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Curtis v. Cellco Partnership

413 N.J. Super. 26, 992 A.2d 795 (App. Div. 2010)

CONSUMER FRAUD ACT; ARBITRATION — Where an arbitration provision in a consumer contract is clear, unambiguous, prominent, and written in broad language sufficient to place the consumer on notice of the requirement to arbitrate all possible claims arising out of the agreement, Consumer Fraud Act claims must be arbitrated.

A consumer entered into a two year cellular telephone service agreement with a wireless provider. The agreement called for a $175 termination payment for ending the contract early. The agreement included expansive provisions for dispute resolution and for mandatory arbitration. These terms were distinguished from the agreement’s other terms by a box placed around them and by use of capitalized and bolded print. The consumer also received an information overview that explained, in bold print, that arbitration would be the forum for most claims (excluding specific small claims). The consumer had fifteen days to cancel the agreement if he found any term unacceptable. He did not cancel the agreement.

Though the consumer had provided his home address, the provider did not disclose the limited strength and quality of transmission and the reception in that location. The consumer soon found the service unreliable and unacceptable, and claimed the provider breached the agreement. The consumer stopped making payments on the account, and the provider sent the account to collection. The consumer filed suit against the provider for consumer fraud, and the provider moved to enforce the arbitration clause of the agreement. The lower court dismissed the lawsuit, concluding the expansive language of the agreement compelled arbitration of the consumer fraud claims under the New Jersey Consumer Fraud Act (CFA). The consumer appealed, arguing the agreement was a contract of adhesion, and to be enforceable had to specifically include a waiver of statutory claims.

The Appellate Division affirmed the lower court’s decision, finding that the agreement constituted a valid and binding provision for arbitration of disputes, as the arbitration provisions were clear and unambiguous, were adequately distinguished from other terms, and were drawn in broad language sufficient to place the consumer on notice of the requirement to arbitrate all possible claims arising under the agreement.

The Court also held the contractual language placed the consumer’s CFA claims within the scope of the arbitration clause. It said the public policy in favor of the arbitration of disputes outweighed the consumer’s statutory right to present a CFA claim to a jury when the contract’s arbitration provisions are specific enough to inform the consumer that she or he is waiving or waived his statutory right to litigation in court. The Court said the agreement clearly mandated the waiver of a jury trial in favor of submitting any controversy or claim arising from the agreement or any service provided under the agreement to arbitration. The agreement also defined arbitrable “claims” to include the statutory right for reimbursement of attorney’s fees. The Court concluded that the agreement’s clear language indicated that disposition of disputes, contractual or statutory, would occur outside of a court, and gave the consumer reasonable notice that he was waiving a right of access to court. The consumer’s allegations that the provider knew its wireless service was inadequate at the inception of the contract, and that its attempts to collect service and termination fees were illegal, touched matters covered by the parties’ agreement.

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