Opinion · Court of Appeals for the Fourth Circuit
Jacqueline Galloway v. Santander Consumer USA, Inc
819 F.3d 79
- Type
- Opinion
- Court
- Court of Appeals for the Fourth Circuit
- Jurisdiction
- Federal
- Date
- 2016-04-08
- Topic
- finance
collecting cases and holding that an arbitration agreement need not include a signature or written assent in order to meet the writing requirement in the FAA | noting application of the FAA requires "a written agreement that includes an arbitration provision" (citation omitted) | applying law of state agreed upon by parties in deciding arbitration issues | applying state law agreed upon by parties in deciding arbitration issue | evaluating materials outside of complaint in assessing motion to compel arbitration | evaluating materials outside of complaint in assessing motion to compel arbitration | evaluating materials outside of complaint in assessing motion to compel arbitration | evaluating materials outside of complaint in assessing motion to compel arbitration | evaluating materials outside of complaint in assessing motion to compel arbitration | evaluating materials outside of complaint in assessing motion to compel arbitration | “[A]n acceptance [of an offer] may be manifested by actions as well as by words.” | “[U]nder Maryland law, contractual limitations on future modifications are not effective to prevent parties from entering into new agreements orally or by performance.” | “When deciding whether the parties agreed to arbitrate a certain matter . . . , courts generally . . . should apply ordinary state-law principles that govern the formation of contracts.” (quoting First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944 (1995)) | “When deciding whether the parties agreed to arbitrate a certain matter . . . , courts generally . . . should apply ordinary state-law principles that govern the formation of contracts.” (quoting First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944 (1995)) | enforcing an arbitration agreement of an assigned debt
Citator
- Cited by
- 42 opinions
PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 15-1392
JACQUELINE GALLOWAY, on her own behalf and on behalf of all
others similarly situated,
Plaintiff - Appellant,
v.
SANTANDER CONSUMER USA, INC.,
Defendant - Appellee.
Appeal from the United States District Court for the District of
Maryland, at Baltimore. Catherine C. Blake, Chief District
Judge. (1:13-cv-03240-CCB)
Argued: January 28, 2016 Decided: April 8, 2016
Before TRAXLER, Chief Judge, and AGEE and WYNN, Circuit Judges.
Affirmed by published opinion. Chief Judge Traxler wrote the
majority opinion, in which Judge Agee joined. Judge Wynn wrote
a dissenting opinion.
ARGUED: Cory Lev Zajdel, Z LAW, LLC, Reisterstown, Maryland, for
Appellant. Robert John Brener, LECLAIRRYAN, Newark, New Jersey,
for Appellee. ON BRIEF: Michael von Diezelski, LECLAIRRYAN,
Annapolis, Maryland, for Appellee.
TRAXLER, Chief Judge:
Jacqueline Galloway appeals a district court order
dismissing her action against Santander Consumer USA, Inc.
seeking damages for breach of contract and alleging a violation
of the Maryland Credit Grantor Closed End Credit Provisions (the
“CLEC”), see Md. Code, Comm. Law §§ 12-1001, et seq. Finding
no error, we affirm.
I.
The pertinent facts in this case are undisputed. Galloway
used a loan she obtained through a retail installment contract
(“the RISC”) to finance her purchase of a vehicle in March 2007.
The CLEC governs the RISC’s terms.
The RISC contained the transaction’s financing terms as
well as information concerning repossession rights and
procedures. It listed the total amount financed as $22,916.28
and required Galloway to make 72 payments of $487.46 on the 17th
day of every month. If a payment or part thereof was more than
15 days late, the RISC called for imposition of a late fee of
five dollars or ten percent of the part of the payment that was
late, whichever was greater. The RISC also included a
modification provision stating that “[a]ny change to this
contract must be in writing and we must sign it.” J.A. 20.
The RISC was assigned to CitiFinancial Auto, Ltd.
(“CitiFinancial”), which took a security interest in the
2
vehicle. Sometime before October 31, 2008, Galloway contacted
CitiFinancial requesting a reduction in the amount of her
monthly loan payment. The CitiFinancial representative with
whom Galloway spoke told her that CitiFinancial would send her
paperwork to review and sign and that, once she returned the
signed papers, the company would consider whether to approve her
request. Galloway stated that CitiFinancial told her they would
notify her in writing concerning whether her request had been
approved.
CitiFinancial then provided Galloway with a cover page and
a two-page document. The cover page asked that she “review the
attached documents and provide the signature(s) required.” J.A.
25. It requested that after she signed the paperwork, she
“return [it] to CitiFinancial Auto for further review, approval
and consideration.” J.A. 25. It also requested that she
“retain a copy of this agreement for [her] records.” J.A. 25.
