Little v. Verizon Wireless (VAW) LLC
Filing
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MEMORANDUM OPINION AND ORDER: The court GRANTS defendant's 5 MOTION to Compel Arbitration and Stay Proceeding pursuant to the Federal Arbitration Act. Accordingly, the Complaint is DISMISSED without prejudice. Signed by Senior Judge David A. Faber on 1/19/2018. (cc: counsel of record) (arb)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
AT BLUEFIELD
JUDY LITTLE,
Plaintiff,
v.
CIVIL ACTION NO. 1:17-03931
CELLCO PARTNERSHIP d/b/a
VERIZON WIRELESS
Defendant.
MEMORANDUM OPINION AND ORDER
This matter is about whether Verizon’s Customer Agreement,
which contains an arbitration clause, binds the defendant, Judy
Little, and requires the court to submit this action to
arbitration.
For the reasons that follow, the defendant’s
Motion to Compel Arbitration and Stay Proceeding pursuant to the
Federal Arbitration Act (ECF No. 5) is hereby GRANTED and
plaintiff’s action is DISMISSED without prejudice.
I.
BACKGROUND
Judy Little purchased a mobile hotspot device on October
21, 2015, at a Verizon Wireless retail location in Princeton,
West Virginia.
See ECF No. 5-1, ¶ 4.
Before activation,
Verizon required Little to sign a standardized electronic sales
receipt agreeing to the terms and conditions of Verizon
Wireless’ Customer Agreement.
See ECF No. 5-1, Ex. A (“Verizon
Sales Receipt”).
The electronically signed sales receipt stated
in pertinent part:
I AGREE TO THE CURRENT VERIZON WIRELESS CUSTOMER
AGREEMENT . . . INCLUDING THE TERMS AND CONDITIONS OF
MY PLAN . . . I UNDERSTAND THAT I AM AGREEING TO . . .
SETTLEMENT OF DISPUTES BY ARBITRATION INSTEAD OF JURY
TRIALS . . . I AM AWARE THAT I CAN VIEW THE CUSTOMER
AGREEMENT ANYTIME AT VERIZONWIRELESS.COM OR IN MY
VERIZON ACCOUNT.
See id. at 3 (emphasis added).
The sales receipt states “JUDY
LITTLE” as the “Account Owner Name” and includes a signature.
See id.
While Little’s signature does not appear to be a full
signature, see id., plaintiff does not claim that she did not
sign the sales receipt.
The Customer Agreement referenced in
the sales receipt is a 10-page document that includes an
arbitration provision within a section titled “HOW DO I RESOLVE
DISPUTES WITH VERIZON WIRELESS?”
See ECF No. 5-1, Ex. B, at 7-9
(“Verizon Customer Agreement”).
This section expounds upon the
arbitration clause announced in the sales receipt.
Id.
Little used the wireless hotspot for “less than two weeks,”
but the device “failed to work properly.”
A, ¶¶ 9.
See ECF No. 7-1, Ex.
As a result, she returned the device but Verizon
continued to charge her.
See id. at Ex. A, ¶¶ 9-11.
Later,
Verizon allegedly contacted Little in an attempt to collect the
outstanding balance owing.
See Amended Complaint at ¶¶ 3, 7-33.
These telephone calls form the basis of Little’s allegation that
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Verizon engaged in violations of federal and state debt
collection laws.
Id. at ¶ 3.
II.
APPLICABLE LAW
A. Standard of Review
Motions to compel arbitration “‘exist in the netherworld
between a motion to dismiss and a motion for summary judgment.’”
U.S. ex rel. TBI Investments, Inc. v. BrooAlexa, LLC, 119 F.
Supp. 3d 512, 523 (S.D.W. Va. 2015) (quoting Shaffer v. ACS
Government Servs., Inc., 321 F. Supp. 2d 682, 683 (D. Md.
2004)).
The defendant, as the party seeking to enforce the
arbitration agreement, bears the initial burden of “persuading
this court that the parties entered into an enforceable
arbitration agreement.”
Drake v. Mallard Creek Polymers, Inc.,
2014 WL 7405762, at *1 (W.D.N.C. Dec. 30, 2014).
If the
defendant succeeds, then “the burden shifts to the plaintiff to
show that even though there was some written contract, [she] did
not actually agree to it--because the signature was forged, the
terms of the contract were misrepresented, or some other reason
evincing lack of true agreement.”
Czopek v. TBC Retail Grp.,
Inc., 2014 WL 5782794, at *4 (M.D. Fla. Nov. 6, 2014); see also
BrooAlexa, LLC, 119 F. Supp. 3d 512, 524 (applying summary
judgment standard to a motion to compel arbitration and stating
that “[o]nce the moving party has met its burden, the burden
3
shifts to the nonmoving party to demonstrate that a genuine
issue of material fact exists for trial.”).
