|
A federal court in Wisconsin ruled that a debt collector was entitled to invoke an arbitration agreement that was formed when the lender sent the borrower a “bill stuffer” advising him that subsequent use of his credit card would signal acceptance of the arbitration agreement.
In Tickanen v. Harris & Harris, Ltd., No. 05-CV-935, 2006 WL 3365788 (E.D. Wis. Oct. 20, 2006), Boston Store issued a credit card to Tickanen. Boston Store later sent notice to its cardholders advising them that subsequent use of the credit card would signal acceptance of changes to the credit card agreement, including the addition of an arbitration clause.
A few years later, all Boston Store credit card accounts were sold to HSBC, who reserved the right to assign the debt. Cardholders with existing balances were notified of the change. HSBC subsequently assigned Tickanen’s debt to Harris & Harris (Harris).
As part of its collection efforts, Harris sent Tickanen a letter identifying Boston Store as the creditor. Based on this letter, Tickanen sued Harris, alleging that Harris violated the Fair Debt Collection Practices Act (FDCPA) by identifying Boston Store as the creditor when Boston Store no longer owned the debt.
Harris filed a motion to compel arbitration. In opposing the motion, Tickanen argued that he never agreed to arbitrate and, alternatively, that Harris was a non-signatory with no right to invoke the arbitration agreement.
The Court found that Tickanen accepted the terms of the arbitration agreement by his conduct – specifically, his “failure to take affirmative action not to accept the agreement.” As support for this finding, the Court cited Hill v. Gateway, 2000, Inc., 105 F.3d 1147 (7th Cir. 1997), in which the Seventh Circuit held that a computer buyer assented to an arbitration agreement enclosed in the computer box because he did not return the computer within 30 days.
Citing the rule that an assignee stands in the shoes of the assignor, the Court found that Harris had a right to invoke the arbitration agreement despite being a non-signatory. The Court cited the doctrine of equitable estoppel as an alternative basis for this finding, noting that Tickanen should be estopped from asserting that only the debt was assigned to Harris. As a result, the Court ordered Tickanen to arbitrate his claims.
Just like any contract, a party offering an arbitration agreement may invite acceptance by conduct. This conduct may take various forms, including continued use of a credit card as in this case, retention of goods as in Hill, and continued employment as in Berkley v. Dillard’s, Inc., 450 F.3d 775 (8th Cir. 2006).
Subscribe to a free weekly update on ADR case law and
legislation
|