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Zean v. Comcast Broadband Security LLC

United States District Court, D. Minnesota

August 1, 2018

Samuel Zean, Plaintiff,
v.
Comcast Broadband Security, LLC; and Southwest Credit Systems, L.P., Defendants.

          ORDER GRANTING MOTIONS TO COMPEL ARBITRATION AND STAY PROCEEDINGS

          Wilhelmina M. Wright United States District Judge

         Defendants move to compel arbitration and to stay the proceedings in this matter pending arbitration. (Dkts. 27, 30.) Because Plaintiff is contractually obligated to arbitrate this dispute, the Court grants Defendants' motions.

         BACKGROUND

         Plaintiff Samuel Zean commenced this lawsuit to dispute a debt. He alleges, among other things, that the debt-collection efforts of Defendants Comcast Broadband Security, LLC, and Southwest Credit Systems, L.P., violated certain consumer protection laws. The parties dispute both the commencement date and the terms of their contractual relationship. Zean argues that he accepted Comcast's offer for residential Internet service via telephone on February 26, 2016. According to Zean, this telephonic interaction formed “a valid contract for services” that addressed only “the price, service speed, and duration of [the] agreement” and did not include “any other terms or conditions.” Zean's complaint alleges, however, that he entered a 12-month “Internet Service Contract” with Comcast on March 7, 2016. And it is undisputed that Zean paid Comcast for residential Internet service and installation in March 2016.

         According to Comcast, its relationship with Zean commenced in March 2016 and that relationship is governed by the Comcast Agreement for Residential Services (Subscriber Agreement). The Subscriber Agreement provides Comcast's terms and conditions, including those governing billing, fees for installation and equipment rental, and cancellation of service. As part of Comcast's “routine and regular business practice, ” Comcast technicians provide the Subscriber Agreement to customers during installation and “direct customers to read and accept the Subscriber Agreement.” The Subscriber Agreement provides that a customer accepts its terms by using Comcast's Internet services after activation.

         The Subscriber Agreement also provides, on its first page, that it “CONTAINS A BINDING ARBITRATION PROVISION IN SECTION 13 THAT AFFECTS [A CUSTOMER'S] RIGHTS UNDER THIS AGREEMENT WITH RESPECT TO ALL SERVICE(S).” (Emphasis in original.) The arbitration provision in Section 13 states that “[a]ny Dispute involving you and Comcast shall be resolved through individual arbitration.” The Subscriber Agreement defines a “dispute” as “any claim or controversy related to Comcast.” A customer may opt out of the arbitration provision by informing Comcast in writing within 30 days of the customer's Internet activation. Zean sent Comcast such an opt-out letter, dated December 22, 2016, nine months after the installation and activation of Zean's Internet service.

         Zean alleges that Comcast erroneously charged him for an August 2016 technical-support visit arising from Comcast's attempts to resolve Internet-connectivity issues. Comcast subsequently transferred the purported debt to Southwest for collection. Despite his protests, Zean alleges, both Comcast and Southwest used an automated telephone dialing system to call Zean in their efforts to collect the debt. Southwest also reported the debt to Trans Union, LLC, [1] and the debt appeared on Zean's credit report. Zean seeks declaratory relief stating that he does not owe the purported debt; alleges violations of the Telephone Consumer Protection Act, 47 U.S.C. §§ 227 et seq.; the Fair Credit Reporting Act, 15 U.S.C. §§ 1681 et seq.; and the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692 et seq.; and seeks damages in tort for invasion of privacy and defamation.

         ANALYSIS

         The Federal Arbitration Act (FAA), 9 U.S.C. §§ 1 et seq., requires the enforcement of written agreements to arbitrate disputes and reflects a “liberal federal policy favoring arbitration agreements, ” Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983). “[C]ontract provisions directing arbitration shall be enforceable in all but limited circumstances.” Kelly v. Golden, 352 F.3d 344, 349 (8th Cir. 2003). A motion to compel arbitration must be granted if there is a valid arbitration agreement between the parties and the dispute falls within the scope of the arbitration agreement. 3M Co. v. Amtex Sec., Inc., 542 F.3d 1193, 1198-99 (8th Cir. 2008); see also 9 U.S.C. § 4. Because the parties rely on matters outside the pleadings, the Court must determine whether, when the evidence is viewed in the light most favorable to the nonmoving party, a genuine dispute of material fact exists as to the propriety of arbitration. Neb. Mach. Co. v. Cargotec Sols., LLC, 762 F.3d 737, 741-42 (8th Cir. 2014).

         I. Comcast's Motion to Compel Arbitration

         The crux of the question before the Court is whether the parties' contractual relationship includes a valid arbitration agreement and, if so, whether the present dispute falls within the scope of that agreement. Comcast argues that Section 13 of the Subscriber Agreement expressly requires Zean to arbitrate his claims against Comcast. Zean counters that his contract with Comcast includes only those terms that Zean agreed to during the February 26 telephone conversation with a Comcast representative, which do not include an arbitration provision.

         A. Existence of a Valid Arbitration Agreement

         State contract law governs whether the parties have entered into a valid agreement to arbitrate a particular matter. Keymer v. Mgmt. Recruiters Int'l, Inc., 169 F.3d 501, 504 (8th Cir. 1999). Under Minnesota law, contract formation requires the communication of a specific and definite offer, acceptance of that offer, and consideration.[2] See Pine River State Bank v. Mettille, 333 N.W.2d 622, 626-27 (Minn. 1983). When determining whether the parties have entered into a valid and enforceable contract, courts evaluate the objective conduct of the parties. Cederstrand v. Lutheran Bhd., 117 N.W.2d 213, 221 (Minn. 1962). A valid and enforceable contract does not exist when an essential term remains uncertain. Triple B & G, Inc. v. City of Fairmont, 494 N.W.2d 49, 53 (Minn.Ct.App. 1992).

         Zean and Comcast do not dispute that a valid contract was formed. Instead, the parties dispute the date of commencement and the terms of their contractual relationship. Zean argues that his contractual relationship with Comcast commenced during a February 26 telephone conversation between Zean and a Comcast representative. According to Zean, that conversation did not include any discussion of an arbitration provision and, for that reason, Zean's contract with Comcast does not include such a provision. But Zean's complaint does not allege that his contract with Comcast commenced on February 26. Instead, Zean's ...


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