Gerald Fazio Jr. v. Altice USA ( 2024 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2102-22
GERALD FAZIO JR.,
Plaintiff-Appellant,
v.
ALTICE USA, CABLEVISION,
OPTIMUM, and OPTIMUM
MOBILE,
Defendants-Respondents.
___________________________
Submitted February 27, 2024 – Decided July 10, 2024
Before Judges Sumners and Smith.
On appeal from the Superior Court of New Jersey, Law
Division, Bergen County, Docket No. L-5522-22.
Law Offices of Dana Wefer, LLC, attorneys for
appellant (Dana Wefer, on the briefs).
Lester Schwab Katz & Dwyer, LLP, attorneys for
respondents (Alfredo J. Alvarado, on the brief).
PER CURIAM
Plaintiff, Gerald Fazio, Jr., who purchased a cellphone and service plan
from defendants, appeals the trial court order dismissing his discrimination
complaint against defendants and compelling arbitration. Plaintiff contends
defendant violated his rights under the New Jersey Law Against Discrimination
(NJLAD), N.J.S.A. 10:5-1 to -50, by refusing him service when he objected to
wearing a mask in defendants' phone store during the COVID-19 pandemic.
Upon defendants' motion, the trial court dismissed plaintiff's complaint and
ordered mandatory arbitration pursuant to the sales and service agreement
executed by the parties. Plaintiff appealed, and we affirm.
I.
We summarize the relevant facts from the undisputed record. Some years'
prior to the mask incident, Gerald Fazio, Jr. was injured in an accident, resulting
in temporary quadriplegia. After rehabilitation, Fazio regained some use of his
arms and legs, but had significant physical limitations. One of those limitations
was to his respiratory system. While the record contains no medical reports to
support his injury claims, Fazio alleges in his merits brief that his diminished
respiratory function prevented him from wearing a mask on the day he entered
defendants' phone store in 2021.
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On November 20 and 25, 2019, Fazio purchased a cell phone and
cellphone service. Fazio's November 20 visit initiated his mobile phone service.
Defendants provided him a receipt which stated in pertinent part: "A copy of
all documents and agreements-including Terms and Conditions, AutoPay,
handset insurance, . . . will be sent electronically to the email address you
provided during account creation." Dency Gonzalez, defendants' Senior
Director of Business Process Management, described the above set of
"documents and agreements" to be emailed to Fazio as a "Customer Service
Agreement."
On November 25, 2019, Fazio returned to the store, signing a retail sales
agreement to purchase a cell phone to use with the service he started on
November 20.
The retail agreement stated in pertinent part:
DISPUTES. THIS AGREEMENT IS SUBJECT TO A
BINDING ARBITRATION PROVISION THAT
AFFECTS YOUR RIGHTS UNDER THIS
AGREEMENT WITH RESPECT TO ALL TERMS.
THIS PROVISION INCLUDES A WAIVER OF
CLASS ACTIONS AND PROVISIONS FOR OPTING
OUT OF ARBITRATION. A FULL COPY IS
CONTAINED IN THE SERVICE AGREEMENT
UNDER THE HEADING "BINDING
ARBITRATION" WHICH TERMS ARE
INCORPORATED BY REFERENCE.
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....
9. ELECTRONIC ACCESS TO
AGREEMENT/OTHER COMMUNICATIONS. By
signing below, you acknowledge that you have access
to Altice Mobile's Website at
https://www.alticemobile.com/Legal/prlvacy, where a
copy of this Agreement and related privacy and other
communications will be available to you. You also
consent to receive account-related communications in
an electronic format, such as by email. If you want a
paper copy of this Agreement, you may ask your sales
representative to email or print a copy for you.
The "Customer Service" agreement referenced binding arbitration in two
places. First, page one provided a notice that the terms of service contained a
binding arbitration agreement, which included a waiver of jury trial and
instructions of how to opt out of arbitration. Next, paragraph twenty-five,
entitled, "Binding Arbitration," stated in pertinent part:
Please read this section carefully. It affects your rights.
Any and all disputes arising between You and Altice,
including its respective parents, subsidiaries, affiliates,
officers, directors, employees, agents, predecessors,
and successors, shall be resolved by binding arbitration
on an individual basis in accordance with this
arbitration provision. This agreement to arbitrate is
intended to be broadly interpreted. It includes, but is
not limited to: Claims arising out of or relating to any
aspect of the relationship between us, whether based in
contract, tort, statute, fraud, misrepresentation or any
other legal theory; Claims that arose before this or any
prior Service Agreement; and Claims that may arise
after the termination of this Service Agreement.
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....
