Providian Nat. Bank v. Conner

• Decision Date: 01 October 2004
• Citation: 898 So.2d 714
• Parties: PROVIDIAN NATIONAL BANK v. Tina G. CONNER.
• Court: Alabama Supreme Court

898 So.2d 714

PROVIDIAN NATIONAL BANK v. Tina G. CONNER.

1021496.

Supreme Court of Alabama.

October 1, 2004.

William H. Brooks and William H. Morrow of Lightfoot, Franklin & White, L.L.C., Birmingham; and Courtney R. Potthoff of Williams, Potthoff, Williams & Smith, L.L.C., Eufaula, for appellant.

Richard A. Harrison, Eufaula, for appellee.

BROWN, Justice.

Providian National Bank ("Providian"), the defendant in a proceeding in the Barbour Circuit Court, appeals from the trial court's order denying its motion to compel arbitration of the claims of Tina G. Conner, the plaintiff below. We reverse and remand.

Facts

Conner applied for and received a VISA credit card from Providian.¹ In March 2001, Providian mailed to its cardholders a notice of changes in the terms of their credit-card agreements with Providian. Conner's March statement contained the following language, prominently placed on the statement:

"* * *PLEASE SEE ENCLOSED IMPORTANT LEGAL NOTICE CONCERNING THE ADDITION OF AN ARBITRATION PROVISION TO YOUR ACCOUNT AGREEMENT. PLEASE READ IT CAREFULLY AND KEEP IT FOR YOUR RECORDS.* * *"

(Capitalization in original.)

A separate document entitled "IMPORTANT LEGAL NOTICE OF CHANGE TO YOUR ACCOUNT AGREEMENT" (hereinafter "the notice") was also enclosed with the March statement. The notice informed cardholders that an arbitration provision contained in the notice would become part of their existing credit-card agreements. The arbitration provision contained in the notice states that either the cardholder or Providian could elect to have the other party's claims resolved by arbitration, and it outlined the procedures that would be employed if either party elected to submit a claim to arbitration. The arbitration provision defined "claim" as

"any dispute between you and us that arises as a result of or has anything at all to do with: (1) your Account; (2) the events leading up to your becoming an accountholder; (3) this Agreement; (4) any prior credit account or agreement relating to such account; or (5) your relationship with us...."

The notice further informed cardholders that the arbitration provision would "become effective forty-five (45) calendar days after the Statement Date on the enclosed billing statement... unless [Providian] receive[d] prior to then a letter from [the cardholder] stating that [the cardholder did] not want the Arbitration Provision to become a part of the Agreement." The notice also provided an address where any correspondence could be directed. Providian has no record of a letter from Conner exercising the option of not accepting the arbitration provision, and Conner does not contend that she did so.

On November 7, 2002, Conner sued Providian² asserting that Providian had wrongfully presented checks against Conner's personal checking account. Specifically, Conner alleged that in 2002 Providian obtained her personal checking-account information and then, allegedly without her permission, "wrongfully presented checks against [Conner's] checking account" for payment to her credit-card account. The complaint alleged conversion, trespass, conspiracy, fraud, negligence, the tort of outrage, negligent supervision, intentional infliction of emotional distress, wantonness, and intentional interference with Conner's business relationship with her bank. Conner sought compensatory and punitive damages not to exceed the specific maximum sum of $74,999.

On December 19, 2002, Providian filed a motion to compel arbitration in this case. Providian argued that its relationship with Conner was governed by a contract that included an arbitration provision; therefore, it asked the trial court to direct Conner to submit her claims to arbitration. In support of its motion to compel arbitration, Providian submitted an affidavit of Michael Cioe, director of Providian Bancorp Services (a servicing affiliate of Providian); a copy of Conner's March 2001 statement; a copy of the notice; and copies of various rules of the American Arbitration Association.

Conner submitted a brief in opposition to the motion to compel arbitration. In support of her brief, Conner included what appears to be several pages from a response to an interrogatory in another action involving different parties. Conner offered no other evidence in support of her opposition to Providian's motion to compel arbitration.

On March 18, 2003, Conner amended her complaint, stating that Providian's actions in this case constituted felonies. She cited Ala.Code 1975, § 6-5-370, which provides: "For any injury, either to person or property, amounting to a felony, a civil action may be commenced by the party injured without prosecution of the offender."

On March 19, 2003, the trial court held a hearing on Providian's motion to compel arbitration. On April 16, 2003, the trial court issued an order denying Providian's motion and ordering Providian to comply with the discovery requests Conner had filed in the action. Providian appeals.