B. Federal Arbitration Act
The Federal Arbitration Act (“FAA”) embodies “a liberal
federal policy favoring arbitration,” AT&T Mobility LLC v.
Concepcion, 563 U.S. 333, 339 (2011) (citations and quotations
omitted) and provides in pertinent part:
A written provision in . . . a contract . . . to
settle by arbitration a controversy thereafter arising
out of such contract . . . or an agreement in writing
to submit to arbitration an existing controversy
arising out of such a contract . . . shall be 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 the parties execute a valid agreement to
arbitrate disputes, federal courts are required to compel
arbitration.
Sydnor v. Conseco Financial Servicing Corp., 252
F.3d 302, 305 (4th Cir. 2001); see also Moses H. Cone Mem'l
Hosp. v. Mercury Const. Corp., 460 U.S. 1, 23–24 (1983)
(“[Q]uestions of arbitrability must be addressed with a healthy
regard for the federal policy favoring arbitration . . . [and]
any doubts concerning the scope of arbitrable issues should be
resolved in favor of arbitration.”).
A party can compel arbitration under the FAA if it
establishes: “(1) the existence of a dispute between the
parties, (2) a written agreement that includes an arbitration
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provision which purports to cover the dispute, (3) the
relationship of the transaction, which is evidenced by the
agreement, to interstate or foreign commerce, and (4) the
failure, neglect or refusal of the [opposing party] to arbitrate
the dispute.”
Whiteside v. Teltech Corp., 940 F.2d 99, 102 (4th
Cir. 1991) (cited by Thomas v. Progressive Leasing, No. CV RDB17-1249, 2017 WL 4805235, at *2 (D. Md. Oct. 25, 2017)).
“When deciding whether the parties agreed to arbitrate a
certain matter, courts generally [ . . . ] should apply ordinary
state-law principles that govern the formation of contracts.”
First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944
(1995); see also Heller v. TriEnergy, Inc., 877 F. Supp. 2d 414,
423-24 (N.D.W. Va. 2012) (explaining that the “one important
caveat to the reach of the FAA” is that state law governs the
formation of the contract).
Thus, “generally applicable
contract defenses, such as fraud, duress, or unconscionability,
may be applied to invalidate arbitration agreements without
contravening § 2” of the FAA.
See Doctor's Assocs., Inc. v.
Casarotto, 517 U.S. 681, 687 (1996) (citations omitted).
If,
however, there is doubt or ambiguity “concerning the scope of
arbitrable issues,” the doubt or ambiguity “should be resolved
in favor of arbitration.”
Id.
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III. Discussion
A.
The Arbitration Agreement is Valid and Enforceable
Little alleges that she never agreed to arbitrate any
dispute with Verizon and that defendant has failed to meet its
burden of demonstrating she entered into an enforceable
arbitration agreement.
(ECF No. 7).
See Plaintiff’s Response in Opposition
Accordingly, the first, third, and fourth factors
in Whiteside v. Teltech Corp. are not in dispute.1
Plaintiff
narrows the court’s inquiry further by conceding that the
arbitration provision “purport[s] to cover the dispute.”
ECF No. 7, at 1.
See
Thus, the court’s inquiry hinges on whether a
valid written arbitration agreement exists.
Teltech Corp., 940 F.2d at 102.
Whiteside v.
As stated above, state law
governs the matter of whether a valid and enforceable agreement
to arbitrate exists.
First Options of Chicago, 514 U.S. at 944.
The parties do not dispute that West Virginia law governs
whether a valid contract exists.
Plaintiff hangs her hat on State ex rel. U-Haul Co. of W.
Virginia v. Zakaib, wherein the West Virginia Supreme Court of
1
Even if plaintiff did contend these factors were at issue,
plaintiff’s arguments would fail. As to the first factor, the
Amended Complaint illustrates a dispute between the parties.
Regarding the third factor, internet services are
instrumentalities of interstate commerce. See, e.g., PSINet,
Inc. v. Chapman, 362 F.3d 227, 239 (4th Cir. 2004). As to the
fourth factor, Little has refused to submit to arbitration.
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Appeals held that “a general reference in one writing to another
document is not sufficient to incorporate that other document
into a final agreement.”
752 S.E.2d 586, 589 (W. Va. 2013),
cert. denied sub nom., –– U.S. ––, 135 S.Ct. 59 (2014)
(“UHaul”).
