Curtis v. Cellco Partnership

• Citation: 413 N.J. Super. 26,992 A.2d 795
• Decision Date: 15 April 2010
• Docket Number: No. A-5863-07T2,A-5863-07T2
• Parties: Robert C. CURTIS, Plaintiff-Appellant, v. CELLCO PARTNERSHIP d/b/a Verizon Wireless, Defendant-Respondent.
• Court: New Jersey Superior Court

992 A.2d 795

413 N.J. Super. 26

Robert C. CURTIS, Plaintiff-Appellant, v. CELLCO PARTNERSHIP d/b/a Verizon Wireless, Defendant-Respondent.

No. A-5863-07T2

Superior Court of New Jersey, Appellate Division.

Decided April 15, 2010.

Argued January 5, 2010.

Re-Argued Telephonically March 30, 2010.

COPYRIGHT MATERIAL OMITTED

Gregory Gogo, Trenton, argued the cause for appellant.

Frank A. Luchak, Princeton, argued the cause for respondent (Duane Morris, LLP, attorneys; Mr. Luchak and Michael W. O'Hara, on the brief).

Before Judges PARRILLO, LIHOTZ and ASHRAFI.

The opinion of the court was delivered by

LIHOTZ, J.A.D.

In this matter, we examine whether plaintiff's claims against defendant for consumer fraud fall within the scope of the arbitration clause of the parties' consumer service agreement. Plaintiff Robert C. Curtis became dissatisfied with the quality of the cellular telephone service provided by defendant, Cellco Partnership d/b/a Verizon Wireless, and refused to pay the outstanding account balance. Defendant reported plaintiff's non-payment to national credit bureaus, which he maintains negatively impacted his credit score and impeded his ability to procure desired financing. Plaintiff filed this action alleging, among other things, violations of the New Jersey Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to—106.¹ On defendant's motion, the trial court dismissed plaintiff's complaint, concluding the expansive language of the parties' service contract compelled arbitration. On appeal, plaintiff argues the service agreement was a contract of adhesion and, to be enforceable, must specifically include a waiver of statutory claims. Plaintiff maintains the contract with defendant lacks this specific waiver. Following our plenary review, we disagree and affirm.

Plaintiff entered into a "Verizon Wireless Customer Agreement" (the Agreement) with defendant to provide cellular telephone service during the period November 1, 2004 to November 1, 2006. The Agreement required a $175 payment for termination of the Agreement prior to its end date. We recite additional Agreement provisions relevant to our review.

The first paragraph of the document stated:

We're Verizon Wireless. Please carefully read this Agreement, including the calling plan or plans you've chosen, before filing it in a safe place.

This agreement covers important topics such as when it begins, how long it lasts, fees for early termination and late payments, our rights to change the agreement and your wireless service, limitations of liability, use of information about you, and settlement of disputes by arbitration instead of in court.

The Agreement included expansive provisions for dispute resolution and mandatory arbitration. These terms were distinguished from the Agreement's other terms by a box placed around them and the use of capitalized and bolded print. The introductory clause of this section states:

Dispute Resolution And Mandatory Arbitration

8² INSTEAD OF SUING IN COURT, WE EACH AGREE TO SETTLE DISPUTES (EXCEPT CERTAIN SMALL CLAIMS) ONLY BY ARBITRATION. THE RULES IN ARBITRATION ARE DIFFERENT. THERE'S NO JUDGE OR JURY,

AND REVIEW IS LIMITED, BUT AN ARBITRATOR CAN AWARD THE SAME DAMAGES AND RELIEF, AND MUST HONOR THE SAME LIMITATIONS STATED IN THE AGREEMENT AS A COURT WOULD.

The Agreement expressed that its arbitration provisions were governed by the Federal Arbitration Act (FAA), 9 U.S.C.A. § 1 to -16. In describing the disputes covered, the Agreement stated:

ANY CONTROVERSY OR CLAIM ARISING OUT OF OR RELATED TO THIS AGREEMENT, ... OR ANY PRODUCT OR SERVICE PROVIDED UNDER OR IN CONNECTION WITH THIS AGREEMENT ... WILL BE SETTLED BY ONE OR MORE NEUTRAL ARBITRATORS.... THIS DOESN'T CHANGE YOUR SUBSTANTIVE RIGHTS, JUST THE POTENTIAL FORUMS FOR RESOLVING DISPUTES. IN ADDITION YOU CAN STILL BRING ANY ISSUES YOU MAY HAVE TO THE ATTENTION OF APPROPRIATE FEDERAL, STATE, OR LOCAL GOVERNMENT AGENCIES AND THEY CAN STILL, IF THE LAW ALLOWS, SEEK RELIEF AGAINST U.S. ON YOUR BEHALF.

In a separately numbered paragraph, in bold font, the Agreement provided: "IF AN APPLICABLE STATUTE PROVIDES FOR AN AWARD OF ATTORNEY'S FEES, AN ARBITRATOR CAN AWARD THEM, TOO." Lastly, the Agreement stated: "IF FOR SOME REASON THESE ARBITRATION REQUIREMENTS DON'T APPLY, WE EACH WAIVE ANY TRIAL BY JURY."

