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Guidotti v. Legal Helpers Debt Resolution, L.L.C.

United States District Court, D. New Jersey

December 3, 2014

DAWN GUIDOTTI, on behalf of herself and other class members similarly situated, Plaintiff,

Page 700

For Plaintiff: Joseph Michael Pinto , Esq., POLINO AND PINTO, P.C., Moorestown, NJ.

For Global Client Solutions, L.L.C., Rocky Mountain Bank and Trust of Colorado Springs, Colorado, and Eclipse Servicing, Inc.: Shaji M. Eapen, Esq., MORGAN, MELHUISH & ABRUTYN, ESQS., Livingston, NJ; Richard W. Epstein, Esq., Meredith H. Leonard, Esq., Rebecca F. Brattner, Esq., GREENSPOON MARDER, P.A., Ft. Lauderdale, FL.


Page 701

HONORABLE JEROME B. SIMANDLE, Chief United States District Judge.


This matter comes before the Court by way of Defendant Global Client Solutions, L.L.C.'s (hereinafter, " Global" ) and Rocky Mountain Bank and Trust's (hereinafter, " RMBT" and, collectively, " Defendants" ) renewed motion to compel arbitration of Plaintiff Dawn Guidotti's (hereinafter, " Plaintiff" ) claims in accordance with the arbitration provision of Defendants' Account Agreement and Disclosure Statement (hereinafter, the " AADS" ).[1] [Docket Item 155.]

Page 702

In this putative class action involving, at one time, twenty-two defendants, Plaintiff generally alleges that she contracted with various law firm and bank defendants in hopes that such entities would negotiate with creditors to settle her consumer debts without forcing Plaintiff into bankruptcy. Rather than settling her outstanding financial obligations, however, Plaintiff alleges that the various defendants conspired to fleece her (and those similarly situated) of her remaining assets, without engaging in any debt negotiations on Plaintiff's behalf.

Defendants performed a distinct function in this overall scheme, by purportedly maintaining and operating a " special bank account" out of which Plaintiff would pay the various defendants with whom Plaintiff contracted for " legal and debt negotiation" services, and into which Plaintiff would deposit funds ultimately intended " to be paid to her settling creditors." Guidotti v. Legal Helpers Debt Resolution, 866 F.Supp.2d 315, 322 (D.N.J. 2011) (citation omitted). Plaintiff's Complaint specifically identifies RMBT as the financial institution with which she opened this special purpose account, and Global as the " agent" processing the automatic fund transfers into, and/or automatic payments out of, such account. (Id.)

The Court has, on multiple occasions and in connection with various agreements, compelled Plaintiff to arbitrate her claims against certain defendants in this litigation. See, e.g., Guidotti, 866 F.Supp.2d at 342 (granting the nine " Law Firm Defendants' motion to compel arbitration), vacated & remanded on other grounds, 716 F.3d 764 (3d Cir. 2013); Guidotti v. Legal Helpers Debt Resolution, No. 11-1219, 2012 WL 3262435 (D.N.J. Aug. 7, 2012) (granting the motion of defendants J.G. Debt Solutions, L.L.C. and Joel Gavalas to compel arbitration).

With respect to Defendants, however, the Court's December 20, 2011 decision concluded that Plaintiff " signed and returned" her Special Purpose Account Application (hereinafter, the " SPAA" )--a document which referenced the AADS--prior to receiving the actual terms contained in the AADS, including its arbitration provision. See Guidotti, 866 F.Supp.2d at 334. Consequently, though " the SPAA clearly and unambiguously referred to the AADS" by name, the Court found that Plaintiff could not be compelled to arbitrate her claims because she lacked sufficient " knowledge of the existence of the arbitration clause or its specific conditions, even if she assented to its incorporation." Id. at 336.

In vacating the Court's December 20, 2011 Order, the Court of Appeals found that a genuine issue of material fact precluded a summary disposition, reliant upon the pleadings, on the issue of the parties' agreement, if at all, to arbitrate. Guidotti, 716 F.3d at 780. The Court of Appeals specifically questioned whether Plaintiff's " unsworn claim" that the AADS did not accompany the documents indisputably received by Plaintiff in September 2009 sufficed to " outright" substantiate such assertion, particularly given Plaintiff's near-contemporaneous execution of the SPAA. Id. at 769, 779-80. The Court of Appeals therefore remanded this action for additional evidentiary development on the validity of the agreement to arbitrate, and clarified Third Circuit law that any renewed motion to compel arbitration be entertained under the summary judgment standard of Rule 56, Fed.R.Civ.P. Id. at 780.

Following seven months of additional factual discovery [Docket Items 146, 148, & 150], Defendants, armed with a more robust factual record, now renew their motion to compel arbitration. [Docket Item 155.]

Page 703

The principal issues presented by the pending motion are whether genuine issues of material fact exist on the parties' agreement, if at all, to arbitrate, and whether the nature of the arbitration clause renders such provision substantively and/or procedurally unconscionable. For the reasons that follow, the Court will deny Defendants' motion to compel arbitration.[2]


A. Rule 56.1 Statements

Plaintiff filed two statements of material fact in opposition to Defendants' motion: one identified as Plaintiff's response to Defendants' statement of material facts [Docket Item 157-2], and the other entitled Plaintiff's certified statement of material facts in opposition to Defendants' motion. [Docket Item 157-3.]

Defendants move to strike Plaintiff's certified statement of material facts on the basis that Plaintiff's statement contravenes Local Civil Rule 56.1(a) by setting forth argumentative and conclusory statements without appropriate citations to record evidence, and by impermissibly relying upon hearsay statements. (Defs.' Br. at 2-3 [Docket Item 164-1].) Defendants also argue that Plaintiff lacks personal knowledge for the vast majority of the assertions set forth in her statement, the accuracy of which Plaintiff certified under penalty of perjury. (Id. at 9-15.)

