Bazemore v. Jefferson Capital Sys., LLC

• Decision Date: 05 July 2016
• Docket Number: No. 15-12607,15-12607
• Citation: 827 F.3d 1325
• Parties: Christina Bazemore, on behalf of herself and all others similarly situated, Plaintiff–Appellee, v. Jefferson Capital Systems, LLC, Defendant–Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

827 F.3d 1325

Christina Bazemore, on behalf of herself and all others similarly situated, Plaintiff–Appellee
v.
Jefferson Capital Systems, LLC, Defendant–Appellant.

No. 15-12607

United States Court of Appeals, Eleventh Circuit.

July 5, 2016

Christopher A. Cosper, David E. Hudson, George Gostin Robertson, Hull Barrett, PC, Augusta, GA, for Plaintiff–Appellee.

David Luther Hartsell, Paul J. Catanese, McGuire Woods, LLP, Chicago, IL, Bryan C. Shartle, Sessions Fishman Nathan & Israel, LLC, Metairie, LA, Daniel L. Delnero, McFadden White Sprattlin & Davis, LLC, Atlanta, GA, Wendi Fassbender, Sessions Fisham Nathan & Isreal, LLC, Mableton, GA, for Defendant–Appellant.

Before TJOFLAT, ROSENBAUM, Circuit Judges, and KAPLAN,^* District Judge.

KAPLAN, District Judge:

In 2005, plaintiff Christina L. Bazemore applied on the Internet for a credit card issued by First Bank of Delaware (“FBD”). She charged several items on the card but failed to pay in full. In 2008, Jefferson Capital System, LLC (“JSC”) acquired all right, title and interest to Ms. Bazemore's account. Eventually, Ms. Bazemore sued JSC for an alleged violation of the Fair Debt Collection Practices Act (the “FDCPA”), 15 U.S.C. § 1692 et seq. JSC moved to compel arbitration in reliance on an arbitration clause said to have been contained in a cardholder agreement between Ms. Bazemore and its predecessor-in-interest. The district court concluded that Ms. Bazemore's claim was outside the scope of the arbitration clause and therefore denied JSC's motion. We affirm, albeit on a different ground. We hold that JSC failed to establish the existence of any agreement between Ms. Bazemore and FBD beyond the agreement to pay whatever charges Ms. Bazemore incurred by using the credit card.

I. FACTS

On November 18, 2005, Ms. Bazemore applied for an Imagine MasterCard issued by FBD. It is undisputed that she did so over the Internet. But whether she agreed to any terms and conditions in the course of doing so is unknown. The only evidence is a declaration of Gregory Ryan, an individual employed at the time Ms. Bazemore applied for her credit card by Atlanticus Services Corporation (“Atlanticus”), which maintained records for such credit cards on behalf of FBD. And while he stated in conclusory terms that Ms. Bazemore “accepted the terms governing her account and opened the account” on or about November 18, 2005, he did not assert that he has any personal knowledge on that score or produce any documents to support that assertion. And those failures are quite important.

Today, virtually every Internet user is familiar with what have become known as clickwrap agreements—“agreements [formed by] requiring a computer user to ‘consent to any terms or conditions by clicking on a dialog box on the screen in order to proceed with [a] ... transaction.’ ” Hancock v. Am. Tel. & Tel. Co. , 701 F.3d 1248, 1255 (10th Cir. 2012) (quoting Feldman v. Google, Inc. , 513 F.Supp.2d 229, 236 (E.D. Pa. 2007) ). But there is no evidence of such an electronic exchange between Ms. Bazemore and either FBD or Atlanticus. In other words, there is no evidence that the Internet web page or pages that Ms. Bazemore viewed, or upon which she applied for her Imagine MasterCard, displayed or referred to any terms

827 F.3d 1328

or conditions of the credit card she sought, much less that she was required to consent to any such terms in order to obtain her credit card.

Mr. Ryan went on to say that a “Welcome Kit” that included a Bank Credit Card Agreement (the “Cardholder Agreement”) “would have been sent ” to Ms. Bazemore about ten days after she applied for the credit card and that it “would have ” contained “[a] form of the Cardholder Agreement” attached to Mr. Ryan's declaration. The Cardholder Agreement attached to Mr. Ryan's declaration (a) contains the arbitration clause upon which JSC relies, and (b) states that the Cardholder Agreement would become effective upon the earlier of the date the card application was approved and the first date upon which credit was extended on the account. But Mr. Ryan did not assert that the form of Cardholder Agreement that “would have been sent” to Ms. Bazemore was the same as that attached to his declaration. Indeed, he did not assert even that the form of Cardholder Agreement that “would have been sent” to Ms. Bazemore contained an arbitration clause of any kind, much less the clause found on the form attached to his declaration. And although Mr. Ryan stated that he was “familiar with Atlanticus record keeping systems” and that he reviewed certain “Atlanticus business records” in preparing his declaration, he never stated that a Welcome Kit containing a Cardholder Agreement actually was sent to Ms. Bazemore, merely that one “would have been sent” as part of the company's “regular and ordinary practice.”

