Gibbs v. Firefighters Cmty. Credit Union

Decision Date05 August 2021
Docket NumberNo. 109929,109929
Citation177 N.E.3d 294
Parties Richard GIBBS, et al., Plaintiffs-Appellees, v. FIREFIGHTERS COMMUNITY CREDIT UNION, Defendant-Appellant.
CourtOhio Court of Appeals

Branstetter, Stranch & Jennings, P.L.L.C., Alyson Steele Beridon, Karla Campbell, Michael J. Wall, J. Gerard Stranch, and Martin F. Schubert ; Cohen & Malad, L.L.P., and Lynn A. Toops, for appellees.

Litchfield Cavo, L.L.P., James Branit, and Keith L. Gibson ; Bricker & Eckler, L.L.P., and Daniel C. Gibson, Columbus, for appellant.

JOURNAL ENTRY AND OPINION

SEAN C. GALLAGHER, P.J.:

{¶ 1} Defendant-appellant Firefighters Community Credit Union ("FFCCU") appeals the decision of the trial court that denied its motion to stay the action pending arbitration. Upon review, we affirm the decision of the trial court.

Background

{¶ 2} On December 26, 2019, appellees Richard Gibbs, Randall L. Joy, and Donna M. Joy (collectively "appellees") filed a class-action complaint against FFCCU. The complaint states that appellees have checking accounts at FFCCU and alleges that FFCCU engages in practices of (1) charging ATM/VCC fees on transactions that do not actually overdraw an account, and (2) charging two or more returned item fees on the same item. The complaint includes class allegations and raises claims for breach of contract, breach of the covenant of good faith and fair dealing, and unjust enrichment.

{¶ 3} In response to the complaint, FFCCU filed a motion to dismiss or, in the alternative, application for stay pending arbitration pursuant to R.C. 2711.02(B). FFCCU argued that appellees agreed to a change in terms and conditions to their account agreements, which adopted an "Arbitration and Waiver of Class Action Relief provision." FFCCU provided an affidavit of an authorized representative who averred that "[o]ne amendment to the Account Agreement that [FFCCU] notified the members of was the inclusion of an arbitration and class action waiver provision, effective August 21, 2019." It was also averred that this notice was sent to email addresses previously provided by appellees to FFCCU and that no failure to deliver notices were received. FFCCU maintained that because appellees never opted out of the Arbitration and Waiver of Class Action Relief provision, it became effective and controls in this matter. Relevant hereto, the Account Agreement provided that it "may be amended by Us at any time in which case We will provide You with a notice of amendment as required by law or regulation," and that the "Agreements and Disclosures provided to You at the time you opened Your Account * * * may be amended by Us from time to time in a manner as prescribed by law."

{¶ 4} The email that purportedly was sent to appellees on August 28, 2019, contained the subject "We've updated our terms of services" and stated as follows:

Dear Valued Member,
We're writing to let you know that we've updated our terms of service. These updates apply to all members and accounts at Firefighters Community Credit Union. We believe these updates will help us serve all of our members better. The changes in terms are attached to this email. We recommend that you familiarize yourself with these updated agreements. As you continue to use FFCCU for your banking needs, you agree to these updated terms. If you have any questions, please don't hesitate to contact us at * * *. We look forward to continuing to serve you and to help you meet your financial goals.

(Emphasis added.)

{¶ 5} This email indicated that the terms of service had been updated, and nothing in the content of the email informed the recipient of the addition of the Arbitration and Waiver of Class Action Relief provision or the ability to opt out. Rather, the Notice of Change in Terms that was stated to "apply to all members" was "attached to this email." The attached Notice of Change in Terms included the Arbitration and Waiver of Class Action Relief provision and opt-out requirements, which were shown in a box.

{¶ 6} In opposing FFCCU's motion, appellees argued in part that they "did not agree to the arbitration or waiver clauses because [they] * * * were not fully informed * * *." Appellees alleged in their opposition that the parties had been engaged in presuit settlement discussions on a class-wide basis for months leading up to the filing of the case and that the August 28, 2019 email informing members of changes to the terms of service was sent after counsel for the Joys sent a presuit demand letter on July 17, 2019. Appellees argued that because they did not make an informed decision, there was no meeting of the minds and no agreement to arbitrate or waiver of their right to participate in a class-action lawsuit or to a jury trial. They maintained that their claims were governed by the 2018 account agreement and that they are not subject to the added provisions under the 2019 agreement. Appellees also argued that at the time the notice was sent, FFCCU was already aware of the claim against it and that the Joys were represented by class counsel. Additionally, they argued that the added arbitration and class or jury waiver clauses were unconscionable.

