Title: Porter v. AT&T Mobility, LLC

State: vermont

Issuer: Vermont Supreme Court

Document:

Porter
v. AT&T Mobility, LLC (2010-308)
 
2011
VT 112
 
[Filed
19-Sep-2011]
ENTRY ORDER
 
2011 VT 112
 
SUPREME COURT DOCKET NO. 2010-308
 
MARCH
  TERM, 2011
 
Pike
  Porter
}
APPEALED
  FROM:
 
}
 
 
}
 
    
  v.
}
Superior
  Court, Chittenden Unit,
 
}
Civil
  Division
 
}
 
AT&T
  Mobility, LLC
}
DOCKET
  NO. S1500-09 CnC
 
 
 
 
 
Trial
  Judge: Helen M. Toor
 
In the above-entitled cause,
the Clerk will enter:
 
¶
1.     
Defendant AT&T
Mobility, LLC appeals the trial court's denial of its motion to compel
arbitration.  AT&T claims the trial court erred by ruling that
AT&T had not been assigned plaintiff Pike Porter's cell phone contract
before sending him unsolicited text messages and erred in failing to hold an
evidentiary hearing on this issue.  AT&T also argues that even if
Porter's claims arose before AT&T purchased his contract,
the trial court erred as a matter of law in holding that AT&T cannot
enforce the binding arbitration agreement in Porter's original cell phone
contract.  We affirm.  
¶
2.     
The basic facts
are uncontested.  In July 2007, Unicel entered into a merger agreement
with Verizon Wireless.  In order to receive state and federal approval for
this merger, Verizon agreed to sell certain Unicel assets to AT&T.  In
December 2008, AT&T purchased around 100,000 to 150,000 contracts between
Vermont consumers and Unicel from Verizon.  By
December 22, 2008, AT&T had completed the acquisition of Unicel's Vermont
assets.  As part of the transition from Unicel's network to AT&T's
network, Unicel customers were informed, beginning in early 2009, that they had
become AT&T's customers.  AT&T further informed these "legacy"
Unicel subscribers that their Unicel service would shut down on December 22,
2009, and that they had the option of subscribing with AT&T.  Much of
this communication was accomplished through text messages and letters.
¶
3.     
Porter entered
into a contract with Unicel for wireless service in July 2007 in Burlington. 
In March 2009, he received three unsolicited text messages from AT&T. 
Shortly thereafter, the Vermont Office of the Attorney General sent AT&T a
letter informing AT&T that its messages to Porter had violated federal and
state "do not call" regulations.  Over the course of the next several
months, Porter continued to receive unsolicited text messages from
AT&T.  During these same months, a representative of AT&T's Office
of the President spoke with Porter and assured him his number would be placed on
AT&T's "do not call" list.  This same representative also sent the
Attorney General's Office two faxes, roughly a month apart, which both stated:
"AT&T reviewed Mr. Porter's complaint and found Mr. Porter is a
non-AT&T customer.  AT&T added Mr. Porter's mobile telephone
number to the Do Not Contact Me list with AT&T."  Porter continued to
receive text messages after these faxes were sent.  In November 2009,
Porter signed a contract for wireless service with AT&T.
¶
4.     
On November 18,
2009, Porter filed suit in superior court alleging AT&T's unsolicited text
messages violated 47 U.S.C. § 227 and the Federal Communications Commission's
rules that govern telephone solicitations and unsolicited advertisements. 
He demanded $476,000 in damages.[1] 
In response, AT&T filed a motion to compel arbitration and dismiss the
complaint, relying on the "Right to Elect Arbitration" clause contained in
Porter's contract with Unicel.  AT&T submitted several documents in
support of the motion, including a copy of Porter's original Unicel contract
containing the arbitration clause and a supporting affidavit from one of its
employees.  The contract, dated in July 2007, stated that Porter agreed to
"have any claim, dispute or controversy . . . of any
kind . . . arising out of or relating to . . . any prior or future dealings
between" Porter and Unicel or its "assignees" or "successors" "resolved by
binding arbitration."  Porter had also specifically indicated he had read
this arbitration clause by signing his initials.  The employee affidavit
averred that Porter "became a customer of [AT&T] in November 2009." 
AT&T argued that because Porter was beholden to the arbitration agreement,
AT&T owned his Unicel contract, and his claims fell within the agreement's
language, he was required to arbitrate.  The trial court denied AT&T's
motion based on "the undisputed fact [contained in AT&T's affidavit] that
Porter did not become a customer of AT&T" until November 2009, after it
sent the offending text messages.  The court also noted that the
arbitration agreement could not bind Porter "with regard to events between him
and AT&T that took place at a time when his only contract was with Unicel,
not AT&T."
¶
5.     
In response,
AT&T filed a motion to amend the findings and order and to reconsider the
judgment.  AT&T argued that it had acquired Unicel's assets in the
Vermont marketincluding Porter's account with Unicelin December 2008. 
In support of this proposition AT&T attached several press releases about
the Unicel purchase and a copy of the "Assurance of Discontinuance," the
written agreement, approved by the Vermont Attorney General's office, outlining
AT&T's purchase of Unicel's assets.  The press releases stated that as
of December 22, 2008, AT&T "completed acquisition of the Vermont assests of
[Unicel]" and that it "acquired some former [Unicel] properties
. . . including licenses, network assets and subscribers, in
the Burlington, Vt. metropolitan service area."  The Assurance document
explained that Verizon had agreed "to divest its wireless businesses in six
cellular market areas, including all of Vermont" and this agreement "was
incorporated into a Final Judgment entered on April 23, 2009."  It further
explained that "pursuant to a December 2, 2008, Purchase Agreement, . . . [AT&T purchased] certain Unicel
assets, including between 100,000 and 150,000 contracts between Vermont
Consumers and Unicel."  Upon this evidence the trial court again denied
