Citizens Telecommunications d/b/a Frontier Communications of W. Va. v. Michael Sheridan , 239 W. Va. 67 ( 2017 )

IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
January 2017 Term FILED
_______________ April 20, 2017
released at 3:00 p.m.
No. 16-0005 RORY L. PERRY II, CLERK
SUPREME COURT OF APPEALS
_______________ OF WEST VIRGINIA
CITIZENS TELECOMMUNICATIONS COMPANY OF WEST VIRGINIA d/b/a
FRONTIER COMMUNICATIONS OF WEST VIRGINIA, FRONTIER WEST
VIRGINIA, INC.,
Defendant Below, Petitioner
v.
MICHAEL SHERIDAN, APRIL MORGAN, TRISHA COOKE, and RICHARD
BENNIS, individually, and on behalf of other similarly-situated individuals,
Plaintiffs Below, Respondents
____________________________________________________________
Appeal from the Circuit Court of Lincoln County
The Honorable Jay M. Hoke, Judge
Civil Action No. 14-C-115
REVERSED AND REMANDED WITH INSTRUCTIONS
____________________________________________________________
Submitted: January 24, 2017
Filed: April 20, 2017
Thomas R. Goodwin, Esq. Benjamin Sheridan, Esq.
J. David Fenwick, Esq. Mitchel Lee Klein, Esq.
Goodwin & Goodwin Klein Sheridan & Glazer LC
Charleston, West Virginia Hurricane, West Virginia
Archis A. Parasharami, Esq. Jonathan J. Marshall, Esq.
(admitted pro hac vice) Bailey Glasser, LLP
Mayer Brown LLP Charleston, West Virginia
Washington, DC
Counsel for the Respondents
Joseph J. Starsick, Jr., Esq.
Frontier Communications
Charleston, West Virginia
Counsel for the Petitioner
JUSTICE WALKER delivered the Opinion of the Court.
SYLLABUS BY THE COURT
1. “An order denying a motion to compel arbitration is an interlocutory
ruling which is subject to immediate appeal under the collateral order doctrine.” Syllabus
Point 1, Credit Acceptance Corp. v. Front, 231 W. Va. 518, 745 S.E.2d 556 (2013).
2. “When an appeal from an order denying a motion to dismiss and to
compel arbitration is properly before this Court, our review is de novo.” Syllabus Point
1, West Virginia CVS Pharmacy, LLC v. McDowell Pharmacy, Inc., ___ W. Va. ___, 796
S.E.2d 574 (2017).
3. “In the absence of a mutual agreement, based on a valid
consideration, establishing modification of a written contract, there can be no subsequent
modification of such a contract without consideration, and the mere promise of one of the
parties to perform what he is already bound to do under the terms of the contract is not a
sufficient consideration.” Syllabus Point 5, Bischoff v. Francesa, 133 W. Va. 474, 56
S.E.2d 865 (1949).
4. “It is not the right or province of a court to alter, pervert or destroy
the clear meaning and intent of the parties as expressed in unambiguous language in their
written contract or to make a new or different contract for them.” Syllabus Point 3,
Cotiga Dev. Co. v. United Fuel Gas Co., 147 W. Va. 484, 128 S.E.2d 626 (1962).
i
WALKER, Justice:
Citizens Telecommunications Company of West Virginia d/b/a Frontier
Communications of West Virginia, Frontier West Virginia, Inc. (“Frontier”) appeals the
November 30, 2015 order of the Circuit Court of Lincoln County denying Frontier’s
motion to compel arbitration in a putative class action filed by Michael Sheridan, April
Morgan, Trisha Cooke, and Richard Bennis on behalf of themselves and similarly-
situated persons (“Respondents”).
Frontier contends that the circuit court erred in refusing to enforce an
arbitration provision in the parties’ agreement. Upon consideration of the parties’ briefs
and arguments, the submitted record and pertinent authorities, we agree with Frontier,
reverse the circuit court’s order and remand with instructions to enter an order
compelling arbitration on an individual basis.
I. FACTUAL AND PROCEDURAL BACKGROUND
Respondents are West Virginia residents who initially subscribed to
Frontier’s residential “high-speed Internet service” between August 2007 and June 2010.
