Graham v. J-Pay, Inc. ( 2019 )

[Cite as Graham v. J-Pay, Inc., 2019-Ohio-598.]
COURT OF APPEALS
RICHLAND COUNTY, OHIO
FIFTH APPELLATE DISTRICT
NATHAN GRAHAM #384-747 : JUDGES:
:
: Hon. John W. Wise, P.J.
Plaintiff-Appellant : Hon. Patricia A. Delaney, J.
: Hon. Craig R. Baldwin, J.
-vs- :
: Case No. 18CA85
:
JPAY, INC. :
:
:
Defendant-Appellee : OPINION
CHARACTER OF PROCEEDING: Appeal from the Richland County Court
of Common Pleas, Case No. 2018-CV-
0470D
JUDGMENT: AFFIRMED
DATE OF JUDGMENT ENTRY: February 15,2019
APPEARANCES:
For Plaintiff-Appellant: For Defendant-Appellee:
NATHAN GRAHAM, PRO SE ZACHARY B. SIMONOFF
#384-747 124 Middle Ave. #500
P.O. Box 45699 Elyria, OH 44035
Lucasville, OH 45699
Richland County, Case No. 18CA85 2
Delaney, J.
{¶1} Plaintiff-appellant Nathan Graham appeals from the August 31, 2018
decision of the Richland County Court of Common Pleas granting Defendant-appellee
JPay Inc.’s motion to stay proceedings and compel arbitration.
FACTS AND PROCEDURAL HISTORY
{¶2} The following facts are adduced from appellant’s complaint filed July 11,
2018.
{¶3} Appellant is incarcerated in an Ohio correctional facility. Appellee provides
electronic media access to Ohio inmates via kiosks located in the prisons. Appellee’s
services include sending and receiving email; video messaging; and 30-minute “video
visits” between prisoners and family members. Inmates purchase media access from
appellee by transferring funds from their commissary accounts to their J-Pay Media
Accounts.
{¶4} In addition to the kiosks, appellee also provides inmates with “individual
digital devices” for electronic media such as digital music, e-books, and electronic games.
These devices are akin to iPads but with offerings limited to appellee’s services.
Appellant owned one of these devices, known as a “JP 4.” The “JP 4” was upgraded to
a “JP 5” in 2015. Appellant asserts that due to prior litigation with appellee, he received
a credit of $547.70 from J-Pay. Appellant eventually upgraded to a “JP 5.”
{¶5} On March 17, 2017, appellant alleges that he observed inmates clustered
around a J-Pay kiosk. Upon investigation, appellant observed the kiosk was “open and
running” his personal information, including his personal emails, photos, account
Richland County, Case No. 18CA85 3
statements, etc. Appellant asserts prison staff advised appellee of the alleged “hack” of
appellant’s account, but appellee denied any problems with the account.
{¶6} Appellant asserts that directly because of revelations of his private
information, he and his family members have been harassed and threatened.
{¶7} Appellant further asserts that his “JP 5” tablet “exploded,” rendering it
unable to be used. Appellee allegedly refused to compensate appellant for the damage.
{¶8} Appellant bought a new “JP 5” tablet after conversation with representatives
of appellee. Appellant claims appellee promised to credit his account and to let him keep
the “exploded” tablet as evidence for his lawsuit, but he was required to turn in the
“exploded” tablet when he bought the new one.
{¶9} Appellant further asserts that appellee tampered with emails on his tablet.
{¶10} On July 11, 2018, appellant filed a civil complaint asserting invasion of
privacy, intentional infliction of emotional distress, product liability, civil theft, tampering
with evidence, negligence, and breach of contract.
{¶11} On July 27, 2018, appellee filed a Motion to Stay the Proceedings and
Compel Arbitration. Appellant responded with a motion in opposition on August 20, 2018.
{¶12} On August 30, 2018, the trial court issued an Order Granting [Appellee’s]
Motion to Stay Proceedings and Compel Arbitration.
{¶13} Appellant now appeals from the trial court’s order of August 30, 2018.
Richland County, Case No. 18CA85 4
{¶14} Appellant raises one assignment of error:
ASSIGNMENT OF ERROR
{¶15} “THE TRIAL COURT ERRED AND ABUSED ITS DISCRETION WHEN IT
FOUND THAT A CONTRACT EXISTED FOR ARBITRATION AND STAYED THE
PROCEEDINGS.”
ANALYSIS
{¶16} Appellant argues the trial court should not have granted the motion to stay
proceedings and compel arbitration because he was not a party to a contract with
appellee. We disagree.
{¶17} R.C. 2711.02(B) states:
If any action is brought upon any issue referable to arbitration
under an agreement in writing for arbitration, the court in which the
action is pending, upon being satisfied that the issue involved in the
action is referable to arbitration under an agreement in writing for
arbitration, shall on application of one of the parties stay the trial of
the action until the arbitration of the issue has been had in
accordance with the agreement, provided the applicant for the stay
is not in default in proceeding with arbitration.