In U-Haul, prospective customers were required to
sign a Rental Contract either in paper or electronic form that
essentially stated: “I acknowledge that I have received and
agree to the terms and conditions of this Rental Contract and
the Rental Contract Addendum.”
Id. at 590 (emphasis added).
Nevertheless, this Rental Contact Addendum was only provided to
customers after the Rental Contract was signed (if ever).
at 591.
Id.
Therefore, customers agreed to the provisions of the
Rental Contract Addendum, which included the only reference to
the arbitration provision, without actually being able to read
the Addendum until after their acceptance.
Id.
Nevertheless, U-Haul argued that since the Addendum was
incorporated by reference in the Rental Contract, plaintiffs’
acceptance of the Rental Contract resulted in their acceptance
of the Addendum as well.
Id. at 590.
The court disagreed,
stating a “general reference is not enough,” rather:
(1) the writing must make a clear reference to the
other document so that the parties' assent to the
reference is unmistakable; (2) the writing must
describe the other document in such terms that its
identity may be ascertained beyond doubt; and
(3) it must be certain that the parties to the
agreement had knowledge of and assented to the
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incorporated document so that the incorporation will
not result in surprise or hardship.
See Syl. Pt. 2, id. (cited by Covol Fuels No. 4, LLC v. Pinnacle
Min. Co., LLC, 785 F.3d 104, 114 (4th Cir. 2015)).
down U-Haul’s arbitration provision,
In striking
the court stated,
“Finally, and most troubling to this Court, is the fact that U–
Haul's practice was to provide customers a copy of the Addendum
only after the Rental Agreement had been executed.”
(emphasis in original).
Id. at 598
Accordingly, “[a]n oblique reference to
a separate, non-contemporaneous document is insufficient to
incorporate the document into the parties' final contract.”
Id.
(cited by SWN Prod. Co., LLC v. Edge, No. 5:15CV108, 2015 WL
5786739, at *5 (N.D.W. Va. Sept. 30, 2015).
U-Haul is distinguished from this matter because the
executed sales receipt that Little signed2 explicitly contains an
2
Plaintiff argues in her Response and Surreply that the
affidavit offered by Meryl Friedman, a senior paralegal employed
by Verizon is inadmissible. See ECF No. 5-1. Ms. Friedman’s
affidavit attaches and gives context to the the Verizon Sales
Receipt (which includes Little’s alleged signature) and the
Verizon Customer Agreement. Id. Moreover, the affidavit is
rooted in Ms. Friedman’s “personal knowledge or on information
that [she] acquired from business records made and maintained in
the usual course of business.” Id. at ¶ 2. As such, the
affidavit is admissible under the business records exception
embodied in Federal Rule of Evidence 803(6), which assumes
“[r]eports and documents prepared in the ordinary course of
business are generally presumed to be reliable and trustworthy.”
Certain Underwriters at Lloyd's, London v. Sinkovich, 232 F.3d
200, 204–05 (4th Cir. 2000).
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arbitration clause provision.
See ECF No. 5-1.
The fact that
there is an additional Customer Agreement that details the
arbitration agreement to which Little submitted is not material.
Furthermore, the Verizon sales receipt “make[s] a clear
reference to the [Customer Agreement] so that the parties'
assent to the reference is unmistakable.”
Syl. Pt. 2, id.
Little electronically signed below a statement contained within
the sales receipt that clearly indicated that the customer is
consenting to not only arbitration but the Customer Agreement.
See id.; see also Verizon Customer Agreement (“I UNDERSTAND THAT
I AM AGREEING TO . . . SETTLEMENT OF DISPUTES BY ARBITRATION
INSTEAD OF JURY TRIALS . . .”).
Second, this express reference
to the arbitration provision further “describe[s] the [Customer
Agreement] in such terms that its identity may be ascertained
beyond doubt.”
Syl. Pt. 2, U-Haul.
Plaintiff alleges that she never read or had knowledge of
the Customer Agreement, resulting in her “surprise and
hardship.”
No. 7).
See Plaintiff Response in Opposition, at 6-7 (ECF
Nevertheless, the Sales Receipt not only provided
notice of the Customer Agreement but also gave independent
notice of the arbitration clause, further detailed in the
Customer Agreement.
Id. at 598; Lousararian v. Royal Caribbean
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Corp., 951 F.2d 7, 11 (1st Cir. 1991) (notice of terms of a
contract depend not on “actual knowledge of the terms in the
contract but focuses instead on the opportunity for such
knowledge.”) (emphasis in original).
Little also misreads U-Haul as requiring Verizon to provide
her with a physical copy of the Customer Agreement, which she
never received.3
Id. at 598 (“Finally, and most troubling to
this Court, is the fact that U–Haul's practice was to provide
customers a copy of the Addendum only after the Rental Agreement
had been executed.”) (emphasis added).