Respondents sued Frontier in October 2014 alleging that the service was much slower
than advertised and that Frontier had intentionally reduced the speed at which
Respondents could connect to the Internet.
As subscribers, Respondents’ relationship with Frontier was governed by
Frontier’s Residential Internet Service Terms and Conditions (“Terms and Conditions”).
The Terms and Conditions, available on Frontier’s Internet website, provided that “BY
USING FRONTIER HIGH SPEED INTERNET SERVICES OR EQUIPMENT
YOU ARE AGREEING TO THESE TERMS AND CONDITIONS.” (Emphasis in
original). At the time Respondents subscribed to the service, the Terms and Conditions
did not contain a dispute resolution provision. However, the Terms and Conditions
contained a provision that permitted Frontier to propose changes to the terms, upon notice
to customers. Continued use of the service by a customer after any change was
considered to be the customer’s acceptance of the new term. For example, the Terms and
Conditions in effect from July 2011 until March 2013 provided:
OUR RIGHT TO MAKE CHANGES
UNLESS OTHERWISE PROHIBITED BY LAW,
FRONTIER MAY CHANGE PRICES, TERMS AND
CONDITIONS AT ANY TIME BY GIVING YOU 30
DAYS NOTICE BY BILL MESSAGE, E-MAIL, OR
OTHER NOTICE, INCLUDING POSTING NOTICE OF
SUCH CHANGES ON THIS WEBSITE, UNLESS THE
PRICES, TERMS AND CONDITIONS ARE
GUARANTEED BY CONTRACT. YOU ACCEPT THE
CHANGES IF YOU USE THE SERVICE AFTER
NOTICE IS PROVIDED.
(Emphasis in original). 1
1
Frontier states that this was the version in effect from July 21, 2011 until March
7, 2013, which encompasses the relevant time frame for the contract modifications at
issue in this case. Frontier further contends that the current version of this “right to make
changes” clause, which has been in effect since March 2013, is materially similar.
2
In September 2011, Frontier altered the Terms and Conditions and added an
arbitration provision requiring any dispute between a customer and Frontier to be
resolved by binding arbitration on an individual basis. More specifically, the arbitration
provision included waivers of the right to a trial by jury and the right to participate in a
class action, a representative proceeding or a private attorney general action. Frontier
included a notice of this change in the September 2011 billing statement, which provided
as follows:
As part of our Terms and Conditions of service, Frontier has
recently instituted a binding arbitration provision to resolve
customer disputes. This provision will become effective 45
days from the date of this bill. Please refer to
www.frontier.com or call Frontier 1-800-426-7320, option 3
for more information.
Respondents assert that they never read this portion of the billing statement because
Frontier placed it toward the end of a multipage billing statement after many other
notices. Respondents further contend the terms of the arbitration provision were not
contained in the billing statement.
In January 2012, Frontier revised the arbitration provision to include terms
that Frontier describes as more “consumer friendly.”2 Frontier sent a notice of these
revisions to Respondents in their January 2012 billing statement.
2
Frontier’s revised arbitration provision provides that (1) arbitration is cost-free to
the customer; (2) Frontier will pay a double recovery up to $5,000 if a customer’s
arbitration award exceeds Frontier’s settlement offer; (3) Frontier disclaims any right to
seek attorneys’ fees; (4) either party may bring a claim in small claims court; (5) there is
3
In November 2012, Frontier placed a folded, paper copy of the Terms and
Conditions, including the arbitration provision, in each customer’s billing statement and
included the following notice:
Frontier has made revisions to the Terms and Conditions that
apply to your Residential Frontier Internet service. The
revised Terms and Conditions are posted at
www.frontier.com/terms/ and are included as a special insert
in this bill. By using and paying for Frontier Internet
services, you are agreeing to these revised Terms and
Conditions and the requirement that disputes be resolved by
individual arbitration instead of class actions and/or jury
trials. You may opt out of the revised Terms and Conditions
and instead remain subject to your previously applicable
terms by calling 1-866-606-2849 . . . within 30 days from the
date of this bill.
