UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

JOHN MATHYS,

Plaintiff, 

v.

THE HARTFORD GOLD GROUP, LLC 

d/b/a AMERICAN HARTFORD GOLD 

GROUP and DAVID WOLAN, 

Defendants. 

)

)

)

)

)

)

)

)

)

)

)

20 C 3927

MEMORANDUM OPINION

CHARLES P. KOCORAS, District Judge:

Before the Court is Defendants Hartford Gold Group, LLC (“HGG”) and David 

Wolan’s (“Wolan”) (collectively, “Defendants”) motion to compel arbitration. For the 

following reasons, the Court grants Defendants’ motion.

BACKGROUND

The following facts are taken from the record and are undisputed unless 

otherwise noted.

Plaintiff Mathys is an eighty-three-year-old resident of Chicago, Illinois. Mathys 

is currently retired and was a professor at a private university in Chicago. HGG is a 

California limited liability company with a principal place of business in Los Angeles, 

California. HGG sells precious metals, primarily gold and silver. Defendant Wolan is

a resident and citizen of California. He is a Senior Director of HGG.

Case: 1:20-cv-03927 Document #: 27 Filed: 12/07/20 Page 1 of 10 PageID #:502
2

On December 11, 2018 Mathys invested $35,000 with HGG to purchase gold 

and silver assets. The assets were held with International Depository Services of 

Delaware (“IDS”). Prior to investing in gold and silver assets, Mathys kept his savings 

in three accounts—a traditional individual retirement account (“IRA”), a Roth IRA, and 

a non-retirement account.

Mathys alleges that HGG “commenced an aggressive marketing campaign” to 

solicit additional funds from him in 2019. This included both emails and phone calls. 

Mathys alleges that several of communications “sounded the alarm” of a possible 

collapse of the economy and that the government might seize bank assets. Mathys 

alleges that HGG encouraged him to make investments in gold and silver in order to 

protect his assets. Additionally, Mathys alleges that Wolan called him and encouraged 

him to liquidate his IRA and Roth IRA and invest those assets with HGG.

Mathys ended up making three additional investments with HGG in October 

2019. Mathys’s first investment was for $211,739.00, the second was for $71,406.63, 

and the third was for $286,186.20. Mathys alleges that the values of the coins he

purchased from HGG were false. He says that the actual values of the coins were less 

than half what HGG said they were worth.

Mathys signed identical Shipping and Transactions Agreements (“STAs”) on 

December 12, 2018, and October 29, 2019. The STAs contain an arbitration provision 

which states: 

Case: 1:20-cv-03927 Document #: 27 Filed: 12/07/20 Page 2 of 10 PageID #:503
3

Any dispute, claim, or controversy arising out of this Agreement or 

otherwise between HGG and the Customer, including but not limited to 

the breach, termination, enforcement, interpretation, or validity of this 

Agreement and the scope and applicability of the agreement to arbitrate 

contained in this paragraph, shall be determined by arbitration before the 

Judicial Arbitration and Mediation Service (‘JAMS’) office closest to 

Customer’s principal place of residence before one arbitrator who shall be 

a retired judicial officer. Any claim asserted by the Customer will not be 

joined, for any purpose, with the claim or claims of any other person or 

entity. The arbitration shall be administered by JAMS pursuant to the 

rules promulgated by JAMS. The laws of the state of the residence of the 

Customer shall govern the substantive rights of the parties. The arbitration 

shall be final and binding, and judgment on the award may be entered in 

any court having jurisdiction. Customer understands that by agreeing to 

arbitration, the Customer is waiving all rights to seek remedies in court, 

unless otherwise mandated by federal or state laws. This clause will not 

prohibit the parties from seeking the provisional remedies in any court of 

competent jurisdiction. ANY CLAIM OR LEGAL PROCEEDING 

HEREUNDER SHALL BE FILED WITHIN ONE YEAR OF ITS 

ACCRUAL. BY AGREEING TO ARBITRATE ANY CLAIM OR 

DISPUTE PURSUANT TO THIS PARAGRAPH 12, THE PARTIES 

WAIVE ANY RIGHTS THEY MAY OTHERWISE HAVE TO A 

COURT OR JURY TRIAL. This paragraph shall survive termination 

of this Agreement. 

