# MYSTIC RETREAT MED SPA & WEIGHT LOSS CENTER v. ZELTIQ AESTHETICS LLC

> District Court, M.D. North Carolina · January 23, 2023

URL: https://www.frixlaw.com/law-library/cases/10254236

## Case

- **Court:** District Court, M.D. North Carolina
- **Decided:** January 23, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10254236

## How later opinions describe it (automated extraction)

- noting that “the court is obliged to conduct a trial under the Trial Provision [of the FAA] when a party unequivocally denies ‘that an arbitration agreement exists,’ and ‘shows sufficient facts in support’ thereof”
- noting court’s discretion to consider arguments raised for first time in reply briefing

## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

MYSTIC RETREAT MED SPA & )
WEIGHT LOSS CENTER, PLLC, AND )
MISTY SINCLAIR, M.D., )
)
Plaintiffs, )
)
v. ) 1:21cv00515
)
ASCENTIUM CAPITAL, LLC, ZELTIQ )
AESTHETICS LLC, AND ALLERGAN )
USA, INC., )
)
Defendants. )

MEMORANDUM OPINION AND ORDER

THOMAS D. SCHROEDER, Chief District Judge.
This case returns to the court on the second motion to compel
arbitration and stay proceedings by Defendants Zeltiq Aesthetics
LLC (“Zeltiq”) and its successor, Allergan USA, Inc. (“Allergan”).
(Doc. 84.) Plaintiffs Mystic Retreat Med Spa & Weight Loss Center,
PLLC (“Mystic”) and Misty Sinclair, M.D. oppose the motion. (Doc.
87.) Plaintiffs also move to strike evidence submitted with
Defendants’ reply brief. (Doc. 90.) The court held a hearing on
the motions on December 15, 2022. For the reasons set forth below,
Plaintiffs’ motion to strike will be denied, and because the court
finds a genuine dispute of material fact whether the arbitration
provision was incorporated into the parties’ contract, Defendants’
motion to compel arbitration will be set for resolution by a jury.
I. BACKGROUND
As Defendants previously moved unsuccessfully to compel
arbitration and stay proceedings (Doc. 73), the court relies on

the factual record developed in that motion as supplemented by the
current record, which demonstrates the following:
Zeltiq sold,1 and Ascentium financed, the purchase of medical
devices designed to assist with weight loss. (Doc. 7 ¶ 8.)
Plaintiff Sinclair is a board-certified neurologist with a sub-
specialty in sleep disorders. (Doc. 34-1 ¶ 4.) She is also a
member-manager of Plaintiff Mystic, a spa and weight loss center,
with her business partner, Marcia Ballard, a nurse practitioner
who is a principal at Mystic. (Id. ¶¶ 2-4; Doc. 34-2 ¶¶ 2-4.)
According to Plaintiffs, in the summer of 2016, Wes Lev,
Zeltiq’s sales manager,2 approached Sinclair about Zeltiq’s
CoolSculpting technology for weight loss, spoke with Sinclair
several times, and met with her in person.3 (Doc. 34-1 ¶¶ 6-9;

Doc. 34-2 ¶¶ 6-8.) On June 19, 2016, Lev sent an email to Sinclair
and Ballard at 8:14 p.m., with a copy to Jason Wise at Ascentium,
regarding the purchase of Zeltiq’s CoolSculpting System and

1 Zeltiq was acquired by Plaintiff Allergan in 2017. (Doc. 16 ¶ 5.)

2 Sinclair states in her affidavit that she has known Lev for “about 6
years” (Doc. 34-1 ¶ 6), but it is not clear whether this predates the
events in this case.

3 Another medical spa operator who had provided Sinclair advice had given
Lev her “name and contact information.” (Doc. 34-1 ¶ 8.)
services. (Doc. 29-2.) The email states:
Dr. Sinclair and Dr. Ballard,
Please see the attached MSA (agreements). I have

one system and 2.
I am copying Jason Wise with Ascentium to give you
finance options and monthly payments.
I look forward to seeing you tomorrow.4
Best,
Wes
(Doc. 29-2 at 1.) The email also includes as attachments two
proposed MSA Sales Orders, each with Attachments A, B, and C.
(Doc. 29-2.) The significant difference between the two MSA Sales
Orders is that one proposes the sale of one CoolSculpting System,
and the other proposes the sale of two such systems. Pertinent
here, Attachment A to both is a three-page document entitled

“Attachment A: Terms & Conditions of Sale” and includes, among
other terms, the following:
APPLICABLE LAW; DISPUTE RESOLUTION

The laws of the State of California govern this agreement
without regard to conflict of laws principles or any
other principles that would result in the application of
a different body of law. The United Nations Convention
on Contracts for the International Sale of Goods is
expressly excluded from this Agreement. Any controversy
or claim arising out of or relating to this Agreement,

4 The next day was June 20, though the parties did not meet until June
22. The discrepancy, though seemingly immaterial, is not explained in
the record.
or its breach, shall be subject to non-binding mediation
prior to binding arbitration in Alameda County,
California under the then-current Commercial Arbitration
Rules of the American Arbitration Association by one
arbitrator appointed in accordance with such Rules. The
arbitrator shall issue a written report to the parties,
detailing the basis of any arbitration award. Judgment
on the award rendered by the arbitrator may be entered
in any court having jurisdiction. Subject to the
parties’ obligation to submit disputes to binding
arbitration in accordance with this paragraph, the
California state courts of Alameda County, California
(or if there is federal jurisdiction, the United States
District Court for the Northern District of California)
have exclusive jurisdiction and venue over any dispute
arising from or related to this Agreement. Customer
hereby, irrevocably, consents to the jurisdiction of
such courts, and waives any objection thereto.
Notwithstanding the foregoing, neither party shall be
precluded, at any time, from seeking injunctive relief
or other provisional relief, or submitting any decision
of an arbitrator reached in accordance with this
paragraph, in any court of law in connection with the
enforcement of this Agreement or such party’s
intellectual property rights.