On October 14, 2014, Respondents filed a putative class action complaint
alleging that Frontier never provided Internet service at advertised speeds and
purposefully “throttled” the speed of its customers’ Internet service. In the complaint,
Respondents sought declaratory relief that they had not agreed to arbitrate any claims
arising from Frontier’s service and that their putative class action was not subject to
no confidentiality requirement; (6) the arbitrator may award the customer any form of
individual relief that a court could including punitive damages, statutory damages,
attorney’s fees, and individualized injunctions; (7) arbitration will be conducted under the
rules of the American Arbitration Association (“AAA”); (8) arbitration will occur in the
customer’s state unless the parties agree otherwise; (9) for claims of $10,000 or less,
customers have the exclusive right to choose whether the arbitrator will conduct an in-
person hearing, a hearing by telephone, or a desk arbitration in which the arbitration will
be conducted solely on the basis of documents submitted to the arbitrator; and (10) the
arbitrator must issue a written decision.
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arbitration. Respondents also sought monetary damages, attorneys’ fees and an
injunction.
On January 30, 2015, Frontier filed a motion to compel arbitration and to
dismiss the action, or, in the alternative, to stay the action. In an order dated November
30, 2015, the circuit court denied the motion to compel arbitration and to dismiss and
found that: (1) an agreement to arbitrate was never formed because Respondents never
assented to the arbitration provision; (2) the arbitration provision was illusory and lacked
consideration; (3) the arbitration provision did not cover claims that pre-dated adoption of
the provision; and (4) the arbitration provision was unenforceable due to its prohibition of
class-wide injunctive relief. It is from this order and these particular findings that
Frontier appeals.
II. STANDARD OF REVIEW
Frontier appeals the circuit court’s denial of its motion to compel
arbitration and to dismiss. This Court has held previously that “[a]n order denying a
motion to compel arbitration is an interlocutory ruling which is subject to immediate
appeal under the collateral order doctrine.” Syl. Pt. 1, Credit Acceptance Corp. v. Front,
231 W. Va. 518, 745 S.E.2d 556 (2013). We recently held that “[w]hen an appeal from
an order denying a motion to dismiss and to compel arbitration is properly before this
Court, our review is de novo.” Syl. Pt. 1, West Virginia CVS Pharmacy, LLC v.
5
McDowell Pharmacy, Inc., ___ W. Va. ___, 796 S.E.2d 574 (2017). Similarly, we “we
apply a de novo standard of review to [a] circuit court's interpretation of [a] contract.”
Zimmerer v. Romano, 223 W.Va. 769, 777, 679 S.E.2d 601, 609 (2009). Accordingly,
we apply a de novo standard of review to the issues presented in this appeal, which is
properly before this Court.
III. DISCUSSION
In support of its challenge to the circuit court’s order, Frontier argues that
an agreement to arbitrate was properly formed with Respondents in a unilateral contract.
First, Frontier asserts that the parties mutually assented to the arbitration provision.
Second, Frontier contends that there was consideration for the parties’ overall agreement
and that the arbitration provision is not illusory in that it binds both parties. Next, it
argues that an arbitration provision may apply to disputes that arose prior to the formation
of the agreement to arbitrate. Finally, Frontier asserts that an arbitration agreement may
prohibit class-wide injunctive relief. We address each of these four issues, in turn, below.
A. Mutual Assent
Frontier first asserts that the circuit court erred in finding that the agreement
lacked mutual assent and thereby erred in concluding that no agreement to arbitrate was
ever formed. The circuit court based its finding, in part, on its characterization of the
6
Terms and Conditions and the arbitration provision contained therein as an online
browsewrap agreement. Frontier disagrees with this characterization, arguing that it is an
enforceable unilateral contract that Respondents received in a printed, physical form in
November 2012. Finally, Frontier argues that the circuit court erred in its conclusion that
the agreement lacked mutual assent because it found the obscured placement of the notice
of Terms and Conditions in the billing statements and the one-time inclusion of a paper
copy of the Terms and Conditions insufficient to show that the Respondents had agreed
to such terms.
Respondents agree with the circuit court’s characterization of the Terms
and Conditions as a browsewrap agreement and also assert that Frontier cannot prove that
any of the Respondents actually visited Frontier’s website or read the Terms and
Conditions. Respondents further assert that they did not assent to the addition of the
arbitration provision to the Terms and Conditions because they were not given adequate
notice by the billing statements or by the one-time inclusion of the paper copy of the
written terms.