After receiving the credit card, Ms. Bazemore charged several items to the card over approximately two-and-a-half months in 2005 and 2006. Although she made several payments, she never paid her balance in full.

In 2013, Ms. Bazemore filed for Chapter 13 bankruptcy protection in the United States Bankruptcy Court for the Southern District of Georgia. See In re Bazemore , No. 13-30476-EJC (Bankr. S.D. Ga.). On January 11, 2014, JSC, which had acquired all right, title, and interest to Ms. Bazemore's account, filed a proof of claim for Ms. Bazemore's alleged debt on her Imagine MasterCard account in the bankruptcy proceeding.

On September 2, 2014, Ms. Bazemore brought this putative class action against JSC in the Superior Court of Laurens County, Georgia. Her complaint asserts that JSC violated the FDCPA by filing the proof of claim in Ms. Bazemore's bankruptcy proceeding because JSC's claim on her alleged debt was time barred. JSC removed the case to federal court on October 13, 2014, and then moved to compel arbitration and stay proceedings pursuant to the arbitration clause in the purported Cardholder Agreement on January 22, 2015. The district court, after briefing and oral argument, denied JSC's motion on the ground that Ms. Bazemore's FDCPA claim fell outside the scope of the arbitration clause that JSC asserted bound Ms. Bazemore. Bazemore v. Jefferson Capital Sys., LLC , No. 14–cv–115 (DHB), 2015 WL 2220057 (S.D. Ga. May 11, 2015). JSC timely appealed pursuant to 9 U.S.C. Section 16(a).

II. DISCUSSION

A. Standard of Review

We review de novo a district court's denial of a motion to compel arbitration. Collado v. J. & G. Transport, Inc. , 820 F.3d 1256, 1259–60 (11th Cir. 2016). We may affirm the district court's decision on any ground supported by the record. Ironworkers Local Union 68 v. AstraZeneca Pharms., LP , 634 F.3d 1352, 1360 (11th Cir. 2011).

827 F.3d 1329

B. Defendant Failed to Prove the Existence of an Arbitration Agreement

If there is an arbitration agreement governing this dispute, it is governed by the Federal Arbitration Act (the “FAA”), 9 U.S.C. §§ 1 et seq. , which “embodies a liberal federal policy favoring arbitration agreements.” Caley v. Gulfstream Aerospace Corp. , 428 F.3d 1359, 1367 (11th Cir. 2005) (quotation marks omitted). Indeed, we have recognized that the FAA creates a “presumption of arbitrability” such that “any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.” Dasher v. RBC Bank (USA) , 745 F.3d 1111, 1115–16 (11th Cir. 2014) (quotation marks omitted), cert. denied , ––– U.S. ––––, 135 S. Ct. 144, 190 L.Ed.2d 231 (2014) ; see Granite Rock Co. v. Int'l Bhd. Of Teamsters , 561 U.S. 287, 301, 130 S.Ct. 2847, 2858–59, 177 L.Ed.2d 567 (2010). Nonetheless, “while doubts concerning the scope of an arbitration clause should be resolved in favor of arbitration, the presumption does not apply to disputes concerning whether an agreement to arbitrate has been made.” Dasher , 745 F.3d at 1116 (quotation marks omitted); see Granite Rock , 561 U.S. at 301, 130 S.Ct. at 2858–59 (directing courts to “apply[ ] the presumption of arbitrability only” to “a validly formed and enforceable arbitration agreement”). The threshold question of whether an arbitration agreement exists at all is “simply a matter of contract.” First Options of Chicago, Inc. v. Kaplan , 514 U.S. 938, 943, 115 S.Ct. 1920, 1924, 131 L.Ed.2d 985 (1995). Absent such an agreement, “a court cannot compel the parties to settle their dispute in an arbitral forum.” Klay v. All Defendants , 389 F.3d 1191, 1200 (11th Cir. 2004).

Here, plaintiff argues that JSC failed to establish that she ever entered into an arbitration agreement with JSC's predecessor-in-interest. This requires that we address the law governing the onus of proof with respect to the existence of an agreement to arbitrate.

Prior to First Options of Chicago , Chastain v. Robinson–Humphrey Co. , 957 F.2d 851 (11th Cir. 1992), and other cases in this Circuit and its predecessor, the Fifth Circuit, had held that a party resisting a motion to compel arbitration on the ground that no arbitration agreement existed could not succeed absent “ ‘an unequivocal denial that the agreement had been made ... and some evidence ... to substantiate the denial.’ ” Id. at 854 (alterations omitted) (quoting T & R Enters., Inc. v. Cont'l Grain Co. , 613 F.2d 1272, 1278 (5th Cir. 1980) ). A...