542 F. App'x 35
2d Cir.2013Background
- Hirsch and Romanov opened Citibank deposit accounts; signature cards did not clearly reference an arbitration provision.
- District court denied Citibank’s motion to compel arbitration, concluding the arbitration agreement was not binding.
- Citibank argued incorporation by reference and that the Client Manual with arbitration terms was provided at account opening.
- Appellees argued the signature cards and materials did not sufficiently incorporate the arbitration clause or show receipt of the Client Manual.
- On appeal, the court reviews de novo whether the parties agreed to arbitration and remands for factual determinations on incorporation by reference and receipt/notice of terms.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether arbitration is binding via incorporation by reference | Hirsch/Romanov contend signature cards fail to incorporate the Client Manual. | Citibank argues the Client Manual is incorporated by reference and binding. | Trial needed; factual dispute on incorporation by reference. |
| Whether the Client Manual was provided/received | Receipt of the Client Manual is not shown, so no arbitration binding. | Citibank provided the Client Manual with accounts. | Issue of fact as to whether the Client Manual was provided/received. |
| Whether equitable estoppel binds Appellees to arbitration | Benefits from the account imply assent to arbitration. | No clear evidence of received benefits tied to arbitration terms. | Issue of fact; remand for resolution. |
Key Cases Cited
- Schnabel v. Trilegiant Corp., 697 F.3d 110 (2d Cir. 2012) (de novo review; whether agreement to arbitrate exists depends on contract formation)
- Bell v. Cendant Corp., 293 F.3d 563 (2d Cir. 2002) (ultimate question of agreement to arbitrate governed by state law)
- Bensadoun v. Jobe-Riat, 316 F.3d 171 (2d Cir. 2003) (facts needed to determine if there is a binding arbitration agreement)
- MAG Portfolio Consultant, GmbH v. Merlin Biomed Grp. LLC, 268 F.3d 58 (2d Cir. 2001) (estoppel requires knowingly exploiting benefits of arbitration agreement)
- Ma v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 597 F.3d 84 (2d Cir. 2010) (presumption of receipt where office procedures followed in regular course)
- Specht v. Netscape Commc’ns Corp., 306 F.3d 17 (2d Cir. 2002) (notice of terms; contract formation when terms are undisclosed)
- Register.com, Inc. v. Verio, Inc., 356 F.3d 393 (2d Cir. 2004) (liberal policy favoring arbitration; awareness of terms matters)