A browsewrap agreement is a contract arising in the context of Internet
commerce that is formed when one accepts it merely by browsing a website. State ex rel.
U-Haul Co. of W. Va. v. Zakaib, 232 W. Va. 432, 440 n.7, 752 S.E.2d 586, 594 n.7
(2013). To be bound by the website’s terms and conditions requires no other affirmative
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act by the user. Id. As noted by the circuit court in the case before us, courts have been
wary to enforce browsewrap agreements where the terms and conditions are heavily
obscured, often only briefly referenced at the bottom of a page buried deep within a
website. Because visitors to the website are often completely unaware that they are
bound by the website’s terms simply by being on the website, much less aware of the
substance of those terms, browsewrap agreements in which terms and conditions are
heavily obscured have been viewed with suspicion. See, e.g., Berkson v. Gogo, LLC, 97
F. Supp.3d 359, 395 (E.D.N.Y. 2015) (“Because of the passive nature of acceptance in
browsewrap agreements, courts closely examine the factual circumstances surrounding a
consumer’s use.”); Specht v. Netscape Comm. Corp., 306 F.3d 17, 35 (2d Cir. 2002)
(declining to enforce arbitration clause in terms and conditions of website where there
was no notice of existence of contract terms and terms and conditions themselves were
hidden).
Although Frontier made the Terms and Conditions accessible online, they
also indisputably were distributed to Respondents in the November 2012 paper billing
statement. The contract between Frontier and its customers was not executed over the
Internet or any other electronic platform; the Terms and Conditions merely were made
available in more than one medium. Likewise, acceptance of Frontier’s Terms and
Conditions was not manifested through use of its website alone, which is the hallmark of
a browsewrap agreement. In fact, Frontier admits it was not necessary for customers to
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ever visit the website in order to continue service. Rather, acceptance of the Terms and
Conditions occurred through continued use of Frontier’s Internet service. Accordingly,
we find that the circuit court erroneously mischaracterized the Terms and Conditions as a
browsewrap agreement.
Traditional contract law rather than a novel analysis of Internet contracts
governs whether mutual assent occurred under the facts of this case. While Frontier
argues correctly that arbitration provisions may not be subject to heightened scrutiny or
notice requirements, we also note that arbitration provisions are not entitled to standards
more lax than any other contract provision. Syl. Pt. 7, in part, Brown v. Genesis
Healthcare Corp., 228 W. Va. 646, 724 S.E.2d 250 (2011), overruled on other grounds
by Marmet Health Care Ctr., Inc. v. Brown, 565 U.S. 530 (2012) (“Brown I”) (“The
[Federal Arbitration] Act does not favor or elevate arbitration agreements to a level of
importance above all other contracts; it simply ensures that private agreements to
arbitrate are enforced according to their terms.”). Notice requirements and mutual assent
to modification are contract principles that apply irrespective of the subject matter of the
term or terms being modified. Thus, the arbitration provision added to Frontier’s Terms
and Conditions is subject to the same scrutiny and notice requirements as any other
modification of a contract. Schumacher Homes of Circleville, Inc. v. Spencer, 237 W.
Va. 379, 391-92, 787 S.E.2d 650, 662-63 (2016) (“The general tools for examining
contracts are familiar to any first-year law student: ambiguity, coercion, duress, estoppel,
9
fraud, impracticality, laches, lack of capacity, misrepresentation, mistake, mutuality of
assent, unconscionability, undue influence, waiver, or even lack of offer, acceptance or
consideration. If the contract defense exists under general state contract law principles,
then it may be asserted to counter the claim that an arbitration agreement or a provision
therein binds the parties.”); Syl. Pt. 9, Brown I, 228 W.Va. 646, 724 S.E.2d 250
(“Nothing in the Federal Arbitration Act . . . overrides normal rules of contract
interpretation. Generally applicable contract defenses—such as laches, estoppel, waiver,
fraud, duress, or unconscionability—may be applied to invalidate an arbitration
agreement.”).
The Terms and Conditions at issue here are the prototypical unilateral
contract. A unilateral contract is established “where one party makes a promissory offer
and the other accepts by performing an act rather than by making a return promise.”
