuss all material parts,” including the arbitration provision, to avoid misleading Plaintiffs.
ECF No. 17 at 20. This argument is unpersuasive. The duty to speak only arises once an individual
“voluntarily chooses to speak . . . about a particular subject matter.” Specialty Beverages, L.L.C.
v. Pabst Brewing Co., 537 F.3d 1165, 1181 (10th Cir. 2008) (quotation and emphasis omitted)
(applying Oklahoma law). Because Blyden did not discuss arbitration, he did not create a false
impression regarding that provision and was under no duty to speak, even though he discussed
other material provisions of the contract. See Sutton, 475 P.3d at 858 (“The duty to disclose . . . is
not a duty to read an entire contract; it is the duty to disclose enough information that will clear
the false impression created, which under the circumstances, only concerned the [dispute
resolution clause]”). Here, no false impression was created, and Blyden had nothing to clarify.
Plaintiffs’ cited cases are distinguishable. They involve the creation of a false impression
and/or specific misrepresentations. See ECF No. 17 at 9-12 (citing, e.g., Sutton, 475 P.3d at 847;
Key Fin., Inc., 371 P.3d at 1133). In Key Finance, the plaintiff purchased a vehicle from a car
dealership and signed an arbitration agreement. 371 P.3d at 1135. The dealership’s agent stated
the arbitration agreement awarded attorney fees to the dealership if the plaintiff defaulted on
payments and litigation was necessary, but he did not state that the agreement limited the plaintiff’s
rights to a jury trial. Id. at 1136, 1138. The Oklahoma Court of Civil Appeals found the agent
owed plaintiff a duty of full disclosure, because his representation “conveyed a false impression
of the purpose and content” of the arbitration agreement by only stating the document awarded
attorney fees if litigation was necessary. Id. at 1138. Unlike the agent in Key Finance who partially
explained the arbitration agreement, Blyden made no mention of the HSC’s arbitration provision.

17

Sutton likewise involved a vehicle purchase at a car dealership. 475 P.3d at 849. In that
case, the plaintiff executed a two-page purchase agreement that was divided into four separate
sections, each with its own signature line. Id. at 850. Under the “trade-in vehicle” section was a
dispute resolution clause in small, red font. Id. The dealership’s finance manager told plaintiff the
purchase agreement was for “verifying his personal information, the vehicle information on both
vehicles, and how much he would be paying.” Id. The finance manager did not discuss the dispute
resolution clause, and plaintiff did not read the purchase agreement before signing. Id. Under
these facts, the Oklahoma Supreme Court found a duty to disclose the dispute resolution clause
arose, because “the representations of the finance manager combined with the structure of the
purchase agreement created a false impression that the purpose of [plaintiff’s] signature was to
only verify information concerning his trade-in vehicle.” Id. at 857 (noting arbitration provision
was a “totally unrelated provision” in a “much smaller font size” that was “tucked-in” right before
a signature line).
Unlike the agent in Sutton, Blyden did not create any false impression that induced
Plaintiffs not to carefully read the entire agreement upon its receipt. Blyden’s failure to mention
the arbitration provision is distinguishable from an indication by a finance manager that a
document’s sole purpose is to verify personal information. Such representation may induce a
purchaser to sign an agreement without reading or neglect reading if, as here, the agreement is
received later. Further, unlike the dispute resolution clause in Sutton, the HSC’s arbitration
provision is not hidden. It is in standard font within the substantive portion of the HSC in a section
entitled, “DISPUTES.” ECF No. 9-1 § L. Here, Blyden’s silence regarding the arbitration

18

provision did not trigger the duty to disclose, and Plaintiffs’ fraudulent inducement argument
fails.11
b.

Unconscionability

Plaintiffs argue the arbitration provision is unconscionable, because (1) it is contained in
an adhesion contract;12 (2) it forces them to unknowingly waive their right to a jury trial; and (3)
arbitration may be costly. ECF No. 17 at 13-15.
Under Oklahoma law, “[t]he basic test of unconscionability of a contract is whether under
the circumstances existing at the time of making . . . the contract . . . , clauses are so one-sided as
to oppress or unfairly surprise one of the parties.” Barnes v. Helfenbein, 548 P.2d 1014, 1020
(Okla. 1976)). “Unconscionability has generally been recognized to include an absence of
meaningful choice on the part of one of the parties, together with contractual terms which are
unreasonably favorable to the other party.” Id.
The Court concludes the HSC’s arbitration provision is not unconscionable. First, the
arbitration provision was not in fine print and was in the same font as other portions of the
agreement. Applying Oklahoma law, courts have consistently found that similar arbitration
provisions in “adhesion” contracts are not so unfair or one-sided as to be deemed unconscionable.
See Lloyd v. Northrop Grumman Sys. Corp., No. CIV-07-887, 2008 WL 320021, at *3 (W.D. Okla.

