Kasie Stevens-Bratton v. TruGreen , 675 F. App'x 563 ( 2017 )

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 17a0022n.06
No. 16-5161
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
KASIE STEVENS-BRATTON, individually and on ) FILED
behalf of all others similarly situated, ) Jan 11, 2017
) DEBORAH S. HUNT, Clerk
Plaintiff-Appellant, )
)
ON APPEAL FROM THE
v. )
UNITED STATES DISTRICT
)
COURT FOR THE WESTERN
TRUGREEN, INC., )
DISTRICT OF TENNESSEE
)
Defendant-Appellee. )
)
)
)
BEFORE: KEITH, BATCHELDER, and CLAY, Circuit Judges.
DAMON J. KEITH, Circuit Judge. Kasie Stevens-Bratton (“Stevens-Bratton”) appeals
from the district court’s order granting TruGreen, Inc.’s (“TruGreen”) motion to compel
arbitration and denying her class certification, which dismissed all claims against TruGreen. The
district court concluded that an agreement between Stevens-Bratton and TruGreen required
arbitration even though the agreement expired before the relevant events that are the subject of
Stevens-Bratton’s lawsuit. Because the dispute between Stevens-Bratton and TruGreen does not
“arise under” the expired agreement, we REVERSE the judgment compelling arbitration and
REMAND for further proceedings.
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I. BACKGROUND
TruGreen is a lawn care service provider headquartered in Memphis, Tennessee. On
May 15, 2013, Stevens-Bratton entered into an agreement with TruGreen for lawn care services.
The agreement included three specific provisions at issue in this case:
CONTACT INFORMATION. If I have provided TruGreen with
my cell phone number, I agree that TruGreen may contact me on
that number using an automatic telephone dialing system or
prerecorded or artificial voice to discuss my account and lawn care
services, including current and possible future services, customer
service and billing. I understand that providing my cell phone
number is not required to purchase TruGreen’s services and that I
may revoke this permission at any time.
MANDATORY ARBITRATION. Purchaser and TruGreen agree
that any claim, dispute or controversy (“Claim”) between them or
against the other or the employees, agents or assigns of the other,
and any Claim arising from or relating to this agreement or the
relationships which result from this agreement including but not
limited to any tort or statutory Claim shall by resolved by neutral
binding arbitration by the American Arbitration Association
(“AAA”), under the Rules of the AAA in effect at the time the
Claim is filed (“AAA Rules”). . . . Each party shall be responsible
for paying its own attorneys’ fees, costs and expenses, the
arbitration fees and arbitrator compensation shall be payable as
provided in the AAA Rules. However, for a Claim of $15,000 or
less brought by Purchaser in his/her/its individual capacity, if
Purchaser so requests in writing, TruGreen will pay Purchaser’s
arbitration fees and arbitrator compensation due to the AAA for
such Claim to the extent they exceed any filing fees that the
Purchaser would pay to a court with jurisdiction over the Claim.
The arbitrator’s power to conduct any arbitration proceeding under
this arbitration agreement shall be limited as follows: any
arbitration proceeding under this agreement will not be
consolidated or joined with any arbitration proceeding under any
other agreement, or involving any other property or premises, and
will not proceed as a class action or private attorney general action.
The foregoing prohibition on consolidated, class action and private
attorney general arbitrations is an essential and integral part of this
arbitration clause and is not severable from the remainder of the
clause. . . . This arbitration agreement is made pursuant to a
transaction involving interstate commerce and shall be governed
by the Federal Arbitration Act. 9 U.S.C. Sections 1-16. . . . Neither
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party shall sue the other party with respect to any matter in dispute
between the parties other than for enforcement of this arbitration
agreement or of the arbitrator’s award. THE PARTIES
UNDERSTAND THAT THEY WOULD HAVE HAD A
RIGHT OR OPPORTUNITY TO LITIGATE DISPUTES
THROUGH A COURT AND TO HAVE A JUDGE OR JURY
DECIDE THEIR CASE, BUT THEY CHOOSE TO HAVE
ANY DISPUTES DECIDED THROUGH ARBITRATION.
CLASS ACTION WAIVER. Any Claim must be brought in the
parties’ individual capacity, and not as a plaintiff or class member
in any purported class, collective, representative, multiple plaintiff,
or similar basis (“Class Action”), and the parties expressly waive
any ability to maintain any Class Action in any forum whatsoever.