Cook v. Heck’s Inc., 176 W. Va. 368, 373, 342 S.E.2d 453, 458 (1986). We have
recognized “[t]hat an acceptance may be effected by silence accompanied by an act of the
offeree which constitutes a performance of that requested by the offeror.” First Nat’l
Bank v. Marietta Mfg. Co., 151 W.Va. 636, 641-42, 153 S.E.2d 172, 176 (1967).
Frontier presented its Terms and Conditions as a condition of providing Internet service
to customers, and Frontier’s customers accepted those Terms and Conditions by using
and paying for that Internet service, forming a unilateral contract.
10
Frontier’s advertisement that its Internet service requires “No Contract”
does not dissuade us from concluding there existed a unilateral contract between the
parties. Such advertisements clearly aim to entice customers to sign up for Internet
service with the option to cancel the service at any time without penalty; they do not
imply that the service is governed by no terms whatsoever. In any case, Frontier did not
begin advertising “No Contract” until several years after Respondents subscribed to
Frontier’s residential Internet service. Moreover, aside from alluding to the
advertisements, Respondents do not argue that the underlying Terms and Conditions are
unenforceable as a unilateral contract. Rather, Respondents assert that the modifications
to the Terms and Conditions to include the arbitration provision did not form an
agreement to arbitrate because the modifications lacked mutual assent.
Most commonly, this Court has examined the interpretation and
modification of unilateral contracts in the context of employee handbooks or manuals.
We have held:
A promise of job security contained in an employee handbook
distributed by an employer to its employees constitutes an
offer for a unilateral contract; and an employee’s continuing
to work, while under no obligation to do so, constitutes
acceptance and sufficient consideration to make the
employer’s promise binding and enforceable.
Syl. Pt. 5, Cook, 176 W. Va. 368, 342 S.E.2d 453. We find the contract and modification
at issue in the present case analogous to an employee handbook in that Frontier agreed to
provide Internet service pursuant to its Terms and Conditions, which would be accepted
11
by Respondents by continuing to subscribe to the service while under no obligation to do
so. Additionally, Frontier, like many employers, reserved the right to make unilateral
modifications to the Terms and Conditions upon notice of the changes.
Concerning mutual assent to contract, we have held:
It is elementary that mutuality of assent is an essential
element of all contracts. Wheeling Downs Racing Ass’n v.
West Virginia Sportservice, Inc., 158 W. Va. 935, 216 S.E.2d
234 (1975). In order for this mutuality to exist, it is necessary
that there be a proposal or offer on the part of one party and
an acceptance on the part of the other. Both the offer and
acceptance may be by word, act or conduct that evince the
intention of the parties to contract. That their minds have met
may be shown by direct evidence of an actual agreement or
by indirect evidence through facts from which an agreement
may be implied. See Lacy v. Cardwell, 216 Va. 212, 217
S.E.2d 835 (1975); Charbonnages de France v. Smith, 597
F.2d 406, 415-416 (4th Cir. 1979).
Bailey v. Sewell Coal Co., 190 W. Va. 138, 140-41, 437 S.E.2d 448, 450-51 (1993). This
Court analyzed mutual assent in the context of an employer’s modifications to its
unilateral contract with employees in Hogue v. Cecil I. Walker Machinery Company, 189
W. Va. 348, 431 S.E.2d 687 (1993). In Hogue, we held that “a subsequent modification
may be made unilaterally by the employer, but to make the modification effective the
employer is required to give the employees reasonable notice of the changes.” Id. at 352,
431 S.E.2d at 691.
12
Based upon this precedent, the issue is whether Frontier gave Respondents
reasonable notice that a modification was being made to the Terms and Conditions.
Frontier argues that its billing statement (1) specifically gave notice that a modification to
the Terms and Conditions was being made relating to the arbitration provision, which
was to become effective in forty-five days; (2) referred customers to its website, where
the Terms and Conditions could be accessed online; and (3) advised that customers could
also call Frontier at a particular extension for information concerning the modification.
Respondents counter that (1) the notice of the changes was obscured because it appeared
on page four of the bill after many other notices, whereas customers need only look at the
first page to make the payment; (2) the Terms and Conditions are difficult to find on
Frontier’s website; and (3) Respondents never actually read the arbitration provision
because it was not printed separately and directly on the bill but rather the entirety of the
Terms and Conditions was included in the November 2012 bill.