The two remaining pages constituted an amended agreement
(the “Amended Agreement”). Under its terms, the Amended
Agreement would take effect on October 31, 2008; Galloway’s
total amount due would be $20,213.50; her monthly payment would
be reduced from $487.46 to $365.57; her first payment would be
due December 14, 2008; and her last (and seventy-second) payment
would be due on November 14, 2014. The Amended Agreement also
included an arbitration agreement (the “arbitration agreement”)
3
under which Galloway, CitiFinancial, and CitiFinancial’s
assignees, could elect to arbitrate any dispute, “whether in
contract, tort or otherwise,” rather than proceed through a
court action. 1 J.A. 26-27. The arbitration agreement also
prohibited Galloway from serving as a class representative or
participating in a class action if arbitration was elected.
Finally, the Amended Agreement provided that “all terms and
provisions of the [RISC] shall remain in full force and effect
except as expressly modified herein.” J.A. 26.
Galloway signed the Amended Agreement on November 12, 2008,
and sent a copy of the signed agreement to CitiFinancial via
fax.
The record does not reflect that CitiFinancial ever
specifically sent Galloway written approval of the Amended
Agreement. Nevertheless, Galloway states in her declaration
that “sometime after November 14, 2008, CitiFinancial lowered
[her] scheduled monthly payments to $366.43,” J.A. 17, an amount
just 86 cents more than the amount contemplated in the Amended
Agreement. Galloway immediately began making monthly payments
of $366.43 beginning December 13, 2008, and continued to make
payments in that amount for several years.
1
The arbitration agreement provided that it did not apply
to certain types of disputes, but Galloway does not maintain
that any of those exceptions applies here.
4
In her declaration, Galloway states that it was an
“agreement between [her] and CitiFinancial entered into sometime
after November 14, 2008” that lowered her payment amount from
$487.46 to $366.43. J.A. 17. However, the record contains no
evidence of any specific discussions between Galloway and
CitiFinancial explaining or addressing the 86-cent discrepancy.
And Galloway’s declaration asserts that the agreement that
“lowered [her] payments to $366.43 each month was not evidenced
by a writing.” J.A. 17.
In December 2011, CitiFinancial assigned the security
interest in Galloway’s vehicle to Santander Consumer USA, Inc.
After Galloway fell behind on her payments, Santander
repossessed her car, sold it, and, after failing in its attempts
to collect the outstanding deficiency, waived the deficiency.
Galloway subsequently brought this action in state court,
alleging that Santander breached the RISC and violated the CLEC
by failing to provide sufficient notice before selling her
vehicle. Galloway purports to bring suit on behalf of herself
and all persons similarly situated.
Santander removed the case to federal district court.
Santander also filed a motion to compel arbitration and stay
federal district court proceedings under the Federal Arbitration
Act (“FAA”), 9 U.S.C. §§ 1
et seq., claiming Galloway had
previously agreed to arbitrate any disputes concerning her loan.
5
Galloway denied that the parties had an agreement to arbitrate
and alternatively claimed that any arbitration agreement was
unenforceable under the FAA because it was not in writing.
Galloway also moved to amend her complaint, and Santander
opposed the motion on the basis that amendment would be futile.
Applying a summary-judgment-like standard, the district
court concluded as a matter of law that Galloway had agreed to
arbitration and that the agreement to arbitrate was enforceable
under the FAA. See Galloway v. Santander Consumer USA, Inc.,
Civ. No. CCB-13-3240, 2014 WL 4384641
(D. Md. Sept. 3, 2014). The district court analyzed several alternative legal theories offered by Santander as support for its position that the parties agreed to arbitration. The court concluded that CitiFinancial’s sending the Amended Agreement to Galloway was a mere invitation for Galloway to make an offer because the company retained the right at that time to reject Galloway’s refinancing application even if Galloway signed the agreement. Seeid. at *3
. However, the court concluded that Galloway’s returning a copy of the executed agreement constituted an offer to enter into the agreement and that CitiFinancial accepted that offer by reducing her monthly payment to only 86 cents more than the agreement had called for. Seeid.
Alternatively, the court concluded that CitiFinancial’s
proposal to reduce the payment to $366.43 constituted a
6
counteroffer to make a minor modification to the dollar amounts
in the Amended Agreement, which Galloway accepted by making the
payments in the amount requested for several years without
objection. See id.
The district court rejected Galloway’s argument that no new contract was formed because Galloway’s returning a signed original of the Amended Agreement to CitiFinancial and CitiFinancial’s written assent were both conditions precedent to modifying the RISC. Seeid. at *4
. The district court concluded that the parties waived any right they may have had to such formalities by virtue of their performance under their new agreement. Seeid.