{¶18} A trial court's decision granting or denying a stay of proceedings pending
arbitration is a final appealable order pursuant to R.C. 2711.02(C) and is subject to de
novo review on appeal with respect to issues of law, which commonly will predominate
because such cases generally turn on issues of contractual interpretation or statutory
application. Hudson v. Ernst & Young, L.L.P., 189 Ohio App.3d 60, 2010-Ohio-2731, 937
Richland County, Case No. 18CA85 5
N.E.2d 585, ¶ 31 (10th Dist.), affirmed on other grounds sub nom. Taylor v. Ernst &
Young, L.L.P., 130 Ohio St.3d 411, 2011-Ohio-5262, 958 N.E.2d 1203.
{¶19} The Ohio General Assembly and Ohio courts have expressed a strong
public policy favoring arbitration. Hayes v. Oakridge Home, 122 Ohio St.3d 63, 2009–
Ohio–2054, 908 N.E.2d 408, ¶ 15 citing R.C. Chapter 2711 and Taylor Bldg. Corp. of Am.
v. Benfield, 117 Ohio St.3d 352, 2008–Ohio–938, 884 N.E.2d 12, ¶ 27. Because of the
strong presumption favoring arbitration, all doubts should be resolved in its favor. Hayes,
supra, citing Ignazio v. Clear Channel Broadcasting, Inc. 113 Ohio St.3d 276, 2007–Ohio–
1947, 865 N.E.2d 18, ¶ 18; Marion v. AWHR, L.L.C., 5th Dist. Stark No. 2012CA00005,
2012-Ohio-2912, ¶ 13.
{¶20} There is an exception to the presumption favoring arbitrability. See, e.g.,
Benjamin v. Pipoly, 155 Ohio App.3d 171, 2003-Ohio-5666, 800 N.E.2d 50, at ¶ 33 (**
Dist.). “‘Arbitration is a matter of contract and, in spite of the strong policy in its favor, a
party cannot be compelled to arbitrate a dispute which he has not agreed to submit to
arbitration.’ ” Id., quoting Teramar Corp. v. Rodier Corp., 40 Ohio App.3d 39, 41, 531
N.E.2d 721 (**Dist.1987). Thus, the principle favoring arbitration does not apply when
there is a question as to whether the parties before the court are the same as the parties
to the agreement to arbitrate. West v. Household Life Ins. Co., 170 Ohio App.3d 463,
2007-Ohio-845, 867 N.E.2d 868, ¶ 11 (10th Dist.).
{¶21} In the instant case, appellant asserts that he is not a party to the arbitration
clause because he never “accepted” the contract. This claim is at odds with appellant’s
averments in his complaint stating he uses appellee’s services via the kiosk at his
institution, and that he and appellee are parties to a contract. Use of appellee’s media
Richland County, Case No. 18CA85 6
services requires periodic agreement to Terms of Service which include the following
arbitration clause, in pertinent part:
* * * *.
8. DISPUTE RESOLUTION.
THIS AGREEMENT REQUIRES THE USE OF
ARBITRATION ON AN INDIVIDUAL BASIS TO RESOLVE
DISPUTES, RATHER THAN JURY TRIALS OR CLASS
ACTIONS.
About Arbitration:
In the event JPay is unable to resolve a complaint you may
have to your satisfaction (or if JPay has not been able to resolve a
dispute it has with you after attempting to do so), we agree to resolve
those disputes through binding arbitration instead of in court.
Arbitration is more informal than a lawsuit in court. Arbitration uses
neutral arbitrators instead of a judge or jury, allows for more limited
discovery than in court, and is subject to very limited review by
courts. Any arbitration under this Agreement will take place on an
individual basis; class arbitrations and in court class actions are not
permitted.
Arbitration Agreement:
a) Any dispute, claim or controversy among the parties
arising out of or relating to this Agreement (“Dispute”) shall be finally
resolved by and through binding arbitration administered by JAMS
Richland County, Case No. 18CA85 7
pursuant to its Comprehensive Arbitration Rules and Procedures
and in accordance with the Expedited Procedures in those Rules
(the “JAMS Rules”), provided that failure to adhere to any of the time
limits set forth therein shall not be a basis for challenging the award.