In Collins v. City of Bridgeport, 206 W.Va. 467, 525 S.E.2d 658 (1999), we
discussed the reasonable notice requirement set forth in Hogue. Although “reasonable
notice” was not defined, this Court found that reasonable notice was met by printing a
new policy in a personnel policy manual. Id. at 476, 525 S.E.2d at 667. In adopting the
rule on reasonable notice, however, this Court in Hogue discussed a Washington
Supreme Court case, Gaglidari v. Denny’s Restaurants, Inc., 117 Wash.2d 426, 815 P.2d
1362 (1991), which recognized the same right to reasonable notice. In Gaglidari, the
13
employer argued that copies of the changed policy manual were often left in the
employees’ lounge, seemingly by new employees who were disposing of them. Id. at
435, 815 P.2d at 1367. The Gaglidari court found that it would be “wholly fortuitous”
that current employees might actually read any copies of the policies left in the
employees’ lounge by the new employees, and found this was insufficient to provide
reasonable notice to the employees of the changes. Id.
In the present case, the facts differ drastically from those in Gaglidari
because it is not “wholly fortuitous” that Frontier customers would read their bills in their
entirety. Likewise, it would not be wholly fortuitous that based on the notice enclosed in
the bill, Respondents would read the provision online, read the enclosed Terms and
Conditions included in the November 2012 bill, or call to inquire about the amended
provision if they took issue with the provision or wanted more information. Frontier
would be required to fit all information it wanted its customers to know onto the first
page of a bill or somehow ensure that all of its customers read their bills in their entirety
in order to conform to the reasoning upon which Respondents rely.
There is clear evidence that Frontier provided written notice of the change
to the Terms and Conditions to its customers, which is consistent with the reasonable
notice found in Collins. The fact that Respondents neither availed themselves of any
paper or electronic source of information on the change nor called the number provided
14
for additional information does not detract from the reasonableness of the notice.
Frontier was entitled to rely on its customers to read information circulated to them,
particularly when a paper copy of the Terms and Conditions was included in the
November 2012 billing statement. There is no dispute that these Respondents received
their September 2011, January 2012 and most importantly, November 2012 bills, and
Respondents do not allege that Frontier otherwise failed to provide access to the Terms
and Conditions to its customers.
Accordingly, we conclude that Frontier provided reasonable notice to its
customers of its changes to the unilateral contract, and Respondents assented to the
changes by virtue of continuing to subscribe to Frontier’s Internet service after the
reasonable notice was provided.
B. Consideration and Illusoriness
We next address the circuit court’s finding that the arbitration provision
lacked consideration and is illusory. “Consideration is . . . an essential element of a
contract.” Cook, 176 W. Va. at 458, 342 S.E.2d at 373 (citations omitted). We have
described sufficient consideration as follows:
Consideration has been defined as “some right, interest,
profit, or benefit accruing to one party, or some forbearance,
detriment, loss, or responsibility given, suffered, or
undertaken by another.” 17 Am.Jur.2d, Contracts, Section 85.
A benefit to the promisor or a detriment to the promisee is
15
sufficient consideration for a contract. 17 Am.Jur.2d,
Contracts, Section 96.
First Nat’l Bank, 151 W.Va. at 642, 153 S.E.2d at 177. Frontier argues at length that
additional consideration may not be required of an arbitration provision and that
consideration for the whole is sufficient for an individual provision. See Syl. Pt. 6, Dan
Ryan Builders, Inc. v. Nelson, 230 W. Va. 281, 737 S.E.2d 550 (2012) (“The formation of
a contract with multiple clauses only requires consideration for the entire contract, and
not for each individual clause. So long as the overall contract is supported by sufficient
consideration, there is not requirement of consideration for each promise within the
contract, or of ‘mutuality of obligation,’ in order for a contract to be formed.”).
However, we also have held that “not only must such modification or alterations be by
mutual agreement but must be based upon a valid consideration, and the original
consideration . . . cannot be used as consideration for any agreement of modification or
alteration in connection therewith.” Steinbrecher v. Jones, 151 W. Va. 462, 470, 153
S.E.2d 295, 301 (1967). Likewise, “[i]n the absence of a mutual agreement, based on a
valid consideration, establishing modification of a written contract, there can be no
subsequent modification of such a contract without consideration, and the mere promise
of one of the parties to perform what he is already bound to do under the terms of the
contract is not a sufficient consideration.” Syl. Pt. 5, Bischoff v. Francesa, 133 W. Va.