The arbitrator shall not have authority to combine or aggregate
similar claims or conduct any Class Action. Nor shall the arbitrator
have authority to make an award to any person or entity not a party
to the arbitration. Any claim that all or part of this Class Action
Waiver is unenforceable, unconscionable, void, or voidable may be
determined only in a court of competent jurisdiction and not by an
arbitrator. THE PARTIES UNDERSTAND THAT THEY
WOULD HAVE HAD A RIGHT TO LITIGATE THROUGH
A COURT AND TO HAVE A JUDGE OR JURY DECIDE
THEIR CASE AND TO BE PARTY TO A CLASS OR
REPRESENTATIVE ACTION, HOWEVER, THEY
UNDERSTAND AND CHOOSE TO HAVE ANY CLAIMS
DECIDED INDIVIDUALLY, THROUGH ARBITRATION.
TruGreen provided lawn care services to Stevens-Bratton from May 15, 2013 until May
15, 2014, when Stevens-Bratton terminated the agreement with TruGreen. On November 9,
2013, Stevens-Bratton registered her cell phone number with the National Do-Not-Call Registry.
Beginning on January 27, 2015, Stevens-Bratton received over ten telemarketing calls on her cell
phone from TruGreen, who used an automatic telephone dialing system. Despite Stevens-
Bratton’s requests that TruGreen stop calling her, the calls continued.
Thereafter, Stevens-Bratton filed a complaint against TruGreen alleging violations under
the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227, and sought class
certification, or in the alternative, a stay of certification briefing pending discovery in federal
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district court. TruGreen filed an answer and a motion to dismiss and compel arbitration, or in the
alternative, to stay the litigation. The district court denied Stevens-Bratton’s motion for class
certification, granted TruGreen’s motion to compel arbitration, dismissed all claims against
TruGreen, and entered a judgment for TruGreen. Stevens-Bratton timely appealed.
II. DISCUSSION
A. Standard of Review
“This Court reviews de novo a district court’s conclusions of law regarding whether to
compel arbitration pursuant to the Federal Arbitration Act.” Lowry v. JPMorgan Chase Bank,
N.A., 522 F. App’x 281 (6th Cir. 2013) (citing Answers in Genesis of Ky., Inc. v. Creation
Ministries, Int’l, Ltd., 556 F.3d 459, 469 (6th Cir. 2009)). “[B]efore compelling arbitration a
court must determine whether a valid arbitration agreement exists and whether the dispute falls
within that agreement’s scope.” Rowan v. Brookdale Senior Living Cmtys., Inc., 647 F. App’x
607, 609 (6th Cir. 2016) (citing Fazio v. Lehman Bros., Inc., 340 F.3d 386, 392 (6th Cir. 2003)).
“The nonmoving party . . . may challenge an arbitration agreement ‘upon such grounds as exist
at law or in equity for the revocation of any contract.’” Id. (quoting 9 U.S.C. § 2).
B. Analysis
1. Arbitrability
Stevens-Bratton argues that the agreement’s arbitration clause does not apply to her
TCPA claim concerning the legality of the telemarketing calls because the agreement expired
before she received those calls. The FAA reflects a “liberal federal policy favoring arbitration.”
AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011). However, “[b]efore compelling
an unwilling party to arbitrate, a court must engage in a limited review to determine whether the
dispute is arbitrable; meaning that a valid agreement to arbitrate exists between the parties and
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that the specific dispute falls within the substantive scope of that agreement.” Bratt Enter., Inc.
v. Noble Intern. Ltd., 338 F.3d 609, 612 (6th Cir. 2013) (internal quotation and citation omitted).
In Litton, the Supreme Court considered whether a dispute over layoffs, which occurred
after the expiration of a collective-bargaining agreement, arose under the agreement despite its
expiration. Litton Fin. Printing Div., a Div. of Litton Bus. Sys., Inc. v. NLRB, 501 U.S. 190, 193
(1991). The Court held that the presumption in favor of postexpiration arbitration of matters will
apply “only where a dispute has its real source in the contract.” Id. at 205. Further, the Court
stated that a dispute will have its real source in the contract where: (1) it involves facts and
occurrences that arose before expiration; (2) an action taken after expiration infringes a right that
accrued or vested under the agreement; or (3) under normal principles of contract interpretation,
the disputed contractual right survives expiration of the remainder of the agreement. Id. at 205-
206. Thus, in order to prevail in her argument that her dispute with TruGreen does not arise
under the contract, Stevens-Bratton must prove that none of the three aforementioned conditions
are present here.