(Doc. 29-2 at 7 (emphasis added).)5
Neither Sinclair nor Ballard in either of their affidavits
denies having received and seen Lev’s June 19 email.6 Rather,
they contend that they never saw or “knew of the terms” of the
email’s attachments until November 18, 2020. (Doc. 34-1 ¶ 16;
Doc. 34-2 ¶ 14-15.) Thus, they contend they never intended to

5 Attachment B is a list of supplies and prices; attachment C is entitled,
“Service and Warranty Terms and Conditions.” (Id. at 8-13.)

6 Plaintiffs’ reliance (Doc. 87 at 19) on the court’s earlier statement
noting lack of proof that Plaintiffs “ever saw or were aware of the MSA
attachments” is misplaced, as the court’s statement was based on
Defendants’ failure at that time to authenticate the June 19, 2016 and
other emails, which were merely appended to a brief and not properly
authenticated. (See Doc. 73 at 14.)
agree to these attachments as part of the MSA Sales Order. (Doc.
34-1 ¶ 17; Doc. 34-2 ¶ 15.)
On June 20, Wise replied to all recipients of Lev’s email,

attaching financing options for Plaintiffs’ purchase of the
CoolSculpting equipment. (Doc. 89-2 at 2 ¶ 5, 45-56.)
On June 22, 2016, Sinclair and Ballard met with Lev regarding
the purchase of Zeltiq’s CoolSculpting System and services. Lev
presented a single-page “Master Sales Agreement Sales Order” for
Mystic’s purchase of the equipment and services.7 (Doc. 29-3; Doc.
34-1 ¶ 13; Doc. 34-2 ¶ 12.) Sinclair made two handwritten changes
to the MSA Sales Order; first, to change the address to the new
Mystic facility in Carthage, North Carolina; and second, to note
$1,000 in marketing funds that Zeltiq would provide. (Doc. 34-1
¶ 14, Doc. 29-3.) Lev and Sinclair both initialed and dated the
two changes, and Sinclair signed the document on behalf of Mystic.

(Doc. 29-3.) The bottom of the document, just above Sinclair’s
signature, states:
Included Terms and Attachments. The agreement between
Customer and ZELTIQ Aesthetics regarding the products
described above (the ‘Master Sales Agreement’) includes
this Sales Order and the attachments (A-C) hereto which
are incorporated herein in their entirety by this
reference.

(Doc. 29-3.) However, attachments A, B, and C were not appended

7 This is the same document as one attached to Lev’s June 19, 2016 email
to Sinclair and Ballard for the sale of one CoolSculpting System.
to the MSA Sales Order or otherwise presented at the June 22
meeting. (Doc. 34-1 ¶¶ 13-16; Doc. 34-2 ¶¶ 12-13.)
The next day, June 23, Lev sent Sinclair, Ballard, and Wise

an email and attached a copy of Plaintiffs’ executed, single-page
MSA Sales Order.8 (Doc. 34-1 ¶ 18; Doc. 34-2 ¶ 16.) In an
affidavit, Sinclair states: “[a]fter the pendency of this
litigation, I was shown an email that Mr. Lev apparently sent on
June 23, 2016, the morning after the meeting when I signed the
one-page physical document.” (Doc. 34-1 ¶ 18.) Similarly, Ballard
states that “[a]fter the pendency of this litigation, I found an
email that Mr. Lev apparently sent on June 23, 2016.” (Doc. 34-2
at 16.) Neither affidavit denies having received or known of the
email at the time.
On June 24, Michael Ballard, apparently Plaintiff Ballard’s
husband, responded to Lev’s June 23 email (using the same email

address for Ballard to which Lev had sent his email) stating, “Look
forward to our venture” and “Thanks for your help,” before asking
a question about the system’s voltage. (Doc. 89-2 at 59.)
On July 1, Lev emailed another Zeltiq employee, with copies
to Sinclair and Ballard, seeking to confirm shipment of the
equipment and noting a delivery address of 75 Magnolia Avenue in
Pinehurst, North Carolina. (Doc. 89-2 at 60.) Seventeen minutes

8 Zeltiq formally accepted the MSA Sales Order, by signing it, on June 27,
2016. (Doc. 29-3.)
later, Sinclair emailed a response (from her iPhone), “No, please
deliver to Marcia's practice 1001 Monroe St Ste D Carthage, NC
28327.” (Id. at 61.)

