Title: Land v. IU Credit Union

State: indiana

Issuer: Indiana Supreme Court

Document:

I N  T H E  
Indiana Supreme Court 
Supreme Court Case No. 23S-CP-115 
Tonia Land, individually and on behalf of all others 
similarly situated, 
Appellant (Plaintiff below) 
–v– 
IU Credit Union, 
Appellee (Defendant below) 
Argued: June 29, 2023 | Decided: February 1, 2024 
Appeal from the Monroe Circuit Court, 
No. 53C06-2103-PL-562 
The Honorable Holly M. Harvey, Judge 
On Petition to Transfer from the Indiana Court of Appeals,  
No. 22A-CP-382 
Opinion on Rehearing by Justice Goff 
Chief Justice Rush and Justices Massa, Slaughter, and Molter concur. 
 
 
 
FILED
C L E R K
Indiana Supreme Court
Court of Appeals
and Tax Court
Feb 01 2024, 3:56 pm
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Goff, Justice. 
The essential facts of this case are as follows: When Tonia Land first 
became a customer of IU Credit Union (IUCU), she received an account 
agreement, the terms of which were “subject to change at any time.” App. 
Vol. II, p. 43. When Land later registered for online banking, she received 
and accepted a second agreement, permitting IUCU to “modify the terms 
and conditions applicable to the Services from time to time.” Id. at 118. In 
2019, IUCU sent to Land a proposed change to these agreements (the 
Addendum). The terms of the Addendum would have (1) permitted either 
party to require arbitration for resolving disputes and (2) prohibited Land 
from initiating or joining a class-action lawsuit. Id. at 127. Unless Land 
exercised her “right to opt out” of this arrangement within thirty days of 
receiving notice, the Addendum stated, its proposed terms would become 
binding. Id. Land, while never having exercised this right, later filed a 
class-action complaint against IUCU. Citing the Addendum, IUCU sought 
to compel arbitration.  
On transfer, this Court held that, while IUCU provided Land with 
reasonable notice of its offer to amend the original agreements, Land’s 
subsequent silence and inaction did not—under Section 69 of the 
Restatement (Second) of Contracts—result in her assent to that offer. Land 
v. IU Credit Union, 218 N.E.3d 1282, 1291 (Ind. 2023).  
IUCU now petitions for rehearing, claiming that the Court failed to 
address certain legal authorities and arguments raised on appeal and in 
the transfer proceedings. We hereby grant the petition to address these 
claims. While we affirm our original opinion in full, we leave open the 
possibility, in some future case, of adopting a different standard 
governing the offer and acceptance of unilateral contracts between 
businesses and consumers. 
Discussion and Decision 
IUCU raises two principal claims on rehearing: (1) that the Court failed 
to consider “two directly applicable authorities” supporting its argument 
that Land “assented to arbitration by failing to opt out” and by continuing 
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to use her accounts, and (2) that the Court failed to consider IUCU’s 
“alternative” argument that the agreements’ modification clauses 
precluded the need for Land’s assent to arbitration. Pet. for Reh’g at 5–6.  
We address these arguments in turn.  
I. This Court did not improperly fail to address the 
supplemental authorities cited by IUCU.  
In its notice of additional authorities, filed during the proceedings on 
transfer, IUCU directed this Court’s attention to two legal authorities—
Cornell v. Desert Financial Credit Union, 524 P.3d 1133 (Ariz. 2023), and 
Section 3 of the Restatement of Consumer Contracts (RCC). Notice at 3. 
These authorities, IUCU explained, specifically supported the arguments 
it had raised in pages 39 through 41 of its appellee’s brief.1 Id. IUCU now 
faults the Court for failing to consider these authorities in our opinion.2 
Pet. for Reh’g at 6–8. But neither Cornell nor Section 3 of the RCC supports 
the arguments IUCU had raised.  
In Cornell, the plaintiff (a bank customer) signed an agreement which 
contained no arbitration clause but expressly allowed the bank to “change 
[the] terms and conditions” of the agreement “from time to time.” 524 
P.3d at 1135. The bank later updated the terms of the agreement by adding 
a mandatory arbitration clause, which customers could opt out of 
(without penalty) by giving notice within a prescribed period. Id. The 
plaintiff, while never having exercised her right to opt out, later filed a 
class-action claim against the bank, alleging illegal overdraft fees. Id. at 
 
