Shorts v. AT&T Mobility
| Decision Date | 17 June 2013 |
| Docket Number | No. 11-1649,11-1649 |
| Court | West Virginia Supreme Court |
| Parties | CHARLENE A. SHORTS, Petitioner, Petitioner v. AT&T MOBILITY and AT&T MOBILITY CORPORATION and, PALISADES COLLECTION, LLC, Respondents, Respondents |
The Petitioner herein, Charlene Shorts, by counsel Christopher J. Regan, appeals from an order entered July 25, 2011, by the Circuit Court of Brooke County which granted Respondents AT&T Mobility, LLC and AT&T Mobility Corporation's (hereinafter collectively referred to as "AT&T Mobility") Motion to Compel Arbitration.1 Herein, Ms. Shorts asserts the following: the circuit court erred in applying the wrong contract in granting AT&T Mobility's Motion to Compel Arbitration; the contract which the circuit court should have applied was unconscionable; the contract provisions applied by the circuit court were also unconscionable and the circuit court failed to allow discovery regarding this issue; and the circuit court erred in requiring the parties to arbitrate the claims involving Palisades Collection, LLC ("Palisades"), the other Respondent below. The appeal was timely perfected by counsel, and the appendix record accompanied the petition. AT&T Mobility filed its response.2 Based upon the parties' written submissions and oral arguments, the portions of the record designated for our consideration, and the pertinent authorities, we find that the circuit court did not err in granting AT&T Mobility's Motion to Compel Arbitration. Accordingly, we affirm the underlying decision. This Court further finds that this case presents no new or significantquestions of law, and, thus, it will be disposed of through a memorandum decision as contemplated by Rule 21 of the Rules of Appellate Procedure.
In February of 2003, Ms. Shorts purchased a cell phone and wireless service plan from AT&T Wireless. The cell phone contract included a mandatory arbitration clause. Ms. Shorts reportedly failed to make payments and, on May 6, 2003, AT&T Wireless terminated her service and assessed a $175 early termination fee, which was not paid.
AT&T Wireless merged with Cingular Wireless in October of 2004 and began operating under the Cingular name. In May of 2005, Ms. Shorts purchased new wireless phone service from Cingular. Cingular and Ms. Shorts ceased doing business under that contract by early 2006. In 2007, Cingular changed its name to AT&T Mobility.
AT&T Mobility assigned to Palisades, a debt collection company, the right to recover the debt that Ms. Shorts allegedly incurred to AT&T Wireless in 2003. On June 23, 2006, Palisades filed a debt collection lawsuit against Ms. Shorts in the Magistrate Court of Brooke County seeking $794.87 plus $242.52 prejudgment interest. As a defense and counterclaim, Ms. Shorts alleged that the early termination fee charged in 2003, and the subsequent attempts to collect it, violated multiple provisions of the West Virginia Consumer Credit and Protection Act ("CCPA") in that it purported to require the payment of excessive and illegal fees. Palisades removed the case to circuit court, where Ms. Shorts amended her counterclaim to assert CCPA claims against AT&T Mobility for actual and statutory damages, statutory attorney's fees, and cancellation of her debt. Ms. Shorts sought to bring her counterclaims against AT&T Mobility on behalf of a class.
After an unsuccessful attempt to remove the case to federal court, AT&T Mobility moved to compel arbitration. AT&T Mobility maintained that the primary obligation to arbitrate arose under the terms of the 2003 agreement, but that procedural aspects of the arbitration are governed by the 2005 Cingular contract and by amendments that AT&T Mobility made to its arbitration provision in December 2006 and March 2009. AT&T Mobility asserted that the 2005 contract is applicable to this dispute because it expressly provided that "Cingular and you (such references include our respective . . . predecessors in interest [and] successors and assigns) agree to arbitrate all disputes and claims . . . arising out of or relating to this Agreement, or to any prior oral or written agreement, for Equipment or services between Cingular and you." AT&T Mobility argued that the 2006 and 2009 amendments apply to all customers and contain consumer-friendly modifications.3 In responding to the motion to compel arbitration below, Ms. Shorts tookthe position that the terms of the 2003 agreement were the only applicable provisions that governed the issue of arbitration in this case.