In August 2016, Michael Ballard, responding from the same
email address as before, emailed Lev from his iPhone and copied
Sinclair (again using her same email address), noting that “Our
Coolsculpting machine comes with a warranty” and asking Lev to
“Please send to Ascentium” as the latter needed it for insurance
purposes to avoid a $100-a-month premium. (Id. at 62.) Less than
a minute later, Michael Ballard sent a second email to the same
recipients, attaching a copy of the inquiry from Ascentium that
noted that “property insurance is required under the terms of your
Financing Agreement.” (Id. at 63-64.)
Sometime later, a dispute arose between the parties, and
Plaintiffs sought to return the system and terminate their business

relationship, claiming that the system did not work as represented.
(Doc. 7 ¶¶ 25-26.) Plaintiffs allege Ascentium took possession of
the CoolSculpting system but wrongfully demanded the balance due
under the equipment financing agreements. (Id. ¶¶ 27, 31.) On
May 10, 2021, Plaintiffs sued Defendants in North Carolina state
court. (Doc. 7.) Defendants timely removed the action to this
court. (Doc. 1 ¶ 8.)
In January 2022, Defendants moved to stay proceedings and
compel arbitration (Doc. 29), which the court denied without
prejudice because “Defendants [] failed to produce admissible
evidence that there was an arbitration agreement.” (Doc. 73 at
13.) This was due at least in part to Defendants’ failure to

submit a declaration or other proper basis to authenticate the
proffered documents, relying instead on assertions in their
briefing, which the court determined was not admissible evidence.
(Doc. 73 at 13.) Defendants now move a second time to compel
arbitration, having filed declarations to authenticate the
relevant documents. (Docs. 84, 84-1 and 84-2.) In response,
Plaintiffs move to strike Defendants’ evidence, maintain that
there was no agreement to arbitrate, and, at a minimum, demand a
jury trial on their motion. (Doc. 87 at 1.)
II. ANALYSIS
A. Motion to Strike
As a preliminary matter, Plaintiffs contend that certain

emails attached to the declaration of Roald John L. Bueno in
support of Defendants’ motion to compel arbitration are
inadmissible under Federal Rule of Evidence 901 on the grounds
they are not “true and correct” copies because they contain the
name of “Bridget Rebillard,” an administrative assistant at
Defendants’ law firm, on their header. (Doc. 87 at 8-9.)
Defendants respond that Rebillard’s name appears on the documents
merely because of the process she used to convert them to
electronic format in order to electronically file them on the
court’s docket. (Doc. 89 at 7.) Rebillard has filed a declaration
describing how and why the documents came to be in the form in
which they were filed and attests that the substance of each

document was not altered in any way. (Doc. 89-1.)
In response to Plaintiffs’ objection, Defendants re-uploaded
the relevant emails onto the court’s docket without Rebillard’s
name in the header and submitted them with another declaration
from Bueno, who again reauthenticated them, as an attachment to
their reply brief. (Doc. 89 at 7.) Plaintiffs now move to strike
these latest attachments to Defendants’ reply brief on the ground
they are “entirely new Declarations and Exhibits,” ignore the rules
of procedure, and should not be considered. (Doc. 90 at 5.)
It is not readily apparent that a correction of the type here
falls outside this court’s local rules for reply briefs, which
limits discussion to “matters newly raised in the response.” L.R.

7.3(h). Courts in this district “have consistently held that
‘[r]eply briefs . . . may not inject new grounds . . . [and that
an] argument [that] was not contained in the main brief . . . is
not before the Court.’” Tyndall v. Maynor, 288 F.R.D. 103, 108
(M.D.N.C. 2013) (quoting Triad International Maintenance Corp. v.
Aim Aviation, Inc., 473 F. Supp. 2d 666, 670 n.1 (M.D.N.C. 2006)).
Thus, it is improper, under Local Rule 7.3(h), to wait until a
reply brief to provide support for an unsupported argument made in
a party’s first motion. See Jarvis v. Stewart, No. 1:04CV00642,
2005 WL 3088589, at *1 (M.D.N.C. Nov. 17, 2005). The rule “exists
to give the replying party a chance to rebut newly raised
arguments, not to give the replying party an unfair advantage in

having a chance to make new arguments that should have been raised
initially.” Pouncey v. Guilford County, No. 1:18CV1022, 2020 WL
1274264, at *5 (M.D.N.C. Mar. 17, 2020).
Here, Defendants did not offer new or additional evidence, as
Plaintiffs charge. (Doc. 90 at 3.) Rather, they technically
offered less, as they eliminated the header information to which
Plaintiffs objected. Even if the evidence Defendants submitted
with their motion to compel were inadmissible for the simple reason
that the copies of emails contain information relating to counsel’s
administrative assistant who downloaded them to the court’s
docket, the court clearly has the discretion to permit such a
deficiency to be corrected. Cf. A Helping Hand, LLC v. Baltimore

County, MD, 515 F.3d 356, 369 (4th Cir. 2008) (noting court’s
discretion to consider arguments raised for first time in reply
briefing); DiPaulo v. Potter, 733 F. Supp. 2d 666, 670 (M.D.N.C.
2010) (noting court’s authority to permit a surreply based on new
arguments when fairness dictates, citing cases). Defendants’ re-
filed attachments to their reply brief merely correct this single
alleged deficiency and are otherwise identical to those filed with
the motion to compel arbitration. Moreover, the declarations and
exhibits were re-submitted solely in response to technical
objections attributable to this court’s electronic filing system.
Fairness dictates that the court allow them to be considered, and
they are admissible under Federal Rule of Evidence 901.