1:20-cv-3927, Dkt. # 11, Ex. N (emphasis in original).

Based on these facts, Mathys filed a ten count First Amended Complaint on 

August 3, 2020. Mathys alleges breach of contract, fraud, misrepresentation, violations 

of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS § 505/1 

et seq., and seeks declaratory judgment that the arbitration provisions are inapplicable 

and unconscionable. Defendants moved to compel arbitration on August 10, 2020.

Case: 1:20-cv-03927 Document #: 27 Filed: 12/07/20 Page 3 of 10 PageID #:504
4

LEGAL STANDARD

The Federal Arbitration Act (“FAA”) governs the enforceability of arbitration 

clauses in state and federal courts. Jain v. de Méré, 51 F.3d 686, 688 (7th Cir. 1995).

Under the FAA, an arbitration agreement in “a contract evidencing a transaction 

involving commerce . . . shall be valid, irrevocable, and enforceable, save upon such 

grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2.

The Court must grant a motion to compel arbitration under the FAA where the parties 

have a written arbitration agreement and the asserted claims are within its scope. 9 

U.S.C. §§ 3-4; Sharif v. Wellness Int'l Network, Ltd., 376 F.3d 720, 726 (7th Cir. 2004).

In deciding a motion to compel arbitration, the Court’s duty is to determine whether the 

parties’ dispute belongs in arbitration, not to rule on the potential merits of the 

underlying claim. AT&T Techs., Inc. v. Communs. Workers of Am., 475 U.S. 643, 649 

(1986).

If a court “determines that the making of the arbitration agreement is seriously 

disputed, ‘the court shall proceed summarily to the trial thereof.’” Tinder v. Pinkerton 

Security, 305 F.3d 728, 735 (7th Cir. 2002) (quoting 9 U.S.C. § 4). “The party opposing 

arbitration must identify a triable issue of fact concerning the existence of the agreement 

in order to obtain a trial on the merits of the contract.” Id. Although the “the FAA does 

not expressly identify the evidentiary standard a party seeking to avoid compelled 

arbitration must meet,” the Seventh Circuit has “analogized the standard to that required 

of a party opposing summary judgment under Rule 56(e).” Id.

Case: 1:20-cv-03927 Document #: 27 Filed: 12/07/20 Page 4 of 10 PageID #:505
5

DISCUSSION

Defendants argue that Mathys’s claims should be submitted to arbitration due to 

the mandatory arbitration agreements in the STAs, which include delegation clauses 

requiring the arbitrator to determine the scope and applicability of the arbitration 

agreements. Mathys first argues that Wolan cannot invoke the arbitration agreements

because he is not a party to the STAs. Second, Mathys argues that the delegation clauses

are procedurally and substantively unconscionable. Third, Mathys argues that the 

issues here fall outside the scope of the arbitration agreement. We address each of 

Mathys’s arguments in turn.

I. Wolan’s Ability to Invoke Arbitration Agreements

Mathys first argues that Wolan cannot invoke the arbitration clauses because he 

was not a party to the STAs. We disagree.

“[T]here are five doctrines through which a non-signatory can be bound by 

arbitration agreements entered into by others: (1) assumption; (2) agency; (3) estoppel; 

(4) veil piercing; and (5) incorporation by reference.” Zurich Am. Ins. Co. v. Watts

Indus., Inc., 417 F.3d 682, 687 (7th Cir. 2005). Mathys’s argument focuses on the 

second doctrine—agency. “Under traditional agency theory, because a principal is 

bound under the terms of a valid arbitration clause, its agents, employees, and 

representatives are also covered under the terms of such agreements.” Denari v. Rist, 

2011 WL 332543, *9 (N.D. Ill. 2011) (quoting Pritzker v. Merrill Lynch, Pierce, Fenner

& Smith, Inc., 7 F.3d 1110, 1121 (3rd Cir.1993)) (cleaned up).

