Wollen v. Gulf Stream Restoration & Cleaning, LLC

• Decision Date: 09 July 2021
• Docket Number: DOCKET NO. A-1107-20
• Citation: 468 N.J.Super. 483,259 A.3d 867
• Parties: Nancy WOLLEN, Plaintiff-Appellant, v. GULF STREAM RESTORATION AND CLEANING, LLC, Gulf Stream Enterprises, LLC, Joseph Janas, a/k/a Joseph Janus, Joseph Lichon, and Judith A. Lichon, Defendants, and Homeadvisor, Inc., Defendant-Respondent.
• Court: New Jersey Superior Court — Appellate Division

468 N.J.Super. 483

259 A.3d 867

Nancy WOLLEN, Plaintiff-Appellant,

v.GULF STREAM RESTORATION AND CLEANING, LLC, Gulf Stream Enterprises, LLC, Joseph Janas, a/k/a Joseph Janus, Joseph Lichon, and Judith A. Lichon, Defendants,andHomeadvisor, Inc.,¹ Defendant-Respondent.

DOCKET NO. A-1107-20

Superior Court of New Jersey, Appellate Division.

Argued June 3, 2021

Decided July 9, 2021

Gary Ahladianakis argued the cause for appellant (Carluccio, Leone, Dimon, Doyle & Sacks, LLC, attorneys; Gary Ahladianakis, of counsel and on the briefs).

Jack Gross argued the cause for respondent.

Before Judges Fuentes, Whipple, and Rose.

The opinion of the court was delivered by

ROSE, J.A.D.

In this appeal, we consider an internet-based company's method of communicating its terms and conditions in the ever-evolving arena of online consumer contracts. At issue is the validity of an arbitration provision embedded in those terms and conditions that "could" be accessed via a hyperlink before plaintiff submitted her request for defendant's services. Because the defendant company did not demonstrate that the consumer plaintiff was on notice of the arbitration provision prior to submitting her service request through the website, we hold defendant failed to establish plaintiff was aware of the arbitration provision. Pursuant to our fact-intensive inquiry, we therefore conclude plaintiff did not knowingly and voluntarily agree to waive her right to resolve her disputes in court. Accordingly, we reverse the order under review that enforced arbitration, and remand for reinstatement of the complaint.

I.

We summarize the facts from the limited record before the motion judge. Defendant HomeAdvisor, Inc. is an internet-based home improvement and maintenance referral service. Through its website, HomeAdvisor utilizes an online portal to provide consumers with "free referrals" for local third-party service providers. The consumer is not required to pay HomeAdvisor for its referral service; the fee is paid by the service providers, who have "register[ed] with HomeAdvisor and undergone an application and screening process."

In April 2017, plaintiff Nancy Wollen consulted the HomeAdvisor website seeking referrals for a contractor to renovate the newly purchased Beachwood home she shared with her family. Plaintiff selected HomeAdvisor after viewing the company's "daily" commercials that "saturated" the market and were "very convincing." Plaintiff rhetorically stated, "why would you go anywhere [else] because these people check the [contractors'] references, they do the work. You don't have to do anything except call the people they send you."

According to HomeAdvisor's Senior Vice President of Software Development, Chris Kucharski, website users must first create an online account to submit a service request through the company's online portal. That process entails navigating multiple webpages. Screenshots of those webpages were annexed to Kucharski's certification.

Pertinent to plaintiff's service request, the initial six webpages sought information about the project, including its address, extent, and timing. To advance to each webpage, plaintiff was required to press the "Next" button. None of those six webpages referred the user to HomeAdvisor's separate terms and conditions webpage.

The top of the seventh and final webpage stated: "We have matching Home Renovation Contactors in your area! Get quotes from up to [four] prescreened pros now." Those statements were followed by fill-in-the-blank fields for the user's name, telephone number, and email address in the middle of the page. The user then encountered an optional check box preceding the statement, "Yes, I would like free project cost information." An orange button, entitled, "View Matching Pros" was situated under that statement, immediately followed by a single line of text, providing: "By submitting this request, you are agreeing to our Terms & Conditions." A reproduction of the seventh webpage appears below:

According to Kucharski, "HomeAdvisor's website will not allow the submission of a service request unless the consumer or homeowner affirmatively clicks the [View Matching Pros] submit button, indicating that he or she agrees to the [t]erms and [c]onditions." It is undisputed that the phrase, "Terms & Conditions" was offset in blue font and acted as a hyperlink to a separate seven-page document, entitled "HomeAdvisor Terms and Conditions." The hyperlinked text did not contain any other explanatory terms, such as "Click Here to Accept [or Acknowledge, or Read, or View] the Terms & Conditions." Nor was the font of the phrase, "Terms & Conditions" underlined, bolded, or enlarged.

