Marciano v. DCH Auto GroupMarciano v. DCH Auto Group
Plaintiff Lucia Marciano brings this action against DCH Auto Group (“DCH”), a Delaware corporation that owns and operates a car dealership located in Mamaroneck, New York, and Brian Lam (“Lam”) and Bernard Fee (“Fee”), the General Manager and Sales Manager, respectively, of that dealership. {See Third Am. Compl. (“Compl”) (Dkt. No. 24) ¶¶8-9.) She alleges three claims of workplace discrimination arising under Title VII of the Civil Rights Act of 1964,
I. Background
A. Factual History
In January 2009, Plaintiff sought a job at a car dealership owned by Defendant DCH. (See Mem. of Law in Supp. of Defs.’ Mot. To Compel Arbitration Pursuant to the FAA To Dismiss Pl.s’ Compl. & for Atty’s Fees (“Mem.”) (Dkt. No. 38) 7.) Plaintiff completed an employment application (“Employment Application”), wherein she was asked to submit personal data and to sign two “Acknowledgement [sic] and Authorization” forms. (See Deck of Gene Hallenbeck in Supp. of Defs.’ Mot. To Compel Arbitration Pursuant to the FAA & To Dismiss Pl.s’ Compl. (“Hallen-beck Deck”) (Dkt. No. 37), Ex. A.) One of the forms (“Employment Agreement”) solicited Plaintiffs consent to various terms of employment, such as submission to random drug and alcohol testing, cooperation in background investigations, and terminable-at-will status. (See id. at unnumbered 6.) The other form (“Arbitration Agreement”) solicited her consent to submit certain types of claims against the company arising out of her employment exclusively to binding arbitration. (See id. at unnumbered 4-5.) Plaintiff signed and dated both forms. (See id. at unnumbered 5-6.)
Plaintiff thereafter accepted Defendants’ offer of an “Internet Manager” position and commenced her employment on February 23, 2009. (See Compl. ¶ 10.) Over the next two years, Plaintiff alleges that she suffered various forms of harassment and discrimination based on her gender, (see id. ¶¶ 17, 26), and a disability, (see id. ¶¶ 29-112). DCH ultimately terminated Plaintiff on March 30, 2011. (See id. ¶ 113.)
B. Procedural History
Plaintiff initially filed a pro se Complaint in December 2011, naming DCH as the sole defendant. (See Dkt. No. 2.) A summons was issued on January 19, 2012, and this Court granted each of Plaintiff’s four requests to extend the service deadline, thereby effectively extending the original deadline by over a year. (See Dkt. Nos. 9-13.) Before she complied with the extended deadline, however, she filed an Amended Complaint — again pro se — in December 2012, re-naming DCH as a defendant and adding Lam and Fee as co-defendants. (See Dkt. No. 15.) Then, before serving the Amended Complaint, Plaintiff retained a law firm to represent her, and the Court gave her permission to file a Second Amended Complaint, (see Dkt. Nos. 18-19, 21), which she filed on April 8, 2013, (see Dkt. No. 23). Shortly thereafter, Plaintiffs counsel requested leave to file a Third Amended Complaint due to “several typographical errors” it discovered in the Second Amended Complaint. (See Dkt.
On May 10, 2013, Defendants sent a letter to the Court, informing it that they had asked Plaintiff to consider withdrawing her Complaint and submitting the matter to arbitration. (See Dkt. No. 29 (Letter from Dena B. Calo to Court (May 10, 2013)).) Three days later, Defendants sent a letter requesting a pre-motion conference to discuss a potential motion to compel arbitration in light of the previously mentioned Arbitration Agreement that Plaintiff signed when she applied for a job with DCH. (See Decl. of Dena B. Calo, Esq. in Supp. of Defs.’ Mot. To Compel Arbitration Pursuant to the FAA To Dismiss Pl.s’ Compl. & for Att’ys’ Fees (“Calo Decl.”) (Dkt. No. 36), Ex. J (Letter from Dena B. Calo to Court (May 13, 2013)).) In response to this letter, Plaintiffs counsel informed the Court that she considered “parts of the arbitration agreement” to be “ambiguous,” and that she had consequently “asked Defendants to stipulate to several additional terms as a condition of [Plaintiff] agreeing to voluntarily dismiss the Complaint and refile in arbitration.” (Id., Ex. K at unnumbered 1 (Letter from Jennifer Smith to Court (May 17, 2013)).) Defendants responded directly to Plaintiffs counsel, informing her that Defendants would “not agree to the proposed Stipulation” in general, but that they were “willing to stipulate ... that they [would] pay all arbitration fees and costs ... in accordance with [the American Arbitration Association’s] Employment Arbitration Rules, as well as the initial filing fee in accordance with the signed Arbitration Agreement.” (Id., Ex. L at unnumbered 1-2 (Letter from Dena B. Cab to Jennifer Smith (May 20, 2013)).) At a hearing held on May 23, the Court ordered Plaintiff to respond to Defendants’ letter by May 31, (see Dkt. (minute entry for May 23, 2013)), and it subsequently granted Plaintiffs request for a two-week extension of that deadline, (see Dkt. No. 34).