But U-Haul does not
stand for the proposition that a physical copy of an
incorporated document needs to be received by a customer.
Instead, the Verizon Sales Receipt had to give Little “the
requisite knowledge of the contents” of the incorporated
document, creating mutual assent between the parties.
Id.
In
U-Haul, the company essentially baited and switched consumers
into consenting to arbitration and other terms and conditions
without knowledge.
Id.
Here, Verizon gave Little notice of the
arbitration agreement before she signed the sales receipt by
3
Verizon does not dispute that it did not give a physical copy
of the Customer Agreement to Little because it is its policy to
provide access to the Customer Agreement online. See Verizon
Sales Receipt (“I AM AWARE THAT I CAN VIEW THE CUSTOMER
AGREEMENT ANYTIME AT VERIZONWIRELESS.COM OR IN MY VERIZON
ACCOUNT.”)
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announcing that an arbitration clause existed within the sales
receipt.
See Verizon Sales Receipt.
Plaintiff lodges two additional objections.
First,
plaintiff alleges that the signature on the sales receipt is not
hers, instead resembling a “pixelated loop” created by a
computer.
See ECF No. 7, at 5-6.
Plaintiff does not allege she
did not sign the Verizon contract, nor that the signature was
procured by fraud, coercion or inducement.
Id.
Rather, even if
the signature is not a realistic model of Little’s signature, it
makes no legal difference.
See Grant-Fletcher v. Collecto,
Inc., No. CIV.A. RDB-13-3505, 2014 WL 1877410, at *6 (D. Md. May
9, 2014) (“[P]laintiff’s contention that the electronic
signature on the Wireless Service Agreement does not resemble
hers . . . is insufficient to show that she did not assent to
the terms of a contract.”).
Second, Little alleges that if she had known that she was
signing an arbitration agreement, she would not have executed
the contract.
Such an argument attempts to undercut the
foundation of contract law.
“The fact that [Little] may have
chosen not to access or read the language of the Arbitration
Agreement does not render it invalid or non-binding.”
Id. at
*7; Am. States Ins. Co. v. Surbaugh, 745 S.E.2d 179, 190 (W. Va.
2013) (internal citations and quotations omitted) (“The law of
[West Virginia] is clear in holding that a party to a contract
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has a duty to read the instrument.”); see also Dieng v. College
Park Hyundai, No. DKC–09–0068, 2009 WL 2096076, at *5 (D. Md.
July 9, 2009) (holding that plaintiffs were bound to an
agreement they “did not have or take the time to read and
understand”).
With the broad federal principle in favor of arbitration in
mind, see AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011).
Verizon’s motion to compel arbitration is granted.
B. Plaintiff Also Waived the Right to Bring a Class Action.
The Customer Agreement also contains a waiver of the right
to bring a class action suit.
at 8.
See Verizon Customer Agreement,
Because the Customer Agreement is valid, binding on the
plaintiff, and enforceable by the defendant, arbitration may
proceed only on an individual, not class, basis.
C. Plaintiff’s Action is Dismissed.
Although defendant has moved only to stay proceedings in
this matter, see ECF No. 5, the Fourth Circuit has “acknowledged
that dismissal is a proper remedy when all of the issues
presented in a lawsuit are arbitrable.”
Aggarao v. MOL Ship
Mgmt. Co., 675 F.3d 355, 376 (4th Cir. 2012) (internal citations
and quotations omitted); Taylor v. Santander Consumer USA, Inc.,
No. CIV.A. DKC 15-0442, 2015 WL 5178018, at *7 (D. Md. Sept. 3,
2015) (“district courts in the Fourth Circuit have recognized
that dismissal, rather than a stay . . . pending arbitration, is
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appropriate where [, as here,] a court rules that all of a
plaintiff's claims must be arbitrated.”)
Since all of plaintiff’s claims are subject to arbitration,
“no useful purpose will be served by staying the pertinent
proceedings pending arbitration.”
Crawl v. Experian Info.
Sols., Inc., No. CV PJM 15-97, 2016 WL 8716597, at *7 (D. Md.
Jan. 29, 2016) (citations and quotations omitted).
IV.
CONCLUSION
This Court finds that defendant’s Motion to Compel
Arbitration and Stay Proceeding pursuant to the Federal
Arbitration Act should be, and hereby is, GRANTED.
Accordingly,
the Complaint is DISMISSED without prejudice.
The Clerk is directed to send copies of this Order to all
counsel of record.
It is SO ORDERED this 19th day of January, 2018.
ENTER:
David A. Faber
Senior United States District Judge
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