Lead Opinion
Affirmеd by published opinion. Chief Judge TRAXLER wrote the majority opinion, in which Judge AGEE joined. Judge WYNN wrote a dissenting opinion.
Jacqueline Galloway appeals a district court order dismissing her action against Santander Consumer USA, Inc. seeking damages for breach of contract and alleging a violation of the Maryland Credit Grantor Closed End Credit Provisions (the “CLEC”), see Md.Code, Comm. Law §§ 12-1001, et seq. Finding no error, we affirm.
I.
The pertinent facts in this case are undisputed. Galloway used a loan she obtained through a retail installment contract (“the RISC”) to finance her purchase of a vehicle in March 2007. The CLEC governs the RISC’s terms.
The RISC contained the transaction’s financing terms as well as information concerning repossession rights and procedures. It listed the total amount financed as $22,916.28 and required Galloway to make 72 payments of $487.46 on the 17th day of every month. If a payment or part thereof was more than 15 .days late, the RISC called for imposition of a late fee of five dollars or ten-percent of the part of the payment that was late, whichever was greater. The RISC also included a modification provision stating that “[a]ny change
The RISC was assigned to CitiFinancial Auto, Ltd. (“CitiFinancial”), which took a security interest in the vehicle. Sometime before October 31, 2008, Galloway contacted CitiFinancial requesting a reduction in the amount óf her monthly loan payment. The CitiFinancial representative with whom Galloway spoke told her that CitiFi-nancial would send her paperwork to review and sign and that, once she returned the signed papers, the company would consider whether to approve her request. Galloway stated that CitiFinancial told her they would notify her in writing concerning whether her request had been approved.
CitiFinancial then provided Galloway with a cover page and a two-page document. The cover page asked that she “review the attached documents and provide the signature(s) required.” J.A. 25. It requested that after she signed the paperwork, she “return [it] to CitiFinancial Auto for further review, approval and consideration.” J.A. 25. It also requested that she “retain a copy of this agreement for [her] records.” J.A. 25.
The two remaining pages constituted an amended agreement (the “Amended Agreement”). Under its terms, the Amended Agreement would take effect on October 31, 2008; Galloway’s total amount due would be $20,213.50; her monthly payment would be reduced from $487.46 to $365.57; her first payment would be due December 14, 2008; and her last (and seventy-second) payment would be due on November 14, 2014. The Amended Agreement also included an arbitration agreement (the “arbitration'agreement”) under which Galloway, CitiFinancial, and CitiFi-nancial’s assignees, could elect to arbitrate any dispute, “whether in. contract, tort or otherwise,” rather than proceed through a court action.
Galloway signed the Amended Agreement on November 12, 2008, and sent a copy of the signed agreement to CitiFinan-cial via fax.
The record does not reflect that CitiFi-nancial' ever specifically sent Galloway written approval of the Amended Agreement. Nevertheless, Galloway states in her declaration that “sometime after November 14, 2008, CitiFinancial lowered [her] scheduled monthly payments to $366.43,” J.A. 17, an amount just 86 cents more than the amount contemplated in the Amended Agreenient. Galloway immediately began making monthly payments of $366.43 bеginning December 13, 2008,' and continued to make payments in that amount for several years.
In her declaration, Galloway states that it was an “agreement between [her] and CitiFinancial entered into sometime after November 14, 2008” that lowered her payment amount from $487.46 to $366.43. J.A. 17. However, the record contains no evidence of any specific discussions between Galloway and CitiFinancial explaining or addressing the 86-cent discrepancy. And Galloway’s - declaration asserts that the agreement that “lowered [her] payments to $366.43 each month was not evidenced by a writing.” J.A. 17.
Galloway subsequently brought this action in state court, alleging that Santander breached the RISC and violated . the CLEC by failing to provide sufficient notice before selling her vehicle. Galloway purports to bring suit on behalf of herself and all persons similarly situated.