On June 13, Plaintiffs counsel sent a letter informing Defendants and the Court that Plaintiff “[did] not consent to transferring the case to arbitration.” (Cab Decl., Ex. N at unnumbered 1.) Defendants thereafter filed the instant Motion To Compel Arbitration and for Attorneys’ Fees on July 1. (See Mot.; Mem.) Plaintiff filed an Opposition Memorandum on August 2, (see Pl.’s Mem. of Law in Opp’n to Defs.’ Mot. To Compel Arbitration Pursuant to the FAA, To Dismiss Pl.s’ Compl. & for Att’ys’ Fees (“Opp’n”) (Dkt. No. 42)), which was followed by Defendants’ Reply Memorandum on August 12, (see Reply Mem. of Law in Further Supp. of Defs.’ Mot. To Compel Arbitration Pursuant to the FAA, To Dismiss Pl.s’ Compl. & for Att’ys’ Fees (“Reply”) (Dkt. No. 48)). The Court then granted Plaintiffs request to file a Sur-reply Memorandum, (see Dkt. No. 49), which Plaintiff filed on September 24, (see Pl.’s Surreply Mem. of Law (“Sur-reply”) (Dkt. No. 50)), and to which Defendant responded on October 7, (see Defs.’ Mem. of Law in Opp’n to Pl.’s Sur-reply & in Further Supp. of Defs.’ Mot. To Compel Arbitration Pursuant to the FAA, To Dismiss Pl.s’ Compl. & for Att’ys’ Fees (“Opp’n to Sur-reply”) (Dkt. No. 55)). The Court now turns to a discussion of Defendants’ Motion.
II. Discussion
A. Arbitration
1. Legal Standard
Defendants move to compel arbitration under the Federal Arbitration Act (“FAA”), which allows a party “aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agree
2. Analysis
The Parties’ dispute essentially concerns the “question of arbitrability,” i.e. “whether the parties have submitted [this] dispute to arbitration.” Howsam v. Dean Witter Reynolds, Inc.,
“Whether one can be bound by an arbitration clause is usually determined by looking at generally accepted principles of contract law.” Gold v. Deutsche Ak-
Plaintiff argues that the Arbitration Agreement is not enforceable for four independent reasons. First, she argues that she did not see, read, or understand the Agreement, possibly due to Defendants’ actions. Second, she argues that the Agreement consists of an illusory promise. Third, she argues that she received no consideration for agreeing to binding arbitration. Fourth, she argues that the Agreement is substantively unconscionable because of the high costs it imposes on her. The Court will address each argument in turn.
a. Lack of Assent
Plaintiff first argues that, although her signature appears on the Arbitration Agreement, she “never agreed to arbitrate her claims.” (Sur-reply 1 (alterations omitted).) Specifically, she argues that “language relating to arbitration ... was not on any page that [she] saw or signed,” that “Fee pressured [her] into signing [both] Acknowledgement [sic] and Authorization pages and misrepresented to her that by signing, she was only assenting to the language he read to her above the signature lines,” which language “did not include the alleged agreement to arbitrate,” and that “Fee never said anything to [her] about arbitration and deliberately prevented her from reading the language on the reverse side of her signature pages that discussed arbitration.” (Id. at 2.)
