“Missouri Court of Appeals affirms denial of motion to compel arbitration based on contract of adhesion”

John Brooks of Baker Sterchi has this article, available in Lexology, discussing the Missouri Court of Appeals decision in Rose v. Sabala, in which the court affirmed a decision denying Verizon’s motion to compel arbitration of a customer complaint. The customer alleged that a Verizon employee, under the guise of evaluating her phone for trade in value, emailed to himself intimate photos of the customer.

The customer agreement contained an online arbitration provision specifying that “ANY DISPUTE THAT IN ANY WAY RELATES TO OR ARISES OUT OF THIS AGREEMENT OR FROM ANY EQUIPMENT, PRODUCTS AND SERVICES YOU RECEIVE FROM US (OR FROM ANY ADVERTISING FOR ANY SUCH PRODUCTS OR SERVICES), INCLUDING ANY DISPUTES YOU HAVE WITH OUR EMPLOYEES OR AGENTS, WILL BE RESOLVED BY ONE OR MORE NEUTRAL ARBITRATORS.”

As the article explains, however, the court took issue with the fact that the store receipt signed by the customer did not contain this arbitration language, but only a reference to the provision:

“I AGREE TO THE CURRENT VERIZON WIRELESS CUSTOMER AGREEMENT (WITH EXTENDED LIMITED WARRANTY/SERVICE CONTRACT, IF APPLICABLE), INCLUDING THE TERMS AND CONDITIONS OF MY PLAN AND ANY OPTIONAL SERVICES I HAVE AGREED TO PURCHASE AS REFLECTED ON THE SERVICE SUMMARY, ALL OF WHICH I HAVE HAD THE OPPORTUNITY TO REVIEW. I UNDERSTAND THAT I AM AGREEING TO AN EARLY TERMINATION FEE PER LINE, LIMITATIONS OF LIABILITY FOR SERVICE AND EQUIPMENT, SETTLEMENT OF DISPUTES BY ARBITRATION INSTEAD OF JURY TRIALS, AND OTHER IMPORTANT TERMS IN THE CUSTOMER AGREEMENT. I AM AWARE THAT I CAN VIEW THE CUSTOMER AGREEMENT ANYTIME AT VERIZONWIRELESS.COM OR IN MY VERIZON ACCOUNT.”

For the court, this was not enough, finding that the contract was one of adhesion. As the court noted in its opinion,

“Verizon asks the court to enforce an arbitration provision that exceeds the scope of what reasonable parties expect. A reasonable party signing a sales receipt might understandably expect the writing to address common, ordinary service provider disputes, such as billing matters, service quality or product and warranty issues. Terms in the Customer Agreement make repeated reference to billing or services interruption disputes, and limit customers’ rights with respect to those topics. This reinforces the likelihood that a reasonable party signing a sales receipt in a retail setting would not anticipate that they were altering their legal position on issues affecting personal matters and privacy in the manner alleged here.”

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