Morales v. Sun Constructors, Inc. , 541 F.3d 218 ( 2008 )

DISSENTING OPINION

FUENTES, Circuit Judge,

dissenting

No one disputes that Sun asked Hodge to translate the Employment Agreement for Morales, who did not read English. And no one disputes that Hodge failed to translate the arbitration clause in the Agreement. On this basis, I disagree with my colleagues’ conclusion that the parties here manifested mutual assent to the arbitration clause of the Agreement, and I would therefore affirm the District Court’s decision.³

The majority opens its opinion by asserting that this case “requires us to determine whether an arbitration clause is enforceable where one party is ignorant of the language in which the agreement is written.” Maj. Op. at 2. The problem, however, is not simply Morales’ ignorance of the language. The gravamen of this case is that Sun — the other party to the Agreement — took upon itself the task of translating the Agreement for Morales and, in doing so, failed to convey the entire contents of the Agreement. What we must determine is whether this failure resulted in a lack of mutual assent; I believe that it did.

The law is clear that a party may not be relieved of his or her obligations pursuant to a contract solely because he or she cannot understand the language in which that contract is written. However, the law is also clear that there are certain circumstances where a person’s inability to comprehend the language in which a contract is written may result in a lack of mutual assent. In fact, the very cases upon which the majority relies acknowledge that such circumstances exist. For example, in New York Life Insurance Co. v. Kwetkauskas, we noted that “an illiterate man may bind himself by contract by negligently failing to learn the contents of an instrument which he has executed,” suggesting that a person who had not acted negligently may not be so bound. 63 F.2d 890, 891 (3d Cir. 1933) (emphasis added). Similarly, in Booker v. Robert Half International, Inc., the court stated that failure “to read or understand an arbitration agreement, or an employer’s failure to explain it, simply will not constitute ‘special circumstances’ [that] warrant[] relieving an employee from compliance with the terms of an arbitration agreement that she signed,” suggesting that “special circumstances” do exist. 315 F. Supp. 2d 94, 101 (D.D.C. 2004) (emphasis added).

The majority appears to agree that there can be such “special circumstances,” but suggests that these circumstances exist only in a case where a fraud has been perpetuated. Maj. Op. at 7.1 do not think that this is correct. In New York Life, the court noted that an illiterate signer will be held to a contract if he or she negligently failed to learn its contents; it does not automatically follow that an illiterate signer who is unaware of the contents of a contract but did not act in a negligent fashion will similarly be held to that contract unless he or she was a victim of fraud. 63 F.2d at 891. In Pimpinello v. Swift & Co., another case cited by the majority, the court found that if a signer is “illiterate, or blind, or ignorant of the alien language of the writing” and the contents of a contract “are misread or misinterpreted to him” or her, the writing would be considered void unless the signer had acted negligently. 253 N.Y. 159, 163, 170 N.E. 530 (1930) (emphasis added). The court did not suggest that the contents would need to be intentionally “misread or misinterpreted” in order to void the writing.

More recently, in American Heritage Life Insurance Co. v. Lang, the Fifth Circuit considered similar facts as those here. 321 F.3d 533 (5th Cir. 1993). In Lang, also cited by the majority, an illiterate man executed a series of loans with a representative of an insurance company. Id. at 535. The representative was aware that the man was unable to read, and took on the task of explaining each document to him.' Id. at 536. The man later testified that the representative never explained that some of the documents were arbitration agreements, and brought suit charging both that the arbitration clause was invalid and that the representative had defrauded him. Id. The Lang court addressed the questions of mutual assent and fraud separately. It noted that while illiteracy alone is not a sufficient basis for the invalidation of an arbitration agreement, the man’s “alleged ignorance of the fact that he was signing arbitration agreements signifies that he may not have consented to them and a meeting of the minds may not have existed.” Id. at 538; see also id. at 539 (concluding that “there [was] sufficient evidence to indicate that the arbitration agreements may not have been valid under ordinary contract principles,” including the principle that both parties must manifest mutual assent). While the case was ultimately remanded so that the district court could reconsider the claim of fraud, the remand did not affect the court’s separate observation that a “meeting of the minds” may not have not occurred. Id. at 539.

Here, although Morales does not allege that Sun acted fraudulently, he does allege that Hodge, who was translating the document at Sun’s direction, failed to inform Morales that the Agreement contained an arbitration clause. Importantly, Sun does not dispute the following factual findings made by the District Court: (1) Morales was unable to read the contract; (2) Sun assigned Hodge, a coworker who himself was not fluent in English, to translate the document for Morales; (3) Hodge, in translating the document, neglected to translate the arbitration clauses; and (4) as a result of Hodge’s incomplete translation, Morales was not aware that the Agreement contained an arbitration clause. (App. 3-5.) I also note, as does the majority, that the record demonstrates that Sun was under pressure to hire Morales in an expedient manner, and urged him to accept Hodge’s translation and to sign the Agreement immediately. Maj. Op. at 3.

As in Lang, Morales did not read English and Sun was aware of his inability to understand the contents of the Agreement. As in Lang, Sun also represented that it (via Hodge) would explain what was contained in the Agreement. And as in Lang, Morales’ failure to realize that an arbitration provision was contained within the Agreement was the direct result of Hodge’s failure to properly translate the document, just as the failure of the plaintiff in Lang to realize he had signed an arbitration provision was because the representative didn’t inform him of that fact. Neither Morales nor the plaintiff in Lang was aware of what they did not know about the contract, and not because they could not read English and acted negligently by not bothering to learn the terms of the contract; but because the translation they were presented with by the other party to the contract, which they had no reason to suspect and no immediate way to verify, was incorrect or incomplete.⁴

If the facts of this case were different, I might adopt the majority’s position. For example, if Sun had simply handed the Agreement to Morales and indicated that it was Morales’ responsibility to find a translator, and Morales had employed a incompetent translator who failed to translate the arbitration clause, I would agree that Morales was bound by the Agreement. However, when Sun made the decision to insert itself between Morales and the contract, it created a situation where lack of mutual assent could, and did, occur.⁵ Because I do not believe it was negligent or otherwise improper for Morales to rely upon the translation provided by Sun, and because Morales was not informed in the course of that translation that the Agreement contained an arbitration clause, I agree with the District Court that Morales did not “manifest an intention” to be bound by the arbitration clause.

For the foregoing reasons, I respectfully dissent.

3 I join the majority in its affirmance of our ruling in Seus v. John Nuveen & Co., Inc., 146 F.3d 175 (3d Cir. 1998), thatitwouldbe inconsistent with the Federal Arbitration Act to apply a heightened “knowing and voluntary” standard to arbitration agreements.

4 The majority notes that Morales “worked under the Agreement for almost a year without complaint.” Maj. Op. at 8 n.2. This fact is irrelevant to the analysis. Until there was an employment dispute between Morales and Sun, Morales had no reason to review the Agreement to determine whether it contained clauses that had not originally been translated for him.

5 The majority opinion regrettably provides no incentive for employers such as Sun to implement procedures that might avoid such a situation.