Case: 1:20-cv-03927 Document #: 27 Filed: 12/07/20 Page 5 of 10 PageID #:506
6

The Seventh Circuit has held that a customer must arbitrate claims against both 

a company and its employees, even if the employees are not express parties to the 

arbitration agreement. Dunmire v. Schneider, 481 F.3d 465, 467 (7th Cir. 2007). In 

Dumnire, the plaintiff argued that the arbitration agreement did not mention the 

employees of the company, Morgan Stanley, and therefore he did not have to arbitrate 

his claims against the employees. Id. The Seventh Circuit disagreed, saying that 

“courts regularly treat employees as third-party beneficiaries of arbitration clauses . . .” 

Id. (collecting cases). Additionally, the Seventh Circuit noted that “[i]t would make 

little sense for a customer to arbitrate Morgan Stanley's liability while simultaneously 

litigating with the employees” because the employees “dealt with [the plaintiff] on 

behalf of a disclosed principal.” Id. Therefore, the Seventh Circuit concluded that the

arbitration clause applied to the Morgan Stanley employees and that the customer must

arbitrate his claims against both the company and its employees. Id.

Here, it is undisputed that Wolan was an employee of HGG at the time the STAs 

were signed. Wolan communicated with Mathys using official HGG letterheads with 

the intent to sell HGG’s products to Mathys. Mathys’s claims are that HGG, through 

Wolan, mislead him into purchasing precious metals. Thus, HGG’s liability is 

dependent on Wolan’s actions and it would make little sense for Mathys to arbitrate 

with HGG while simultaneously litigating with Wolan. Accordingly, Wolan may 

invoke the arbitration agreement.

Case: 1:20-cv-03927 Document #: 27 Filed: 12/07/20 Page 6 of 10 PageID #:507
7

II. Unconscionability

Mathys argues that the arbitration agreements and delegation clauses are both 

procedurally and substantively unconscionable. We address each in turn.

a. Procedural Unconscionability

Mathys argues that the arbitration agreements are procedurally unconscionable 

because they were written in small font, he did not discuss the documents with a lawyer, 

and he lacked capacity to assent to the arbitration clauses. We disagree.

“Procedural unconscionability consists of some impropriety during the process

of forming the contract depriving a party of meaningful choice.” Phoenix Ins. Co. v.

Rosen, 242 Ill. 2d 48, 60 (2011) (cleaned up). This can occur when “a term is so difficult 

to find, read, or understand that the plaintiff cannot fairly be said to have been aware he 

was agreeing to it.” Bess v. DirecTV, Inc., 381 Ill. App. 3d 229, 237 (1st Dist. 2008). 

Factors to be considered “include whether each party had the opportunity to understand 

the terms of the contract, whether important terms were ‘hidden in a maze of fine print,’ 

and all of the circumstances surrounding the formation of the contract.” Phoenix Ins. 

Co., 242 Ill. 2d at 60.

Mathys first argues that the arbitration agreements were in small, single spaced 

font. However, the arbitration agreements are the same size and font as the rest of the 

provisions of the STAs. In fact, parts of the arbitration agreements were bolded and in 

all capitals in order to call attention to it. Mathys also initialed the bottom of the page 

just below the arbitration agreement indicating that he had read and agreed to the terms 

Case: 1:20-cv-03927 Document #: 27 Filed: 12/07/20 Page 7 of 10 PageID #:508
8

on that page. Thus, the arbitration clauses were not so inconspicuous as to make the 

arbitration clauses procedurally unconscionable. See Bess, 381 Ill. App 3d at 240 (no 

procedural unconscionability where portions of the arbitration clause were bolded).

Next, Mathys argues that the arbitration agreements are unconscionable because 

he did not consult with an attorney before signing the STAs. However, Mathys had 

opportunity to consult with counsel and he chose not to. HGG recommended that he 

consult with counsel and gave him opportunity to do so. This was even in bold type at 

the very beginning of STAs. Despite this, Mathys chose not to consult with his attorney. 

Therefore, Mathys failing to consult with his attorney under these circumstances does 

not make the arbitration clauses procedurally unconscionable.