Resolving Your dispute with Altice through arbitration
means You will have a fair hearing before a neutral
arbitrator instead of in a court before a judge or jury.
YOU AGREE THAT BY ENTERING INTO THIS
SERVICE AGREEMENT, YOU AND ALTICE EACH
WAIVE THE RIGHT TO A TRIAL BY JURY AND
THE RIGHT TO PARTICIPATE IN A CLASS,
REPRESENTATIVE, OR PRIVATE ATTORNEY
GENERAL ACTION.
The rest of paragraph twenty-five detailed other arbitration aspects,
including but not limited to: the scope of eligible issues; designation of the
American Arbitration Association to administer disputes; and various
procedural considerations.
Finally, paragraph fourteen of the "Customer Service" agreement
expressly conditioned defendants' phone service on agreement by Fazio to "use
electronic signatures . . . [and] receive electronic records . . . ."
Fazio's two in-store visits to start his service, purchase his phone, and sign
his retail service agreement occurred several months before the onset of the
COVID-19 pandemic. In June 2021, while our state was still in the throes of the
pandemic, Fazio experienced technical difficulties with his cellphone. He
visited defendants' cellphone store site in Oakland for in-person customer
service to repair his phone. Store personnel declined to serve him in the store
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because he was not wearing a mask, citing store policy. They asked him to
leave. When Fazio stated that he could not wear a mask for medical reasons and
refused to leave the premises, the staff called police, who escorted him from the
premises. The police then went back into the store and obtained the replacement
part that Fazio needed, completing his transaction for him.
Fazio filed suit in October 2022, alleging defendants discriminated against
him in violation of the NJLAD, and negligent infliction of emotional distress.
The trial court granted defendants' motion to dismiss for failure to state a claim
and compel arbitration, making findings. First, the court found that the retail
and service agreements were not contracts of adhesion, also finding that Fazio
could have gotten phone service elsewhere. Next, the court found the service
agreement arbitration clause was clear and unambiguous.
Finally, the court addressed plaintiff's main argument: there could be no
meeting of the minds on the arbitration clause contained in the customer service
agreement because he never received it. The court found the parties entered into
an agreement, as represented by the terms and conditions of the customer service
and retail service agreements. It stated:
Neither party has presented to this Court concrete
evidence on this issue; however, the Court does note
that these are transactions that take place by the
thousands every day, via email, and that the service
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provided, the phone provided[,] and the loan provided
clearly would not have continued, in this Court’s
opinion, in the absence of . . . agreement between the
. . . parties . . . .
Considering the record, the court found "there is absolutely strong
evidence that the goods and services between the parties were supplied by the
defendant to the plaintiff, thus making the arbitration clause . . . binding." The
trial court found that Fazio's claim that he was discriminated against because he
refused to wear a mask in defendants' retail store during the pandemic was
within the scope of the arbitration clause in the customer service agreement.
Consequently, the court ordered the parties to arbitration.
On appeal, Fazio first contends there was no mutual assent to the
arbitration clause because he never saw the customer service agreement
defendants allegedly emailed him after November 20, 2019. Next, he argues
that even if the clause were valid, his LAD claim falls outside the scope of
arbitration. Finally, he posits that the arbitration clause is unenforceable
because the customer service agreement is a contract of adhesion.
II.
We review a trial court's order granting or denying a motion to compel
arbitration de novo because the validity of an arbitration agreement presents a
question of law. Skuse v. Pfizer, Inc., 244 N.J. 30, 46 (2020) ("[W]e need not
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defer to the interpretative analysis of the trial . . . court[] unless we find it
persuasive" (quoting Kernahan v. Home Warranty Adm'r of Fla., Inc., 236 N.J.
301, 316 (2019))). We owe no special deference to the trial court's interpretation
of an arbitration provision, which we view "with fresh eyes." Morgan v. Sanford
Brown Inst., 225 N.J. 289, 303 (2016).
The Federal Arbitration Act (FAA), 9 U.S.C. §§ 1-16, and the New Jersey
Arbitration Act (NJAA), N.J.S.A. 2A:23B-1 to -32, represent a legislative
choice "to keep arbitration agreements on 'equal footing' with other contracts."
Roach v. BM Motoring, LLC, 228 N.J. 163, 174 (2017) (quoting Atalese v. U.S.
Legal Servs. Grp., L.P., 219 N.J. 441 (2014)). Under both statutes, "arbitration
is fundamentally a matter of contract," and should be regulated according to
general contract principles. Ogunyemi v. Garden State Med. Ctr., 478 N.J.