The court added that, under the doctrine of equitable estoppel, Galloway could not disclaim the Amended Agreement, having accepted the benefit of the agreement in the form of reduced monthly payments. Seeid.
Having determined that the parties bound themselves to the
terms of the Amended Agreement, or at least to the terms of the
Amended Agreement with the slightly modified payment amount, the
court concluded that the written arbitration agreement was
enforceable under the FAA. 2 See id.
at *3 n.4. On that basis, the court initially granted Santander’s motion to compel arbitration and stayed the case pursuant to9 U.S.C. § 3
. See
2 The court also concluded that Galloway’s proposed
amendment of her complaint would be futile. See Galloway v.
Santander Consumer USA, Inc., Civ. No. CCB-13-3240, 2014 WL 4384641
, at *5 (D. Md. Sept. 3, 2014).
7
id., at *5
. However, on reconsideration, the court, citing Choice Hotels Int’l, Inc. v. BSR Tropicana Resort, Inc.,252 F.3d 707, 709-10
(4th Cir. 2001), entered a final judgment
dismissing the case so as to allow Galloway to pursue an
immediate appeal.
II.
“We review de novo the district court’s judgment compelling
arbitration, as well as any questions of state contract law
concerning the validity of the arbitration agreement.” Santoro
v. Accenture Fed. Servs., LLC, 748 F.3d 217, 220
(4th Cir.
2014).
“Sections 3 and 4 [of the FAA] . . . provide two parallel
devices for enforcing an arbitration agreement: a stay of
litigation in any case raising a dispute referable to
arbitration, 9 U.S.C. § 3
, and an affirmative order to engage in arbitration, § 4.” Chorley Enters. v. Dickey’s Barbecue Rests., Inc.,807 F.3d 553, 563
(4th Cir. 2015) (alteration and internal quotation marks omitted). Before the FAA was enacted, “courts were hostile to the enforcement of arbitration provisions, following a long-standing common law rule which evolved from the judiciary’s jealous refusals to oust courts of jurisdiction in favor of other dispute resolution mechanisms.” Whiteside v. Teltech Corp.,940 F.2d 99, 101
(4th Cir. 1991). “The purpose
for enacting the FAA was to assure judicial enforcement of
8
privately made agreements to arbitrate by placing them upon the
same footing as other contracts.” Id.
(internal quotation marks omitted). This purpose is served by the cause of action the FAA provides and its “primary substantive provision,” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp.,460 U.S. 1, 24
(1983),
declaring, with exceptions not relevant here, that
[a] written provision in . . . a contract evidencing a
transaction involving commerce to settle by
arbitration a controversy thereafter arising out of
such contract or transaction, or the refusal to
perform the whole or any part thereof, . . . shall be
valid, irrevocable, and enforceable.
9 U.S.C. § 2
.
We have stated that “[a]pplication of the FAA requires
demonstration of four elements: ‘(1) the existence of a dispute
between the parties, (2) a written agreement that includes an
arbitration provision which purports to cover the dispute, (3)
the relationship of the transaction, which is evidenced by the
agreement, to interstate or foreign commerce, and (4) the
failure, neglect or refusal of the defendant to arbitrate the
dispute.’” Rota-McLarty v. Santander Consumer USA, Inc., 700 F.3d 690
, 696 n.6 (4th Cir. 2012) (quoting Whiteside,940 F.2d at 102
).
Only the second element is at issue here. Galloway does
not dispute that the present action falls within the scope of
the arbitration agreement, but she argues that the district
9
court erred in concluding, without the benefit of a jury trial,
that the provision was a term of any contract she and
CitiFinancial entered into. She also alternatively maintains
that if the arbitration agreement was a term of a contract the
parties entered into, the district court erred in ruling that
their acceptance of that provision satisfied the FAA’s writing
requirement. We address these issues seriatim.
A.
We first address Galloway’s contention that she is entitled
to a jury trial regarding whether she and CitiFinancial entered
into a binding contract that included the arbitration agreement.
Under the FAA, “the party seeking a jury trial must make an
unequivocal denial that an arbitration agreement exists – and
must also . . . provide sufficient evidence in support of its
claims such that a reasonable jury could return a favorable
verdict under applicable law.” Chorley Enters., 807 F.3d at 564
. Thus, “to obtain a jury trial, the parties must show genuine issues of material fact regarding the existence of an agreement to arbitrate.” 3Id.
We conclude that the district
court properly ruled that no such factual issue existed here.
3
We have noted that “[t]his standard is akin to the burden
on summary judgment.” Chorley Enters. v. Dickey’s Barbecue
Rests., 807 F.3d 553, 564
(4th Cir. 2015).