By order entered December 1, 2009, the circuit court found that "the 2005 arbitration agreement, with its consumer oriented revisions in December 2006 and March 2009, [is] the focus of the legal issue before the court." Citing to the 2005 contract language quoted above, the circuit court opined: "[W]hen Shorts was sued in 2006 by Palisades, she had the right to arbitrate her 2003 AWS [AT&T Wireless] phone service disagreement under the more beneficial Cingular arbitration terms." Additionally, the circuit court ruled that AT&T's arbitration provision was unconscionable under State ex rel. Dunlap v. Berger, 211 W.Va. 549, 567 S.E.2d 265 (2002), because it provided that arbitration could only be pursued on an individual basis, not as a class action. AT&T Mobility thereupon filed a petition for prohibition with our Court, which was granted.
In State ex rel. AT&T Mobility v. Wilson, 226 W.Va. 572, 703 S.E.2d 543 (2010) (hereinafter "AT&T Mobility I"), this Court held that, standing alone, a lack of class action relief herein does not render an arbitration agreement unenforceable on the grounds of unconscionability under West Virginia law. This Court also recognized that just because a contract providing for arbitration is a contract of adhesion, the contract is not automatically unconscionable. Id. at 577, 703 S.E.2d at 549 (citing State ex rel Clites v. Clawges, 224 W. Va. 299, 685 S.E.2d 693 (2009)). This Court remanded the case to the circuit court for specific findings and a meaningful analysis of whether the arbitration provision is unconscionable under the tests set forth in Dunlap and Art's Flower Shop, Inc. v. Chesapeake and Potomac Telephone Co., 186 W.Va. 613, 413 S.E.2d 670 (1991). AT&T Mobility I, 226 W. Va. at 580, 703 S.E.2d at 551.4
In AT&T Mobility I, this Court distinguished the facts of the case from those of Dunlap. In Dunlap there were concerns that small-dollar/high-volume claims would not be pursued without the availability of class action relief. See 211 W. Va. at 562, 567 S.E.2d at 278. In AT&T Mobility I, this Court found that "[b]ased on the limited record that is before us, it appears that this case stands in severe contrast to the concerns of legal representation; burdensome mediation costs; and nominal recovery that we articulated in Dunlap." 226 W.Va. at 579, 703 S.E.2d at 550. This Court then discussed the arbitration provisions that AT&T Mobility adopted in its 2006 and 2009 amendments to its arbitration clause. Id. at 575 n.8, 703 S.E.2d at 546 n.8. We noted in footnote 9 that "Ms. Shorts' counsel represented during oral argument that he did not object to the trial court's ruling that the 2005 agreement, along with the 2006 and 2009 modifications, are the controlling provisions with regard to arbitration." Id. at 576 n.9, 703 S.E.2d at 547 n.9. This Court also noted in footnote 20 that "this Court does not address the issue of which agreement is controlling, finding that the issue is not properly before us." Id. at 580 n.20, 703 S.E.2d at 551 n.20. We then said in footnote 22 that, because of the undeveloped record, "[t]his Court takes no position on whether the contractual provisions at issue are unconscionable." Id. at 580 n.22, 703 S.E.2d at 551 n.22. Following this Court's opinionin AT&T Mobility I, Ms. Shorts filed a motion for rehearing challenging the foregoing conclusion, which this Court denied on November 29, 2010.
Upon remand, by order of July 25, 2011, the circuit court granted AT&T Mobility's motion to compel arbitration and stayed the litigation. In a memorandum opinion attached to the order, the circuit court found that "there is very little left in this case on the issue of unconscionability that is not preordained by what has already occurred." The circuit court cited to, inter alia, its earlier decision that the 2006 and 2009 amendments apply; this Court's discussion in the AT&T Mobility I opinion regarding the consumer-friendly provisions in the 2006 and 2009 amendments; and this Court's and the U.S. Supreme Court's decisions5 that a class-action ban does not render an arbitration agreement unconscionable. Thereafter, the circuit court denied a motion filed by Ms. Short to clarify and reconsider the order compelling arbitration.
McGraw v. American Tobacco Co., 224 W. Va. 211, 222, 681 S.E.2d 96, 107 (2009) (citing Dunlap, 211 W.Va. at 556, 567 S.E.2d at 272). "Other courts reviewing orders compelling arbitration have likewise utilized a de novo standard of review." McGraw, 224 W. Va. at 222, 681 S.E.2d at 107 ...
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