Third District Court of Appeal State of Florida

Opinion filed December 26, 2018. Not final until disposition of timely filed motion for rehearing.

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No. 3D17-375 Lower Tribunal No. 12-17187 ________________

MetroPCS Communications, Inc. and MetroPCS Florida, LLC, Appellants,

vs.

Jorge Porter, Appellee.

An Appeal from a non-final order from the Circuit Court for Miami-Dade County, Jorge E. Cueto, Judge.

Drinker Biddle & Reath LLP (San Francisco), Michael J. Sortz (San Francisco), Carlton Fields Jorden Burt, P.A., Aaron S. Weiss, and Steven M. Blickensderfer, for appellants.

Dorta Law, Gonzalo R. Dorta, for appellee.

Before ROTHENBERG, C.J., and FERNANDEZ and LUCK, JJ.

PER CURIAM. MetroPCS Communications, Inc., et al., a wireless telephone service

company, appeals from the denial of its request for enforcement of an arbitration

provision against Jorge Porter. The issue is whether Porter was on notice of the

arbitration provision contained in MetroPCS’ terms and conditions of service.

Because we conclude Porter was provided with inquiry notice, we reverse the order

denying arbitration.

Factual and Procedural Background

Porter filed this putative class action claiming that MetroPCS violated

Florida’s Deceptive and Unfair Trade Practices Act when it improperly charged

Porter and other MetroPCS customers sales tax on the full price of mobile phones

purchased using a rebate. MetroPCS moved to compel arbitration of the claim based

on a provision found in its terms and conditions of service. The trial court summarily

denied MetroPCS’ motion. In MetroPCS Communications, Inc. v. Porter,

(Fla. 3d DCA 2013), this court reversed the summary denial “for a

determination after an evidentiary hearing of the threshold issue of whether the

arbitration clause was contained in a binding agreement between the parties.”

On remand, the trial court held an evidentiary hearing where it heard

testimony from Porter, Mr. Avila, the former MetroPCS sales agent who sold Porter

his phone in 2012, and MetroPCS representative, Ms. Brown. The testimony and

documents admitted revealed the process used by MetroPCS to inform its customers

2 of its terms of use. Three different notice methods are germane to Porter’s interaction

with MetroPCS: (1) written documents at sale; (2) pre-litigation text messages; and

(3) post-litigation text messages.

(1) Written documents at sale.

At the hearing, Mr. Avila could not remember Porter or the transaction with

him specifically. When asked about the procedure he normally followed in selling

MetroPCS phones, Mr. Avila testified he filled out a start of service form in

triplicate, keeping the top sheet and giving the customer the remainder of the form.

The customer copy of the form warned that use of MetroPCS services acknowledged

acceptance of the company’s terms and conditions of service and gave a webpage

link to those terms and conditions. In addition, the second page of the form entitled

“MetroPCS Terms and Conditions of Service” summarized the terms and conditions,

including arbitration of any disputes.

Avila further testified he would take the phone out of the box to activate it,

and on occasion to transfer data from the customer’s prior phone. He would then

give the customer the phone and the box the phone came in. The box contained the

phone charger, other accessories, if any, and a small booklet. The booklet was a

quick start guide which accompanied all phones sold by MetroPCS. The quick start

guide also warned that use of MetroPCS services denoted agreement to the

company’s terms and conditions of use which included arbitration of any disputes.

3 Porter admitted he was a MetroPCS customer since 2009 and purchased

several phones from MetroPCS during that time. MetroPCS provided him with

prepaid cellular service for his phones. Porter would receive a text message from

MetroPCS alerting him that his payment was due and, around the 26th of each month,

he paid in advance for the upcoming month’s service. With regard to the purchase

of his phones, Porter testified that each time he left the store only with his new phone

and a payment receipt. He vehemently denied receiving any packaging or other

materials with the phone.

(2) Pre-litigation text messages.

As Porter testified, each month MetroPCS would send a text message to

Porter’s phone reminding him that his payment was due for next month’s service.

Porter would then go to a MetroPCS store to make his payment. A screenshot of an

August 2012 text message depicted the typical payment reminder: “Please pay

$70.00 by 8/26/12 for [account number] to avoid service interruption.

Terms&Condition apply.” After payment, a second message acknowledged

payment and also contained the warning that terms and conditions applied. An

example of a payment text message read: “Thank you for your $70.00 pymt on

[account number]. Pymt posted on 08/23/12 03:18p. Terms&Conditions apply.”

Porter understood that the phrase “Terms&Conditions” was a link through which he

could access information of MetroPCS’s terms and conditions on his phone.

4 However, Porter never accessed the information because he believed he “had no

reason to go there.”

(3) Post-litigation text messages.

Sometime in 2014, well into the litigation of the instant case, MetroPCS’s

payment reminder text messages changed. They now expressly referred to

arbitration as evidenced by the March 26, 2014 message: “Please pay $75.00 by

03/26/14 for [account number] to avoid service interruption. MetroPCS

Terms&Conditions including arbitration apply. See www.metropcs.com/terms.”

Porter testified he was shocked by the message’s reference to arbitration.

Based on the evidence presented, the trial court found that Porter did not

receive the purchase documents. Additionally, although it found that Porter received

both the pre-litigation and post-litigation text messages, the trial court concluded that

the messages did not put Porter on notice of the arbitration provision. Thus, the trial

court decided there was no binding agreement to arbitrate and again denied the

motion to compel arbitration. MetroPCS appeals this ruling.

