Verizon receipt not enough to compel arbitration

The Missouri Court of Appeals Eastern District ruled June 29 that a Verizon customer’s 2015 receipt referencing settling disputes by arbitration is unenforceable because it exceeds the scope of what reasonable parties would expect in entering an agreement. 

Breanna Rose sued Verizon and its employee Santiago E. Sabala Jr. in 2019 in St. Louis County Circuit Court, alleging he forwarded nude photos of herself on her phone to his email address while he handled her phone upgrade. 

Verizon filed a motion to compel arbitration, pointing to a receipt Rose had signed in 2015 following an earlier visit to a Verizon store. The receipt referenced the settlement of disputes by arbitration and referred to an online customer agreement. 

The Eastern District agreed with a judge’s earlier finding that the provision was unconscionable and a contract of adhesion, a form contract created and imposed by a stronger party on a weaker one. While adhesion contracts are not necessarily unenforceable, Missouri courts review them to ensure that a contract matches the parties’ reasonable expectations. 

A reasonable party signing a receipt for a cell phone would not expect that she was consenting to provisions affecting her legal protections from the kind of misconduct alleged by Rose’s suit, the court said. The online agreement’s structure “screams of ‘take this or nothing,’ effectively nullifying any meaningful negotiation opportunity.”  

The case is Rose v. Verizon et al., ED109193.