Craig Schultz v. Verizon Wireless Services, LLC
2016 U.S. App. LEXIS 15236
| 8th Cir. | 2016Background
- Plaintiffs Craig and Belen Schultz sued Verizon for alleged TCPA and Iowa debt-collection-law violations arising from a billing dispute.
- Verizon moved to compel arbitration under a Customer Agreement between Verizon and Belen; the Schultzes initially consented to arbitration in their pleading.
- The parties negotiated a settlement by email; Verizon proposed a multi-page Settlement Agreement that included a mutual non-disparagement clause.
- Plaintiffs’ counsel exchanged multiple drafts and at one point represented the parties were “settled” on an amount, but negotiations over the release language continued and the Schultzes later refused the non-disparagement term.
- Cross-motions to enforce competing settlement drafts were denied by the magistrate; the district court then compelled arbitration and dismissed the action, and denied plaintiffs’ motion to amend the judgment.
- On appeal the Eighth Circuit affirmed: there was no binding settlement because material terms (the release/non-disparagement clause) were unresolved, and Craig Schultz was bound to arbitrate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether parties formed a binding settlement on Oct. 31 | Schultz: acceptance of Verizon’s stated amount created a binding settlement; only amount was material | Verizon: the release terms (including non-disparagement) were material and remained under negotiation | No binding settlement; no mutual assent because material release terms were unresolved |
| Whether Craig Schultz must arbitrate | Schultz: Craig never agreed to Verizon’s Customer Agreement or arbitration clause | Verizon: plaintiffs consented to arbitration in pleadings and Craig, as Account Manager who activated service, accepted the contract | Craig is bound to arbitrate; district court’s order compelling arbitration affirmed |
Key Cases Cited
- Vaughn v. Sexton, 975 F.2d 498 (8th Cir. 1992) (settlement-formation factual findings reviewed for clear error)
- LoRoad, LLC v. Glob. Expedition Vehicles, LLC, 787 F.3d 923 (8th Cir. 2015) (multiple draft negotiations indicate lack of mutual assent)
- Rucker v. Taylor, 828 N.W.2d 595 (Iowa 2013) (terms left open may show no offer or acceptance)
- Abbott Labs. v. Alpha Therapeutic Corp., 164 F.3d 385 (7th Cir. 1999) (release provisions in settlement agreements are inherently material)
- Pro Tech Indus., Inc. v. URS Corp., 377 F.3d 868 (8th Cir. 2004) (standard of review for district court’s decision to compel arbitration)
- Liberty Mut. Ins. Co. v. Mandaree Pub. Sch. Dist. #36, 503 F.3d 709 (8th Cir. 2007) (district court may decide arbitrability absent contractual delegation to arbitrator)