Lastly, Mathys argues that the arbitration agreements are unconscionable 

because he lacked capacity to enter into the agreements. Mathys argues that he lacked 

capacity to enter into only to the arbitration agreements and not to the STAs as a whole. 

In fact, his breach of contract claim relies on the existence of a valid and enforceable

contract. However, “a mental capacity challenge can logically be directed only at the 

entire contract.” Spahr v. Secco, 330 F.3d 1266, 1273 (10th Cir. 2003). The arbitrator 

must decide this issue as the arbitration agreements expressly state that the arbitrator 

must determine the validity of the contracts and arbitration agreements. Accordingly,

Mathys’s procedural unconscionability arguments fail.

Case: 1:20-cv-03927 Document #: 27 Filed: 12/07/20 Page 8 of 10 PageID #:509
9

b. Substantive Unconscionability

Mathys argues that the delegation clauses are substantively unconscionable 

because he cannot afford to pay the costs of arbitration.1 We disagree.

“Substantive unconscionability refers to those terms which are inordinately onesided in one party's favor.” Crown Mortg. Co. v. Young, 2013 IL App (1st) 122363, ¶ 

7. “Indicative of substantive unconscionability are contract terms so one-sided as to 

oppress or unfairly surprise an innocent party, an overall imbalance in the obligations 

and rights imposed by the bargain, and significant cost-price disparity.” Sanchez v.

CleanNet USA, Inc., 78 F. Supp. 3d 747, 755 (N.D. Ill. 2015).

JAMS rules allow the parties to agree on an allocation of fees and expenses 

different from the allocation set forth by JAMS rules. JAMS R. 31(a). HGG has offered 

to attempt reach an agreement to make the arbitration process more affordable to 

Mathys. The Court sees no reason to believe this offer is not made in good faith. 

Additionally, there is no evidence that JAMS would go far as to rule that the dispute is 

within the scope of the arbitration agreements solely to receive fee payments, as Mathys 

asserts. Accordingly, Mathys’s substantive unconscionability argument fails. See Bess, 

381 Ill. App. 3d at 244 (finding that arbitration was not cost-prohibitive and therefore 

 1 Mathys moves to strike HGG’s argument involving the price of the home in which he lives. HGG argued 

that the value of Mathys’s home proves that he can afford arbitration. In support of that argument, HGG 

provided a screenshot of a Zillow.com listing for the address where Mathys lives. We grant Mathys’s

motion as the information may be misleading and the evidence shows that Mathys does not even own the 

home.

Case: 1:20-cv-03927 Document #: 27 Filed: 12/07/20 Page 9 of 10 PageID #:510
10

the arbitration clause was not substantively unconscionable); see also Davis v. Fenton, 

26 F. Supp. 3d 727, 739 (N.D. Ill. 2014) (similar).

The STAs clearly and unmistakably require that the arbitrator determine the 

validity of the contracts and the scope and applicability of the arbitration agreements. 

See AT&T Techs., Inc. v. Commc'ns Workers of Am., 475 U.S. 643, 649 (1986) (“Unless 

the parties clearly and unmistakably provide otherwise, the question of whether the 

parties agreed to arbitrate is to be decided by the court, not the arbitrator.”); First

Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943 (1995) (arbitrator must decide 

the issue of arbitrability if the parties clearly and unmistakably agreed to do so); 

Employers Ins. Co. of Wausau v. Century Indem. Co., 443 F.3d 573, 576 (7th Cir. 2006) 

(similar). Accordingly, HGG’s motion to compel arbitration is granted.

CONCLUSION

For the reasons mentioned above, the Court grants Defendants’ motion to compel 

arbitration (Dkt. # 13). Mathys is ordered to proceed with his claims in arbitration. 

Additionally, Mathys’s motion to strike is granted (Dkt. # 19). Any remaining pending 

motions are denied as moot. Civil case terminated. It is so ordered.

Dated: 12/07/2020

________________________________

Charles P. Kocoras

United States District Judge

Case: 1:20-cv-03927 Document #: 27 Filed: 12/07/20 Page 10 of 10 PageID #:511