Santander removed the case to federal district court. Santander also filed a motion to compel arbitration and stay federal district court proceedings undér the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1 et seq., claiming Galloway had previously agreed to arbitrate any disputes concerning her loan. Galloway denied that the parties had an agrеement to arbitrate and alternatively claimed that any arbitration agreement was unenforceable under the FAA because it was not in writing. Galloway also ihoved to amend her complaint, and Santander opposed the motion on the basis that amendment would be futile.
Applying a summary-judgment-like standard, the district court concluded as a matter of law that Galloway had agreed to arbitration and that the agreement to arbitrate was enforceable under the FAA. See Galloway v. Santander Consumer USA, Inc., Civ. No. CCB-13-3240,
Alternatively, the court concluded, that CitiFinaneial’s proposal to reduce the payment to $366.43 constituted a counteroffer to make a minor modification to the dollar amounts in the Amеnded Agreement, which Galloway accepted by making the payments in the amount requested for several years without objection. See id. The district court rejected Galloway’s argument that no new contract was formed because Galloway’s returning a signed original of the Amended Agreement to Ci-tiFinancial and CitiFinancial’s written assent were both conditions precedent to modifying the RISC. See id. at *4. The district court concluded that the parties waived any right they may have had to such formalities by virtue of their performance under their new agreement. See id. The court added that, under the doctrine of equitable' estoppel, Galloway could not disclaim the Amended Agreement, having accepted the benefit of the agreement in thе .form of reduced monthly payments. See id.
■Having determined that the parties bound themselves to the terms of the Amended Agreement, or at least to the terms of the Amended Agreement with the slightly modified payment amount, the court concluded that the written arbitration agreement was enforceable under the
II.
“We review de novo the district court’s judgment compelling arbitration, as well as any questions of state contract law concerning the validity of the arbitration agreement.” Santoro v. Accenture Fed. Servs., LLC,
“Sections 3 and 4 [of the FAA] ... provide two parallеl devices for enforcing an arbitration agreement: a stay of litigation in any ease raising a dispute referable to arbitration, 9 U.S.C. § 3, and an affirmative order to engage in arbitration, § 4.” Chorley Enters. v. Dickey’s Barbecue Rests., Inc.,
[a] written provision in ... a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, ... shall be valid, irrevocable, and enforceable.
9 U.S.C. § 2.
We have stated that “[application of the FAA requires demonstration of four elements: ‘(1) the existence of a dispute between the parties, (2) a written agreement that includes an arbitration provision which purports to cover the dispute, (3) the relationship of the transaction, which is evidenced by the agreеment, to interstate or foreign commerce, and (4) the failure, neglect or refusal of the defendant to arbitrate the dispute.’ ” Rota-McLarty v. Santander Consumer USA Inc.,
Only the second element is at issue here. Galloway does not dispute that the present action falls within the scope of the arbitration agreement, but she argues that the district court erred in concluding, without the benefit of a jury trial, that the provision was a term of any contract she and CitiFinancial entered into. She also alternatively maintains that if the arbitration agreement was a term of a contract the parties entered into, the district court erred in ruling that their acceptance of that provision satisfied the FAA’s writing
A.
