Zobrist v. Verizon Wireless

822 N.E.2d 531, 354 Ill. App. 3d 1139, 290 Ill. Dec. 946, 2004 Ill. App. LEXIS 1587
CourtAppellate Court of Illinois
DecidedDecember 29, 2004
Docket5-03-0691
StatusPublished
Cited by29 cases

This text of 822 N.E.2d 531 (Zobrist v. Verizon Wireless) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Zobrist v. Verizon Wireless, 822 N.E.2d 531, 354 Ill. App. 3d 1139, 290 Ill. Dec. 946, 2004 Ill. App. LEXIS 1587 (Ill. Ct. App. 2004).

Opinion

JUSTICE KUEHN

delivered the opinion of the court:

This appeal stems from the trial court’s October 7, 2003, order denying the defendants’ motion to compel arbitration and stay judicial proceedings. The contract provision at issue provides that the majority of the claims between the parties “shall be settled by binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (‘Rules’)” and that “[a] judgment upon the award rendered by the arbitrator may be entered in any court of competent jurisdiction.” The trial court essentially concluded that the arbitration clause at issue was unenforceable and unconscionable and, further, that the parties had intended that claims for small amounts should be litigated in small claims court. This appeal is before this court pursuant to Supreme Court Rule 307(a)(1) (188 Ill. 2d R. 307(a)(1)), because the motion denied sought injunctive relief.

Verizon Wireless 1 is a provider of various wireless services, including cellular phone services. To become a Verizon customer, Verizon required each prospective customer to sign a Verizon contract. The typical Verizon contract was for a 12- or 24-month service term. If the Verizon customer decided for whatever reason to terminate the contract before the service term’s natural expiration, the Verizon contract in question required the Verizon customer to pay a $175 early cancellation penalty. There was no sliding scale relative to cancellation of the Verizon contract. In other words, regardless of when the contract was canceled, the fee was $175.

The Verizon contract also contained an arbitration clause, stating as follows:

“Any controversy or claim arising out of or relating to this Agreement, other than a claim by Verizon Wireless as to non[ Ipayment, shall be settled by binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association (‘Rules’), and judgment upon the award rendered by the arbitrator may be entered in any court of competent jurisdiction. Each party shall bear their own costs of arbitration[ ] and shall split the cost of the arbitrator between them.”

Dawn M. Zobrist was a Verizon customer beginning in July 2001, at which time she elected to enter into a two-year service plan. She terminated her relationship with Verizon in March 2002. Because she did not complete her two-year service plan, Verizon billed her the $175 cancellation penalty in her final, April 2002 statement. Dawn M. Zobrist (the plaintiff) paid this cancellation penalty “under protest.”

On August 9, 2002, the plaintiff brought a lawsuit against Verizon. She sued individually and as the representative of a purported class of similarly situated individuals. Specifically, the plaintiff’s proposed class included “[a]ll persons in Illinois who were billed an ‘Early Cancellation Fee’ (or substantially similar termination or cancellation fee) by Verizon Wireless when they cancelled their agreement before the end of its Service Term.” Specifically excluded from this purported class were “the Verizon Wireless defendants, any entity in which they have a controlling interest, any of their parents, subsidiaries, affiliates, officers, directors, employees and members of their immediate families[,] and members of the Illinois state court judiciary and their immediate families.”

A first amended complaint was filed on March 14, 2003. One week later, Verizon filed a motion to compel arbitration and stay judicial proceedings. On October 7, 2003, the trial court denied the motion without holding an evidentiary hearing. Verizon appeals that order. That order thoroughly detailed the trial court’s rationale. The trial court found the arbitration clause to be unenforceable because the proposed class action sought to have claims decided that went beyond the dictates of the arbitration clause and would thwart the plaintiffs right to obtain attorney fees pursuant to the Illinois Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/1 et seq. (West 2000)) and because arbitration of the plaintiff’s claims would be prohibitively expensive. The trial court also found the arbitration clause to be both procedurally and substantively unconscionable. The procedural unconscionability was found in the fact that the arbitration clause was within a brochure separate from the cellular contract the plaintiff signed. The trial court concluded that the arbitration clause was substantively unconscionable because it was one-sided and harsh. Finally, the trial court concluded 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.

