Court Opinion

ID: 9375945
Source: CourtListenerOpinion
Date Created: 2023-03-01 15:04:32.111441+00
Date Added: 2024-06-11T17:17:02.984454
License: Public Domain

Cite as 2023 Ark. App. 117
                  ARKANSAS COURT OF APPEALS
                                       DIVISION II
                                       No. CV-21-33

 ALTICE USA, INC., D/B/A                       Opinion Delivered March   1, 2023
 SUDDENLINK COMMUNICATIONS
                                           APPEAL FROM THE CLARK
                                           COUNTY CIRCUIT COURT
                                 APPELLANT [NO. 10CV-20-96]

 V.                                            HONORABLE C.A. BLAKE BATSON,
                                               JUDGE
 RONNIE FRANCIS AND DEBBIE
 FRANCIS
                      APPELLEES REVERSED AND REMANDED

                            CINDY GRACE THYER, Judge

      The appellant, Altice USA, Inc., does business in Arkansas as Suddenlink

Communications (Suddenlink). Suddenlink provides cable television, internet, and

telephone services to subscribing customers throughout Arkansas. Appellees Ronnie Francis

and Debbie Francis filed a complaint in the Clark County Circuit Court alleging that they

were entitled to damages for alleged breach of contract and violations of the Arkansas

Deceptive Trade Practices Act.

      Suddenlink unsuccessfully moved to compel arbitration in circuit court, and pursuant

to Arkansas Code Annotated section 16-108-228 (Repl. 2016) and Rule 2(a)(12) of the
Arkansas Rules of Appellate Procedure–Civil, it now takes this appeal. As we do in four

other cases that we decide today on similar facts, we reverse and remand.1

                                    I. Factual Background

       The Francises subscribed to Suddenlink’s internet and television services on a month-

to-month basis. On July 29, 2020, they filed a complaint alleging that they “regularly

experience service problems and outages,” and in the last year, had lost service “dozens of

times.” The Francises also claimed that Suddenlink regularly imposed late fees on their

account “even though [they had] made timely monthly payments[.]” They said that their

monthly bill inexplicably increased seventy dollars in April 2020, and several attempts to

contact Suddenlink—even through the Federal Communications Commission—were

unsuccessful. They further alleged that despite their timely payments, Suddenlink

disconnected their service in July 2020 without prior notice, forcing them to pay additional

reconnection fees. The Francises also claimed that they never received a discount or credit

to compensate them for the outages that they experienced. They asserted that, as a result,

they were entitled to damages for alleged violations of the Arkansas Deceptive Trade

Practices Act and for breach of contract.

       Suddenlink moved to compel arbitration on September 3, 2020, claiming it had a

valid arbitration agreement with the Francises. Its arguments in the Francis case were nearly

       1
       See Altice USA, Inc. v. Johnson, 2023 Ark. App. 120; Altice USA, Inc. v. Peterson, 2023
Ark. App. 116; Altice USA, Inc. v. Campbell, 2023 Ark. App. 123; Altice USA, Inc. v. Runyan,
2023 Ark. App. 124.

                                              2
identical to those it made in its motion to compel arbitration in Altice USA, Inc. v. Peterson,

2023 Ark. App. 116, which we also decide today. Specifically, Suddenlink offered proof that

Ms. Francis signed an installation work order (including the same acknowledgment that she

had read and agreed to the general terms and conditions that the service technician provided

on an iPad or iPhone) when the Francises transferred their service to a new address on

February 25, 2020. Suddenlink also argued that the Francises had confirmed their agreement

to binding arbitration when they paid their monthly bills from January 2020 to July 2020,

as those bills provided that payment of the bill confirmed their acceptance of the Residential

Services Agreement (RSA) viewable on Suddenlink’s website.