i. Facts and occurrences did not arise before expiration
The district court in this case relied upon our Huffman decision to determine that the
arbitration clause survived the expired agreement in this case. In Huffman, this court considered
whether the “strong presumption” in favor of arbitration applies post-expiration when an
arbitration clause is not listed in a survival clause or whether the omission of the arbitration
clause from a survival clause in an agreement constitutes a “clear implication” that the parties
intended the arbitration clause to expire with the agreement. Huffman v. Hilltop Cos., LLC, 747
F.3d 391, 393 (6th Cir. 2014). Huffman involved a professional services contract agreement that
governed an employment relationship and eventually expired. Id. The agreement included both
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an arbitration clause and a survival clause, but the survival clause, which detailed the provisions
of the contract that would survive past expiration or termination of the agreement, did not
explicitly mention the arbitration clause. Id. at 394.
This court noted that “with respect to agreements containing broadly-worded arbitration
clauses, ‘there is a presumption of arbitrability in the sense that an order to arbitrate the
particular grievance should not be denied unless it may be said with positive assurance that the
arbitration clause is not susceptible of an interpretation that covers the asserted dispute.’” Id. at
395 (quoting Litton, 502 U.S. at 209). However, the Supreme Court in Litton “refuse[d] to apply
that presumption wholesale in the context of an expired . . . agreement, for to do so would make
limitless the contractual obligation to arbitrate.” Litton, 501 U.S. at 209.
In Huffman, this court rejected the argument that the omission of the arbitration provision
from the survival clause was tantamount to a clear implication that the parties did not intend the
arbitration clause to have post-expiration effect. Huffman, 747 F.3d at 397. Rather, this court
concluded that the agreement did not indicate any intent by the parties to create an exhaustive list
of every provision that would survive expiration of the agreement. Id. We rationalized that
decision on the basis that the non-compete clause of the agreement stated that it remained in
effect for twelve months after expiration, but the non-compete clause was not included in the
survival clause. Id.
However, this case is different from Huffman. There was no survival provision in the
agreement at issue here. Thus, we are dealing with a completely expired agreement. This case is
more akin to South Cent. Power Co. v. Int’l. Broth. Of Elec. Workers, Local Union 2359, 186
F.3d 733 (6th Cir. 1999), where this court considered whether arbitration was required in a
situation in which some, but not all, of the facts and occurrences arose prior to the expiration of
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the agreement. In South Central, this court held that “a dispute ‘arises under the contract’ when
a majority of the material facts and occurrences arose before the expiration of the . . .
agreement.” Id. at 740 (emphasis in original). If a majority of the material facts and occurrences
arose before the expiration of the agreement, we must then “determine if the parties negated,
either expressly or by clear implication, the presumption that the arbitration clause of the . . .
agreement extends beyond the expiration of the Old Agreement.” Id. at 741.1
TruGreen argues that a majority of the material events regarding the dispute occurred
before the agreement expired. TruGreen describes those material events as: (1) the parties’
negotiation of the terms of the agreement; (2) the memorialization and discussion of Stevens-
Bratton’s lawn care needs; (3) Stevens-Bratton’s election to provide her cell phone number to
TruGreen; and (4) Stevens-Bratton’s vesting in TruGreen the right to call her at that number to
discuss “possible future services.”
However, the memorialization of Stevens-Bratton’s lawn care services is irrelevant to this
case and thus not material, as her dispute only deals with phone calls and not anything
concerning the services TruGreen provided her. Further, usually the agreement itself or the
negotiation thereof, is not part of the inquiry of material facts concerning the dispute. See, e.g.,
South Central, 186 F.3d at 739; General Truck Drivers, Chauffeurs, Warehousemen and
Helpers, Local No. 957 v. Dayton Newspapers, Inc., 83 F. App’x 712, 714 (6th Cir. 2003);
Zucker, 174 F. App’x 944, 945, 948 (6th Cir. 2006). Thus, only two of TruGreen’s alleged
material occurrences before the expiration of the agreement remain: Stevens-Bratton providing
her cell phone number and allowing TruGreen to call her regarding “possible future services.”
1
While South Central and Litton concern cases involving collecting bargaining
agreements, “their holdings are based upon principles applicable to arbitration agreements
generally, and their application need not be limited to the collective bargaining context.” Zucker
v. After Six, Inc., 174 F. App’x 944, 947 (6th Cir. 2006).
