Robert Sharpe v. AmeriPlan Corporation, et
769 F.3d 909
| 5th Cir. | 2014Background
- Four AmeriPlan Sales Directors (Sharpe, Moen, Downard, Guarisco) sued after AmeriPlan terminated contracts and stopped paying promised “lifetime residual” commissions; suit filed as a California class action and removed to federal court.
- The parties’ written relationship consists of three documents: Broker Application & Agreement, Sales Director Agreement, and Policies & Procedures Manual; the Agreements incorporate the Manual and generally require written amendments executed by all parties to change the Agreements.
- In November 2010 AmeriPlan unilaterally revised the Policies & Procedures Manual to add a mandatory arbitration clause and conditioned continued online access on assent; two plaintiffs clicked “I agree,” two received mailed notice and did not log in.
- The Sales Director Agreements (different versions) contain preexisting dispute-resolution provisions: (1) Guarisco’s 1994 agreement contains only a choice-of-law and venue clause (Dallas); (2) Sharpe/Moen/Downard’s later agreements require nonbinding mediation then submission to specific state or federal courts (Dallas or Collin County).
- The district court compelled arbitration but severed two unconscionable arbitration provisions; the Fifth Circuit reviews de novo and must decide (a) whether the arbitration agreement is valid under Texas contract law and (b) whether the disputes fall within its scope.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the arbitration clause added to the Manual conflicts with preexisting dispute-resolution clauses | Sharpe/Moen/Downard: their Agreements reserve a two-step process (mediation then court) that survives the Manual amendment and precludes mandatory arbitration | AmeriPlan: the Manual’s arbitration clause governs disputes and can be harmonized with prior provisions | For Sharpe, Moen, Downard: the court held the Sales Director Agreements’ two-tier provisions cannot be harmonized with the later mandatory arbitration and thus those three plaintiffs are not compelled to arbitrate |
| Whether Guarisco’s forum-selection clause conflicts with the Manual’s arbitration clause | Guarisco: her agreement’s venue clause requires lawsuits in Dallas and is inconsistent with arbitration | AmeriPlan: Guarisco’s clause is only venue/choice-of-law and can be harmonized with arbitration | Held: harmonized — Guarisco must arbitrate (except for two severed unconscionable provisions) |
| Validity of the arbitration amendment (consideration/illusory) | Guarisco: amendment lacked consideration and was illusory because AmeriPlan could unilaterally amend | AmeriPlan: bilateral promise to arbitrate and a savings/severability clause supply consideration and prevent retroactive unilateral change | Held: arbitration amendment valid under Texas law; bilateral arbitration promises are sufficient and the savings clause prevents illusory effect |
| Waiver by AmeriPlan of right to arbitrate due to litigation conduct (removal, transfer, delay) | Guarisco: AmeriPlan’s litigation steps and timing show intent to litigate, so it waived arbitration | AmeriPlan: it timely reserved arbitration in its answer and used forum clauses to obtain agreed forum for adjudicating arbitration issues | Held: no waiver — AmeriPlan gave timely notice and delay was not unreasonable; it did not forfeit arbitration rights |
Key Cases Cited
- Klein v. Nabors Drilling USA L.P., 710 F.3d 234 (5th Cir. 2013) (two-step arbitration analysis; harmonization of dispute clauses examined under state law)
- Sherer v. Green Tree Servicing, LLC, 548 F.3d 379 (5th Cir. 2008) (arbitrability analysis: validity under state law, then scope under federal policy)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (U.S. 1995) (arbitration is a matter of contract)
- Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323 (Tex. 2011) (contract interpretation: harmonize all provisions when possible)
- In re Halliburton Co., 80 S.W.3d 566 (Tex. 2002) (savings clause can cure unilateral amendment problems and sustain arbitration clause)
- In re Palm Harbor Homes, Inc., 195 S.W.3d 672 (Tex. 2006) (bilateral arbitration promises constitute consideration)
- Pers. Sec. & Safety Sys., Inc. v. Motorola Inc., 297 F.3d 388 (5th Cir. 2002) (forum-selection clauses can be harmonized with arbitration clauses)
- Applied Energetics, Inc. v. NewOak Capital Mkts., LLC, 645 F.3d 522 (2d Cir. 2011) (conflict between all-inclusive arbitration clause and all-inclusive forum clause cannot be reconciled)
- Tenneco Resins, Inc. v. Davy Int’l AG, 770 F.2d 416 (5th Cir. 1985) (delay and actions showing intent to litigate can constitute waiver of arbitration, but burden on party alleging waiver is heavy)