Standard of Review

This Court reviews an order denying a motion to compel arbitration de novo. Potts v. Baptist Health Sys., Inc., 853 So.2d 194 (Ala.2002); Vann v. First Cmty. Credit Corp., 834 So.2d 751, 752-53 (Ala.2002). Furthermore,

"[a] party seeking to compel arbitration has the burden of proving: (1) the existence of a contract containing an arbitration agreement and (2) that the underlying contract evidences a transaction affecting interstate commerce. Once those two items have been shown, the burden shifts to the opposing party to present evidence either that the arbitration agreement is not valid or that it does not apply to the dispute in question."

Jim Walter Homes, Inc. v. Saxton, 880 So.2d 428, 430 (Ala.2003) (citations omitted).

Discussion

Conner argues that the arbitration provision contained in the notice sent to cardholders is not part of her credit-card agreement with Providian. However, Providian produced substantial evidence indicating that the arbitration provision in the notice became part of the credit-card agreement. Specifically, Cioe testified in his affidavit (1) that Conner entered into a credit-card agreement with Providian, (2) that a copy of the notice (which contains the arbitration provision) was mailed to Conner with her March 2001 statement, and (3) that Conner did not opt out of the arbitration provision, as the notice indicated she could have.

This Court has previously held that this exact factual scenario, involving apparently the same notice and the same arbitration provision, results in the cardholder's acquiescing to the addition of the arbitration provision to the cardholder's credit-card agreement. In Providian National Bank v. Screws, 894 So.2d 625 (Ala.2003), this Court held:

"In March 2001 ... [Providian] notified holders of its credit card, including the plaintiffs, of a change in the terms of the credit-card agreement, inserting into the agreement an arbitration provision. Providian notified its cardholders of this change in the terms of their credit-card agreements by enclosing a notice in the monthly billing statement. The front page of the regular account statement contained the following language:

"`* * *PLEASE SEE ENCLOSED IMPORTANT LEGAL NOTICE CONCERNING THE ADDITION OF AN ARBITRATION PROVISION TO YOUR ACCOUNT AGREEMENT. PLEASE READ IT CAREFULLY AND KEEP IT FOR YOUR RECORDS.* * * '

"(Capitalization in original.)

"A separate document labeled `Important Legal Notice of Change to Your Account Agreement' was enclosed with the monthly statement containing the above language. This notice informed the cardholder that an arbitration provision had been added to the credit-card agreement. The notice set out the terms of that provision; explained the differences between resolving claims in arbitration as opposed to court proceedings; and set out those claims that could be arbitrated. ...

"`....'

"... [U]nder the definition of `claim' in the arbitration provision, the plaintiffs' claims would be subject to arbitration.

"Importantly, acceptance of the arbitration provision by the cardholder was not mandatory. The notice enclosed within the monthly billing statement began by stating:

"`This notice is to advise you that the following Arbitration Provision will be added to your Account Agreement (the "Agreement"). The Arbitration Provision will become effective forty-five (45) calendar days after the Statement Date on the enclosed billing statement ... unless we receive prior to then a letter from you stating that you do not want the Arbitration Provision to become part of the Agreement.... If we receive such a letter on time, the Arbitration Provision will not become part of the Agreement, and the status of your Account will be unaffected by your rejection of the Arbitration Provision.'

"(Emphasis in original.) Therefore, based on the 45-day time frame contained in the notice, the arbitration provision, if not rejected, became effective in late April or early May 2001, depending on the date of the individual cardholder's billing statement. None of the plaintiffs rejected the arbitration provision. Approximately 15 months later, in August 2002, the plaintiffs filed this action.

"On September 13, 2002, Providian filed a motion to compel arbitration.... On December 5, 2002, the circuit court denied Providian's motion to compel arbitration. Providian appealed.

"....

"This Court has previously enforced an arbitration provision added to credit-card agreements by amendment. See Ex parte Colquitt, 808 So.2d 1018 (Ala.2001). Further, this Court has continually held that express assent is not required in order for an arbitration provision to be enforceable. SouthTrust Bank v. Williams, 775 So.2d 184, 189 (Ala.2000) (holding that an arbitration provision added to a customer's account agreement by notice was valid and enforceable); Woodmen of the World Life Ins. Soc'y v. Harris, 740 So.2d 362, 367 (Ala.1999) (holding that express assent to an arbitration provision is

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