Plaintiffs’ motion to strike (Doc. 90) will accordingly be denied.
B. Motion to Compel Arbitration
1. Legal Standard
The Federal Arbitration Act (“FAA”) establishes “a liberal
federal policy favoring arbitration” agreements. Moses H. Cone
Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 24
(1983). “When parties have entered into a valid and enforceable
agreement to arbitrate their disputes and the dispute at issue
falls within the scope of that agreement, the FAA requires federal
courts to stay judicial proceedings, and compel arbitration.”
Murray v. United Food & Commercial Workers International Union,
289 F. 3d 297, 301 (4th Cir. 2002) (citations omitted); 9 U.S.C.

§§ 3-4. However, “a party cannot be required to submit to
arbitration any dispute which he has not agreed so to submit.”
American Bankers Insurance Group v. Long, 453 F.3d 623, 626-27
(4th Cir. 2006) (citation omitted). As such, the court must
determine whether parties have a valid and enforceable agreement
to arbitrate.9 Berkeley County School District v. Hub

9 Defendants contend that an “arbitrator, not the court, must determine
whether Plaintiffs’ claims are subject to arbitration under the MSA
[Sales Order] and enforceability of the MSA [Sales Order].” (Doc. 85
at 7.) While an arbitrator may ultimately determine the scope of an
International Limited, 944 F.3d 225, 234 (4th Cir. 2019).
The party seeking to compel arbitration must establish an
agreement to arbitrate. See In re Mercury Construction Corp.,

656 F.2d 933, 939 (4th Cir. 1981), aff’d sub nom. Moses H.
Cone, 460 U.S. 1 (1983); see Adkins v. Labor Ready, Inc., 303 F.3d
496, 500–01 (4th Cir. 2002) (requiring litigant seeking to compel
arbitration to demonstrate “a written agreement that includes an
arbitration provision which purports to cover the dispute”). A
court may order arbitration of a dispute only where it is satisfied
that the parties entered into an agreement to arbitrate it.
Granite Rock Co. v. International Brotherhood of Teamsters, 561
U.S. 287, 296 (2010) (citing First Options of Chicago, Inc. v.
Kaplan, 514 U.S. 938, 943 (1995)). The party seeking to compel
arbitration must demonstrate: “(1) the existence of a dispute
between the parties, (2) a written agreement that includes an

arbitration provision which purports to cover the dispute, (3) the
relationship of the transaction, which is evidenced by the
agreement, to interstate or foreign commerce, and (4) the failure,
neglect or refusal of [a party] to arbitrate the dispute.”
American General Life & Accident Insurance Co. v. Wood, 429 F.3d
83, 87 (4th Cir. 2005) (quoting Adkins, 303 F.3d at 500-01). Here,

arbitration agreement, the court must first determine whether there was
an agreement to arbitrate. 9 U.S.C. § 4; Dillon v. BMO Harris Bank,
N.A., 787 F.3d 707, 713 (4th Cir. 2015).
the parties dispute whether their agreement included an
arbitration provision.
“Arbitration is ‘a matter of consent, not coercion,’ and

federal arbitration policy does not alter that maxim.” Raymond
James Financial Services, Inc. v. Cary, 709 F.3d 382, 385 (4th
Cir. 2013) (quoting Volt Information Sciences, Inc. v. Board of
Trustees of Leland Stanford Junior University, 489 U.S. 468, 479
(1989)). The Fourth Circuit has recognized that “the ‘touchstones
of arbitrability analysis’ are the ‘twin pillars’ of the parties’
‘consent and intent’ to arbitrate.” Id. at 385-86 (quoting Peabody
Holding Co., LLC v. United Mine Workers of Am., Int’l Union, 665
F.3d 96, 103 4th Cir. 2012)). While the court must resolve any
ambiguity regarding the scope of the arbitral issues in favor of
arbitration, Moses H. Cone, 460 U.S. at 24-25; Wachovia Bank
National Ass’n v. Schmidt, 445 F.3d 762, 767 (4th Cir. 2006), the

question of the parties’ intent to enter into an agreement to
arbitrate does not enjoy any presumption favoring arbitration,
First Options of Chicago, Inc. v. Kaplan, 514 U.S 938, 944 (1995).
To determine whether the parties agreed to arbitrate a
particular dispute, the court must consider relevant state law
principles governing contract formation. Hill v. Peoplesoft USA,
Inc., 412 F.3d 540, 543 (4th Cir. 2005); see Perry v. Thomas,
482 U.S. 483, 492 n.9 (1987). In a case premised upon diversity
jurisdiction, such as the present one, a federal court applies the
law of the forum state. Arthur Anderson LLP v. Carlisle, 556 U.S.
624, 630–31 (2009).10 Thus, this state’s choice of law rules apply.
Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 495–97 (1941).
For a contract claim, North Carolina’s choice of law rule is lex
loci contractus - the law of the place where the contract was

formed. Fortune Ins. Co. v. Owens, 526 S.E.2d 463, 466 (N.C.
2000). A contract is formed at the “place at which the last act
was done by either of the parties essential to a meeting of the
minds.” Key Motorsports, Inc. v. Speedvision Network, LLC, 40 F.
Supp. 2d 344, 347 (M.D.N.C. 1999) (quoting Fast v. Gulley, 155
S.E.2d 507, 510 (N.C. 1967)). While presumably that might be
either California or Delaware, as the MSA Sales Order reflects it
was accepted by Zeltiq (which Plaintiffs represent is a Delaware
LLC with a California address (see Doc. 1-1 at 3, 6)) on June 27,
2016 (Doc. 29-3), Defendants do not argue this ground, and none of

