854 F. Supp. 2d 1021
D. Colo.2012Background
- Grosvenor sues over a Price for Life internet service claim; dispute centers on arbitration under Qwest's Subscriber Agreement.
- Qwest moved to compel arbitration; Grosvenor opposed, seeking to avoid arbitration as illusory.
- The court previously held a contract formation question to be decided in court rather than by an arbitrator.
- Grosvenor argues Qwest can unilaterally modify arbitration terms, rendering the agreement illusory.
- The court evaluates whether the installation process and post-installation communications formed a binding arbitration agreement.
- The court ultimately concludes the arbitration clause is illusory and unenforceable, and grants summary judgment accordingly.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is there a binding arbitration agreement between Grosvenor and Qwest? | Grosvenor contends terms were not conspicuous; assent was not effectively manifest. | Qwest argues there was mutual assent via installation and Welcome Letter. | Arbitration agreement formed and enforceable based on conspicuous terms and assent. |
| Did the 2007 upgrade create a new contract or refresh the existing terms? | Assent to terms may have been voided by new contract. | Upgrade followed by a new Welcome Letter; terms remained clear. | 2007 Welcome Letter refreshed understanding; continued use signified continued assent to terms. |
| Is the arbitration clause illusory due to unilateral modification rights? | Dumais renders unilateral modification of arbitration terms illusory. | Dumais is distinguishable; contract as a whole may be valid. | Dumais controls; unilateral modification renders arbitration clause illusory and unenforceable. |
Key Cases Cited
- Specht v. Netscape Communications Corp., 306 F.3d 17 (2d Cir. 2002) (notice and assent in clickwrap; terms not reasonably conspicuous)
- Dumais v. American Golf Corp., 299 F.3d 1216 (10th Cir. 2002) (unfettered right to modify arbitration terms renders agreement illusory)
- Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (U.S. 1967) (separability of arbitration clause; court vs arbitrator for validity challenges)
- Specht v. Netscape Communications Corp.—(see above), (duplicate entry avoided) () ()