1 “When pertinent and significant authorities come to the attention of a party after the party’s 
brief or Petition has been filed, or after oral argument but before decision,” our appellate rules 
allow a party to “promptly file with the Clerk a notice of those authorities setting forth the 
citations.” Ind. Appellate Rule 48. The notice must include “a reference either to the page of 
the brief or to a point argued orally to which the citations pertain, with a parenthetical or a 
single sentence explaining the authority.” Id. 
2 While we appreciate vigorous legal advocacy, we strongly caution IUCU’s counsel against 
the indecorous tone of argument in their rehearing petition. 
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1136. The bank moved to compel arbitration. Id. The plaintiff responded 
by arguing that she never assented to the arbitration clause. Id. In rejecting 
the plaintiff’s argument, the Supreme Court of Arizona adopted Section 3 
of the RCC to hold that a business may modify a contract if (1) the 
contract’s original terms contained an express modification clause; (2) the 
business gave, and the consumer received, reasonable notice of the 
modification and an opportunity to opt out with no penalty; and (3) the 
consumer continued the business relationship past a reasonable opt-out 
period. Id. at 1135 (citing RCC § 3 (Am. L. Inst., Tentative Draft No. 2, 
2022)).  
Importantly, the Cornell court expressly held that its ruling applied 
only to “on-going, at-will, consumer-business relationships” that “consist 
of the day-to-day offer and acceptance of unilateral contracts.” Id. 
(emphasis added); see also RCC § 3 (specifying its applicability to a 
“standard contract term in a consumer contract governing an ongoing 
relationship”). By contrast, the Cornell court emphasized at length, a party 
may not modify the original terms of a bilateral contract—absent an 
express provision for unilateral modification—without an additional offer, 
acceptance, and consideration. 524 P.3d at 1136, 1137–38.  
It would certainly be fair to characterize the relationship between Land 
and IUCU as an “on-going, at-will, consumer-business relationship.” See 
id. at 1135. But IUCU, in that section of its appellee’s brief referred to in its 
notice of additional authorities, disclaimed—repeatedly—its authority 
under the original agreements’ change-in-terms clauses to “unilaterally 
impose the Arbitration [Addendum] on anyone.” Appellee’s Br. at 39. 
Those agreements, IUCU emphasized instead, were “necessarily 
bilateral,” and the issue in this case, IUCU insisted, was “whether the 
parties can enter into a new contractual amendment regarding arbitration 
by establishing the three essential elements of any contract under standard 
contract law—offer, acceptance, and consideration.” Id. at 40, 41 (emphasis 
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added).3 This emphasis on the bilateral nature of the agreements aligns 
with IUCU’s reliance on Section 69 of the Restatement (Second) of 
Contracts, which recognizes a party’s silence as acceptance in only a few 
exceptional circumstances—and which we expressly based our holding 
on. Id. at 37. By contrast, Section 3 of the RCC recognizes silence by 
acceptance as the default rule, so long as the offeree received reasonable 
notice and an opportunity to opt out without penalty and continued 
business with the offeror.  
To be sure, Section 3 of the RCC may very well offer “an effective 
modification procedure that fairly balances the public policies of economic 
efficiency and consumer protection.” See Cornell, 524 P.3d at 1139. And we 
recognize the practical difficulties that businesses may face in securing 
affirmative consent to contract modifications from existing customers. For 
these reasons, we leave open the possibility of adopting Section 3 of the 
RCC in some future case. But, given IUCU’s arguments on appeal and on 
transfer, neither Section 3 of the RCC nor Cornell apply to this case. We 
thus did not improperly fail to consider those authorities.  
II. This Court did not improperly fail to consider 
IUCU’s “alternative” argument on appeal.  
IUCU also faults the Court for failing to consider its “alternative” 
argument that it “properly applied” the agreements’ modification clauses 
“when it added an additional forum of arbitration to an already existing 
term establishing a forum for resolving disputes.” Pet. for Reh’g at 16. 
Those clauses, IUCU insists, “allowed [it] to ‘unilaterally’ amend” the 
agreements’ existing terms “without the need to establish Land’s assent to 
 