Defendants’ declarations avers where the MSA Sales Order was
finally accepted by Zeltiq. (Doc. 84-1; Doc. 84-2; Doc. 89-1;
Doc. 89-2.) Rather, the parties argue that the law of North
Carolina, where the MSA Sales Order was negotiated, applies, and
the court need not question that conclusion on this record.11

10 While the proposed arbitration provision states that California law
applies, the court’s preliminary question of course is whether the
provision is even part of the parties’ contract.

11 In any event, there is no showing by the parties that North Carolina
law regarding contract formation differs substantively from California
Wiener v. AXA Equitable Life Ins. Co., No. 21-2165, 2023 WL 329317,
at *3 (4th Cir. Jan. 20, 2023) (holding that choice of law issues
may be waived).

In determining if an agreement to arbitrate exists, North
Carolina law instructs “the court to examine the language of the
contract itself for indications of the parties’ intent.” State v.
Philip Morris, USA, Inc., 618 S.E.2d 219, 225 (N.C. 2005). The
parties’ intent is determined in light of the “contract as a
whole.” Id. “Whenever a court is called upon to interpret a
contract its primary purpose is to ascertain the intention of the
parties at the moment of its execution.” Lane v. Scarborough,
200 S.E.2d 622, 624 (N.C. 1973). When construing contractual
terms, a contract’s plain language controls. See DeLoach v.
Lorillard Tobacco Co., 391 F.3d 551, 558 (4th Cir. 2004) (noting
that “as under general principles of contract law, our task is to

‘give ordinary words their ordinary meanings.’” (quoting Internet
East, Inc. v. Duro Communications, Inc., 553 S.E.2d 84, 87 (N.C.
Ct. App. 2001))); Walton v. City of Raleigh, 467 S.E.2d 410, 411
(N.C. 1996) (“If the plain language of a contract is clear, the

or Delaware law. While Defendants contend that Attachment A is part of
their agreement (which states “[t]he laws of the State of California
govern this agreement without regard to conflict of law principles”),
they do not suggest that California law should apply in deciding whether
Attachment A was a part of the contract. (See Doc. 85 at 2, 6-7, 11
(noting that “North Carolina law governing contract formation dictates
whether a valid arbitration agreement exists”).)
intention of the parties is inferred from the words of the
contract.”).
The standard for deciding a motion to compel arbitration is

similar to that applied to a motion for summary judgment.
Berkeley, 944 F.3d at 234; Adams v. Citicorp Credit Services, Inc.,
93 F. Supp. 3d 441, 445 (M.D.N.C. 2015). A party seeking to compel
arbitration bears the initial burden of demonstrating the absence
of any genuine dispute of material fact as to the parties’
agreement to arbitrate. See Celotex Corp. v. Catrett, 477 U.S.
317, 323 (1986); see also Dillon v. BMO Harris Bank, N.A., 787
F.3d 707, 713 (4th Cir. 2015). Once the moving party has met its
burden, the nonmoving party must affirmatively demonstrate with
specific evidence that there is a genuine dispute of material fact
requiring trial. Matsushita Electric Industry Co. v. Zenith Radio
Corp., 475 U.S. 574, 585–87 (1986); see Drews Distributing, Inc.

v. Silicon Gaming, Inc., 245 F.3d 347, 352 n.3 (4th Cir. 2001).
In determining whether arbitration should be compelled, the court
is entitled to consider materials beyond the complaint and its
supporting documents. Berkeley, 944 F.3d at 234. If there are
unresolved questions of material fact that prevent the court from
deciding the arbitrability issue, the court shall hold “an
expeditious and summary hearing.” Dillon, 787 F.3d at 713 (citing
Moses H. Cone, 460 U.S. at 22; 9 U.S.C. § 4.) “If the making of
the arbitration agreement . . . be in issue, the court shall
proceed summarily to the trial thereof.” (Id. (citing 9 U.S.C.
§ 4).)
2. Merits

Defendants contend that that the parties’ written agreement
includes an arbitration provision because the signed MSA Sales
Order expressly incorporated Attachment A, which contains an
arbitration provision, by reference. (Doc. 85 at 12-13.) As
evidence, Defendants proffer two declarations authenticating the
MSA Sales Order and the purported attachments and stating that Lev
emailed Sinclair and Ballard the MSA and attachments, including
the arbitration provisions, on June 19, 2016, three days before
the parties met in person to sign the MSA Sales Order. (Doc. 85
at 13; Docs. 84-1 & 84-2.) Defendants also offer a recent decision
from a California court that granted Zeltiq’s motion to compel
arbitration in another case, Ascentium Capital LLC v. Mitchell

