Hansen v. Rock Holdings, Inc.

• Decision Date: 17 January 2020
• Docket Number: No. 2:19-cv-00179-KJM-DMC,2:19-cv-00179-KJM-DMC
• Citation: 434 F.Supp.3d 818
• Parties: Bill HANSEN, Plaintiff, v. ROCK HOLDINGS, INC., et al., Defendants.
• Court: U.S. District Court — Eastern District of California

434 F.Supp.3d 818

Bill HANSEN, Plaintiff,

v.ROCK HOLDINGS, INC., et al., Defendants.

No. 2:19-cv-00179-KJM-DMC

United States District Court, E.D. California.

Signed January 17, 2020

Filed January 21, 2020

David Hall, Hedin Hall LLP, San Francisco, CA, Frank S. Hedin, Hedin Hall LLP, Miami, FL, for Plaintiff.

Edward San Chang, M. John A. Vogt, Justin Andrew Potesta, Irvine, CA, Lawrence K. Iglesias, Mark E. Ellis, Ellis Law Group, LLP, Sacramento, CA, for Defendants.

ORDER

Kimberly J. Mueller, CHIEF UNITED STATES DISTRICT JUDGE In this case, brought under the Telephone Consumer Protection Act (TCPA), defendants move to stay the case and compel arbitration. For the following reasons, the motion is DENIED.

I. BACKGROUND

Plaintiff Bill Hansen filed this lawsuit on behalf of himself and all those similarly situated, alleging defendants violated the TCPA by sending texts advertising mortgage refinancing services without the recipients' consent. Am. Compl., ECF No. 13, ¶¶ 14–31, 48 (citing 47 U.S.C. § 227 (TCPA) ). Specifically, plaintiff alleges defendants sent a text to his cellphone number ending in 9577 stating:

willena – Regarding your monthly payment for your Roseville home. Come back and see your potential savings in 2 minutes.

** http://dcmg.com/adgTdKbj_ **

LMB Reply STOP to stop[.]

Id. ¶ 16.

Defendants LMB Mortgage Services, Inc., d/b/a LowerMyBills.Com ("LMB") and CPL Assets, LLC, d/b/a Core Digital Media Solutions filed a motion to compel arbitration of plaintiff's claims and stay the case pending arbitration. Mot., ECF No. 23. Defendant Digital Media Solutions, LLC, d/b/a DCMG joined the motion to compel. ECF No. 26. Defendants argue plaintiff should be compelled to arbitrate his TCPA claim because he agreed to LMB's Terms of Use, which include a provision requiring arbitration of "all claims, disputes or controversies between [plaintiff] and LMB, and its parents, affiliates, subsidiaries or related companies ...." Mot. at 9–10. According to defendants, plaintiff agreed to these Terms of Use in March 2014 when he entered his information into LowerMyBills.com and clicked the button labeled "Click to See Your Free Results!" (the "submit button"). Id. at 8. In so doing, defendants argue, plaintiff manifested his agreement to LMB's Terms of Use, because the following statement appeared right above the button:

By clicking the button, you agree to the Terms of Use and Privacy Policy to be matched with up to 5 participants in the LMB Partner Network and consent (not required as a condition to purchase a good/service) for us and/or them to contact you (including through automated or prerecorded means) via telephone, mobile device (including SMS and MMS), and/or e-mail about lending information ...."

Id. (explaining "Terms of Use" and "Privacy Policy" are hyperlinked on the website). In support of their argument, defendants offer LMB company records and an accompanying declaration suggesting the following information, referred to here as the "Hansen information," was entered into LowerMyBills.com and submitted using the submit button¹ :

1. Name: Willena Hansen

2. Telephone Number: (916) ***-9577

3. E-mail address: williern*** 4. Property Address: *** Americana Drive, Roseville, California

5. Current Property Value: $***

6. Current Mortgage Balance: $***

7. Current Interest Rate: ***%

8. Assessment of Current Credit: ***

Mot. at 7. It is undisputed that Willena Hansen, who died recently, was plaintiff Bill Hansen's mother, and the telephone number ending in 9577 belongs to Bill Hansen. See Mot. at 7; Hansen Decl. ¶¶ 4–5, ECF No. 30; Compl. ¶ 15. It is also undisputed that Bill Hansen, his wife, and Willena Hansen at one point jointly owned the Americana Drive property in Roseville, California (the "Roseville property") as joint tenants. Vogt Decl. ¶¶ 3–4, ECF No. 23-2 (explaining title search revealing ownership of the Roseville property). The parties dispute whether the e-mail williern* * * belongs to Bill Hansen or Willena Hansen. Mot. at 7 (citing Vogt Decl. ¶ 7 & Ex. 6); Hansen Decl. ¶ 5. Defendants also offer evidence suggesting the Roseville property was refinanced using Assent, LLC, three months after LMB claims to have sent plaintiff a referral to Assent, LLC, Mot. at 14 (citing Vogt Decl. ¶ 5 & Ex. 3); plaintiff does not dispute that the refinancing occurred, Opp'n, ECF No. 28, at 17.

