Tuesday, January 3, 2012

Arbitration: assignee of arbitration agreement has no right to arbitrate its own, pre-assignment conduct

Porter v. AT&T Mobility, LLC, 2011 VT 112 (mem.)

 Defendant AT&T appeals the trial court’s denial of its motion to compel arbitration.  AT&T claims the trial court erred by ruling that AT&T had not been assigned plaintiff Pike Porter’s cell phone contract before sending him unsolicited text messages and erred in failing to hold an evidentiary hearing on this issue.  AT&T also argues that even if Porter’s claims arose before AT&T purchased his contract; the trial court erred as a matter of law in holding that AT&T cannot enforce the binding arbitration agreement in Porter’s original cell phone contract.  We affirm. 

AT&T claims that as an “assignee” or “successor” of Unicel, a party to the original contract, it has the right to elect to arbitrate a claim, even one arising out of conduct it may have undertaken before it was assigned the contract, because such a claim involves a “prior dealing.” The key provision of the contract states that claims “arising out of . . . any prior or future dealings between you and us [may be] resolved by binding arbitration.”  While AT&T, as Unicel’s assignee and successor, certainly took “whatever interest the assignor possessed” when it assumed Porter’s contract, In re Ambassador Ins. Co., 2008 VT 105, ¶ 19, 184 Vt. 408, 956 A.2d 486, that “interest” did not include the ability to compel arbitration between Porter and AT&T.

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