3 See also Appellee’s Br. at 40 (insisting that IUCU’s “right to freedom of contract does not 
depend in any way on the ‘change in terms’ clause, nor does that clause . . . serve in any [way] 
to limit IUCU’s or Land’s freedom to enter into new agreements of any type, including 
arbitration agreements”); id. at 41 (relying on “Indiana contract law rather than the ‘change in 
terms’ provision in the Agreement to establish it entered into a new contractual amendment 
requiring arbitration”). 
Indiana Supreme Court | Case No. 23S-CP-115 | February 1, 2024 
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the change.” Id. (citing Appellee’s Br. at 42, 47–48) (bold emphasis added, 
italics omitted).  
We view this claim as nothing more than a variation of IUCU’s first 
argument, signaling a labored attempt to litigate theories that IUCU 
expressly rejected on direct appeal.  
In her appellant’s brief, Land argued that the agreements’ modification 
clauses did not permit IUCU’s unilateral addition of the arbitration 
Addendum. Appellant’s Br. at 35–41. In response, IUCU insisted that it 
was “not relying on the change in terms clause as the basis for its ability 
to add an arbitration provision.” Appellee’s Br. at 45 (emphasis added). 
Instead, IUCU emphasized, it was “relying on standard Indiana contract 
law” and the parties’ “freedom” to contract “to support its ability to enter 
into arbitration agreements with its members.” Id. Thus, IUCU concluded, 
“interpretation of the change in terms clause is irrelevant to the Court’s 
ultimate decision in this case.” Id. (emphasis added). To be sure, if the 
Court were to have found otherwise, IUCU asked us to “reject Land’s 
suggested interpretation” of the change-in-terms clauses. Id. at 46. But 
ultimately, we chose the former option. See Land, 218 N.E.3d at 1287 n. 3 
(declining to address Land’s argument “that the terms of the original 
account Agreement did not permit the unilateral addition of the 
Addendum” because we “resolve[d] this case in her favor on other 
grounds”). So, IUCU can’t now complain that the Court’s opinion 
improperly omitted its “alternative argument” from consideration.4 
 
4 IUCU also argues that subsection 69(1)(a) of the Restatement imposed on Land a duty to opt 
out to avoid assenting to the Addendum and that the parties’ “previous dealings” under 
subsection 69(1)(c) gave Land clear notice that continued use of the account without opting 
out would amount to acceptance. Pet. for Reh’g at 12–14. But IUCU raised no arguments 
under subsection 69(1)(a) in its appellee’s brief or transfer petition, thus waiving the issue on 
rehearing. See Strong v. Jackson, 781 N.E.2d 770, 772 (Ind. Ct. App. 2003). And even if Land had 
“necessarily” agreed in the original contracts “to be bound by any change in terms as long as 
she maintained her banking relationship with IUCU,” Pet. for Reh’g at 11, that arguably 
defeats the purpose of giving her the right to “opt out” of the Addendum. In any case, IUCU, 
to reiterate, repeatedly disclaimed its authority under the original change-in-terms clauses to 
“unilaterally impose the Arbitration Provision on anyone.” Appellee’s Br. at 39.  
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Conclusion 
We recognize the practical difficulties that businesses may face in 
securing affirmative consent to contract modifications from existing 
customers. And for that reason, we leave open the possibility of adopting, 
in some future case, a different standard governing the offer and 
acceptance of unilateral contracts between businesses and consumers. But 
given IUCU’s emphasis on the bilateral nature of the agreements here, and 
its persistent disavowal of authority to unilaterally impose the arbitration 
Addendum, we find no merit in IUCU’s arguments on rehearing. We thus 
affirm our original opinion in full.  
Rush, C.J., and Massa, Slaughter, and Molter, JJ., concur. 
A TT O R N E YS F O R  AP P EL LA N T  
Tyler B. Ewigleben 
Lisa M. LaFornara 
Vess A. Miller 
Lynn A. Toops 
Cohen & Malad, LLP 
Indianapolis, Indiana 
Matthew R. Gutwein 
DeLaney & DeLaney LLC 
Indianapolis, Indiana 
John Steinkamp 
John Steinkamp & Associates, P.C. 
Indianapolis, Indiana 
A TT O R N E YS F O R  AP P EL LE E  
James R. Branit 
Phillip G. Litchfield 
Litchfield Cavo LLP 
Chicago, Illinois