Super. 310, 315 (App. Div. 2024) (quoting Antonucci v. Curvature Newco, Inc.,
470 N.J. Super. 553, 561 (2022)).
"An agreement to arbitrate . . . 'must be the product of mutual assent,'"
and "requires 'a meeting of the minds.'" Id. at 316 (quoting Antonucci, 470 N.J.
at 561). "'[T]o be enforceable, the terms of an arbitration agreement must be
clear,' and the contract needs to explain that the agreement waives a person's
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right to have their claim tried in a judicial forum." Ibid. (quoting Antonucci,
470 N.J. at 561).
III.
Fazio first contends that there was no mutual assent between parties,
making the arbitration clause in the customer service agreement unenforceable.
We are not persuaded.
Fazio entered into two agreements with defendants within five days in
November 2019. The record shows he first agreed to purchase phone service on
November 20, 2019, and it also shows that defendants emailed a "Customer
Service Agreement" to him. The record also shows that days later, on November
25, 2019, Fazio signed a "Retail Services Agreement" to purchase a cell phone
connected to defendants' service. The retail agreement included a "notice of
arbitration," and referenced the arbitration clause contained in the customer
service agreement. Fazio had utilized defendants' cell services for
approximately nineteen months when he entered defendants' store to correct
technical problems with his phone. Fazio posits that, because he searched his
records, including his home email, and could not locate the customer service
agreement, there was no mutual assent. This argument has no merit.
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While the record shows neither party produced the emailed copy of the
customer service agreement, the record also shows that the parties' conduct
evidenced a binding agreement. Defendants continuously supplied cellphone
service to Fazio, who used it uninterrupted for nearly two years, until he had
technical difficulties with his phone. Even on the day of the mask incident,
defendants provided Fazio with the cellphone part he needed to fix his
cellphone. Neither party ever acted as if there was no agreement. We agree
with the trial court's finding and conclude a binding agreement between the
parties existed.
Having found mutual assent, we briefly turn to the scope of the arbitration
clause. The pertinent portion of the arbitration clause reads as follows:
"[c]laims arising out of or relating to any aspect of the relationship between [the
parties], whether based in contract, tort, statute, fraud, misrepresentation or any
other legal theory . . . ." Fazio's claims fit squarely within the clear and plainly
written terms of the arbitration clause, as he alleged violation of the NJLAD and
negligent infliction of emotional distress. Because we consider arbitration
"fundamentally a matter of contract," we apply "general contract principles."
Ogunyemi, 478 N.J. Super. at 315. Applying those principles here, we conclude
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that Fazio's complaint falls within the scope of the arbitration clause in the
customer service agreement, and his argument falls flat.
Finally, we consider whether the agreement was a contract of adhesion. A
contract of adhesion is one that "is presented on a take-it-or-leave-it basis,
commonly in a standardized printed form, without opportunity for the 'adhering'
party to negotiate except perhaps on a few particulars." Vitale v. Schering-
Plough Corp., 231 N.J. 234, 246 (2017) (quoting Rudbart v. N. Jersey Dist.
Water Supply Comm'n, 127 N.J. 344 (1992)). "Although a contract of adhesion
is not per se unenforceable, a [judge] may decline to enforce it if it is found to
be unconscionable." Ibid. The customer service agreement and the retail service
agreement evidence characteristics of contracts of adhesion. They were form
agreements that fit our Court's definition as "take-it-or-leave-it" adhesion
contracts. Ibid. Nothing in the record suggests that Fazio was afforded an
opportunity to negotiate terms before assent. However, an agreement found to
be an adhesion contract can be enforced if it is not unconscionable. Ibid.When determining whether an adhesion contract is unconscionable, we
evaluate four factors. Those factors include "the subject matter of the contract,
the parties' relative bargaining positions, the degree of economic compulsion
motivating the 'adhering' party, and the public interests affected by the contract."
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Rudbart, 127 N.J. at 356. The first three factors speak to procedural
unconscionability, and the last factor speaks to substantive unconscionability.
Rodriquez v. Raymours Furniture Co., Inc., 225 N.J. 343, 367 (2016).
Applying the four-factor test to this cellphone service agreement, a
relatively commonplace consumer service, we focus on the economic
compulsion factor. Fazio engaged in the discretionary purchase of a cell phone
and related services. He was free to accept or reject defendants' services. He
could have taken his business to another cell phone company, or he could have
taken more time to read the agreements before signing. There is no procedural
unenforceability. Given the ubiquitous and fungible nature of cellphone
contracts, we discern no substantive public policy barrier to enforcement.
We conclude the arbitration clause was properly enforced by the trial
court.
Affirmed.
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