According to Defendants, the Employment Application was presented to Plaintiff as a “tri-fold document” consisting of three double-sided pages connected to each other such that the entire six-page application was printed on a single, twenty-five-and-a-half-inch-wide sheet of paper. (See Deck of Carrie Ferrantino in Further Supp. of Defs.’ Mot. To Compel Arbitration Pursuant to the FAA, To Dismiss Pl.s’ Compl. & for Att’ys’ Fees (“Ferrantino Deck”) (Dkt. No. 47) ¶¶ 6-7; id., Ex. A (containing photographs of the original Employment Agreement).)
Fee handed me an employment application, containing three pages for me to fill out.
When I had finished filling out the three pages ... I returned [them] to Fee. .... After a few minutes Fee called me to his office and told me that I had to sign the employment application. I told Fee that I did not see a place for my signature. Fee showed me two additional pages, neither of which were part of the original three page application, and told me that I had to sign both pages.... Fee told me that the two pages were supposed to be attached to my employment application and explained that these papers got lost in the mess of papers on his desk....
Fee told me the pages were not numbered and he place[d] them behind my employment application....
(Decl. of Lucia Marciano (“Marciano Deck”) (Dkt. No. 44) ¶¶ 3-8 (emphasis added).) However, after Defendants submitted photographs of the original tri-fold application, showing that all three pages were connected, Plaintiff offered a different recollection:
When Fee handed me the employment application, it was folded. The only page that was visible was the first page, which had the words “Application for Employment — NY” on the top. I filled that page out and turned over that first page.
When I did so, only the second and third pages were visible — the pages that have the words “Employment History” ... and “Education” ... on top. I filled those out as well....
I did not see any other pages when I filled out the employment application. I returned the application to Fee.
After a few minutes, Fee called me into his office and .... told me that I had to sign two pages that I believed were separate pages because he never told me they were attached on the backside of my employment application and I had not seen any pages other than the three I had filled out....
Fee[,] still holding the application, showed me the signature page [for the Employment Agreement] and told me to sign. He then showed me [the signature page for the Arbitration Agreement] and told me to sign that page also. Fee refused to give me either page to read on my own, and rushed me through the language on the pages while I tried to follow along. There was no language on either page about arbitration.
[I]t appears [that] a page containing alleged arbitration language ... may have been on the reverse side of one of the signature pages that was folded behind the last page of my application, but I did not see that page and was not notified of it. Nothing required me to read, fill out or sign that page at the time I filled out the 3 page application. There was no language on either signature page tonotify me that there was arbitration language on the reverse side or that my signature meant I was agreeing to arbitration. Fee did not turn the page over to show me the reverse side, when he told me that I had to sign [the two signature pages], and rushed me to sign them. Fee did not show me the page containing arbitration language and he did not tell me anything about arbitration before I signed. Fee refused to give me the page to read on my own[. I]n fact, I believe he deliberately misrepresented the Acknowledgment and Authorization signature pages and prevented me from seeing the page containing arbitration language....
(Decl. of Lucia Marciano (“Second Marciano Decl.”) (Dkt. No. 51) ¶¶ 2-5, 8 (emphasis added).) Plaintiff thus ultimately agrees with Defendants as to the form of the Employment Application and the placement of both pages of the Arbitration Agreement, but she disputes Defendants’ contention that her signature constituted a valid acceptance of that agreement.