474, 56 S.E.2d 865 (1949). Thus, because the original Terms and Conditions lacked an
agreement to arbitrate, the modification of the Terms and Conditions to include such a
provision required new consideration.
16
Frontier argues that the mutual agreement of the parties to arbitrate is
sufficient consideration to support the modification. Respondents counter that the
commitment to arbitrate cannot be adequate consideration as it is an illusory promise
because Frontier retains the ability to change the Terms and Conditions at its discretion.
We find that the mutual commitment to arbitrate is sufficient consideration for the
modification. As we explained in Toney v. EQT Corp., No. 13-1011, 2014 WL 2681091
at *3 (June 13, 2014) (memorandum decision), “the mutual commitments to arbitrate
alone constitute sufficient consideration to support the contract.” As to the subsequent
modification altering the terms of arbitration in January 2012, Frontier undertook
3
additional burdens while providing its customers with additional benefits. In
accordance with our holding in First Nat’l Bank, 151 W.Va. at 642, 153 S.E.2d at 177,
these additional burdens and benefits are the hallmark of consideration. Thus, we find
that both the September 2011 and January 2012 modifications were supported by
adequate consideration.
Finally, we reject Respondents’ argument that the promise to arbitrate was
illusory by virtue of Frontier’s right to make changes. In Williams v. Precision Coil, Inc.,
194 W. Va. 52, 459 S.E.2d 329 (1995), we discussed a “change in terms” reservation,
finding that “[r]etaining the right to make changes . . . does not necessarily mean
3
See supra note 2.
17
promises explicitly or implicitly made . . . are not enforceable, at least until such time as
they are in fact changed.” Id. at 65, 459 S.E.2d at 342. Here, the arbitration provision
itself explicitly provides that if Frontier makes any changes to the arbitration provision,
the customer has the ability to reject the change and instead remain subject to the
previous terms relating to dispute resolution. Thus, the agreement to arbitrate is not an
illusory promise because both parties are bound to arbitrate and unilateral changes to the
agreement to arbitrate may not be implemented without consent from Frontier customers.
Accordingly, we find that the agreement to arbitrate did not lack consideration and was
not illusory.
C. Applicability to Pre-existing Claims
Frontier also asserts that the circuit court erred in finding that the arbitration
provision did not apply to pre-existing claims because it relied on a mistaken reading of
New v. GameStop, Inc., 232 W. Va. 564, 753 S.E.2d 62 (2013), as holding that arbitration
agreements could not be enforced retroactively. In GameStop, we held that an arbitration
provision in an employee handbook was enforceable, but that it could not apply
retroactively pursuant to the text of the arbitration agreement itself, which provided that
the arbitration provision could only be applied prospectively. Id. at 68, 753 S.E.2d at
570. Therefore, the holding was a simple matter of enforcing the parties’ agreement
pursuant to the terms outlined, not a general prohibition on retroactive enforcement of all
agreements to arbitrate.
18
Frontier asserts that this Court has applied arbitration agreements
retroactively by applying a 2005 version of an arbitration provision to a dispute arising in
2003. See Shorts v. AT&T Mobility, No. 11-1649, 2013 WL 2995944, at *4 (W. Va.
2013) (memorandum decision); State ex rel. AT&T Mobility, LLC v. Wilson, 226 W. Va.
572, 576 n.9, 703 S.E.2d 543, 547 n.9 (2010). However, Frontier’s reading of these cases
is also flawed. In those cases, the parties had already conceded which version of the
arbitration provision was applicable; this Court made no finding or holding in Shorts or
Wilson regarding which version was applicable. In those cases, we merely observed that
the concession had been made and was not at issue in the appeal. Id. In light of the lack
of binding precedent specific to arbitration provisions, we return to traditional contract
principles.
Although Respondents argue that subjecting Frontier customers to arbitrate
disputes arising before institution of the arbitration clause would produce an unfair result,
we have previously held:
[i]n the absence of ambiguity we cannot be swayed by a
persuasive argument that the intent expressed by such
language may produce a harsh result. So long as an otherwise
valid contract does not contravene some principle of law or
public policy, it must stand and become operative as the
deliberate act of the parties.