{¶ 7} In its reply, FFCCU argued that the opposition included no admissible evidence and that appellees did not dispute receiving the notice that was sent or their failure to opt out of the arbitration requirement. FFCCU continued to maintain that the 2019 agreement and its arbitration and waiver provisions applied in this matter. FFCCU further argued that appellees failed to establish procedural or substantive unconscionability.

{¶ 8} Following a hearing on FFCCU's motion, the trial court issued a decision that denied the motion and found "plaintiffs’ claims may proceed as the arbitration clause in issue is not enforceable against them." The trial court recognized the circumstances under which the change to the terms of service was sent, including the active negotiations between the parties, and determined that "there was no agreement to arbitrate because plaintiffs could not have made an informed decision as to whether or not to opt out of the arbitration clause under these factual circumstances." The trial court specifically recognized that the "notice of arbitration and class waiver provisions must be clear so that the parties can make an informed decision" and that "the language used by defendants in the notice email implied that all members already agreed to the updated terms." In this regard, the trial court determined as follows:

Further, the language used by defendant in the notice email implies that all members have already agreed to the updated terms. Defendant's notice e-mail dated August 28, 2019 indicated that the terms had already been updated and that members should familiarize themselves with the updated terms because by continuing to use defendant's services, members had actually already agreed to the terms. (See Def. Mem. Ex. 2. at 1. e-mail entitled "We've updated our terms of service," stating that "we recommend that you familiarize yourself with these updated agreements" and "As you continue to use FFCCU for your banking needs, you agree to these updated terms.").

{¶ 9} The trial court concluded that "there was no agreement to arbitrate" and denied FFCCU's motion. This appeal followed.

Law and Analysis

{¶ 10} Under its sole assignment of error, FFCCU claims the trial court erred by denying its motion to dismiss.

{¶ 11} Initially, we address appellees’ contention that there is a lack of a final appealable order because the trial court denied FFCCU's motion to dismiss. Although FFCCU styled its motion as a motion to dismiss, it requested in the alternative that the case be stayed pending arbitration pursuant to R.C. 2711.02(B). The trial court ultimately determined that the case was not subject to arbitration because there was no agreement to arbitrate. Pursuant to R.C. 2711.02(C), "an order under [ R.C. 2711.02(B) ] that grants or denies a stay of a trial of any action pending arbitration * * * is a final order * * *." Accordingly, "Ohio law authorizes appellate review of such orders." Taylor Bldg. Corp. of Am. v. Benfield , 117 Ohio St.3d 352, 2008-Ohio-938, 884 N.E.2d 12, ¶ 30.

{¶ 12} R.C. 2711.02(B) requires a trial court to stay litigation pending arbitration when certain conditions are met and provides as follows:

If any action is brought upon any issue referable to arbitration under an agreement in writing for arbitration, the court in which the action is pending, upon being satisfied that the issue involved in the action is referable to arbitration under an agreement in writing for arbitration, shall on application of one of the parties stay the trial of the action until the arbitration of the issue has been had in accordance with the agreement, provided the applicant for the stay is not in default in proceeding with arbitration.

{¶ 13} The standard of review for a trial court's decision on whether to stay a case pending arbitration under R.C. 2711.02(B) depends on the underlying issue presented. McCaskey v. Sanford-Brown College , 8th Dist. Cuyahoga No. 97261, 2012-Ohio-1543, 2012 WL 1142880, ¶ 7. Generally, an abuse-of-discretion standard has been applied when there is a question such as whether a party has waived its right to arbitrate a given dispute, and a de novo standard has been applied when reviewing whether a party has agreed to arbitration or questions of unconscionability. Hedeen v. Autos Direct Online, Inc. , 2014-Ohio-4200, 19 N.E.3d 957, ¶ 9 (8th Dist.), citing McCaskey at ¶ 7-8. "The existence of a contract is a question of law that we review de novo." Vogel v. Albi , 1st Dist. Hamilton No. C-190746, 2020-Ohio-5242, 2020 WL 6580169, ¶ 21, citing N. Side Bank & Trust Co. v. Trinity Aviation, L.L.C. , 1st Dist. Hamilton Nos. C-190021 and C-190023, 2020-Ohio-1470, 153 N.E.3d 889, ¶ 17. Accordingly, because we are reviewing the trial court's determination that there was no agreement to...

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