We- first address Galloway’s contention that she is entitled to a jury trial regarding whether she and' CitiFinancial entered into a binding contract that included the arbitration agreement.-
Under the FAA, “the party seeking a jury trial must make an unequivocal denial that an arbitration agreement exists — and must also .,. provide sufficient evidence in support of its claims such that a reasonable jury could return a favorable verdict under applicable law,” Chorley Enters.,
The parties agree that principles of Maryland law control the question of whether they reached an agreement to arbitrate. See First Options of Chicago, Inc. v. Kaplan,
Under Maryland law, a prerequisite to the formation of a contract is mütual assent between the parties. See Cochran v. Norkunas,
“A contract is formed when an unrevoked offer made by one person is accepted by another.” County Comm’rs for Carroll Cnty. v. Forty W. Builders, Inc.,
As it did below, Santander offers several theories concerning how a meeting of the minds occurred here. Santander first argues that CitiFinaneial’s sending Galloway the Amended Agreement for her signature amounted to an offer to enter the agreement, and that Galloway’s signing it and faxing, a copy to CitiFinancial constituted her acceptance of the Amended Agreement. Just, as the district court did, we reject this, argument because CitiFinancial made clear to Galloway, both orally and in writing, that it retained the right to deny Galloway’s request for lower monthly payments. Since CitiFinancial had not agreed that Galloway’s execution of the Amended Agreement would bind the parties, the sending of the agreement to Galloway for her signature was a mere invitation to Galloway to make an offer. See Spaulding v. Wells Fargo Bank, N.A.,
Santander alternatively contends that the district court correctly ruled that Citi-Financial accepted Galloway’s offer by lowering 'the amount of Galloway’s monthly payment to 86 cents more than the amount the Amended Agreement specified, a difference described by the district court as “de minimis.” Galloway,
Even assuming arguendo that Galloway is correct that CitiFinancial’s actions did not bind the parties to an agreement, we agree with the district court’s, alternative ruling that CitiFinancial’s actions proposing payments in an amount 86 cents more than the amount specified in the Amended Agreement constituted a Counteroffer to modify the terms of the Amended Agreement in this minor way and that Galloway accepted the counteroffer by making the payments in this slightly increased amount.
Although Galloway contends that the question of whether a meeting of the minds occurred presented a genuine factual dispute, we conclude that the.legal consequences of the parties’ undisputed actiоns are clear. When Galloway first inquired about lowering the amount of her monthly payment, CitiFinancial drafted the Amended Agreement and instructed her-that if she signed it and returned it, the company would review her request. Galloway indicated her assent to the company’s proposed terms when she executed the Amended Agreement ‘ on November 12, leaving CitiFinancial to undertake its formal review process. Within approximately one month, at some time early enough to allow Galloway to make her December payment- in the new amount, CitiFinancial informed Galloway that it would lower Galloway’s payment to $366.43, almost the exact amount that the Amended Agreement had contemplated. On these facts, CitiFinancial cоuld not reasonably be understood to be offering Galloway the option to her lower payment amount without accepting the other new terms specified in the Amended Agreement — such as, for example, the increase in the number of payments that Galloway would be required to make. Rather, Citi-Financial could only be reasonably understood to be proposing, a very minor tweak to the terms that it had originally suggested and that Galloway had already indicated she would accept. See Learning Works, Inc. v. Learning Annex, Inc.,
Galloway argues that, under Maryland law, the parties could not validly modify the RISC without setting out all of the new terms together in a written document and signing the document; In support of her argument, Galloway maintains that a signature on a contract is a condition precedent if “the terms of the contract make the parties’ signatures a condition precedent to the formation of the contract.” All State Home Mortg., Inc. v. Daniel,
Galloway does not suggest that when CitiFinancial agreed to reduce her payment to $366.43, the company indicated
The only contractual language Galloway cites as the basis for her position that a written agreement signed by both parties was necessary to effectively modify the RISC is the language in the RISC itself stating that any future amendment would need to be by a signed writing. However, under Maryland law, contractual limitations on future modifications are not effectivе to prevent parties from entering into new agreements orally or by performance; rather, they only provide context for interpreting subsequent conduct. See Hovnanian Land Inv. Grp., LLC v. Annapolis Towne Ctr. at Parole, LLC,
Here, as we have explained, the parties left no doubt that they intended to modify the terms of the RISC, even in the absence of a signed writing memorializing all of the new terms to which they agreed. Having led CitiFinancial to believe for many years that the parties had successfully amended the RISC even without a signed writing — and having accepted the benefit of the modification in the form of substantially lower monthly payment requirements — Galloway cannot now be heard to claim that there was no valid amendment in the absence of a signed writing. See Hovnanian,
B.
In addition to her state-law arguments, Galloway also maintains that any arbitration agreement that the parties entered into is not enforceable under the FAA. We disagree.
The FAA declares, with exceptions not relevant here, that
[a] written provision in ... a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, ■... shall be valid, irrevocable, and enforceable.