Thereafter, Verizon filed a motion to reconsider this order in the trial court, on the bases that it had no notice that the court’s order had been drafted by counsel for the plaintiff and that it had been denied an opportunity to respond to and point out substantive errors contained within the order. The trial court has not yet ruled upon this motion.

In an appeal from a denial of a motion to compel arbitration without an evidentiary hearing, the standard of review is de novo. Travis v. American Manufacturers Mutual Insurance Co., 335 Ill. App. 3d 1171, 1174, 782 N.E.2d 322, 325 (2002).

In 1925, Congress enacted the Federal Arbitration Act (FAA) (now 9 U.S.C. § 1 et seq. (2000)) “ ‘to reverse the longstanding judicial hostility to arbitration agreements that had existed at English common law and had been adopted by American courts [ ] and to place arbitration agreements upon the same footing as other contracts.’ ” Borowiec v. Gateway 2000, Inc., 209 Ill. 2d 376, 384, 808 N.E.2d 957, 962 (2004), quoting Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24, 114 L. Ed. 2d 26, 36, 111 S. Ct. 1647, 1651 (1991). The FAA provides:

“A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction *** shall he valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2 (2000).

Section 4 of the FAA provides for orders compelling arbitration when one party has failed, neglected, or refused to comply with an arbitration agreement. 9 U.S.C. § 4 (2000). Generally speahing, the arbitration agreement’s own language defines the scope of disputes subject to arbitration. See Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Sherrier v. Alliant Credit Union
2022 IL App (1st) 211214-U (Appellate Court of Illinois, 2022)
In re Marriage of Haenisch
2021 IL App (2d) 200356-U (Appellate Court of Illinois, 2021)
Zuniga v. Major League Baseball
2021 IL App (1st) 201264 (Appellate Court of Illinois, 2021)
Copello v. Boehringer Ingelheim Pharmaceuticals Inc.
812 F. Supp. 2d 886 (N.D. Illinois, 2011)
Barber v. LM Property & Casualty Insurance
782 F. Supp. 2d 628 (N.D. Illinois, 2011)
Khan v. BDO Seidman, LLP
Appellate Court of Illinois, 2010
Cellphone Termination Fee Cases
186 Cal. App. 4th 1380 (California Court of Appeal, 2010)
Dubey v. Public Storage, Inc.
918 N.E.2d 265 (Appellate Court of Illinois, 2009)
Wigginton v. Dell, Inc.
890 N.E.2d 541 (Appellate Court of Illinois, 2008)
Williams v. Jo-Carroll Energy, Inc.
890 N.E.2d 566 (Appellate Court of Illinois, 2008)
Bess v. DirecTV, Inc.
885 N.E.2d 488 (Appellate Court of Illinois, 2008)
Charlotte Bess v. DirecTV, INC.
Appellate Court of Illinois, 2008
Tortoriello v. Gerald Nissan of North Aurora, Inc.
882 N.E.2d 157 (Appellate Court of Illinois, 2008)
Tortoriello v. Gerald Nissan of North Aurora
Appellate Court of Illinois, 2008
Kinkel v. Cingular Wireless, LLC
857 N.E.2d 250 (Illinois Supreme Court, 2006)
Kinkel v. Cingular Wireless
Illinois Supreme Court, 2006
Melena v. Anheuser-Busch, Inc.
847 N.E.2d 99 (Illinois Supreme Court, 2006)
Kinkel v. Cingular Wireless, LLC
828 N.E.2d 812 (Appellate Court of Illinois, 2005)
Ragan v. AT & T CORP.
824 N.E.2d 1183 (Appellate Court of Illinois, 2005)

Cite This Page — Counsel Stack

Bluebook (online)
822 N.E.2d 531, 354 Ill. App. 3d 1139, 290 Ill. Dec. 946, 2004 Ill. App. LEXIS 1587, Counsel Stack Legal Research, https://law.counselstack.com/opinion/zobrist-v-verizon-wireless-illappct-2004.