You may obtain copies of the current rules and forms and
instructions for initiating arbitration by contacting JAMS in any of the
following ways:
By mail:
JAMS, The Resolution Experts
600 Brickell Avenue
Suite 2600
Miami, FL 33131
Online:
Web site: www.jamsadr.com
By telephone:
1 (800) 352-5267
You agree that, by entering into this Agreement, you and
JPay are each waiving the right to a trial by jury or to participate in
a class action or class arbitration. Both the foregoing agreement of
the parties to arbitrate any and all Disputes, and the results,
determinations, findings, judgments and/or awards rendered
through any such arbitration, shall be final and binding on the parties
Richland County, Case No. 18CA85 8
and may be specifically enforced by legal proceedings in any court
of competent jurisdiction.
* * * *.
{¶22} We therefore do not find this to be a case in which there is a question as to
whether the parties before the court are parties to the agreement to arbitrate. See, West
v. Household Life Ins. Co., supra, 2007-Ohio-845 at ¶ 11. Appellant wants to apply
favorable portions of the contract to his dispute with appellee but wants to avoid the
arbitration clause. A party entering a contract has a responsibility to learn the terms of
the contract prior to agreeing to its terms. The law does not require that each aspect of a
contract be explained orally to a party prior to signing. Moore v. Houses on the Move,
Inc., 8th Dist. No. 89478, 177 Ohio App.3d 585, 2008-Ohio-3552, 895 N.E.2d 579, ¶ 28,
citing ABM Farms, 81 Ohio St.3d at 503, 692 N.E.2d 574. “It will not do for a man to enter
into a contract, and, when called upon to respond to its obligations, to say that he did not
read it when he signed it, or did not know what it contained. If this were permitted,
contracts would not be worth the paper on which they are written.” ABM Farms, supra,
citing Upton v. Tribilcock, 91 U.S. 45, 50, 23 L.Ed. 203 (1875).
{¶23} Appellant further argues that if we find that he is subject to the arbitration
clause, he is entitled to a hearing before the trial court in which he may “conduct discovery
and challenge that the arbitration clause is unconscionable and invalid.” Brief, 3.
Appellant acknowledges he did not raise the issue of unconscionability before the trial
court, but argues on the basis of our decision in Strader v. Magic Motors of Ohio, Inc., 5th
Dist. Stark No. 2006CA00376, 2007-Ohio-5358, that he is entitled to further challenge the
arbitration clause in a hearing before the trial court upon remand.
Richland County, Case No. 18CA85 9
{¶24} We note Strader was in a different procedural posture than the instant case.
In Strader, the appellant buyers responded to a motion to stay proceedings and refer to
arbitration in the trial court with a request for an additional 90 days to conduct discovery
on the arbitration clause. Although the appellee seller did not object to the request for
additional time, the trial court granted the motion to stay the proceedings and refer to
arbitration. In our remand, we ordered the trial court to allow the parties to conduct
discovery related to the arbitration clause and to conduct a hearing on the issue of
whether or not the arbitration clause is enforceable. Strader v. Magic Motors of Ohio,
Inc., 5th Dist. Stark No. 2006CA00376, 2007-Ohio-5358, ¶ 33.
{¶25} In the instant case, appellant’s sole argument before the trial court was that
he was not party to a contract with appellee. He did not challenge the enforceability of
the arbitration clause itself. We therefore find Strader distinguishable. Furthermore, our
decision in Garber v. Buckeye Chrysler-Jeep-Dodge of Shelby, 5th Dist. Richland No.
2007-CA-0121, 2008-Ohio-3533, at ¶ 17, is applicable:
Appellants' complaint only challenges the contract as a whole,
and does not contain any separate, independent challenge to the
arbitration clause. We find because appellants' complaint did not
challenge the arbitration clause, appellants have waived any such
challenge. Appellants' complaint submitted the matter to the trial
court on the entire contract. For this reason, we find the trial court did
not err in basing its decision on the pleadings and appellee's motion.
Appellee's motion was made pursuant to R.C. 2711 .02, which only
requires the court to be satisfied the matter is referable to arbitration.
Richland County, Case No. 18CA85 10
The trial court is not required to conduct a hearing or give the
appellants further opportunity to make a specific challenge to the
arbitration clause.
{¶26} The trial court noted appellant stipulated that appellee’s terms of service
constitute a “contract,” and appellant’s simultaneous claims that the terms did not apply
to him but appellee breached the contract was disingenuous. Appellant did not challenge
the arbitration clause itself, only its application to him. We conclude the trial court did not
err in granting appellee’s motion and that the trial court is not required to conduct a
hearing or grant appellant further opportunity to challenge the arbitration clause. Garber,
supra.
{¶27} In the instant case, the trial court did not err in granting appellee’s motion
to stay proceedings and compel arbitration. Appellant’s sole assignment of error is
overruled.
Richland County, Case No. 18CA85 11
CONCLUSION
{¶28} The sole assignment of error is overruled and the judgment of the Richland
County Court of Common Pleas is affirmed.
By: Delaney, J.,
Wise, John, P.J. and
Baldwin, J., concur.