Plaintiff declares under penalty of perjury that he never visited the website LowerMyBills.com, never entered any of the Hansen information and never clicked the submit button. Hansen Decl. ¶¶ 2–3. Therefore, he argues, he is not bound by the arbitration clause in the Terms of Use, and his claim should proceed in district court. Opp'n at 8.

Defendants LMB and CPL Assets filed a joint reply, ECF No. 33, and defendant Digital Media Solutions, LLC filed a separate reply, ECF No. 34. The court held a hearing on July 12, 2019, and resolves the motion here: because genuine disputes of material fact exist as to whether plaintiff is bound by LMB's Terms of Use, as explained below, the court DENIES the motion to compel.

II. LEGAL STANDARD

Congress enacted the Federal Arbitration Act, 9 U.S.C. the FAA, "in response to widespread judicial hostility to arbitration agreements." AT & T Mobility LLC v. Concepcion , 563 U.S. 333, 339, 131 S.Ct. 1740, 179 L.Ed.2d 742 (2011) (citations omitted). Section two of the FAA is its "primary substantive provision." Id. at 339, 131 S.Ct. 1740 (citation omitted). It states: "A written provision in ... a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction ... 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.

"A party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.’ " Knutson v. Sirius XM Radio Inc. , 771 F.3d 559, 565 (9th Cir. 2014) (quoting United Steelworkers of Am. v. Warrior & Gulf Nav. Co. , 363 U.S. 574, 582, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960) ). "A court may invalidate an arbitration agreement based on ‘generally applicable contract defenses’ like fraud or unconscionability, but not on legal rules that ‘apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.’ " Kindred Nursing Centers Ltd. P'hip v. Clark , ––– U.S. ––––, 137 S. Ct. 1421, 1426, 197 L.Ed.2d 806 (2017) (quoting Concepcion , 563 U.S. at 339, 131 S.Ct. 1740 ).

Section 4 of the FAA allows district courts to hear motions to compel arbitration. 9 U.S.C. § 4. "Generally, in deciding whether to compel arbitration, a court must determine two ‘gateway’ issues: (1) whether there is an agreement to arbitrate between the parties; and (2) whether the agreement covers the dispute." Brennan v. Opus Bank , 796 F.3d 1125, 1130 (9th Cir. 2015) (quoting Howsam v. Dean Witter Reynolds, Inc. , 537 U.S. 79, 84, 123 S.Ct. 588, 154 L.Ed.2d 491 (2002) ). The party moving to compel arbitration bears the burden of showing each of these elements by a preponderance of the evidence. See BG Grp., PLC v. Republic of Argentina , 572 U.S. 25, 60, 134 S.Ct. 1198, 188 L.Ed.2d 220 (2014) (it is for the court, not the arbitrator, to resolve a dispute regarding the consent of the parties to arbitration); Ashbey v. Archstone Prop. Mgmt., Inc. , 785 F.3d 1320, 1323 (9th Cir. 2015) (party moving to compel bears burden of showing these elements); Knutson , 771 F.3d at 565 (applying preponderance of the evidence).

In considering a motion to compel arbitration, the court applies a standard similar to that used in resolving summary judgment under Federal Rule of Civil Procedure 56. Concat LP v. Unilever, PLC , 350 F. Supp. 2d 796, 804 (N.D. Cal. 2004) (citation omitted); see also Cox v. Ocean View Hotel Corp. , 533 F.3d 1114, 1119 (9th Cir. 2008) ("[D]enial of a motion to compel arbitration has the same effect as a grant of partial summary judgment denying arbitration[.]"); Greystone Nevada, LLC v. Anthem Highlands Cmty. Ass'n , 549 F. App'x 621, 623 (9th Cir. 2013) (reversing order compelling arbitration where the opposing party was afforded no opportunity to present evidence and argument). The party opposing arbitration receives the benefit of any reasonable doubts and the court draws reasonable inferences in that party's favor, Alarcon v. Vital Recovery Servs., Inc. , 706 F. App'x 394 (9th Cir. 2017) (citing Three Valleys Mun. Water Dist. v. E.F. Hutton & Co. , 925 F.2d 1136, 1141 (9th Cir. 1991) ). Only when no genuine disputes of material fact surround the arbitration agreement's existence may the court compel arbitration. Concat , 350 F. Supp. 2d at 804.

Nevertheless, if the gateway requirements are met, the decision to compel arbitration is mandatory, not discretionary, Dean Witter Reynolds, Inc. v. Byrd , 470 U.S. 213, 217–18, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985), and federal law favors arbitration agreements, Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp. , 460 U.S. 1, 24–25, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983).

III. DISCUSSION

The parties do not dispute the FAA governs this motion to compel. Primarily, the parties' dispute is over the first "gateway" issue, whether the parties agreed to arbitrate. On this threshold issue, defendants have not met their burden of showing there are no genuine disputes of material fact as to the arbitration agreement's existence. Therefore, the motion to compel is DENIED.

"Before a party to a lawsuit can be ordered to arbitrate and thus be deprived of a day in court, there should be an express, unequivocal agreement to that effect." Three Valleys Mun. Water Dist. , 925 F.2d at 1141 (citation omitted). "The district court, when considering a motion to compel arbitration which is opposed on the ground that no agreement to arbitrate had been made between the parties, should give to the opposing party the benefit of all reasonable doubts and inferences that...