Kucharski further certified: "All services provided to consumers by HomeAdvisor are provided pursuant to the [t]erms and [c]onditions set forth in a written online agreement." Containing eighteen paragraphs, the text of that "agreement" appears in smaller font than that of the seven webpages the user must navigate through before accessing it.²

Set forth on the final two pages of the HomeAdvisor Terms and Conditions webpage, the mandatory arbitration clause provided:

17. ARBITRATION AND GOVERNING LAW

The exclusive means of resolving any dispute between you and HomeAdvisor or any claim made by you or HomeAdvisor arising out of or relating to your use of this Website and/or HomeAdvisor's services (including any alleged breach of these Terms and Conditions) shall be BINDING ARBITRATION administered by the American Arbitration Association. The one exception to the exclusivity of arbitration is that you have the right to bring an individual claim against HomeAdvisor in a small-claims court of competent jurisdiction OR EXCEPT AS EXPRESSLY PROVIDED BY APPLICABLE FEDERAL OR STATE LAW. But whether you choose arbitration or small-claims court, you may not under any circumstances commence or maintain against HomeAdvisor any class action, class arbitration, or other representative action or proceeding.

*NOTICE OF RIGHTS*

a. By using the Website and/or HomeAdvisor's services in any manner, you agree to the above arbitration agreement. In doing so, YOU ALSO GIVE UP YOUR RIGHT TO GO TO COURT to assert or defend any claims between you and HomeAdvisor (except for matters that may be taken to small-claims court). YOU ALSO GIVE UP YOUR RIGHT TO PARTICIPATE IN A CLASS ACTION OR OTHER CLASS PROCEEDING . Your rights will be determined by a NEUTRAL ARBITRATOR, NOT A JUDGE OR JURY . You are entitled to a fair hearing before the arbitrator. The arbitrator can grant any relief that a court can, but you should note that arbitration proceedings are usually simpler and more streamlined than trials and other judicial proceedings. Decisions by the arbitrator are enforceable in court and may be overturned by a court only for very limited reasons. For details on the arbitration process, see our Arbitration Procedures.³ b. Any proceeding to enforce this arbitration provision, including any proceeding to confirm, modify, or vacate an arbitration award, may be commenced in any court of competent jurisdiction. In the event that this arbitration provision is for any reason held to be unenforceable, any litigation against HomeAdvisor (except for small-claims court actions) may be commenced only in the federal or state courts located in Denver County, Colorado. You hereby irrevocably consent to the jurisdiction of those courts for such purposes. c. These Terms and Conditions, and any dispute between you and HomeAdvisor, shall be governed by the laws of the state of Colorado without regard to principles of conflicts of law, provided that this arbitration agreement shall be governed by the Federal Arbitration Act.

Absent from HomeAdvisor's terms and conditions is a signature line or electronic button requiring the user to "click-to-accept" those terms and conditions before returning to and clicking the View Matching Pros button. As such, the user may click the View Matching Pros button without ever viewing the terms and conditions containing the arbitration provision.

According to paragraph thirty-eight of Kucharski's amended certification:

[T]hroughout 2017 (and presently), nearly every webpage of HomeAdvisor's website directed toward consumers contained a hyperlink to the [t]erms and [c]onditions, presented in text such as, "By using HomeAdvisor, you agree to our Terms & Conditions" – with the hyperlinked blue text, "Terms & Conditions" leading a consumer directly to the full text of the version of the [t]erms [and] [c]onditions in effect at that time, including the arbitration clause and forum selection clause.

Screenshots of the webpages referenced in paragraph thirty-eight were not included in the record before the motion judge or this court. In any event, Kucharski made no representations that the hyperlinked "Terms & Conditions" text that appeared on HomeAdvisor's other webpages required the consumer to accept those terms before continuing to the View Matching Pros submit button.

When deposed in September 2020, plaintiff said she did not recall clicking on the "Terms & Conditions" hyperlinked text before clicking on the View Matching Pros submit button. "Had [she] done so, [she] believe[d] [she] would recall that ...." Plaintiff also did not remember answering "a number of questions" on HomeAdvisor's website. According to plaintiff, she "usually scroll[s] to whatever is required to get ... through the thing and [she] d[idn't] recall any specific obstacles." She repeatedly told counsel she did not recall "specifically" answering certain questions but "k[new] there was a series of steps that [she] went through that were in [her] mind reasonable."

Pursuant to HomeAdvisor's referral, on April 28, 2017, plaintiff retained defendant Gulf Stream Renovation and Cleaning, LLC or Gulf Stream Enterprises, LLC (Gulf Stream) to perform the work. Dissatisfied with Gulf Stream's services – after expending more than $97,000 – on April 13, 2018, plaintiff filed a complaint in the ...