       The Francises filed a response to Suddenlink’s motion to compel arbitration on

September 16, 2020. The Francises claimed that they never agreed to submit to arbitration

and that Suddenlink had failed to offer proof—as they said it must—of any written agreement

between the parties. In support of their response, Ms. Francis executed an affidavit in which

she acknowledged that a technician came to their new home to transfer their internet and

television service. She claimed that the technician “was there about ten minutes and then

left” and that “he did not give us any paperwork of any kind.” Ms. Francis also testified that

she reviewed the installation work order bearing her signature but did not “remember ever

seeing that document and . . . never got a copy of it.” Ms. Francis concluded her affidavit by

declaring that “she never agreed to arbitrate any dispute with Suddenlink,” and “no one

from Suddenlink has ever mentioned arbitration to me.”

                                              3
       The circuit court denied Suddenlink’s motion to compel arbitration in an order

entered on December 14, 2020. Suddenlink now appeals this order, arguing that the

Francises manifested their agreement to the arbitration provision when they paid monthly

invoices referring them to the Residential Services Agreement (RSA) on its website.

Suddenlink also asserts that the claims that the Francises filed in the circuit court are within

the arbitration agreement.2

       The Francises respond that the circuit court did not err when it denied Suddenlink’s

motion to compel arbitration. First, they insist that they had no reason to believe that they

were under contract with Suddenlink because the provider routinely advertises that it offered

its services on a “no contract” basis and because there was no proof that they assented to a

written agreement to arbitrate. The Francises further contend that their payment of their

monthly bills falls short of manifesting their assent because they are not contracts. According

to the Francises, the bills contain only “unexplained charges which Suddenlink claims to be

owed,” and they “impose no obligation on Suddenlink[.]” The Francises also claim that the

bills fail to unequivocally incorporate the terms of the RSA—even if they could be considered

contracts themselves.

       2
        As we do in Altice USA, Inc. v. Peterson, 2023 Ark. App. 116, we address Suddenlink’s
argument concerning the scope of the arbitration agreement because it briefed the issue
below and because the circuit court did not make any specific findings in support of its denial
of the motion to compel arbitration. See Asset Acceptance, LLC v. Newby, 2014 Ark. 280, at
6–7, 437 S.W.3d 119, 123.

                                               4
       The Francises alternatively argue that even if they manifested their assent to the RSA,

the arbitration clause is unenforceable for several reasons. First, they contend that the RSA

as a whole lacks mutuality of obligation because it reserves to Suddenlink “the right to

unilaterally change any portion of the terms at any time” and imposes a host of obligations

on subscribers that it does not also impose on Suddenlink. The arbitration clause itself also

lacks mutuality of obligation because, according to the Francises, other terms in the RSA

allow Suddenlink to bypass arbitration in favor of charging late fees; terminating service;

referring accounts to collection agencies; and limiting the customer’s ability to dispute

charges. The Francises also suggest that the arbitration clause is substantively and

procedurally unconscionable and that Suddenlink has failed to establish that its franchise

agreement with the city of Arkadelphia “would allow it to force Arkadelphia citizens into

arbitration.”

                                     II. Standards of Review

       “Arkansas strongly favors arbitration as a matter of public policy” as “a less expensive

and more expeditious means of settling litigation and relieving docket congestion.” Jorja

Trading, Inc. v. Willis, 2020 Ark. 133, at 2, 598 S.W.3d 1, 4. We review denials of motions to

compel arbitration “de novo on the record.” Id. at 3, 598 S.W.3d at 4. That generally means

that this court “is not bound by the circuit court’s decision, but in the absence of a showing

that the circuit court erred in its interpretation of the law, this court will accept its decision

as correct on appeal.” Erwin-Keith, Inc. v. Stewart, 2018 Ark. App. 147, at 9, 546 S.W.3d 508,

512.

                                                5
        Arbitration agreements are governed by the Federal Arbitration Act (FAA), which

makes them “valid, irrevocable, and enforceable, save upon such grounds as exist at law or

in equity for the revocation of any contract.” Jorja Trading, 2020 Ark. 133, at 3, 598 S.W.3d

at 4 (quoting 9 U.S.C. § 3). “The primary purpose of the FAA is to ensure that private

agreements to arbitrate are enforced according to their terms,” and “any doubts and

ambiguities will be resolved in favor of arbitration.” Id. (internal citations and quotation

marks omitted).