Street Dental Group PC, No. 30-2018-01001353-CU-BC-NJC (Cal. Sup.
Ct. Nov. 10, 2022)). (Doc. 93-1.) Finally, Defendants contend
that Plaintiffs “should be estopped from denying their agreement
to the full terms of the MSA because they have been performing and
receiving benefits under the MSA for years.” (Doc. 85 at 19.)
Plaintiffs’ affidavits state that they were never presented
with the attachments containing any arbitration provision at the
June 22, 2016 meeting and never saw attachments A through C before
signing the one-page MSA Sales Order. (Docs. 34-1 ¶¶ 16-17; 34-2
¶¶ 14-15.) Plaintiffs contend they had no intention of signing a
contract with an arbitration provision. (Id.) Plaintiffs also
contend that the MSA.pdf file attached to the June 19, 2016 email,

which contained (among other provisions) the arbitration
agreement, cannot serve as a “valid written agreement” for several
reasons, including Defendants’ failure to comply with North
Carolina’s Uniform Electronics Transactions Act (“NCUETA”), N.C.
Gen. Stat. § 66-315(e), and the writing requirements of both North
Carolina’s statute of frauds, N.C. Gen. Stat. § 25-2-201(1), and
§ 2 of the FAA. (Doc. 87 at 12-13.)
The court begins with Plaintiffs’ argument that consideration
of Attachment C is barred by the NCUETA, as this argument is
potentially dispositive of Defendants’ motion to compel
arbitration. The NCUETA allows for certain transactions to be
conducted by electronic means. It also permits parties to sign

documents electronically, and there are certain presumptions about
when electronic records are received if sending protocols are
observed. N.C. Gen. Stat. §§ 66-316(b), 66-325. Plaintiffs note
that the act, by its terms, “applies only to transactions between
parties each of which has agreed to conduct transactions by
electronic means,” which is “determined from the context and
surrounding circumstances, including the parties conduct.” Id.
§ 66-315(b). Plaintiffs argue that the MSA.pdf file attached to
the June 19, 2016 email constitutes an “electronic record” within
the meaning of the NCUETA (id. at § 66-312(7), and they point out
that they never agreed, either implicitly or explicitly, to conduct
their transaction by electronic means. (Doc. 87 at 13.) Thus,

Plaintiffs contend, their failure to ever agree to conduct the MSA
Sales Order transaction electronically prevents Defendants from
relying on the MSA.pdf file, an electronic record, as a basis for
the contract. (Id. at 15.)
Merely because the MSA.pdf file attached to the June 19, 2016
email is an electronic record within the potential protection of
the NCUETA, however, does not mandate that it not be considered
here. The actual transaction – the signing of the MSA Sales Order
– was conducted in person and not by electronic means, which is
the central purpose of the act. The NCUETA does not clearly
contemplate that the sending of documents by email prior to an in-
person meeting precludes their consideration. Plaintiffs have

cited no authority to that effect. The only case law applying the
NCUETA is Powell v. City of Newton, 703 S.E.2d 723, 727-28 (N.C.
2010), which expressly rejected the application of the act to a
transaction involving the exchange of documents by email where the
parties contemplated a physical signature for a land conveyance.
This court is bound to follow state law and should not seek to
expand it. See Burris Chem., Inc. v. USX Corp., 10 F.3d 243, 247
(4th Cir. 1993) (federal courts adjudicating issues of state law
“rule upon state law as it exists and do not surmise or suggest
its expansion”). To adopt Plaintiffs’ position would exceed the
application contemplated by the statute as interpreted by the North
Carolina courts.

Plaintiffs’ reliance on several cases from other
jurisdictions under their various statutes for electronic records
transactions to support their contention is unpersuasive. For
example, Plaintiffs cite SN4, LLC v. Anchor Bank, 848 N.W.2d 559,
567 (Minn. App. 2014), and Buckles Management LLC v. InvestorDigs,
LLC, 728 F. Supp. 2d 1145 (D. Colo. 2010). However, these cases
concerned whether an electronic signature validated contracts, not
whether attachments could be sent via email before signing
documents in person. In Anchor Bank, the trial court found, and
the appellate court affirmed, that there was no express or implied
agreement to “electronically subscribe to the purported agreement”
but rather evidence that one party wanted the contracts executed

by hand. 848 N.W.2d at 567. Though plaintiffs sent the bank hand-
signed versions of the contract, the bank never hand-signed them.
Id. The court rejected plaintiffs’ argument that “the bank
electronically subscribed to the agreement.” Id. at 566. The
court was unpersuaded because it concluded that “the [state
electronic transactions act] is inapplicable because no reasonable
fact-finder could determine that the buyers and the bank agreed to
use electronic signatures to subscribe to an e-mail attachment.”
Id. at 569. Similarly, in Buckles Management, the court determined
that as a matter of law, an email signature was not “executed or
adopted by a person with the intent to sign the record.” 728 F.
Supp. 2d at 1151 (citations omitted). Here, in contrast, the

parties executed the MSA Sales Order in person, and the issue is
whether they intended for the attachments to be incorporated into
it, not whether the parties signed the MSA Sales Order.
The court therefore finds that the NCUETA is inapplicable and
does not bar consideration of the purported attachments merely
because they were sent via email.
In similar fashion, Plaintiffs’ argument that the arbitration
provision of Attachment A cannot be considered because it is barred
by the writing requirements of both the statute of frauds and § 2
of the FAA fails. The arbitration provision is indisputably in
writing, and the MSA Sales Order is signed. The question is
whether Attachment A is signed by the party to be charged – i.e.,