10
The parties agree that principles of Maryland law control
the question of whether they reached an agreement to arbitrate.
See First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944
(1995) (“When deciding whether the parties agreed to arbitrate a certain matter . . ., courts generally . . . should apply ordinary state-law principles that govern the formation of contracts.”); see Chorley Enters.,807 F.3d at 563
.
Under Maryland law, a prerequisite to the formation of a
contract is mutual assent between the parties. See Cochran v.
Norkunas, 919 A.2d 700, 708
(Md. 2007). “Manifestation of mutual assent includes two issues: (1) intent to be bound, and (2) definiteness of terms.”Id.
“A contract is formed when an unrevoked offer made by one
person is accepted by another.” County Comm’rs for Carroll
Cnty. v. Forty W. Builders, Inc., 941 A.2d 1181, 1209
(Md. Ct. Spec. App. 2008) (internal quotation marks omitted). “An ‘offer’ is the ‘manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.’” Prince George’s Cnty. v. Silverman,472 A.2d 104, 112
(Md. Ct. Spec. App. 1984). Importantly, an acceptance may be manifested by actions as well as by words. See Porter v. General Boiler Casing Co.,396 A.2d 1090, 1095
(Md. 1979) (“The
11
purpose of a signature is to demonstrate ‘mutuality or assent’
which could as well be shown by the conduct of the parties.”).
As it did below, Santander offers several theories
concerning how a meeting of the minds occurred here. Santander
first argues that CitiFinancial’s sending Galloway the Amended
Agreement for her signature amounted to an offer to enter the
agreement and that Galloway’s signing it and faxing a copy to
CitiFinancial constituted her acceptance of the Amended
Agreement. Just as the district court did, we reject this
argument because CitiFinancial made clear to Galloway, both
orally and in writing, that it retained the right to deny
Galloway’s request for lower monthly payments. Since
CitiFinancial had not agreed that Galloway’s execution of the
Amended Agreement would bind the parties, the sending of the
agreement to Galloway for her signature was a mere invitation to
Galloway to make an offer. See Spaulding v. Wells Fargo Bank,
N.A., 714 F.3d 769, 778
(4th Cir. 2013) (“[W]hen some further
act of the purported offeror is necessary, the purported offeree
has no power to create contractual relations, and there is as
yet no operative offer.” (internal quotation marks omitted)).
Thus, Galloway’s execution of the Amended Agreement and her
sending of a copy of the signed document to CitiFinancial
constituted not an acceptance of an offer made to her, but
rather an offer to CitiFinancial to enter into the agreement.
12
Santander alternatively contends that the district court
correctly ruled that CitiFinancial accepted Galloway’s offer by
lowering the amount of Galloway’s monthly payment to 86 cents
more than the amount the Amended Agreement specified, a
difference described by the district court as “de minimis.”
Galloway, 2014 WL 4384641
, at *3. Galloway argues, however,
that CitiFinancial’s actions did not constitute an acceptance of
her offer because, under Maryland law, any variation from the
terms offered is considered to be a conditional acceptance or
counteroffer, as opposed to an unconditional acceptance that
would immediately create a binding agreement. 4
Even assuming arguendo that Galloway is correct that
CitiFinancial’s actions did not bind the parties to an
agreement, we agree with the district court’s alternative ruling
that CitiFinancial’s actions proposing payments in an amount 86
cents more than the amount specified in the Amended Agreement
constituted a counteroffer to modify the terms of the Amended
Agreement in this minor way and that Galloway accepted the
counteroffer by making the payments in this slightly increased
amount.
4
Galloway also argues that the fact that CitiFinancial
charged her a late fee on November 3 in accordance with the
terms of the RISC demonstrated, for several reasons, that
CitiFinancial had not accepted the terms of the Amended
Agreement by that date.
13
Although Galloway contends that the question of whether a
meeting of the minds occurred presented a genuine factual
dispute, we conclude that the legal consequences of the parties’
undisputed actions are clear. When Galloway first inquired
about lowering the amount of her monthly payment, CitiFinancial
drafted the Amended Agreement and instructed her that if she
signed it and returned it, the company would review her request.
Galloway indicated her assent to the company’s proposed terms
when she executed the Amended Agreement on November 12, leaving
CitiFinancial to undertake its formal review process. Within
approximately one month, at some time early enough to allow
Galloway to make her December payment in the new amount,
CitiFinancial informed Galloway that it would lower Galloway’s
payment to $366.43, almost the exact amount that the Amended
Agreement had contemplated. On these facts, CitiFinancial could
not reasonably be understood to be offering Galloway the option
to her lower payment amount without accepting the other new
terms specified in the Amended Agreement – such as, for example,
the increase in the number of payments that Galloway would be
required to make. Rather, CitiFinancial could only be
reasonably understood to be proposing a very minor tweak to the
terms that it had originally suggested and that Galloway had
already indicated she would accept. See Learning Works, Inc. v.