        In deciding whether to grant a motion to compel arbitration, two threshold questions

must be answered. Courtyard Gardens Health and Rehab., LLC v. Arnold, 2016 Ark. 62, at 7,

485 S.W.3d 669, 674. The first question is whether there is a valid agreement between the

parties. Id. If such an agreement exists, the second question is whether disputes fall within

the scope of the agreement. Id.

        “When deciding whether the parties agreed to arbitrate a certain matter, ordinary

state-law principles governing contract formation apply.” Id. at 3, 598 S.W.3d at 4–5. “In

Arkansas, the essential elements of a contract are: (1) competent parties; (2) subject matter;

(3) consideration; (4) mutual agreement; and (5) mutual obligations.” Id. at 4, 598 S.W.3d

at 5.

                                        III. Discussion

                                  A. Agreement to Arbitrate

        Suddenlink first argues that the circuit court erred by denying its motion to compel

arbitration because it demonstrated that it had a valid agreement to arbitrate with Mr. and

                                              6
Ms. Francis. Specifically, Suddenlink contends that the Francises manifested their agreement

to the terms and conditions in the RSA, including the arbitration provision, when they paid

their monthly invoices directing them to the RSA on Suddenlink’s website. We agree.

       This case is controlled by our contemporaneous decision in Altice USA, Inc. v. Johnson,

2023 Ark. App. 120. There, we held that Ms. Johnson assented to the terms and conditions

in the RSA when she paid her monthly invoices, which, like the invoices at issue here,

directed Ms. Johnson to the RSA on Suddenlink’s website and provided that payment of her

bill was confirmation of her agreement to those terms. Consequently, we apply Johnson here

to hold that the Francises, who did not dispute paying the invoices they received from

Suddenlink from January 2020 to July 2020, manifested their assent to the terms of the RSA,

including the arbitration provision.

                 B. Defenses to Enforcement of the Arbitration Agreement

       We also hold, in light of our decision in Johnson, that the Francises’ defenses against

enforcement of the arbitration provision are without merit. That is, Johnson directs our

conclusion that the RSA, as it appears on Suddenlink’s website, meets the FAA’s

requirement that arbitration provisions must be written. See id. at 11–12. Johnson also

compels our holding that the absence of a signed writing does not violate a recent

amendment to the statute of frauds. See id. at 12–13. Johnson further directs our conclusions

that the Francises’ challenges to the mutuality of obligation supporting the RSA as a whole

(and its alleged unconscionability) are outside the scope of our review, see id. at 14–15, and

                                              7
that their argument based on Arkadelphia’s franchise agreement with Suddenlink lacks

merit. See id. at 18.

       That leaves the Francises’ arguments concerning the alleged lack of mutuality of

obligation in the arbitration agreement itself, which we perceive to be the same as the

challenge we rejected in Altice USA Inc. v. Peterson, 2023 Ark. App. 116, as well as the alleged

unconscionability of the arbitration clause, which is dependent on our examination of the

proof admitted in this particular case. We find both to be without merit. 3

       As we observe in Johnson and Peterson, “[m]utuality of obligations means an obligation

must rest on each party to do or permit to be done something in consideration of the act or

promise of the other; thus, neither party is bound unless both are bound.” Jorja Trading, 2020

Ark. 133, at 4, 598 S.W.3d at 5 (internal quotation marks omitted). “It requires that the

terms of the agreement impose real liability upon both parties.” Id. “[A] contract that

provides one party the option not to perform his promise would not be binding on the

other.” Id.

       The Francises’ argument against the mutuality of the arbitration provision must meet

the same fate as the appellee’s argument in Peterson. As we state there, the fact that

Suddenlink may use other measures to resolve disputes before resorting to arbitration,

including late fees, cancellation, and collection, has no relevance to our analysis—which looks

       3
        The breach-of-contract claim in the Francises’ complaint affirms the existence of a
contract with Suddenlink and, in our view, suffices to reject their argument based on
Suddenlink’s “no contract” advertising.