Standard of Review

In reviewing an order denying arbitration on the ground that the parties’ did

not agree to arbitration, this court employs a mixed standard of review. We review

the record for substantial, competent evidence to support the trial court’s findings of

fact and consider de novo its conclusions of law. See Gainesville Health Care Ctr.,

5 Inc. v. Weston,

(Fla. 1st DCA 2003) (“The standard of review

applicable to the trial court’s factual findings is whether they are supported by

competent, substantial evidence. However, the standard of review applicable to the

trial court’s construction of the arbitration provision, and to its application of the law

to the facts found, is de novo.” (citation omitted)).

Discussion

Porter may be compelled to arbitrate his dispute with MetroPCS only if he

agreed to do so. See Basulto v. Hialeah Auto.,

(Fla. 2014)

(“Because the buyers have not agreed to the [arbitration clause], they cannot be

compelled to arbitrate their claims for monetary relief.”). After a great deal of debate,

both courts and legal commentators have concluded that well-settled legal principles

of contract formation suffice to decide cases, such as this one, involving contracts

entered into and evidenced by electronic means. See, e.g., Register.com, Inc. v.

Verio, Inc.,

(2d Cir. 2004) (“While new commerce on the Internet

has exposed courts to many new situations, it has not fundamentally changed the

principles of contract.); Juliet M. Moringiello & William L. Reynolds, From Lord

Coke to Internet Privacy: The Past, Present, and Future of the Law of Electronic

Contracting,

, 455 (2013) (“Soon … the courts recognized that

the legal problems posed by the new technology were no different than those that

had been presented in the preceding century and, therefore, judges rejected efforts

6 to change the basic law of contracts.” (footnote omitted)). Hence, we look to those

well-settled principles to determine whether the parties here agreed to arbitrate

disputes arising from their electronic contract.

The key issues in most cases involving electronic contract formation is notice

and manifestation of assent. In Vitacost.com, Inc. v. McCants,

(Fla. 4th DCA 2017), the court described the two types of agreements generally

found in internet sales cases which concern issues of notice and assent. “A

‘clickwrap’ agreement occurs when a website directs a purchaser to the terms and

conditions of the sale and requires the purchaser to click a box to acknowledge that

they have read those terms and conditions.”

“A ‘browsewrap’ agreement occurs

when a website merely provides a link to the terms and conditions and does not

require the purchaser to click an acknowledgement during the checkout process. The

purchaser can complete the transaction without visiting the page containing the

terms and conditions.”

The agreement in this case does not precisely fit within

either category, although it is akin to a browsewrap agreement in that Porter

completed his transaction with MetroPCS without visiting the web page containing

the terms and conditions. As Vitacost.com recognized “‘[b]rowsewrap’ agreements

have only been enforced when the purchaser has actual knowledge of the terms and

conditions, or when the hyperlink to the terms and conditions is conspicuous enough

to put a reasonably prudent person on inquiry notice.”

. In Vitacost.com,

7 the agreement was not sufficiently conspicuous because the purchaser had to scroll

through multiple pages of products before locating the hyperlink at the bottom of a

final webpage.

The notice to Porter via the pre-litigation text messages was more direct.1

Between the sale and the filing of this action, MetroPCS sent text messages to Porter

each month letting Porter know that payment for next month’s service was due and

then acknowledging payment for the service. These text messages informed Porter

that terms and conditions applied to use of the service. The reference to terms and

conditions was a hyperlink which Porter could use to read the terms and conditions.

The hyperlink was at the end of the short text messages. In marked contrast to the

circumstances in Vitacost.com and other browsewrap cases, the hyperlink was not

buried in pages of information or hidden at the foot of a web page. Here notice that

terms and conditions applied was conspicuous.

Porter admitted he saw the messages and the trial court found that Porter

received the text message. Porter also testified he understood the messages contained

a hyperlink which he could use to read the terms and conditions. Porter simply chose

1 If any of the means used by MetroPCS to communicate its terms and conditions of service to its customers reached Porter, his continued use of the company’s services constituted assent to the terms and conditions and he must arbitrate. Thus, we will confine our analysis to the one method which we conclude sufficed as notice – the pre-litigation text messages.

8 not to click on the hyperlink. “[A] person has no right to shut his eyes or ears to

avoid information, and then say that he has no notice.” Sapp v. Warner,

(Fla. 1932); see also Meyer v. Uber Techs., Inc.

(2d Cir.

2017) (“Where there is no evidence that the offeree had actual notice of the terms of

the agreement, the offeree will still be bound by the agreement if a reasonably

prudent user would be on inquiry notice of the terms.”).

Conclusion

Accordingly, because Porter was put on notice that his contract with

MetroPCS was subject to arbitration, we reverse the trial court’s order denying

arbitration on the ground that the parties did not agree to arbitrate disputes arising

from their contract.2,3 The case is remanded for further proceedings consistent with

this opinion.

Reversed and remanded.

2 Both parties agree and we concur that the trial court erred in sua sponte extending its ruling regarding arbitration to similarly situated putative class members. 3 Although on appeal the parties briefed the issue of unconscionability, the trial court never ruled on the issue because it found that there wasn’t a binding arbitration agreement. Having reversed on that ground, we leave it to the trial court to decide the unconscionability issue in the first instance. See Akers v. City of Miami Beach,

(Fla. 3d DCA 1999) (“Appellee would have us affirm the summary judgment nevertheless on the alternative ground that there is insufficient evidence to support a finding of negligence on the part of the City. Because the trial court based its judgment solely on the workers’ compensation immunity and this court should not ordinarily decide issues not ruled on by the trial court in the first instance, we reverse the summary judgment and express no opinion as to the legal merits of appellee’s alternative ground at this time.”).

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