Learning Annex, Inc., 830 F.2d 541, 543
(4th Cir. 1987)
14
(“Maryland law . . . requires unqualified acceptance of an offer
before a contract can be formed. If a purported acceptance
varies from the terms of the offer, then it does not operate as
an acceptance, but rather as a rejection of the offer and a
counteroffer.”). 5
There is no evidence that Galloway ever explicitly agreed
to accept this small modification to the Amended Agreement.
Nevertheless, her making payment in the revised amount
CitiFinancial requested and then continuing to make those
payments for several years without complaint can only be
interpreted as an assent to the terms of the Amended Agreement
as slightly modified by the company. See Restatement (Second)
of Contracts § 19(2) (“The conduct of a party is not effective
as a manifestation of his assent unless he intends to engage in
5 We note that the record does not reflect whether
CitiFinancial’s communication to Galloway informing her that it
would lower her payment to $366.43 was oral or in writing.
Galloway’s declaration states that the agreement that “lowered
[her] payments to $366.43 was not evidenced by a writing.” J.A.
17. It is unclear whether Galloway meant that CitiFinancial
informed her orally that it would lower her payment to that
amount or rather merely that there was no writing setting out
all of the terms of the parties’ new agreement. Regardless, the
means by which CitiFinancial informed Galloway of the amount of
her new monthly payment is not material to our decision.
Additionally, although the reason for the 86-cent increase
is also not material to our decision, the increase may be
attributable to a late fee of $48.74 imposed on November 3,
2008, when Galloway failed to make her October payment in a
timely manner, which increased the total amount she owed on her
loan.
15
the conduct and knows or has reason to know that the other party
may infer from his conduct that he assents.”); see also Cochran,
919 A.2d at 714
(indicating that offeree’s silence can
constitute acceptance if the offeree has accepted the benefit of
the offer); Restatement (Second) of Contracts § 53(3) (cmt. b)
(1981) (noting that offeree may guard against the risk that his
performance will constitute an unintended acceptance; he can
simply communicate to the offeror that he does not intend to
assent). This was not a case, after all, in which the parties
were engaging in back-and-forth negotiation over what the terms
of a new agreement would be. Galloway asked CitiFinancial if it
would modify the RISC to lower her required monthly payment
amount. In the context of the parties’ dealings, it was
CitiFinancial’s decision whether it would agree to do so, and,
if so, what new terms it would accept. Then Galloway would
decide whether she would also accept those terms. CitiFinancial
initially proposed terms in an Amended Agreement that it would
consider if Galloway returned the signed document to the
company. When, after its formal review process, CitiFinancial
proposed a slight change in the dollar amounts, Galloway
assented to that change as well.
Galloway argues that, under Maryland law, the parties could
not validly modify the RISC without setting out all of the new
terms together in a written document and signing the document.
16
In support of her argument, Galloway maintains that a signature
on a contract is a condition precedent if “the terms of the
contract make the parties’ signatures a condition precedent to
the formation of the contract.” All State Home Mortg., Inc. v.
Daniel, 977 A.2d 438, 447
(Md. Ct. Spec. App. 2009); see also Chirichella v. Erwin,310 A.2d 555, 557
(Md. 1973) (explaining
that a condition precedent is “a fact, other than mere lapse of
time, which, unless excused, must exist or occur before a duty
of immediate performance of a promise arises”) (internal
quotation marks omitted). While that legal proposition is
correct, no term in the Amended Agreement indicated that
CitiFinancial’s signature was necessary to bind the parties, and
Galloway does not contend otherwise.
Galloway does not suggest that when CitiFinancial agreed to
reduce her payment to $366.43, the company indicated that any
further paperwork would be forthcoming or that any additional
signatures would be needed to complete the parties’ modification
of the terms of the RISC. All CitiFinancial sought from
Galloway was payment in the new amount. By making her December
payment in that amount and continuing to make payments in that
amount for several years, she accepted the terms CitiFinancial
had offered. See Porter, 396 A.2d at 1095
; Restatement (Second)
of Contracts § 30(2) (1981) (“Unless otherwise indicated by the
17
language or the circumstances, an offer invites acceptance in
any manner and by any medium reasonable in the circumstances.”).