                                               8
only at the terms of the arbitration agreement itself. See Peterson, 2023 Ark. App. 116, at 9.

Further, as we observe in Johnson, 2023 Ark. App. 120, at 16, those terms do not operate to

shield only Suddenlink from litigation. The terms allow both Suddenlink and the subscriber

to file their disputes in small claims court in appropriate cases, and each must otherwise

submit to arbitration. Therefore, we find no merit to the Francises’ argument challenging

the mutuality of obligation in the arbitration agreement.

       We are likewise unpersuaded by the Francises’ suggestion that the arbitration

agreement is procedurally and substantively unconscionable. As the appellees first argued in

Johnson, the Francises contend that the arbitration agreement is substantively unconscionable

because it prohibits class actions and non-individualized relief (relief that would affect other

subscribers in addition to the subscriber that is a party to the dispute). They also assert that

the arbitration provision is procedurally unconscionable because the opt-out clause, which

may save these provisions, is too difficult to invoke. Last, they suggest that the provision in

the RSA that allows Suddenlink to unilaterally modify its terms makes the RSA as a whole

unconscionable (if not also defeating mutuality of obligation).

       As we observe in Johnson and Peterson, the Francises’ argument regarding the

unconscionability of the RSA as a whole is outside the scope of our review. See Johnson, 2023

Ark. App. 120, at 17; Peterson, 2023 Ark. App. 116, at 10. Their claims against the terms in

the arbitration provision, moreover, must suffer the same fate as they did in Johnson and

Peterson. Like the appellees there, the Francises do not point to any individualized proof that

they have been (or will be) adversely affected by the class-action waiver, the clause prohibiting

                                               9
non-individualized relief, or the opt-out clause. Accordingly, we must reject their argument

as also lacking merit.

                            C. Scope of the Arbitration Provision

       Suddenlink next contends the circuit court erred in denying the motion to compel

arbitration when it found the Francises’ claims were outside the scope of the arbitration

provision. We agree.

       As we first observe in Peterson, 2023 Ark. App. 116, at 10, the arbitration provision

in the RSA is “intended to be broadly interpreted” and requires “any and all disputes arising

between [the subscriber] and Suddenlink” to be arbitrated. The provision further provides

that the agreement to arbitrate “includes, but is not limited to claims arising out of or relating

to any aspect of the relationship between [the subscriber and Suddenlink] whether based in

contract, statute, fraud, misrepresentation, or any other legal theory[.]” The agreement also

includes “claims that arose before this or any other prior agreement” as well as “claims that

may arise after the termination of [the agreement to arbitrate].”

       The claims in the Francises’ complaint alleging breach of contract and violation of

the Arkansas Deceptive Trade Practice Act clearly fall within the broad scope of the RSA’s

arbitration provision, and the Francises do not make any argument to the contrary here.

Accordingly, inasmuch as the circuit court denied the motion to compel arbitration on the

basis of its conclusion that the Francises’ claims were outside the scope of the agreement, we

must reverse.

                                         IV. Conclusion

                                               10
         The circuit court erred when it denied Suddenlink’s motion to compel arbitration.

The Francises’ payment of the invoices that they received from Suddenlink, which directed

them to the RSA available on Suddenlink’s website, manifested their assent to its terms, and

the arbitration provision otherwise appears in writing on Suddenlink’s website and is

supported by mutuality of obligation. The Francises’ arguments urging us to affirm also lack

merit.

         Reversed and remanded.

         WOOD and BROWN, JJ., agree.

         Husch Blackwell LLP, by: Laura C. Robinson and Mark G. Arnold, pro hac vice; and

McMillan, McCorkle & Curry, LLP, by: F. Thomas Curry, for appellant.

         Thrash Law Firm, P.A., by: Thomas P. Thrash and Will Crowder; and Turner & Turner,

PA, by: Todd Turner, for appellees.

                                             11