Local Civil Rule 56.1(a) generally permits the opponent of summary judgment to " furnish a supplemental statement of disputed material facts, in separately numbered paragraphs citing to the affidavits and other documents submitted in connection with the motion," to the extent necessary " to substantiate the factual basis for opposition." L. CIV. R. 56.1(a). Plaintiff's eighty-eight paragraph certified statement of material facts sets forth lengthy factual assertions, many of which lack citations to affidavits or other documents submitted in connection with Plaintiff's submission. [Docket Item 13-3.] Moreover, much of Plaintiff's supplemental statement concerns the legal relevance and weight to be afforded such facts, the inclusion of which the Court finds inappropriate in connection with a Rule 56.1(a) supplemental statement. See L. CIV. R. 56.1(a) (" Each statement of material facts shall be a separate document (not part of a brief) and shall not contain legal argument or conclusions of law." ). Finally, the Court agrees with Defendants that Plaintiff's certified statement fails to set forth verbatim recitations or accurate paraphrases of the deposition testimony of Jennifer Kelly and Brent Hampton. Rather, Plaintiff's certified statement clearly editorializes such testimony. (Compare, e.g., Certified Statement of Material Facts (hereinafter, " CSMF" ), ¶ 37, with Kelly Dep. at 34:25-35:19.) The Court, accordingly, will grant Defendants' motion to strike, and will disregard Plaintiff's submission to the extent it states legal arguments or conclusions of law, and to the extent Plaintiff failed to appropriately support her factual assertions through record citations, contrary to Local Civil Rule 56.1(a).

The Court need not, however, entirely disregard Plaintiff's certified statement to the extent that such statement otherwise comports with Local Civil Rule 56.1(a) by setting forth, in part, substantiating citations for Plaintiff's factual averments. Defendants' motion to strike will, therefore, be denied to the extent Defendants urge the Court to entirely disregard Plaintiff's certified statement. Rather, all statements will be considered to the extent permissible under Federal Rule of Civil Procedure 56 and Local Civil Rule 56.1.

Page 704

However, to the extent either party failed to make clear any dispute of material fact in their respective Rule 56.1 statements by citing to contrary evidence in the record, the Court assumes that the opponent has no evidence raising a genuine dispute with respect to the stated fact. The Court will therefore deem any such fact undisputed for purposes of the pending motion. See L. CIV. R. 56.1(a) (" [A]ny material fact not disputed shall be deemed undisputed for purposes of the summary judgment motion." ). Having so concluded, the Court turns the facts of this litigation, as derived from the parties' voluminous exhibits and their 56.1 statements.

B. Factual Background

In September 2009, Plaintiff provided defendants JG Debt Solutions and Eclipse Financial, Inc. (hereinafter, " Eclipse" ) with certain non-public, personally identifying biographical and financial information, in order to determine Plaintiff's eligibility for a debt resolution program. (Defs.' Statement of Material Facts (hereinafter, " SMF" ) at ¶ 1; Pl.'s Responsive Statement of Material Facts (hereinafter, " RSMF" ) at ¶ 1.) In light of Plaintiff's interest in the debt resolution program, Eclipse emailed Plaintiff the relevant program documents, through the DocuSign system, on September 21, 2009.[3] (Kelly Dec., Attach. 1 (" [Agreement] was emailed to DocuSign." ); Kelly Dep. at 21:1-14 (describing the DocuSign process).) Though Plaintiff has no recollection of receiving such documents by email, or signing such documents through DocuSign (Giudotti Dep. at 62:10-16), the DocuSign " Certificate of Completion" reflects that Plaintiff received on September 21, 2009, and electronically signed on September 22, 2009, ten documents, including Defendants' SPAA. (Pl.'s App., Pa000022 (DocuSign Envelope ID: 92E83CC3-FEA5-41CD-9AE7-16FBD3A4E289, Pa000012-Pa000021 (reflecting the same DocuSign Envelope ID).) In the SPAA, DocuSign'd by Plaintiff on September 22, 2009, Plaintiff " acknowledged " receipt of the AADS, and further acknowledged that the SPAA fully incorporates " by reference" the binding terms and conditions of the AADS. (Id. at Pa000021 (emphasis in original).) In accordance with such conditions, the SPAA authorized Defendants " to initiate" monthly " debits" from Plaintiff's checking account in the amount of $348.68 " until further notice." (Pl.'s App., Pa 000021.)

Following Plaintiff's execution of the program documents, Joel Gavalas, the owner of defendant J.G. Debt Solutions, Inc., contacted Plaintiff on September 24, 2009 to confirm her understanding of the debt settlement program, including her special purpose account with Defendants. (Kelly Dec., Attach. 2.) Mr. Gavalas further directed Plaintiff to anticipate a " Welcome package" from Legal Helpers containing " important" documents concerning Plaintiff's obligations under the debt resolution program. (See id. at 14:1-14.)

On September 29, 2009, Eclipse emailed Plaintiff, through the DocuSign system, substantively identical, but partially revised program documents. (Defs.' SMF at ¶ ¶ 12-13; Pl.'s RSMF at ¶ 10; Pl.'s App., Pa000001; Kelly Dec., Attach. 1 (" [Agreement] was emailed to Docusign." ).) Though Plaintiff recalls receiving such documents electronically through DocuSign on September 30, 2009 (Pl.'s RSMF at ¶ ¶ 12-13), she " didn't take the time to review each page or [to] read any other documents." (Guidotti Dep. at 63:16-20.) Instead, she " just pointed and clicked" on

Page 705

those portions of the documents that required an electronic signature, and promptly " sent them back." (Id.; 49:1-12; ...

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