Cotiga Dev. Co. v. United Fuel Gas Co., 147 W. Va. 484, 492-93, 128 S.E.2d 626, 633
(1962). Indeed, as we cautioned in Cotiga, “[i]t is not the right or province of a court to
19
alter, pervert or destroy the clear meaning and intent of the parties as expressed in
unambiguous language in their written contract or to make a new or different contract for
them.” Id. at Syl. Pt. 3. Moreover, the subject arbitration provision is valid, enforceable,
and devoid of ambiguity. Thus, it is not the province of this court to alter the terms of
that contract to exclude pre-existing disputes where there is no contravening principle of
law or public policy. Indeed, the Federal Arbitration Act (“FAA”) specifically provides
that parties may agree to arbitrate “an existing controversy.” 9 U.S.C. § 2.
The arbitration provision at issue provides in relevant part:
You and Frontier agree to arbitrate all disputes and claims
between us. This agreement to arbitrate is intended to be
broadly interpreted. It includes, but is not limited to, all
claims arising out of or relating to any aspect of our
relationship, whether based in contract, tort, statute, fraud,
misrepresentation or any other legal theory that arose either
before or during this or any prior Agreement, or that may
arise after termination of this agreement.
This arbitration provision clearly and explicitly provides that it applies to pre-existing
disputes. Because there is no contravening authority that would preclude enforcement of
the provision as written, we conclude that the agreement to arbitrate may be applied to
pre-existing claims.
D. Prohibition on Class-wide Injunctive Relief
Finally, Frontier argues that the circuit court erred in finding the arbitration
provision unenforceable due to its prohibition on class-wide injunctive relief. Frontier
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contends that AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) precludes such a
finding under the FAA. In response, Respondents argue that the circuit court, having
already rendered the arbitration provision unenforceable on other grounds, never actually
made that finding. According to Respondents, the circuit court simply was commenting
that the limitation on class-wide injunctive relief is “significant and troubling.” However,
Respondents also assert that the circuit court did not err in rendering the arbitration
provision unenforceable due to its prohibition on class-wide injunctive relief because
such a finding did not run afoul of Concepcion. We disagree.
In Concepcion, the United States Supreme Court explained that “[r]equiring
the availability of class-wide arbitration interferes with fundamental attributes of
arbitration and thus creates a scheme inconsistent with the FAA” and concluded that
“[s]tates cannot require a procedure that is inconsistent with the FAA, even if it is
desirable for unrelated reasons.” Id. at 344, 351. Subsequently, in American Express Co.
v. Italian Colors Restaurant, ___ U.S. ___, 133 S. Ct. 2304, 186 L. Ed. 2d 417 (2013), the
Court upheld a class action waiver in an arbitration agreement, noting that neither any
contrary congressional command nor any judge-made exception to the FAA requires
rejection of a class-arbitration waiver. Id. at ___, 133 S.Ct. at 2309-12, 186 L. Ed. 2d at
424-27.
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Similarly, in considering arbitration agreements that contain class action
waivers, we consistently have recognized that inclusion of such a waiver does not
automatically render the arbitration agreement unconscionable or unenforceable. State ex
rel. Ocwen Loan Serv. v. Webster, 232 W.Va. 341, 359, 752 S.E.2d 372, 390 (2013);
State ex rel. Richmond Am. Homes of W. Va., Inc. v. Sanders, 228 W.Va. 125, 140, 717
S.E.2d 909, 924 (2011); State ex rel. AT & T Mobility, LLC v. Wilson, 226 W.Va. 572,
579, 703 S.E.2d 543, 550 (2010). Assuming that the circuit court found the arbitration
provision unenforceable due to its prohibition of class-wide injunctive relief, such ruling
is prohibited by our precedent and by the FAA under Concepcion. It is permissible for
parties to an arbitration provision to agree to waive class-wide injunctive relief. The
circuit court erred in holding otherwise.
IV. CONCLUSION
For the foregoing reasons, we reverse the November 30, 2015 order of the
Circuit Court of Lincoln County and remand with instructions to enter an order
compelling arbitration on an individual basis.
Reversed and remanded with instructions.
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