9 U.S.C. § 2. We have stated that “[ajppli-cation of the FAA requires demonstration of,” among other things, “a written agreement that includes an arbitration provision which purports to cover the dispute.” Rota-McLarty,
The “written arbitration agreement” that is necessary to bring an agreement within the FAA’s scope is an “actual document — the physical embodiment of the underlying legal obligations” and need not include- any written assent to those obligations. Seawright v. American Gen. Fin. Servs.,
III.
In sum, because we conclude that the district court correctly enforced the parties’ arbitration agreement, we affirm the district court order dismissing Galloway’s action.
AFFIRMED
Notes
. The arbitration agreement provided that it did not apply to certain types of disputes, but Galloway does not maintain that any of those exceptions applies here.
. The court also concluded that Galloway’s proposed amendment of her complaint would be futile. See Galloway v. Santander Consumer USA, Inc., Civ. No. CCB-13-3240,
. We have noted that “[t]his standard is akin to the Burden on summary judgment.” Chorley Enters. v. Dickey's Barbecue Rests.,
. Galloway also argues that the fact that Citi-Financial charged her a late fee on November 3 in accordance with the terms of the RISC demonstrated, for several reasons, that CitiFi-nancial had not accepted the terms of the Amended Agreement by that date.
. We note that the record does not reflect whether CitiFinancial’s communication to
Additionally, although the reason for the 86-cent increase is also not material to our decision, the increase may be attributable to a late fee of $48.74 imposed on November 3, 2008, when Galloway failed to make her October payment in a timely manner, which increased the total amount she owed on her loan.
. Additionally, because the parties agreed on a monthly payment of $366.43, the terms to which the parties manifested assent were sufficiently definite. Galloway argues that there was some uncertainly regarding the date that monthly payments were due, but that is not correct. The Amended Agreement plainly provided that Galloway's payments were due on the 14th of every month. Galloway contends that CitiFinancial changed this date, as evidenced by the fact that the RISC provided that late fees would be incurred if payments were more than 15 days late, yet after December 2008, CitiFinancial often imposed late fees 15 days, rather than 16 days, after the due date. However, CitiFinancial had often been charging late fees exactly 15 days after the payment due date since the initiation of the loan. Regardless of whether that was proper under the' parties’ agreements, the continuation of that practice after December 2008 was no indication that the payment due date had somehow changed from that provided in the Amended Agreement.
. It is, therefore, inaccurate to suggest that the record contains "no evidence,” ante at 82, of discussions between Galloway and CitiFi-nancial.
Dissenting Opinion
dissenting:
The question at the heart of this appeal is whether the parties formed a written agreement to arbitrate. Santander says yes, pointing to a (problematic) amendment document with an arbitration clause; Galloway says no, declaring that the operative modification contract was never reduced to writing. In short, the parties dispute a material fact: whether they entered into a written agreement to submit disputes to arbitration. It therefore cannot accurately be said that “[t]he pertinent facts in this case are undisputed.” Ante at 81. A jury — not á court — should resolve this dispute. .Accordingly, 1 dissent.
I.
Galloway, a Maryland consumer, bought a car in 2007, and her loan was initially assigned to CitiFinancial. Under the financing contract, Galloway was .required to make 72 monthly payments of $487.46. J.A. 19. The original contract contained no arbitration provision. It did, however, include a provision requiring changes to be in writing and signed to be binding: “Any change to this contract must be in writing and we must sign it. No oral changes are binding.” J.A. 20 (emphasis added). No one disputes the original contract’s validity.
The same cannot be said of a purpоrted amendment to the agreement dating to 2008: The dispute surrounding its validity is at the center of this appeal. Galloway contacted CitiFinancial and requested that her monthly payments be reduced. In response, CitiFinancial sent Galloway a fax letter and an “Amendment Agreement” and instructed her to sign the “Amendment Agreement” and return it to CitiFinancial for , “review, approval and consideration.” J.A. 25. The “Amendr ment Agreement” proposed monthly payments of $365.57.- and .included an arbitration provision. J.A. 26.
