Supreme Court affirms arbitration ruling in favor of AT&T

By Nathan Bass | Jun 24, 2013

CHARLESTON – AT&T had the right to compel arbitration in a cellular phone bill dispute, according to an opinion issued by the state Supreme Court on June 17.

The unanimous memorandum opinion affirmed the decision of the Circuit Court of Brooke County in Charlene A. Shorts vs. AT&T Mobility and AT&T Mobility Corporation and Palisades Collection, LLC.

Charlene A. Shorts purchased a cell phone and wireless service plan from AT&T in February 2003. After Shorts allegedly failed to make timely payments, AT&T terminated the service and assessed a $175 termination fee in May 2003.

AT&T merged with Cingular Wireless in October 2004 and Shorts purchased new service from Cingular. By the time Cingular changed its name to AT&T Mobility in 2007, Shorts had stopped doing business under that contract.

AT&T Mobility assigned the right to collect the 2003 AT&T Wireless debt to Palisades, a debt collection company, and Palisades filed a debt collection lawsuit against Shorts on June 23, 2006, seeking $794.87 plus prejudgment interest of $242.52.

In Shorts' defense and counterclaim, she alleged that AT&T had violated multiple provisions of the state Consumer Credit and Protection Act. Shorts added AT&T Mobility in the counterclaim and sought actual and statutory damages, statutory attorneys fees and cancellation of her debt. Shorts also sought to bring her counterclaims against AT&T on behalf of a class.

After unsuccessfully attempting to remove the case to federal court, AT&T Mobility moved to compel arbitration. AT&T maintained that the primary obligation to arbitrate arose under the terms of the 2003 contract, but the procedural aspects of the arbitration were governed by the 2005 Cingular contract and amendments it made to its arbitration provision in December 2006 and March 2009.

In December 2009, the circuit court issued its first order in the case, parts of which were appealed by AT&T. Upon remand, the circuit court granted AT&T Mobility’s motion to compel arbitration on July 25, 2011. The circuit court denied a motion by Short to clarify and reconsider the order compelling arbitration.

Short appealed.

“In her first assignment of error, Ms. Shorts asserts that the circuit court erred in applying the 2005 contract and 2006 and 2009 modifications instead of applying the 2003 contract,” the court wrote. “Ms. Shorts maintains in her second assignment of error that the 2003 contract terms are unconscionable and thus, the circuit court erroneously granted AT&T’s motion to compel arbitration.

“We accord both of these arguments scant merit.

“When this case was previously before this Court, this Court stated in footnote 9 of our opinion in AT&T Mobility I that ‘Ms. Shorts’ counsel represented during oral argument that he did not object to the trial court’s ruling that the 2005 agreement, along with the 2006 and 2009 modifications, are the controlling provision with regard to arbitration.’ Consequently, the applicability of the 2005 agreement, along with the 2006 and 2009 modifications, is now the law of the case.

“Alternatively, Ms. Shorts contends that the circuit court erred in failing to find that AT&T’s 2006 and 2009 contract modifications were unconscionable on the record presented. Specifically, Ms. Shorts asserts that the 2006 and 2009 provisions are unconscionable because customers who refuse settlement offers are not guaranteed to receive the $10,000 minimum payment provided for under the 2009 provision if they are not awarded more than AT&T Mobility’s last written settlement offer.

“Because she did not raise this argument below, we find that she has waived this argument on appeal. Furthermore, we find that the circuit court complied with the directives of this Court’s mandate on remand and found that the 2005 contract, along with the 2006 and 2009 modifications, was not unconscionable.

The court also ruled that the circuit court did not err in denying Shorts’ request for discovery prior to granting AT&T’s motion to compel arbitration.

“For the foregoing reasons, we affirm the circuit court’s order entered July 25, 2011, granting AT&T’s Motion to Compel Arbitration.”

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