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However, TruGreen overlooks the other material occurrences surrounding the dispute; indeed,
the occurrences at the heart of the dispute itself—the more than ten phone calls Stevens-Bratton
received after the agreement expired. The phone calls are the majority of the material events of
the dispute and thus the majority of events occurred after the agreement expired. Absent those
phone calls, there is in fact no dispute at all. Thus, we need not analyze whether the parties
negated, expressly or impliedly, the presumption that the arbitration clause extends beyond the
expiration of the agreement.2
ii. Post-expiration action does not infringe a right that accrued or vested under
agreement
The district court found that the agreement allowed TruGreen to call Stevens-Bratton
about “possible future services” and thus the right to call her accrued or vested under the
agreement. “[A] court may use standard principles of contract interpretation to determine
whether a right is vested.” Cincinnati Typographical Union No. 3, Local 14519, Commc’ns.
Workers of America, AFL-CIO v. Gannett Satellite Info. Network, Inc., 17 F.3d 906, 910 (6th
Cir. 1994) (citation omitted). That means “we might conclude the parties intended a right to vest
if we are shown contract language or extrinsic evidence to support that conclusion.” Id. Further,
this court presumes certain types of rights to be “accrued or vested” without any other evidence
in a contract when they can be “worked toward or accumulated over time.” Id. at 911 (citing
2
TruGreen points to our holding in Fazio v. Lehman Bros., Inc., 340 F.3d 386 (6th Cir.
2003), to assert that the proper method to determine whether an issue is within the scope of an
arbitration agreement “is to ask if an action could be maintained without reference to the contract
or relationship at issue. If it could, it is likely outside the scope of the arbitration agreement.”
Id. at 395. However, this rule applies to disputes arising out of existing agreements, not those
that expired prior to the dispute. See, e.g., Nestle Waters North America, Inc. v. Bollman, 505
F.3d 498 (6th Cir. 2007); NCR Corp. v. Korala Assocs., Ltd., 512 F.3d 807 (6th Cir. 2008);
Dental Assocs., P.C. v. American Dental Partners of Michigan, LLC, 520 F. App’x 349 (6th Cir.
2013). Whether the parties could maintain an action without reference to the contract or
relationship is not helpful when, as here, the contract has expired.
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Chauffeurs, Teamsters & Helpers, Local Union 238 v. C.R.S.T., Inc., 795 F.2d 1400, 1404 (8th
Cir. 1986) (en banc)). Some examples are severance or vacation pay, where the longer a person
works, more pay accrues and thus the right accrues and vests over time. Id.TruGreen’s right to call Stevens-Bratton is not the type of right that we typically view as
accruing or vesting under a contract. We do not view a right under an agreement as dependent
upon the conveyance of a benefit, but instead we view a purported right as such if it can be
“worked toward or accumulated over time.” Id. The right to call a phone number does not
accumulate over time. In fact, the right to call someone’s phone number is revocable by that
person at any point, which the agreement at issue anticipates. Thus, TruGreen did not have a
vested right to call Stevens-Bratton. Even if we assumed otherwise, our inquiry would then be
whether Stevens-Bratton’s request to end the telemarketing calls infringed on TruGreen’s right to
call her. See Litton, 501 U.S. at 205-06 (requiring analysis of whether an action taken after
expiration infringes a right that accrued or vested under the agreement). That inquiry is
counterintuitive and further illustrates that the right to call a person’s number is not the type of
right that would accrue or vest under a contract.
iii. Disputed contractual right does not survive expiration under normal
principles of contract interpretation
Despite the above analysis, we must still determine whether the disputed contractual
right, that is, TruGreen’s right to call Stevens-Bratton regarding future services, survives
expiration under normal principles of contract interpretation. “[C]ontracts must be construed as
a whole . . . .” Workmon v. Publishers Clearing House, 118 F.3d 457, 459 (6th Cir. 1997).
“Moreover, the ‘cardinal rule’ in contract interpretation is to ascertain the parties’ intent.” Soltis
v. J.C. Penny Corp. Inc., 635 F. App’x 245, 248 (6th Cir. 2015) (quoting Omnicom Grp., Inc. v.
880 W. Long Lake Assocs., 504 F. App’x 487, 490 (6th Cir. 2012)). “In an unambiguous
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contract, intent is established solely based on the plain language of the contract because in such a
case, no outside evidence can better evince the intent of the parties than the writing itself.” Id.(internal quotation marks omitted). An ambiguous contract, however, “should be construed
against its drafter.” Royal Ins. Co. of America v. Orient Overseas Container Line Ltd., 525 F.3d
409, 423 (6th Cir. 2008). Additionally, “contracts must be construed consistent with common
sense and in a manner that avoids absurd results.” Certified Restoration Dry Cleaning Network,
L.L.C. v. Tenke Corp., 511 F.3d 535, 545 (6th Cir. 2007) (citation omitted).