by Plaintiffs, and that turns on whether it was properly
incorporated by reference into the MSA Sales Order, an issue to
which the court now turns.
Defendants’ principal argument is that Attachment A is
incorporated into the MSA Sales Order by virtue of the express
incorporation at the bottom of the MSA Sales Order as well as the
fact that a copy of the attachment containing the arbitration
provision was sent to Plaintiffs in Lev’s June 19, 2016 email.
Defendants contend Plaintiff Sinclair is bound by the reference
because she signed the MSA Sales Order and had a duty to read it.
(Doc. 85 at 14-15.) Plaintiffs respond that North Carolina’s duty
to read obligation cannot be stretched to benefit Defendants in

this case and that no attachment was presented at the June 22,
2016 signing of the MSA Sales Order. (See Doc. 87 at 15-16.)
In North Carolina, a party signing a contract has a duty to
read its provisions and will be bound by the terms of what she
signs. Mills v. Lynch, 130 S.E.2d 541, 543-544 (N.C. 1963) (“The
duty to read an instrument or to have it read before signing it is
a positive one, and the failure to do so, in the absence of any
mistake, fraud, or oppression, is a circumstance against which no
relief may be head, either at law or in equity.”) (quoting Furst
& Thomas v. Merritt, 130 S.E. 40, 43 (N.C. 1925)). A contract can
incorporate other documents by reference such that the
incorporated documents become part of the contract, binding the

parties. Booker v. Everhart, 240 S.E.2d 360, 363 (N.C. 1978) (“To
incorporate a separate document by reference is to declare that
the former document shall be taken as part of the document in which
the declaration is made, as much as if it were set out at length
therein.”); Montessori Children’s House of Durham v. Blizzard, 781
S.E.2d 511, 514 (N.C. App. 2016) (noting that “[w]hen a contract
expressly incorporates a document by reference . . . that document
becomes a part of the parties’ agreement”). However, in order for
a document to be incorporated by reference as a matter of law it,
as with any material term of an agreement, must be unambiguous.
Lane, 200 S.E.2d at 624.
Here, while Sinclair surely had a duty to read the MSA Sales

Order she signed, and while that document stated that the parties’
“‘Master Sales Agreement’ includes this Sales Order and the
attachments (A-C) hereto which are incorporated herein in their
entirety by this reference,” the reference to the attachments is
ambiguous. The MSA Sales Order does not specifically identify the
location of the attachment containing the arbitration provision.
Cf. Krusch v. TAMKO Bldg. Prods., Inc., 34 F. Supp. 3d 584, 589
(M.D.N.C. 2014) (upholding arbitration provision contained in
warranty materials whose availability was specifically molded onto
each shingle plaintiff purchased). Moreover, Plaintiffs contend,
and Defendants do not deny, that Lev did not present the
attachments at the June 22 meeting, which would have been easy to

do. Given the manner in which Lev proceeded, identification of
the attachments referenced depends on parol evidence offered by
Defendants - that the attachments are the those attached to Lev’s
June 19, 2016 email. Martin v. Vance, 514 S.E.2d 306, 311 (N.C.
App. 1999) (approving of consideration of extrinsic evidence to
interpret ambiguity of contract containing arbitration provision).
Yet, Sinclair and Ballard deny ever having read those attachments
and claim they were unaware of them at the time Sinclair executed
the MSA Sales Order. (Doc. 34-1 ¶¶ 15-16; 34-2 ¶¶ 13-14.) The
duty to read does not extend to Lev’s June 19, 2016 email, as it
was not a document that Plaintiffs executed. Thus, Plaintiffs
cannot be held to knowledge of the email’s attachments as a matter

of law.
The question ultimately is the intent of the parties when
they signed the MSA Sales Order. Martin, 514 S.E.2d at 311.
Defendants have offered evidence that Plaintiffs must have known
of the contents of Attachment A, which included the arbitration
provision, and intended that it be incorporated because, among
other things: Sinclair and Ballard do not deny having read the
June 19, 2016 email; they would not likely have entered into a
contract of this magnitude (over $136,000) without having read the
terms of the agreement in the attachments; the MSA Sales Order
Sinclair signed expressly makes reference to and includes
“attachments (A-C) hereto”; Plaintiffs responded to other emails

at about the same time as the June 19, 2016 email; and Michael
Ballard shortly thereafter inquired about the CoolSculpting
System’s warranty that was contained in Attachment C in order to
save money on financing. Sinclair and Ballard maintain, however,
that they never read or were aware of the attachments to the
June 19, 2016 email. This is an unequivocal denial, which is
supported by their affidavits. Drews, 245 F.3d at 352 n.3 (noting
duty of party opposing arbitration to unequivocally deny there was
an arbitration agreement and produce evidence to support that
denial). As a consequence, the court is not satisfied there is an
agreement to arbitrate because this factual dispute must first be
resolved by a fact finder. 9 U.S.C. § 4; Berkeley, 944 F.3d at