The only contractual language Galloway cites as the basis
for her position that a written agreement signed by both parties
was necessary to effectively modify the RISC is the language in
the RISC itself stating that any future amendment would need to
be by a signed writing. However, under Maryland law,
contractual limitations on future modifications are not
effective to prevent parties from entering into new agreements
orally or by performance; rather, they only provide context for
interpreting subsequent conduct. See Hovnanian Land Inv. Grp.,
LLC v. Annapolis Towne Ctr. at Parole, LLC, 25 A.3d 967, 978-83
(Md. 2011) (Maryland “caselaw shows a persistent unwillingness to give dispositive and preclusive effect to contractual limitations on future changes to that contract . . . whether it is mutual modification, novation, waiver of remedies, or . . . a waiver of condition precedent”); University Nat’l Bank v. Wolfe,369 A.2d 570, 576
(Md. 1977) (holding that parties may modify their original agreement by their conduct “notwithstanding a written agreement that any change to a contract must be in writing”); see also Porter,396 A.2d at 1095
(explaining that
formation of a contract does not require the parties’ signatures
“unless the parties have made them necessary at the time they
18
expressed their assent and as a condition modifying that assent”
(emphasis added and internal quotation marks omitted)).
Here, as we have explained, the parties left no doubt that
they intended to modify the terms of the RISC, even in the
absence of a signed writing memorializing all of the new terms
to which they agreed. Having led CitiFinancial to believe for
many years that the parties had successfully amended the RISC
even without a signed writing – and having accepted the benefit
of the modification in the form of substantially lower monthly
payment requirements – Galloway cannot now be heard to claim
that there was no valid amendment in the absence of a signed
writing. See Hovnanian, 25 A.3d at 979
(waiver of a provision
requiring amendments to a contract to be in writing may be by
express agreement or by implication). 6 Accordingly, the district
6 Additionally, because the parties agreed on a monthly
payment of $366.43, the terms to which the parties manifested
assent were sufficiently definite. Galloway argues that there
was some uncertainty regarding the date that monthly payments
were due, but that is not correct. The Amended Agreement
plainly provided that Galloway’s payments were due on the 14th
of every month. Galloway contends that CitiFinancial changed
this date, as evidenced by the fact that the RISC provided that
late fees would be incurred if payments were more than 15 days
late, yet after December 2008, CitiFinancial often imposed late
fees 15 days, rather than 16 days, after the due date. However,
CitiFinancial had often been charging late fees exactly 15 days
after the payment due date since the initiation of the loan.
Regardless of whether that was proper under the parties’
agreements, the continuation of that practice after December
2008 was no indication that the payment due date had somehow
changed from that provided in the Amended Agreement.
19
court properly concluded that the arbitration agreement was a
term of a contract that the parties entered into.
B.
In addition to her state-law arguments, Galloway also
maintains that any arbitration agreement that the parties
entered into is not enforceable under the FAA. We disagree.
The FAA declares, with exceptions not relevant here, that
[a] written provision in . . . a contract evidencing a
transaction involving commerce to settle by
arbitration a controversy thereafter arising out of
such contract or transaction, or the refusal to
perform the whole or any part thereof, . . . shall be
valid, irrevocable, and enforceable.
9 U.S.C. § 2
. We have stated that “[a]pplication of the FAA requires demonstration of,” among other things, “a written agreement that includes an arbitration provision which purports to cover the dispute.” Rota-McLarty,700 F.3d at 696
n.6
(internal quotation marks omitted). As we have explained, the
record demonstrates as a matter of law that Galloway, by making
payments in the amount CitiFinancial requested, bound herself to
the terms of the written Amended Agreement, with a slight
modification in the dollar amounts that is not included in the
writing. The question this case presents is whether the fact
that the Amended Agreement, and specifically the arbitration
agreement, were in writing was sufficient to satisfy the FAA’s
writing requirement, or rather, whether the parties’ non-written
20
modification of a separate term of the agreement rendered the
arbitration agreement unenforceable. We conclude that the
writing requirement was satisfied.
The “written arbitration agreement” that is necessary to
bring an agreement within the FAA’s scope is an “actual
document—the physical embodiment of the underlying legal
obligations” and need not include any written assent to those
obligations. Seawright v. American Gen. Fin. Servs., 507 F.3d 967
, 978-79 & nn.5-7 (6th Cir. 2007) (holding that FAA’s writing requirement was satisfied when pamphlet distributed to employees contained arbitration provision and stated that an employee’s continuing employment would constitute acceptance of the procedures); see In re Cotton Yarn Antitrust Litig.,505 F.3d 274
, 281 n.5 (4th Cir. 2007) (holding that when agreement to arbitrate was incorporated under the UCC into terms of oral contracts because it was established that arbitration is a usage of trade, and subsequent written confirmations containing the details of the arbitration terms became part of the contract by operation of law, the confirmations satisfied the FAA’s writing requirement); Caley v. Gulfstream Aerospace Corp.,428 F.3d 1359, 1369
(11th Cir. 2005) (holding FAA’s writing requirement
was satisfied when, “[a]lthough the employees’ acceptance was by
continuing their employment and was not in writing, all material
terms – including the manner of acceptance – were set forth in
21
the written” dispute resolution policy); International Paper Co.