The contact information provision at issue in the agreement states that Stevens-Bratton
agrees that TruGreen may contact her on her cell phone “to discuss [her] account and lawn care
services, including current and possible future services, customer service and billing.” The
district court interpreted the provision to mean that TruGreen could contact Stevens-Bratton after
the termination of her agreement to discuss returning as a client for more services.
However, Stevens-Bratton argues that this interpretation would lead to absurd results
because it would allow TruGreen to contact her indefinitely past the expiration of the agreement.
She argues that nothing in that contract provision implies that the discussions themselves would
take place outside the term of the contract. To be sure, the district court acknowledged that this
interpretation, which terminates the right to call about future services at the expiration of the
contract, was just as viable an interpretation as the reading that allows for calls concerning
possible future services indefinitely after termination of the contract. Thus, because the
provision is susceptible to more than one reasonable interpretation, there is ambiguity in the
contract. See Roy v. Bledsoe Cmty. Hosp., Inc., 61 F. App'x 930, 934 (6th Cir. 2003).
Construing the provision against the contract’s drafter, TruGreen, we must read the
provision regarding “possible future services” with the interpretation that favors Stevens-Bratton,
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identified by the district court, as concerning Stevens-Bratton’s account with TruGreen before
the contract expired. Thus, TruGreen’s disputed right to call Stevens-Bratton does not survive
expiration under the contract under normal principles of contract interpretation.3
For these reasons, we conclude that Stevens-Bratton’s TCPA dispute with TruGreen did
not arise under the contract and thus the district court’s judgment was erroneous.
2. Unconscionability
Stevens-Bratton also argues that the arbitration clause is unconscionably broad because it
pertains to “any claim, dispute or controversy.” We resolve this issue summarily. This court has
upheld arbitration provisions with the same language that Stevens-Bratton disputes. See, e.g.,
Andrews v. TD Ameritrade, Inc., 596 F. App’x 366, 368 (6th Cir. 2014) (upholding arbitration
provision that stated that “any controversy between [the parties] . . . arising out of or relating to
this Agreement, our relationship, any services provided . . . or the use of the Services, . . . shall
be arbitrated . . .”); Lowry v. JPMorgan Chase Bank, N.A., 522 F. App’x 281, 283 (6th Cir.
2013) (upholding arbitration provision that applied to “[a]ny claim or dispute, whether in
contract, tort, statute or otherwise . . . between you and us or our employees, agents, successors
or assigns, which arise out of or relate to your credit application . . .”). Thus, the district court
did not err in concluding that the arbitration provision was not unconscionable.
3. Class Action Waiver
Lastly, TruGreen argues that the class action waiver in the agreement is enforceable and
that even if we reverse the district court’s order granting the motion to compel arbitration, we
3
To be sure, pursuant to Huffman, we examine “arbitration language in a contract in light
of the strong policy in favor of arbitration, resolving any doubts as to the parties’ intentions in
favor of arbitration.” Huffman, 747 F.3d at 395. However, at this stage of the analysis, we are
not examining the arbitration language in the contract. Instead, we must decide whether
TruGreen’s disputed right to call Stevens-Bratton survives expiration of the agreement under
basic contract principles, not under the policy favoring arbitration.
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should affirm the district court’s order denying class certification. In response, Stevens-Bratton
argues that the class action waiver does not apply to her claims for conduct that occurred after
the agreement expired. The district court denied Stevens-Bratton’s motion for class certification
on the basis that the claim was arbitrable. The district court did not make findings of fact or
conclusions of law regarding the merits of Stevens-Bratton’s motion for class certification.
Consequently, there is no record to review regarding application of the class action waiver.
Because we reverse and remand the district court’s order granting the motion to compel
arbitration and dismissing Stevens-Bratton’s claims, we vacate the district court’s order denying
the motion for class certification, and remand for further proceedings consistent with this
opinion.
III. CONCLUSION
For the foregoing reasons, the district court erroneously found that Stevens-Bratton’s
dispute against TruGreen arose under the expired agreement and thus erroneously concluded that
the dispute was arbitrable. Accordingly, we REVERSE the district court’s judgment compelling
arbitration, vacate the judgment denying class certification, and REMAND for further
proceedings.
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