234 (noting that “the court is obliged to conduct a trial under
the Trial Provision [of the FAA] when a party unequivocally denies
‘that an arbitration agreement exists,’ and ‘shows sufficient
facts in support’ thereof”).
Plaintiffs cite several cases to support their argument that
Defendants’ motion should be denied because Sinclair and Ballard
never saw the attachments and thus could not have agreed to
arbitrate. However, their cases are distinguishable. Plaintiffs
rely most heavily on Sciolino v. TD Waterhouse Investor Services,
Incorporated, 562 S.E.2d 64, 66 (N.C. Ct. App. 2002). There, the
defendant argued that an arbitration provision was incorporated
into the parties’ contract because plaintiff’s application

contained an agreement to “be bound by the terms of the attached
Customer Agreement” which contained the arbitration clause. Id.
The appeals court affirmed a denial of a motion to arbitrate after
the trial court “conducted a plenary hearing” and found that “the
existence of an agreement to arbitrate has not been demonstrated.”
Importantly, the court determined that there was not an agreement
to arbitrate as a matter of fact, not as a matter of law. See id.
Among the problems was a lack of evidence “to suggest that [the
arbitration provision] was ever provided to plaintiffs, when it
was provided . . . or whether plaintiffs ever saw it at all.” Id.
As the court noted, “Defendants produced no evidence that
plaintiffs actually received either customer agreement when they

signed the application.” Id. at 67. Here, in contrast, Defendants
have provided evidence that Plaintiffs received Attachment A
before executing the MSA Sales Order.
Similarly, in Dillon, the court denied arbitration after it
found the evidence submitted regarding the arbitration agreements
was neither reliable nor credible. 173 F. Supp. 3d at 273. The
court admonished that “online sellers cannot insert terms and
conditions the consumer did not have an opportunity to review.”
Id. at 269. Here, by contrast, Defendants’ evidence is sufficient
for a fact finder to believe Plaintiffs must have read the
attachments, including the arbitration provision, before executing
the MSA Sales Order.

Defendants’ reliance on the decision of the California court
granting a motion to compel arbitration is also misplaced. While
the parties there agreed that they signed the MSA Sales Order and
the plaintiff claimed he never received or saw the attachments
containing the arbitration provision, that version of the MSA Sales
Order included the additional statement that the parties
“explicitly acknowledge[] receipt of the Attachments,” which the
court found persuasive. (Doc. 93-1 at 2-3.) In contrast, the MSA
Sales Order in this case does not contain that explicit
acknowledgement of receipt of the attachments.
Finally, Defendants’ argument that Plaintiffs are

collaterally estopped from denying the arbitration provision is
part of their contract is meritless. Defendants’ argument relies
heavily on Plaintiffs’ request to have Zeltiq forward Ascentium a
copy of the warranty for the CoolSculpting System to permit
Plaintiffs to avoid an insurance premium as well as Plaintiffs’
use of the equipment after the June 2016 sale. (Doc. 85 at 19-
20.) More specifically, Defendants contend that because
Plaintiffs “invoked the additional terms of MSA Attachments A-C,”
Plaintiffs should be estopped from denying the arbitration
provision. (Doc. 89 at 6-7.) Defendants rely on this court’s
decision in Krusch, supra. But the facts here fall short of those
in that case. In Krush, this court enforced an arbitration

provision contained in a limited warranty because before purchase
the plaintiff’s agent had received a sample roofing shingle that
contained an embossed notice advising of the limited warranty and
listing a toll-free telephone number and website address for a
copy of the materials. 34 F. Supp. 3d at 589-90. Thus, the
evidence demonstrated that the plaintiff’s agent had actual notice
of the materials. Whether Plaintiffs here had notice, by contrast,
remains a fact issue. While there is an inference (perhaps even
a strong one) that Plaintiffs may have only learned of the warranty
in the email attachments, it is not apparent that is the only
source of their knowledge. Indeed, had Plaintiffs known of the
warranty in Attachment C, they ostensibly would not have had to

ask Zeltiq for a copy. Moreover, while the Krusch plaintiff was
aware of the warranty before purchase and chose not to read it,
there is a fact question here whether Plaintiffs were even aware
of Attachment A containing the arbitration provision (or
Attachment C’s warranty for that matter) before purchase. And
unlike the situation in Krusch, where the plaintiff was seeking to
enforce the very warranty that contained the arbitration provision
he claimed was not agreed to, here the Plaintiffs do not seek to
enforce the warranty provision contained in Attachment C, which is
also a different document from Attachment A that contained the
arbitration provision. (Doc. 84-1 at 7-9.)
Because a review of the complete record demonstrates that

Defendants have not established an agreement to arbitrate as a
matter of law in that there is an issue of fact as to whether the
Plaintiffs intended for Attachment A, which includes the
arbitration provision, to be part of their contract, and because
Plaintiffs have made a jury demand, Defendants’ motion to compel
arbitration must be resolved by that factfinder. Berkeley, 944
F.3d at 241-42.
III. CONCLUSION
For the reasons stated,
IT IS THEREFORE ORDERED that Plaintiffs’ motion to strike
evidence in Defendants’ reply brief (Doc. 90) is DENIED;
IT IS FURTHER ORDERED that Defendants’ second motion to compel

arbitration and stay proceedings (Doc. 84) shall be set for
determination by jury on March 6, 2023, at 9:00 a.m.

/s/ Thomas D. Schroeder
United States District Judge

January 23, 2023

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10254236. Public record. Not legal advice.