v. Schwabedissen Maschinen & Anlagen GMBH, 206 F.3d 411, 416
(4th Cir. 2000) (“While a contract cannot bind parties to arbitrate disputes they have not agreed to arbitrate, it does not follow that under the Federal Arbitration Act an obligation to arbitrate attaches only to one who has personally signed the written arbitration provision. Rather, a party can agree to submit to arbitration by means other than personally signing a contract containing an arbitration clause.” (alterations & internal quotation marks omitted)); Fisser v. International Bank,282 F.2d 231, 233
(2d Cir. 1960) (“[T]he [FAA] contains no
built-in Statute of Frauds provision but merely requires that
the arbitration provision itself be in writing. Ordinary
contract principles determine who is bound by such written
provisions.” (footnote omitted)). Because the arbitration
agreement was in writing and Galloway assented to be bound by
that agreement when she made payments in the amount
CitiFinancial requested, it does not matter, for purposes of
enforceability under the FAA, that she also assented to other
terms that may not have been in writing. Stated another way,
although no writing documented CitiFinancial’s minor change to
the Amended Agreement’s dollar amounts, the parties were not
required to draft an integrated writing documenting this minor
change in order to make the written arbitration agreement
22
enforceable under the FAA. See Medical Dev. Corp. v. Industrial
Molding Corp., 479 F.2d 345, 348
(10th Cir. 1973) (“[I]t [is]
not necessary that there be a simple integrated writing or that
a party sign the writing containing the arbitration clause. All
that is required is that the arbitration provision be in
writing.” (citations omitted)). The district court was
therefore correct to enforce the arbitration agreement.
III.
In sum, because we conclude that the district court
correctly enforced the parties’ arbitration agreement, we affirm
the district court order dismissing Galloway’s action.
AFFIRMED
23
WYNN, Circuit Judge, dissenting:
The question at the heart of this appeal is whether the
parties formed a written agreement to arbitrate. Santander says
yes, pointing to a (problematic) amendment document with an
arbitration clause; Galloway says no, declaring that the
operative modification contract was never reduced to writing.
In short, the parties dispute a material fact: whether they
entered into a written agreement to submit disputes to
arbitration. It therefore cannot accurately be said that “[t]he
pertinent facts in this case are undisputed.” Ante at 2. A
jury—not a court—should resolve this dispute. Accordingly, I
dissent.
I.
Galloway, a Maryland consumer, bought a car in 2007, and
her loan was initially assigned to CitiFinancial. Under the
financing contract, Galloway was required to make 72 monthly
payments of $487.46. J.A. 19. The original contract contained
no arbitration provision. It did, however, include a provision
requiring changes to be in writing and signed to be binding:
“Any change to this contract must be in writing and we must sign
it. No oral changes are binding.” J.A. 20 (emphasis added).
No one disputes the original contract’s validity.
The same cannot be said of a purported amendment to the
agreement dating to 2008: The dispute surrounding its validity
is at the center of this appeal. Galloway contacted
CitiFinancial and requested that her monthly payments be
reduced. In response, CitiFinancial sent Galloway a fax letter
and an “Amendment Agreement” and instructed her to sign the
“Amendment Agreement” and return it to CitiFinancial for
“review, approval and consideration.” J.A. 25. The “Amendment
Agreement” proposed monthly payments of $365.57 and included an
arbitration provision. J.A. 26.
Galloway signed the Amendment Agreement and faxed it back
to CitiFinancial. But CitiFinancial never signed the Amendment
Agreement. And for months, Galloway made, and CitiFinancial,
and later its assignee Santander, the defendant here, accepted
monthly payments of $366.43—not the $365.57 in the Amendment
Agreement. In fact, Santander’s spreadsheet for Galloway’s
account listed as her requisite payment amount “$366.43”—not the
$365.57 in the Amendment Agreement.
Ultimately, Galloway failed to make her monthly payments,
and Santander repossessed and sold her car. Galloway sued in
Maryland state court, alleging that Santander failed to give
notice as required under the Credit Grantor Closed End Credit
Provisions of the Maryland Credit Deregulation Act. Galloway
also declared in an affidavit that CitiFinancial “told me that
the paperwork provided to me was not pre-approved . . . and that
25
someone within CitiFinancial would have to approve my request
before it became effective.” J.A. 16 (emphasis added).