AT&T's motion to compel arbitration because the newly submitted materials
"state that AT&T acquired 100,000 and 150,000 contracts between Vermont
Consumers and Unicel,' but [do] not establish that the acquisition included all
Vermont Unicel contracts, or Mr. Porter's in particular."  AT&T
appealed.  See 12 V.S.A. § 5681(a)(1) (permitting
direct appeal from "an order denying an application to compel arbitration").
¶
6.     
AT&T's central
claim on appeal is that the trial court erred in holding that Porter's Unicel
contract had not been assigned to AT&T until November 2009 because the
evidence AT&T provided suggested that it acquired all of Unicel's contracts
in December 2008.  AT&T posits that the contract at issue "evidences
a transaction involving commerce,' " and as such this court should
presume that the Federal Arbitration Act (FAA) governs this dispute.  Little
v. Allstate Ins. Co.¸ 167 Vt. 171, 172, 705 A.2d 538, 540 (1997) (quoting 9
U.S.C. § 2).  Porter does not challenge this assertion, and we assume
without deciding that this is the case.[2] 
Under the FAA, a court reviewing the denial of a motion to compel arbitration
does so de novo, under a standard akin to a summary judgment motion.  See,
e.g., Bensadoun v. Jobe-Riat, 316 F.3d 171, 175 (2d Cir. 2003) (noting
courts apply "standard similar to that applicable for a motion for summary
judgment" when addressing motions to compel arbitration); Commonwealth v.
Philip Morris Inc., 864 N.E.2d 505, 511 (Mass. 2007) (determining, under
FAA, that review of denial of motion to compel should be de novo).
¶
7.     
Under this
standard, we must determine whether AT&T met its burden in proving it was
assigned Porter's contract before sending him the offending text.  See In
re Mercury Constr. Corp., 656 F.2d 933, 939 (4th Cir. 1981) (noting that
party seeking arbitration must establish making of arbitration
agreement).  AT&T highlights four pieces of evidence it submitted
along with its motion to amend and reconsider as "undisputed" proof that it
purchased Porter's contract in December 2008.  First, AT&T points to
the "Assurance of Discontinuance" it filed with the Vermont Attorney General's
office.  This document states that Verizon agreed "to divest its wireless
businesses in six cellular market areas, including all of Vermont."  It
also included a purchase agreement dated December 2, 2008 concerning "certain
Unicel assets, including between 100,000 and 150,000 contracts between Vermont
Consumers and Unicel."  This document does not establish that Porter's
contract was one of the 100,000 to 150,000 contracts sold, nor does it suggest
that "certain Unicel assets" include all of the wireless contracts Unicel held
in Vermont.  
¶
8.     
AT&T's
remaining evidence is equally unpersuasive.  It suggests that two press
releases also support its contention, yet neither state that Unicel assigned all
of its Vermont wireless contracts to AT&T in December 2008.  Likewise,
AT&T relies on an affidavitthe only sworn document providedfrom the
custodian of its legacy contracts, who stated that Porter's contract was among
those acquired during the Unicel merger.  Yet the only contract date the
affidavit provides is unequivocal: "[Porter] became a customer of [AT&T] in
November 2009."  Cf. U.S. Bank Nat'l Ass'n v. Kimball, 2011 VT 81,
¶ 16, ___ Vt. ___, ___ A.3d ___ (affirming dismissal of foreclosure action
because plaintiff bank filed "contradictory and uncertain
documentation" in support of its ownership claim such that "there was no
evidence to show that [the bank] was a holder of the note at the time it filed
the complaint.").  Finally, AT&T points to an undated letter it sent
Porter informing him that AT&T had acquired his Unicel account.  It is
unclear how an undated letter helps clarify the date when AT&T took over
Porter's account.  Nowhere, in any of its submissions to the trial court,
did AT&T provide clear evidence, in any form, that it was assigned Porter's
contract or that it purchased all of the contracts of Unicel's Vermont customers
before November 2009.  Its argument to the contrary is little more than a
"bald assertion."  In re Shenandoah LLC, 2011 VT 68, ¶ 17, ___ Vt.
___, ___ A.3d ___ (dismissing plaintiff's argument that its affidavits
supported judgment in its favor where documents provided merely conclusory
facts).
¶
9.     
As a corollary to
this main argument, AT&T also claims that once the trial court discerned
that there was ambiguity as to when Porter's contract was assigned to AT&T,
the court should have held a hearing on that issue.  In support of this
argument, it points to the FAA and the Vermont Arbitration Act, which both
direct a court to summarily determine whether the making of a contract is in
dispute.  See 9 U.S.C. § 4 ("If the making of the arbitration agreement . . . be in issue, the court
shall proceed summarily to the trial thereof."); 12 V.S.A. § 5674(c)
("When the existence or validity of an agreement to arbitrate . . .
is in substantial and bona fide dispute, the court shall proceed summarily to
the determination of the issue.").  What AT&T fails to explain is how
it was prejudiced by the lack of this hearing.  After the trial court
denied its motion to compel, AT&T submitted additional evidence along with
its motion to reconsider.  The court expressly considered this new
evidence and denied this second motion, finding insufficient evidence to
support AT&T's contention, not an ambiguity in the contract.  What
AT&T appears to request is a third bite at the apple.  This we shall
not permit.
¶
10.   Finally, AT&T argues that,
as a matter of law, it can still enforce the arbitration agreement contained in
the contract, even if the exact date of assignment was not fixed, because
AT&T is now the undisputed assignee of Unicel and thus can step into
Unicel's shoes and invoke all of the contractual rights that Unicel would have
had.  It bases this assertion on contract law and the text of the
arbitration clause, which reads, in part:
         