11

In Sutton, the Oklahoma Supreme Court found plaintiff’s failure to read the purchase agreement
was not a defense to defendant’s failure to disclose. 475 P.3d at 857-58. The holding in Sutton is
not applicable to this case, as the Court finds there was no duty to disclose in the first instance.
12

An adhesion contract is a “standardized contract prepared entirely by one party to the transaction
for the acceptance of the other. These contracts, because of the disparity in bargaining power . . . ,
must be accepted or rejected on a ‘take it or leave it’ basis without opportunity for bargaining.”
Max True Plastering Co. v. U.S. Fid. & Guar. Co., 912 p.2d 861, 864 (Okla. 1996). Adhesion
contracts are not per se unconscionable. See Towe Hester & Erwin, Inc. v. Kansas City Fire &
Marine Ins. Co., 947 P.2d 594, 597 (Okla. Civ. App. 1997) (explaining adhesion contracts “are not
in themselves illegal or inequitable”); Freeman v. Bodyworks, Inc., 213 P.3d 838, 840 (Okla. Civ.
App. 2008) (noting adhesion contracts are enforceable, “although often annoying”).
19

Feb. 4, 2008) (finding arbitration provision in adhesion contract was not unconscionable where
provision was not “hidden in a maze of fine print” but was contained within “[t]wo clearly written
documents”). See also Boles, 2023 WL 8851626, at *5-6 (finding near-identical arbitration
provision was not unconscionable); Lockett v. Conn Appliances, Inc., No. 16-CV-703, 2017 WL
2129316, *4 (E.D. Tex. Apr. 11, 2017) (same), report and recommendation adopted, 2017 WL
2120010 (May 16, 2017) (applying Oklahoma law); Towe Hester & Erwin, Inc. v. Kansas City
Fire & Marine Ins. Co., 947 P.2d 594, 597 (Okla. Civ. App. 1997) (same). Plaintiffs did not cite
any contrary authority finding similar arbitration provisions unconscionable, and the Court follows
the above-cited authority.
Second, Plaintiffs inflate the significance of the HSC’s jury trial waiver provision. All
arbitration agreements in effect waive the right to jury trial. See Busby v. Adams Homes, LLC, No.
12CV92, 2012 WL 12884479, at *5 (S.D. Miss. July 24, 2012) (explaining “[a]ll valid arbitration
agreements constitute the waiver of the right to a jury trial”). However, as noted above, these
provisions are routinely enforced.
Finally, it is Plaintiffs’ burden to show arbitration would be “prohibitively expensive.”
Shahin v. J and L Acquisitions, LLC, No. CIV. 24-424, 2024 WL 4804080, at *4 (W.D. Okla. Nov.
15, 2024). The only evidence before the Court indicates that arbitration would cost $150 to initiate
and could be done remotely. ECF No. 23-1 at Ex. 1 ¶¶ 17-18. Plaintiffs’ concerns about costs are
merely speculative.
The Court finds the arbitration provision is not so one-sided as to oppress or surprise
Plaintiffs.
D.

Claims Fall Within Scope of Arbitration Agreement

Having found a valid, mandatory arbitration agreement exists between the parties, the