Defendant also gave plaintiff a Verizon Wireless Customer Information Overview (CIO). That document was not designed to "replace or supplement" the Agreement but rather to "succinctly summarize the terms and conditions of the Customer Agreement." Using bold print, the CIO reiterated the basic parameters for using arbitration to resolve disputes. It too explained, "all such customer disputes (except certain small claims) will be resolved through arbitration, not with a judge or jury." Immediately before the account holder's signature, the CIO set forth, in bolded capital letters, the signor's agreement to accept the terms of the Agreement, the $175 early termination fee, and the "SETTLEMENT OF DISPUTES BY ARBITRATION AND OTHER MEANS INSTEAD OF JURY TRIALS."

Plaintiff's acceptance of these terms was confirmed by his electronic signature, as well as his activation and use of the wireless phone service plan. The first page of the Agreement included a procedure to cancel the Agreement "within fifteen days of accepting" if its terms were objectionable. Plaintiff did not cancel the Agreement.

When he purchased the wireless service, plaintiff provided his home address; however, defendant did not disclose the limited signal strength and quality of transmission and reception in that location. Plaintiff found the cellular telephone service in his home was unreliable due to "dropped calls, poor reception and coverage gaps." A technician for defendant later told plaintiff that, due to a lack of transmission equipment, the signal at plaintiff's home address was marginal to non-existent. Based upon defendant's prior knowledge of the lack of reliable wireless service in his area, plaintiff insisted defendant breached the service agreement from its inception. Plaintiff refused to satisfy the payment obligation on his wireless account and canceled his service before the conclusion of the Agreement term. An August 9, 2006 invoice showed a balance due, including an early termination fee, of $769.66.

Plaintiff called a customer service representative to complain of the problems he experienced and to dispute his obligation to satisfy the sum claimed due. As a result of those conversations, plaintiff believed defendant consented to relieve him of the outstanding obligation. However, on September 22, 2006, and June 22, 2007, plaintiff received notices from collection agencies seeking payment on defendant's behalf.

In July 2007, plaintiff applied for a home equity loan. He learned that, beginning in December 2006 and for several successive months thereafter, defendant reported plaintiff's nonpayment to credit reporting agencies. This adversely affected plaintiff's credit rating, and he was deemed ineligible for a desired lower interest rate on an equity line of credit.

Plaintiff filed this action on December 12, 2007. He sought to amend his complaint and transfer the matter from the Special Civil Part to the Law Division. R. 6:4-1. Defendant opposed the motion and moved to enforce the arbitration clause of the Agreement. The court granted plaintiff's request to transfer the matter to the Law Division for the purpose of consideration of the motions, then granted defendant's motion to dismiss the complaint and compel arbitration. Plaintiff appealed.

We have little trouble concluding the Agreement contained a valid and binding provision for arbitration of disputes. Martindale v. Sandvik, Inc., 173 N.J. 76, 86, 800 A.2d 872 (2002). The arbitration provisions are sufficiently clear, unambiguously worded, satisfactorily distinguished from the other Agreement terms, and drawn in suitably broad language to provide a consumer with reasonable notice of the requirement to arbitrate all possible claims arising under the contract. Plaintiff's arguments to the contrary lack merit. R. 2:11-3(e)(1)(E).

We must examine, however, whether the contractual language "clearly and unmistakably established" that plaintiff's CFA claims fall within the scope of the arbitration clause of the Agreement. In this regard, some basic principles apply.

First, we note the FAA "requires courts to enforce privately negotiated agreements to arbitrate, like other contracts, in accordance with their terms." Volt Info. Scis., Inc. v. Bd. of Leland Stanford Junior Univ., 489 U.S. 468, 478, 109 S.Ct. 1248, 1255, 103 L.Ed.2d 488, 500 (1989); See Martindale, supra, 173 N.J. at 84, 800 A.2d 872. Likewise, New Jersey courts favor arbitration as a means of resolving disputes, embracing the federal policy preferring this method of alternative dispute resolution. Ibid.; EPIX Holdings Corp. v. Marsh & McLennan Cos., 410 N.J.Super. 453, 471, 982 A.2d 1194 (App.Div.2009); Bruno v. Mark MaGrann Assocs., 388 N.J.Super. 539, 545, 909 A.2d 768 (App.Div.2006). "Because of the favored status afforded to arbitration, `an agreement to arbitrate should be read liberally in favor of arbitration.'" Griffin v. Burlington Volkswagen, Inc., 411 N.J.Super. 515, 518, 988 A.2d 101 (App.Div.2010) (quoting Garfinkel v. Morristown Obstetrics & Gynecology Assocs., 168 N.J. 124, 132, 773 A.2d 665 (2001)). See Martindale, supra, 173 N.J. at 84, 800 A.2d 872. Accordingly, "courts operate under a `presumption of arbitrability in the sense that an order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.'" EPIX Holdings, supra, 410 N.J.Super. at 471, 982 A.2d 1194 (quoting Caldwell v. KFC Corp., 958 F.Supp. 962, 973 (D.N.J.1997)).

Second, "agreements to arbitrate are not violative of public policy." Martin...