Under New York law, “[a] party is under an obligation to read a document before he or she signs it, and a party cannot generally avoid the effect of a [document] on the ground that he or she did not read it or know its contents.” Brandywine Pavers, LLC v. Bombard,
Plaintiff does not argue that these allegations satisfy the elements of any specific legal doctrine — such as fraud, duress, coercion, or misrepresentation— that would justify invalidating the Arbitration Agreement. However, a review of potentially applicable doctrines reveals that none apply to this case. To state a claim for fraud, Plaintiff must establish that it was reasonable for her to rely on Defendants’ alleged misrepresentation. See Cont’l Airlines, Inc. v. Lelakis,
The language on that page also includes an acknowledgment that “[n]o implied, oral or written agreements contrary to the express language of this agreement are valid unless they are in writing and signed by the President of the Company,” and that “[n]o supervisor or representative of the Company, other than the President of the Company, has any authority to make any agreements contrary to the foregoing.” (See Marciano Deck, Ex. C; Second Marciano Deck ¶ 7.) This language thus “destroys” Plaintiffs allegations “that the agreement was executed in reliance upon
Finally, Plaintiffs purported reliance on Fee’s alleged representation that the signature page contained the entirety of the Agreement’s language would have been unreasonable in light of the first sentence on the page, which is, in fact, a sentence fragment. (See Marciano Decl., Ex. C (Arbitration Agreement signature page, beginning with the sentence fragment “Company’s unrestricted option at any time, with or without good cause”).) See Sorenson v. Bridge Capital Corp.,
In addition to alleging that Fee effectively concealed the other page of the Arbitration Agreement from her, Plaintiff also alleges that Fee actively prevented her from reading it. (See Second Marciano Deck ¶ 8 (“Fee refused to give me the [signature] page to read on my own[, and,] in fact, I believe he deliberately misrepresented the Acknowledgment and Authorization signature pages and prevented me from seeing the page containing arbitration language_”).) Courts have recognized that a party might not be bound by a contract where the other party prevents it from reading the contract’s terms. See, e.g., In re Toscano,
Furthermore, Plaintiff has not sufficiently alleged that Defendants used “high pressure tactics or any other form of coercion in attaining her consent.” Nayal v. HIP Network Servs. IPA, Inc.,
b. Illusory Promise
Plaintiff next contends that, even if she assented to the Arbitration Agreement, it is nonetheless unenforceable because it contains an illusory promise. See In re 114 Tenth Ave. Assoc., Inc.,
If hired, I agree as follows: My employment and compensation are terminable at will, are for no definite period, and my employment and compensation may be terminated by the Company at any time and for any reason whatsoever, with or without good cause at the option of either the Company or myself. Consequently, all terms and conditions of my employment, with the exception of the arbitration agreement, may be changed or withdrawn at the Company’s unrestricted option at any time, with or without good cause. No implied, oral or written agreements contrary to the express language of this agreement are valid unless they are in writing and signed by the President of the Company. No supervisor or representative of the Company, other than the President of the Company, has any authority to make any agreements contrary to the foregoing. This agreement is the entire agreement between the Company and the employee, and takes the place of all prior agreements, representations, and understandings of the employee and the Company.
{Id., Exs. C, D (emphasis removed).) She contends that this language “gives Defendants ... the unrestricted right to modify” the Agreement, such that DCH “can do whatever [it] wants with respect to the [Agreement], including decide that it does not apply to the company’s claims.” (Opp’n 9-10.)
“[U]nder New York law, contract claims are generally not subject to summary judgment if the resolution of a dispute turns on the meaning of an ambiguous term or phrase.” Fed. Ins. Co. v. Am. Home Assurance Co.,
c. Consideration
Plaintiff next contends that the Arbitration Agreement is unenforceable because Plaintiff received “no consideration” for her “purported promise to submit to arbitration.” (Opp’n 12.) She specifically claims that she was “promised nothing in return for her giving up her right to [a] jury trial,” in that “Defendants [did] not agree to consider her application” in return for signing the Agreement, and “they [did] not offer her employment^] ... continued employment^] ... [or] any other benefit to which Plaintiff was not otherwise entitled.” (Id.) Moreover, she asserts that there was no “detriment to Defendants.” (Id.) Even if Plaintiff was correct that Defendants did not promise to hire or to consider hiring her in exchange for signing the Arbitration Agreement, the Agreement by itself contains sufficient consideration because, as discussed, it mutually binds both parties to submit claims exclusively to arbitration. See Hellenic Lines, Ltd. v. Louis Dreyfus Corp.,
