Rudolph v. Wright Patt Credit Union

Decision Date30 June 2021
Docket NumberNo. 2020-CA-50,2020-CA-50
Citation175 N.E.3d 636
Parties Vincent RUDOLPH, Plaintiff-Appellant v. WRIGHT PATT CREDIT UNION, Defendant-Appellee
CourtOhio Court of Appeals

ROBB S. STOKAR, Atty. Reg. No. 0091330, 2712 Observatory Avenue, Cincinnati, Ohio 45208, Attorney for Plaintiff-Appellant.

DANIEL C. GIBSON, Atty. Reg. No. 0080129, 100 South Third Street, Columbus, Ohio 43215 and JAMES R. BRANIT, pro hac vice, 303 West Madison Street, Suite 300, Chicago, Illinois 60606, Attorneys for Defendant-Appellee.



{¶ 1} Plaintiff-Appellant, Vincent Rudolph, appeals from a judgment ordering the case to arbitration. According to Rudolph, the trial court erred in ordering arbitration because he and Defendant-Appellee, Wright Patt Credit Union, Inc. ("WPCU"), never entered into an agreement to arbitrate, and WPCU was not permitted to add arbitration provisions to its existing membership agreements. In addition, Rudolph contends that he did not have actual or constructive notice of any modifications. Rudolph further argues that a February 2019 membership agreement contained only a stray reference to a non-existent dispute resolution section, which rendered it vague and unenforceable. And finally, Rudolph contends that an arbitration provision in a July 2019 membership agreement was both procedurally and substantively unconscionable.

{¶ 2} We disagree, and we find no error by the trial court. When Rudolph entered into the original membership agreement with WPCU, he agreed to comply with any amendments to the WPCU membership agreement and further agreed that WPCU could change the terms of the agreement and other account documents at any time. Rudolph also accepted the arbitration terms by continuing his membership in WPCU. Furthermore, Rudolph had notice of changes to the agreement, as they were posted on WPCU's website, which Rudolph accessed. And finally, the arbitration provisions were neither vague nor unconscionable. Accordingly, the judgment of the trial court will be affirmed.

I. Facts and Course of Proceedings

{¶ 3} WPCU is a not-for-profit cooperative and financial institution which provides its members with account and loan services. WPCU's assets are owned by its members, who democratically control it. WPCU Motion to Dismiss or in the Alternative, Application for Stay Pending Arbitration ("Motion to Dismiss") (Aug. 10, 2020), and attached Affidavit of Kim Riley, ¶ 2.

{¶ 4} In August 2017, Rudolph became a WPCU member. Affidavit of Vincent Rudolph ¶ 3. At the time, Rudolph's account was governed by the 2015 WPCU Membership and Account Agreement. Affidavit of Christian A. Jenkins, ¶ 5; Ex. B attached to the Jenkins’ Affidavit; and WPCU000224.1 The Agreement noted that it was a legally binding document. Id. In addition, the Agreement stated that:

Your account type(s) and ownership features are designated on your Account Card. By signing an Account Card, each of you, jointly and severally, agree to the terms and conditions in this Agreement and Account Card, which includes the Electronic Fund Transfers Disclosure, the Funds Availability Policy Disclosure, the Truth-in-Savings Disclosure, the General Fee Schedule, the Rate Sheet, and any account Receipt accompanying this Agreement (collectively known as the "Account Documents"). Additionally, you agree to comply with the Credit Union's Articles of Incorporation and Code of Regulations and membership conditions (collectively known as the "Articles") and any amendments to the Articles and Account Documents.

(Emphasis added.) Id.

{¶ 5} The 2015 agreement contained 25 sections outlining various matters such as account ownership, deposit requirements, overdrafts, and so forth. Section 15 was entitled "Notices" and stated, in pertinent part, as follows:

(b) Notice of Amendments . Except as prohibited by applicable law, we may change the terms of this Agreement and the other Account Documents at any time. We will notify you of any changes in terms, rates, or fees as required by law. We reserve the right to waive any term in this Agreement. Any such waiver shall not affect our right to future enforcement.
(c) Effect of Notice . Any written notice you give us is effective when we receive it. Any written notice we give to you is effective when it is deposited in the U.S. Mail, postage prepaid and addressed to you at your statement mailing address. Notice to any account owner is considered notice to all account owners.

(Emphasis sic.) WPCU000230, Section 15(b) and (c).

{¶ 6} The 2015 membership agreement did not contain any arbitration provisions. Instead, it stated that "[a]ny action to enforce this Agreement shall be commenced in the Common Pleas Court of Greene County, Ohio." WPCU000232, Section 25.

