Clyde L. Kuehn
Melissa A. Chapman
Terrence J. Hopkins
Madison County Circuit Judge Nicholas Byron’s order on a Verizon Wireless class action lawsuit was recently overturned by the 5th Appellate Court.
In October, Byron had denied Verizon's motion to compel arbitration and stay judicial proceedings in a class action case filed by Dawn M. Zobrist in August 2002. The suit disputes a service cancellation fee.
"The trial court denied the motion without holding an evidentiary hearing," Justice Clyde Kuehn wrote in the decision filed Dec. 29 and released Jan. 6. Kuehn replaced Gordon E. Maag on the appellate bench after Maag was not retained by voters and delivered the opinion of the court in which Justices Melissa Chapman and Terrence Hopkins concurred.
The Court reversed Byron's order and granted Verizon's motion to compel arbitration and stay judicial proceedings.
Zobrist is represenetd by the Lakin Law Firm of Wood River. Phone calls to Zobrist and Lakin were not returned.
When Zobrist became a Verizon customer in July 2001, she entered into a two-year service plan. Zobrist cancelled service in March 2002, and Verizon billed her $175 for a cancellation penalty which Zobrist claims she paid “under protest.”
The contract also contained an arbitration clause that states, “Any controversy or claim arising or relating to this agreement, other than a claim by Verizon as to non-payment, shall be settled by binding arbitration..."
“We turn to the arbitration issue in this case,” Kuehn writes. “A clause of this type, including the language such as the word “any” is about as broad as one can conceive.”
On Mar. 14, 2003, Zobrist amended her complaint, and one week later, Verizon filed a motion to compel arbitration and stay judicial proceedings.
Byron ruled that the arbitration clause was both procedurally and substantively "unconscionable" because the clause was in a brochure separate from the contract and also was one-sided and harsh. He also ruled that the language of the contract supported the conclusion that the parties intended for claims of this type to be litigated in small claims court.
Byron has yet to rule on a motion to reconsider filed by Verizon on the basis that it had no notice that the courts order had been drafted by counsel for the plaintiff and that it had been denied an opportunity to response to and point out substantive errors contained within the order.
Before a court can invalidate an arbitration clause on unconscionable grounds, the clause must be found to be both procedurally and substantively unconscionable, according to the opinion written by Kuehn. He also writes:
"In this case, the trial court concluded that the arbitration clause was procedurally unconscionable because Verizon's clause was contained within a brochure separate from the actual contract documents the plaintiff signed and because the plaintiff lacked any meaningful choice with respect to the clause.
"The trial court concluded that because the arbitration agreement called for each party to bear his or her own costs, there was no vehicle by which the arbitrator could ever award a prevailing plaintiff his or her attorney fees. In count II of her complaint, the plaintiff sought relief in the trial court pursuant to the Illinois Consumer Fraud and Deceptive Business Practices Act, which provides for the possibility of an award of attorney fees.
"The trial court also concluded that the arbitration clause was substantively unconscionable because it is 'one-sided and overly harsh.' The one-sided aspect of this argument is that Verizon is not required to arbitrate any claims it might have had against the plaintiff for nonpayment on her account.
"The trial court found this arbitration clause to be substantively unconscionable because the clause lacked mutuality. The trial court noted, 'the Arbitration Clause requires Plaintiff to settle every claim by arbitration, including claims for less than $175.00, but does not require Verizon to arbitrate its claims against Plaintiff.'
Larry Hepler of Burroughs, Hepler, Broom, MacDonald, Hebrank & True represents Verizon, he could not be reached for comment.
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