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Citizens Telecommunications Company of West Virginia v. Sheridan

Supreme Court of West Virginia

April 20, 2017

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

          Submitted: January 24, 2017

         Appeal from the Circuit Court of Lincoln County The Honorable Jay M. Hoke, Judge Civil Action No. 14-C-115

          Thomas R. Goodwin, Esq. J. David Fenwick, Esq. Goodwin & Goodwin Charleston, West Virginia Archis A. Parasharami, Esq. (admitted pro hac vice) Mayer Brown LLP Washington, DC Joseph J. Starsick, Jr., Esq. Frontier Communications Charleston, West Virginia Counsel for the Petitioner

          Benjamin Sheridan, Esq. Mitchel Lee Klein, Esq. Klein Sheridan & Glazer LC Hurricane, West Virginia Jonathan J. Marshall, Esq. Bailey Glasser, LLP Charleston, West Virginia Counsel for the Respondents

         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).

          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]

         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 ...


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