Galloway signed the Amendment Agreement and faked it back to CitiFinancial; But CitiFináncial never signed the Amendment Agreement. And for months, Galloway made, and CitiFinancial, and later its assignee Santander, the defendant here,
Ultimately, Galloway failed to make her monthly payments, and Santander repossessed and sold her car. Galloway sued in Maryland state court, alleging that San-tander failed to give notice as required under the Credit Grantor Closed End Credit Provisions of the Maryland Credit Deregulation Act. Galloway also declared in an affidavit that CitiFinancial “told me that the paperwork provided to me was not pre-approved ... and that someone within CitiFinancial would have to approve my request before it became effective.” J.A. 16 (emphasis added).
Galloway further declared, under penalty of perjury, that “CitiFinancial did not aсcept the terms of the executed Amendment Agreement ” and that “[tjhe agreement between myself and CitiFinancial ... which lowered my payments to $366.43 each month was not evidenced by a writing.” J.A. 17 (emphasis added).
Santander removed the case to federal court and then moved to compel arbitration. The district court granted the motion, holding that a written arbitration agreement existed.
II.
Where a party “show[s] genuine .issues of material fact regarding the existence of an agreement to arbitrate,”, a standard we have likened to “the burden on summary judgment,” that party is entitled -to a jury trial- on the issue. Chorley Enters. v. Dickey’s,
In my view, this case presents a straightforward -factual dispute entitling Galloway to a jury trial. Galloway contends that the amendment to the original contract was not reduced to writing. Evidence supporting Galloway’s version of the facts includes: (1) her sworn statement, including her averment that “[t]he agreement between myself and CitiFinancial ... which lowered my payments to $366.43 each month was not evidenced by a writing,” J.A. 17; (2) the fact that the actual amount of Galloway’s lowered payments differed from the amount stated in the purported Amendment Agreement; (3) Santander’s admission in its declaration that it simply relied on the accuracy of the documents; (4) the fact that thе.original contract clearly contemplated non-written amendments — because it stated that only written and signed amendments would be binding; and (5) the fact that CitiFinancial never signed the. Amendment Agreement as required under the original contract.
Santander, by contrast,.contends that in sending Galloway the Amendment Agreement — which required “review, approval and consideration” by CitiFinancial, J.A. 25 — CitiFinancial made Galloway an offer, which she accepted when she faxed the signed document back. Santander- also argues, for example, that the difference in amount between the payments Galloway actually made and- the payments she was
Instead, this is a classic case of he said/ she said. Galloway claims that the parties’ ultimate agreement to lower her monthly payments was never reduced to writing. Santander claims that the Amendment Agreement document constitutes the operative agreement to reduce payments. Without doubt, what the parties agreed to — and whether it is memorialized by a writing — is material. It is plainly disputed. And it is a question for the jury, not the courts.
III.
Where a party “show[s] genuine issues of material fact regarding the existence of an agreement to arbitrate,” that party is entitled to a jury trial. Chorley Enters.,
. I am confounded by the way in which the majority opinion invokes waiver here. Plainly. "[t]he parties left no doubt that they intended to modify the terms of the RISC, even in the absence of a signed writing to which they agreed.” Ante at 88. And indeed, Galloway does not contest that the parties agreed to a modification; she instead contests how they did so, disputing that the modification took the form of a written document containing an arbitration provision. Waiver is thus plainly misplaced and certainly does not lead to the conclusion that "the district court properly concluded that the arbitration agreement was a term of the contact that the parties entered into.” Ante at 88-89.
. I agree with the majority’s rejection of San-tander’s argument that, in faxing the Amendment Agreement to Galloway, CitiFinancial made her an offer. I also note that not a single reported Maryland case engages in the "de minimis” analysis featured in Santander's brief and the court’s analysis. On the contrary, the case law suggests that any discrepancy between an offer and a purported acceptance results in no contract being formed. See, e.g., Learning Works, Inc. v. The Learning Annex, Inc.,