{¶ 7} In addition to the membership provisions, the 2015 agreement also contained a section called "Electronic Fund Transfers Disclosure," which outlined a member's rights and responsibilities. Id. at WPCU000232-000233. This section discussed debit cards, told members how to access their accounts electronically by using WPCU's Online Internet Account Service ("WPCU On-Line"), and provided information about reporting errors. WPCU000233 at Section 5, and WPCU000234, Sections 7 and 10. Also included was a statement that "Your designated account may also be governed by other agreements between you and us and by our rules and regulations for your designated account." WPCU000236, Section 14.

{¶ 8} Effective in January 2018, WPCU amended the membership agreement. Jenkins’ Affidavit, Ex. C, WPCU000001-000021. This amended agreement stated that "By opening or maintaining your Credit Union account on or after the effective date of this Agreement, you agree that the terms and conditions contained in this Agreement will govern your account and any services related to your account." WPCU000002. WPCU changed how the sections were organized and numbered and also added an arbitration provision. Specifically, the January 2018 agreement stated:

3. Reporting Errors and Dispute Resolution
* * *
If you have a dispute with the Credit Union and we are not able to resolve the dispute informally, you agree that the dispute will be resolved through an arbitration process further detailed in the Dispute Resolution section of the Account Agreement. If a claim is eligible to be resolved in small claims court, you may pursue the claim in small claims court.

WPCU000007, Section 3. However, the agreement did not contain a Dispute Resolution section.

{¶ 9} WPCU did not mail or email the January 2018 agreement to its members. Instead, WPCU communicated with its members as a whole by posting documents on its website. WPCU's continuous practice has been to maintain current copies of its Membership Agreement and Account Documents on its website. If members request copies of agreements by calling WPCU or inquiring at a branch, WPCU will mail or email the documents to them. Jenkins’ Affidavit, Ex. E (Deposition Excerpts of Kimberly Riley), p. 72. 120, 141, and 143; Motion to Dismiss, Riley Affidavit at ¶ 14.

{¶ 10} On December 4, 2018, Rudolph registered for online banking. In order to do so, he had to consent to the terms of WPCU's online banking agreement. Riley Affidavit at ¶ 13 and 15, and Ex. 3 attached to the Riley Affidavit. Under the terms of the online banking agreement, Rudolph agreed " ‘to electronically view any changes in disclosures, election information, or updates to WPCU products, services, and fees.’ " Id. at ¶ 14; Ex. 2 attached to the Riley Affidavit (WPCU 000170 – the WPCU Internet Account Access Agreement, Optional Bill Pay Agreement and Disclosure Statement dated July 27, 2017).

{¶ 11} WPCU again amended its member agreement in February 2019. Section 3 remained the same, requiring arbitration according to the agreement's Dispute Resolution section. Jenkins’ Affidavit, Ex. D, WPCU000028. Again, however, the agreement did not contain a separate Dispute Resolution section.

{¶ 12} In 2019, WPCU issued two versions of the membership agreement. They are identical other than an irrelevant part dealing with how WPCU handles personal information. Riley Affidavit at ¶ 5 and Ex. 1 attached to the Affidavit. Version 1 was posted on the website on July 31, 2019, and Version 2 was posted in October 2019. Riley Affidavit at ¶ 8.

{¶ 13} These versions added additional information about arbitration. Again, the agreement stated that "By opening or maintaining your Credit Union account on or after the effective date of this Agreement, you agree that the terms and conditions contained in this agreement will govern your account and any services related to your account." Ex. 1 attached to the Riley Affidavit, WPCU000093 (Version 1).2

{¶ 14} Concerning arbitration, the 2019 agreement again required arbitration, but added that the process was "further detailed in Section 8.25 Dispute Resolution and Exhaustion of Administrative Remedies below." WPCU000098, Section 3. This section stated as follows:

8.25 Dispute Resolution and Exhaustion of Administrative Remedies You understand and agree as a member of the Credit Union that member service and satisfaction is our primary objective. The Credit Union would not exist without its member/owners. A fundamental principle of member services and satisfaction is to resolve all disputes with our members in a friendly and non-adversarial basis. Therefore, the procedures outlined in this Section are critically important to our overall mission of member services and satisfaction.
Before you are permitted to proceed with a claim against the Credit Union as outlined in Section 8.23 above, you must request resolution of your claim in writing to the Credit Union by mandatory binding arbitration as outlined in this Section. You must send your request to the Credit Union by certified U.S. Mail to, "Wright-Patt Credit Union, Inc., c/o Legal Department, 3560 Pentagon Blvd., Beavercreek, OH 45431-1706. Your request must conspicuously state, "REQUEST FOR ARBITRATION" near

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