20

second step is to determine whether their dispute falls within the scope of the agreement. The
Court first categorizes the arbitration provision as broad or narrow. Cummings v. FedEx Ground
Package Sys., Inc., 404 F.3d 1258, 1261 (10th Cir. 2005). If the Court finds the arbitration
provision is narrow, it then determines whether the dispute “is over an issue that is on its face
within the purview of the clause, or over a collateral issue that is somehow connected to the main
agreement that contains an arbitration clause.” Id. (quotation omitted). Collateral matters are
generally beyond the purview of a narrow arbitration clause. Id. If the Court finds the arbitration
provision is broad, “there arises a presumption of arbitrability and arbitration of even a collateral
matter will be ordered if the claim alleged implicates issues of contract construction or the parties’
rights and obligations under it.” Id. (quotation omitted).
The arbitration provision provides that “[a]ny legal dispute between YOU and US relating
to this CONTRACT may be resolved by arbitration.” ECF No. 9-1 § L (emphasis added). This
language is consistent with a broad arbitration clause. See Wohlford, 2023 WL 1107891, at *1 n.3
(finding arbitration clause broad where parties agreed to arbitrate “any legal dispute . . . relating
to” the VSC). See also Prima Paint Corp., 388 U.S. at 398 (same, where parties agreed to arbitrate
“[a]ny controversy or claim arising out of or relating to” agreement or breach of agreement); P &
P Indus., Inc. v. Sutter Corp., 179 F.3d 861, 871 (10th Cir. 1999) (same, where parties agreed to
arbitrate “[a]ny controversy, claim, or breach arising out of or relating to” agreement).
Accordingly, a presumption of arbitrability is applied to Plaintiffs’ claims. This presumption is
“overcome only if [the Court] can say with positive assurance that the arbitration clause is not
susceptible of an interpretation that covers the asserted dispute.” Soc’y of Pro. Eng’g Emps. in
Aerospace v. Spirit Aerosystems, Inc., 681 F. App’x 717, 721 (10th Cir. 2017) (citation and internal
quotation marks omitted).

21

Plaintiffs concede their breach of contract claim is within the scope of the arbitration
provision. Plaintiffs argue in a footnote that their claim for breach of the duty of good faith and
fair dealing is an “extra-contractual” tort claim and therefore outside the scope of the arbitration
provision. ECF No. 17 at 5 n.3.13 This argument is unpersuasive. Plaintiffs’ tort claim is based
on Defendants’ purported mishandling of Plaintiffs’ claim for benefits under the HSC. ECF No.
9-2 ¶¶ 30-32 (petition). Plaintiffs generally allege that Defendants refused to pay benefits Plaintiffs
were legally entitled to under the HSC; intentionally and recklessly misapplied provisions of the
HSC to avoid payment; and failed to properly evaluate and investigate Plaintiffs’ claim for benefits
under the HSC. Id. ¶ 32. Plaintiffs’ tort claim is clearly premised on a dispute “relating to the”
HSC. See P & P Indus, Inc., 179 F.3d at 871-72 (finding tortious interference claim arbitrable
where underlying factual allegations of claim “touch[ed] matters” covered by the contract)
(rejecting argument that tort-based claims can never fall within the scope of a “arising out of or
relating to” arbitration clause). All of Plaintiffs’ claims fall within the scope of the broad arbitration
provision. See Boles, 2023 WL 8851626, at *8 (finding fraudulent inducement and breach of duty
of good faith and fair dealing claim within scope of arbitration provision and compelling claims to
arbitration); Wohlford, 2023 WL 1107891, at *6 (same).
E.

Timeliness of Defendants’ Demand for Arbitration Must Be Decided by
Arbitrator

Plaintiffs argue Defendants failed to make a timely written demand for arbitration. ECF
No. 17 at 15-16. Defendants argue this issue must be decided by the arbitrator, and, alternatively,
that its claim was timely. ECF No. 23 at 9.

13

Although the Court chooses to address this argument, arguments raised in footnotes are typically
waived. See Eisenach v. Life Ins. Co. of N. Am., No. 13-CV-82, JED-PJC, 2013 WL 4483058, at
*7 (N.D. Okla. Aug. 19, 2013). Counsel is cautioned against raising substantive arguments in
footnotes.
22

Unless otherwise agreed to by the contracting parties, courts decide issues of “substantive
arbitrability,” while arbitrators decide issues of “procedural arbitrability.” Howsam v. Dean Witter
Reynolds, Inc., 537 U.S. 79, 85 (2002). Substantive arbitrability looks to “whether there is a
contractual duty to arbitrate at all” – i.e., “whether the parties are bound by a given arbitration
clause, or whether an arbitration clause in a concededly binding contract applies to a particular
type of controversy.” BG Grp., PLC v. Republic of Argentina, 572 U.S. 25, 34-35 (2014) (citation,
internal quotation marks, and emphasis omitted). Procedural arbitrability “determines when the
contractual duty to arbitrate arises.” Id. at 35 (emphasis omitted). Procedural arbitrability issues
include matters of “waiver, delay, or a like defense to arbitrability” and “the satisfaction of
prerequisites such as time limits, notice, laches, estoppel, and other conditions precedent to an
obligation to arbitrate.” Id. at 35 (citation and internal quotation marks omitted).
Whether Defendants timely demanded arbitration is an issue of procedural arbitrability that
must be decided by the arbitrator. The arbitration provision states, “[t]o begin arbitration, either
YOU or WE must make a written demand for arbitration within sixty (60) days of OUR final
decision.” See ECF No. 9-1 § L. “Final decision” is not defined in the HSC, and the parties differ
on the meaning and application of this requirement. Plaintiffs’ timeliness argument concerns when
the duty to arbitrate is triggered, rather than whether such an obligation exists at all. Such issue is
properly reserved to the arbitrator. See Com. Park at DFW Freeport v. Mardian Constr. Co., 729
F.2d 334, 339 n.5 (5th Cir. 1984) (“[M]atters of procedural arbitrability, such as . . . whether the
request for arbitration was timely under the arbitration agreement, are for the arbitrator to
decide.”); Conticommodity Servs., Inc. v. Philipp & Lion, 613 F.2d 1222, 1227 (2d Cir. 1980)
(finding that, absent express language to the contrary, “the timeliness of a demand for arbitration .
. . is to be determined by the arbitrator.”); Cent. Jersey Freightliner, Inc. v. Freightliner Corp., 987