(2) BINDING ARBITRATION: (a) RIGHT TO ELECT TO ARBITRATE: We (including our
assignees, . . . predecessors and successors) or you may elect to
have any claim, dispute or controversy ("Claim") of any kind (whether in
contract, tort or otherwise) arising out of or relating to your Service or this
agreement . . . , any goods or services provided to you, any billing
disputes between you and us, or any prior or future dealings between you and us
resolved by binding arbitration.  
AT&T
claims that as an "assignee" or "successor" of Unicel, a party to the original
contract, it has the right to elect to arbitrate a claim, even
one arising out of conduct it may have undertaken before it was assigned the
contract, because such a claim involves a "prior dealing."
¶
11.   We need not comb volumes of law
to answer this request in the negative.  In reviewing a contract, we "give
effect to the intent of the parties as it is expressed in their writing." 
Southwick v. City of Rutland, 2011 VT 53, ¶ 4, ___ Vt. ___, ___ A.3d
___.  The key provision of the contract states that claims "arising out of . . . any prior or future dealings between you
and us [may be] resolved by binding arbitration."  While AT&T, as
Unicel's assignee and successor, certainly took "whatever interest the assignor
possessed" when it assumed Porter's contract, In re Ambassador Ins. Co.,
2008 VT 105, ¶ 19, 184 Vt. 408, 956 A.2d 486, that "interest" did not include
the ability to compel arbitration between Porter and AT&T.  At the
time AT&T sent Porter the offending text messages, AT&T was notbased
on the evidence it submitteda party to the contract.  Unicel could not
have forced Porter to arbitrate his clams against an unrelated third party, and
AT&T does not so argue.  The "prior dealings" referenced in the clause
refer to earlier business transactions between the contracted parties. 
See Black's Law Dictionary 457 (9th ed. 2009) (defining "deal"
as "[t]o transact business with (a person or entity)").  Plainly
the interaction between AT&T and Porter was not of this nature. 
AT&T's citations on this point are unavailing.
Affirmed.
 
 
BY THE COURT:
 
 
 
 
 
 
 
Paul L. Reiber, Chief Justice
 
 
 
 
 
John A. Dooley, Associate Justice
 
 
 
 
 
Denise R. Johnson, Associate Justice
 
 
 
 
 
Marilyn S. Skoglund, Associate Justice
 
 
 
 
 
Brian L. Burgess, Associate Justice
 
 
 

[1]  In February 2010, Porter filed a
second suit under substantially the same facts alleging violations of Vermont's
Consumer Fraud Law, 9 V.S.A. § 2464a, and demanding $110,000 in
damages.  The parties have since settled this claim.  
[2]  We take no position on whether the
standard of review would be different if the trial court had held a hearing and
taken evidence on the issue of formation rather than basing its ruling on the
documents defendant submitted.  Cf., e.g., Stenzel v.
Dell, Inc., 2005 ME 37, ¶ 6, 870 A.2d 133 ("We review a trial court's
decision on a motion to compel arbitration for errors of law and for facts not
supported by substantial evidence in the record." (quotation
omitted)).