Galloway further declared, under penalty of perjury, that
“CitiFinancial did not accept the terms of the executed
Amendment Agreement” and that “[t]he agreement between myself
and CitiFinancial . . . which lowered my payments to $366.43
each month was not evidenced by a writing.” J.A. 17 (emphasis
added). 1 Santander proffered no evidence affirmatively refuting
Galloway’s statements, instead declaring that it had simply
“relied upon the accuracy of the [original financing contract]
and the Amendment Agreement.” J.A. 31.
Santander removed the case to federal court and then moved
to compel arbitration. The district court granted the motion,
holding that a written arbitration agreement existed.
II.
Where a party “show[s] genuine issues of material fact
regarding the existence of an agreement to arbitrate,” a
standard we have likened to “the burden on summary judgment,”
that party is entitled to a jury trial on the issue. Chorley
Enters. v. Dickey’s, 807 F.3d 553, 564
(4th Cir. 2015). And we
review a district court’s judgment compelling arbitration de
1 It is, therefore, inaccurate to suggest that the record
contains “no evidence,” ante at 5, of discussions between
Galloway and CitiFinancial.
26
novo. Santoro v. Accenture Fed. Servs., LLC, 748 F.3d 217, 220
(4th Cir. 2014).
In my view, this case presents a straightforward factual
dispute entitling Galloway to a jury trial. Galloway contends
that the amendment to the original contract was not reduced to
writing. Evidence supporting Galloway’s version of the facts
includes: (1) her sworn statement, including her averment that
“[t]he agreement between myself and CitiFinancial . . . which
lowered my payments to $366.43 each month was not evidenced by a
writing,” J.A. 17; (2) the fact that the actual amount of
Galloway’s lowered payments differed from the amount stated in
the purported Amendment Agreement; (3) Santander’s admission in
its declaration that it simply relied on the accuracy of the
documents; (4) the fact that the original contract clearly
contemplated non-written amendments—because it stated that only
written and signed amendments would be binding; and (5) the fact
that CitiFinancial never signed the Amendment Agreement as
required under the original contract.
Santander, by contrast, contends that in sending Galloway
the Amendment Agreement—which required “review, approval and
consideration” by CitiFinancial, J.A. 25—CitiFinancial made
Galloway an offer, which she accepted when she faxed the signed
document back. Santander also argues, for example, that the
difference in amount between the payments Galloway actually made
27
and the payments she was required to make under the Amendment
Agreement was simply de minimis and that the discrepancy was
either ratified or waived. 2 While Santander’s arguments may not
all be frivolous, 3 I simply cannot agree that they lead to the
conclusion that “CitiFinancial could only be reasonably
understood to be proposing a very minor tweak to the terms that
it had originally suggested and that Galloway had already
indicated she would accept.” Ante at 14.
Instead, this is a classic case of he said/she said.
Galloway claims that the parties’ ultimate agreement to lower
her monthly payments was never reduced to writing. Santander
2 I am confounded by the way in which the majority opinion
invokes waiver here. Plainly, “[t]he parties left no doubt that
they intended to modify the terms of the RISC, even in the
absence of a signed writing to which they agreed.” Ante at 19.
And indeed, Galloway does not contest that the parties agreed to
a modification; she instead contests how they did so, disputing
that the modification took the form of a written document
containing an arbitration provision. Waiver is thus plainly
misplaced and certainly does not lead to the conclusion that
“the district court properly concluded that the arbitration
agreement was a term of the contact that the parties entered
into.” Ante at 20.
3 I agree with the majority’s rejection of Santander’s
argument that, in faxing the Amendment Agreement to Galloway,
CitiFinancial made her an offer. I also note that not a single
reported Maryland case engages in the “de minimis” analysis
featured in Santander’s brief and the court’s analysis. On the
contrary, the case law suggests that any discrepancy between an
offer and a purported acceptance results in no contract being
formed. See, e.g., Learning Works, Inc. v. The Learning Annex,
Inc., 830 F.2d 541, 543
(4th Cir. 1987) (“Maryland law, which
applies in this case, requires unqualified acceptance of an
offer before a contract can be formed.” (citations omitted)).
28
claims that the Amendment Agreement document constitutes the
operative agreement to reduce payments. Without doubt, what the
parties agreed to—and whether it is memorialized by a writing—is
material. It is plainly disputed. And it is a question for the
jury, not the courts.
III.
Where a party “show[s] genuine issues of material fact
regarding the existence of an agreement to arbitrate,” that
party is entitled to a jury trial. Chorley Enters., 807 F.3d at 564
. In my view, Galloway has done just that—shown a material
fact in dispute. She is entitled to have a jury decide the
dispute. With much respect to my colleagues in the majority, I
therefore dissent.
29