23

F. Supp. 289, 293, 301 (D.N.J. 1997) (same); Ercon Corp. v. Gibbs Constr., L.L.C., No. 04-1071,
2005 WL 8174295, at *1, *4 (W.D. La. Feb. 11, 2005) (same), report and recommendation adopted
(Mar. 7, 2005).
In sum, the Court concludes: (1) Plaintiffs agreed to a valid, mandatory agreement to
arbitrate, and such agreement was not fraudulently induced or unconscionable; (2) Plaintiffs’
claims fall within the scope of the arbitration provision; and (3) the arbitrator must decide the issue
of the timeliness of the arbitration demand. Therefore, the Court compels arbitration in accordance
with this Opinion and Order.
III.

Motion to Dismiss for Improper Venue
Defendants argue the Court should dismiss this case, rather than institute a stay, because

the HSC’s forum-selection clause provides that, “[i]n the event of litigation involving this
CONTRACT, venue shall be in the courts of Jefferson County, Colorado.” ECF No. 9 at 5-7.
The FAA instructs that, upon finding the matter arbitrable, the Court “shall on application
of one of the parties stay the trial of the action until such arbitration has been had.” 9 U.S.C. § 3.
See also Smith v. Spizzirri, 601 U.S. 472, 475-76 (2024) (“When a federal court finds that a dispute
is subject to arbitration, and a party has requested a stay of the court proceeding pending
arbitration, the court does not have discretion to dismiss the suit on the basis that all claims are
subject to arbitration.”). However, the FAA permits dismissal if “there is a separate reason to
dismiss, unrelated to the fact that an issue in the case is subject to arbitration.” Id. at 476 n.2.
Here, Defendants raise a separate ground for dismissal other than arbitrability – namely,
improper venue due to the forum-selection clause. However, the parties contest whether this
provision is mandatory or permissive. Further, the Court has concerns that Defendants waived
their right to enforce the clause by asking the Court to compel arbitration in this Oklahoma venue,

24

rather than seeking transfer to Colorado in the first instance. See NLM Servs., LLC v. K1 Speed
Franchising, Inc., No. 23-cv-1777, 2023 WL 11887252, at *2 (D.S.C. June 27, 2023) (finding
defendant waived contractual provision mandating venue in the courts of Orange County,
California, when it sought to compel arbitration in South Carolina District Court). Rather than
resolve these issues now, the Court elects to stay the proceedings and reach these issues only if
necessary at a later time. Defendants may re-urge this ground for dismissal upon remand from the
arbitration proceedings.14
IV.

Conclusion
Defendants’ Motion to Compel Arbitration and to Dismiss (ECF No. 9) is GRANTED IN

PART and DENIED IN PART. The motion to compel arbitration is granted, and the motion is
denied in all other respects.
Pursuant to LCvR 41-1, the Court Clerk is directed to administratively close the case
pending either an Order of the Court reopening the proceedings, or dismissal of the action with
prejudice by stipulation of the parties.
SO ORDERED this 6th day of March, 2025.

J
ODIF.
J
AYNE,
MAGI
STRATEJ
UDGE
UNI
TEDSTATESDI
STRI
CTCOURT

14

Defendants also move to dismiss HomeSafe as a party pursuant to Federal Rule of Civil
Procedure 12(b)(6), in the event the Court declines to compel arbitration and declines to dismiss
for venue. The Court need not reach this alternative argument at this time. The Rule 12(b)(6)
motion is denied without prejudice to re-urging upon remand from the arbitration proceedings.
25