d. Substantive Unconscionability
Plaintiff finally claims that the Agreement is unenforceable because it is substantively unconscionable due to the “more than speculative” “risk of prohibitive arbitration cost[s].” (Opp’n 15.) She specifically asserts that “[c]osts are not addressed in the alleged agreement,” that “Defendants are only obligated to pay the
“[W]here ... a party seeks to invalidate an arbitration agreement on the ground that arbitration would be prohibitively expensive, that party bears the burden of showing the likelihood of incurring such costs.” Green Tree Fin. Corp.-Ala.,
3. Conclusion&emdash;The Arbitration Agreement Is Enforceable
For the foregoing reasons, the Court finds that the Arbitration Agreement constitutes “a valid agreement to arbitrate.” In re Am. Express Fin. Advisors Sec. Litig.,
Defendants further request that the Court award them attorneys’ fees “in connection with the filing of this [M]otion” because, according to them, “Plaintiff has irrationally and inexplicably refused to abide by her contractual obligations to arbitrate” despite “[being] given multiple opportunities ... by Defendants ... [and] by this Court[ ] to fulfill her agreement to arbitrate.” (Mem. 18.) It is true, as Defendants note, that the Court “may, pursuant to its inherent equitable powers, assess attorneys’ fees and costs when a party has ‘acted in bad faith, vexatiously, wantonly, or for oppressive reasons.’” First Nat’l Supermarkets, Inc. v. Retail, Wholesale & Chain Store Food Emps. Union Local 338,
III. Conclusion
For the foregoing reasons, the Court grants Defendants’ Motion To Compel Arbitration, but it denies their Motion for Attorneys’ Fees. The case will remain stayed pending arbitration. The Clerk of Court is respectfully requested to terminate the pending Motion. (See Dkt. No. 35.) SO ORDERED.
Notes
. Although the Arbitration Agreement does not specify which state’s law applies to the agreement, the Parties’ Memoranda apply New York law. (See Mem. 11 (applying New York law); Opp’n 6 (same).) Consequently, the Court applies New York law when interpreting the agreement. See Motorola Credit Corp. v. Uzan,
. Plaintiff asserts that, "because Defendants have raised [this] argument in their reply papers for the first time, and submitted new evidence, [the argument and the evidence] should be disregarded.” (Sur-reply 1.) However, consideration of the argument and the evidence is appropriate because it was directly responsive to claims Plaintiff made in her Memorandum of Law and associated Declaration. (See Opp’n 1-2 (”[T]he application was a three page document that made no reference at all to arbitration.... At no point during the application process was [Plaintiff] ever shown the actual arbitration agreement
. Plaintiff cites two cases that appear to be at odds with this holding, both of which are unavailing. First, Plaintiff cites Specht v. Netscape Communications Corp.,
. In her first Declaration, Plaintiff alleged that "Fee rushed [her] through both [signature pages], pointing to selected sentences and reading through them while [she] tried to follow along,” and that she “was never given the opportunity to read” the first page of the Arbitration Agreement. (Marciano Deck ¶¶ 6, 11.)
. Although Plaintiff disputes Defendants' account of the circumstances surrounding the contract signing, the Court will not allow her to create a fact dispute through her own contradictory statements made in two affidavits. (See Marciano Decl. ¶¶ 6, 8 (alleging that the employment-application pages were not attached to each other); Second Marciano Decl. ¶ 2 (conceding that the pages were folded and attached).) See Margo v. Weiss,
. Plaintiff specifically alleges that she "asked Fee what [the words "Please continue to Back Page” on the Arbitration Agreement’s signature page] meant,” and that "he told [her that] the pages were not numbered and answered ... that the ‘Back Page’ was the page he made [her] sign first,” i.e. the signature page of the Employment Agreement. (Second Marciano Decl. ¶ 7.) Plaintiff further alleges that she "understood [Fee’s response] to mean that there was no language other than what [he] had already shown [her] on the signature pages he made [her] sign.” (Id.) However, the photographs of the Employment Application make clear that Fee’s explanation fairly interpreted the language, because in the context of the tri-fold document, where the Arbitration Agreement preceded the Employment Agreement, the latter document was, in fact, the "Back Page” of the entire Employment Application. (See Ferrantino Decl., Ex. A.)
. Although the Parties do not appear to dispute this issue, the Court notes that claims brought under Title VII, the ADA, and New York's Human Rights Law ("NYHRL”) are arbitrable. See Parisi v. Goldman, Sachs & Co.,
. The Court rejects Defendants’ request that it dismiss the case instead of staying it. (See Mem. 15-16.) Defendants cite a number of cases in this circuit recognizing that dismissal is appropriate despite the FAA's clear command that courts "shall ... stay the trial of the action.”