Eglin Federal Credit Union v. Baird

FIRST DISTRICT COURT OF APPEAL

STATE OF FLORIDA

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No. 1D2023-1866

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EGLIN FEDERAL CREDIT UNION,

Appellant,

v.

KELSEY M. BAIRD and PAULA

STOKES-WILKINSON,

individually and on behalf of all

others similarly situated,

Appellees.

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On appeal from the Circuit Court for Okaloosa County.

Terry D. Terrell, Judge.

August 28, 2024

LONG, J.

This is an interlocutory appeal concerning the denial of two

motions to compel arbitration filed by Appellant, Eglin Federal

Credit Union (“Eglin”). We have jurisdiction. § 682.20, Fla. Stat.

I.

Eglin is a not-for-profit cooperative and financial institution

that provides account and loan services to its members. Appellees,

Kelsey Baird (“Baird”) and Paula Stokes-Wilkinson (“Stokes”)

(collectively, “Appellees”) were members of Eglin at the time the

underlying action commenced. The relationship between Eglin

and Appellees is defined by various account documents that form

the governing contract between them, hereinafter referred to as

the “Agreement.” When Appellees began their relationship with

Eglin, the Agreement did not contain an arbitration provision or a

class action waiver provision. At Eglin’s October 2021 board

meeting, the board took a formal vote to add these provisions to

the parties’ Agreement.

Eglin notified its members of this change by mail. It

purportedly mailed all members a cover letter, the Arbitration

Provision (“Provision”) and Class Action Waiver (“Waiver”), and

the opt-out form in late December 2021. The cover letter provided

that a member’s continued use of their Eglin account would act as

consent to the Provision and Waiver. Its effective date was

January 1, 2022. Members could reject the Provision by

submitting the opt-out form, with a signature that was notarized

or witnessed by an Eglin employee. But members could not opt-

out of the Waiver.

Eglin also sends routine emails informing its members when

their electronic statements are available to view. These emails

sometimes contain a hyperlink to Eglin’s quarterly newsletter.

After the changes to the Agreement went into effect, the four-page

newsletter included (along with Happy New Year messages,

wealth management advertisements, cybersecurity tips, upcoming

meeting notices, personnel updates, and other items) a statement

that members had been mailed a notice regarding a “new

Arbitration Provision and Class Action Waiver that amends the

Membership and Account Terms and Conditions section in the

[Understanding Your Share Account] booklet.” It said that

members could get a physical copy of the new terms in a branch

store or by contacting Eglin. The newsletter did not contain, or

hyperlink to, the text of the Provision and Waiver or the opt-out

form.

The physical notice was mailed to Stokes’ address on file with

Eglin on December 30, 2021. Stokes continued to use her Eglin

account as normal. Eglin never mailed the notice to Baird, but

both parties received emails regarding their electronic statements,

which contained hyperlinks to the newsletter. Shortly after, both

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parties filed separate lawsuits against Eglin, alleging that it was

improperly assessing fees against its customers. The cases were

consolidated, and Appellees subsequently filed their consolidated

class action complaint. Eglin moved to compel arbitration on both

claims, pursuant to the newly added Provision.

The trial court held a hearing on the motions and found that

Eglin had not entered into an enforceable agreement to arbitrate

with Stokes or Baird. Specifically, it found that Eglin’s unilateral

imposition of the new terms was improper, that it failed to provide

reasonable notice of the new terms, and that neither Stokes nor

Baird assented to the new terms. Further, the trial court found

that even if the Provision was otherwise valid, it is inapplicable to

their claims. The trial court interpreted the language of the

Provision as “forward-looking” and concluded it did not

retroactively apply to Stokes’ and Baird’s previously accrued

claims. Eglin appealed.

II.

We apply a mixed standard of review when reviewing an order

denying arbitration. See MetroPCS Comms., Inc. v. Porter, 273

So. 3d 1025, 1027 (Fla. 3d DCA 2018). We review whether the

trial court’s findings of fact are supported by competent,

substantial evidence, and we review its conclusions of law de novo.

Id.

We first address whether Eglin and Baird entered into an

agreement to arbitrate. Eglin argues on appeal that it provided

Baird with reasonable notice of the Provision and Waiver. We

disagree.

“Appellants, as the proponents of arbitration, have the burden

of establishing an enforceable written agreement to arbitrate.”

Palm Garden of Healthcare Holdings, LLC v. Haydu, 209 So. 3d

636, 638 (Fla. 5th DCA 2017). Under Florida law, a valid contract

requires “offer, acceptance, consideration and sufficient

specification of essential terms.” St. Joe Corp. v. McIver, 875

So. 2d 375, 381 (Fla. 2004). “Mutual assent is an absolute

condition precedent to the formation of the contract,” without

which “neither the contract nor any of its provisions come into

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existence.” Gibson v. Courtois, 539 So. 2d 459, 460 (Fla. 1989).

And an “offeree cannot actually assent to an offer unless the offeree

knows of its existence.” 1 WILLISTON ON CONTRACTS § 4:16 (4th

ed.).

Mutual assent can be shown where a contract is knowingly

and intentionally signed by both parties—the signatures serving

as a demonstration and confirmation of the parties’ assent. See

Arena Football League v. Bishop, 220 So. 3d 1243, 1245 (Fla. 1st

DCA 2017). But demonstrating assent is not always that simple.

It can sometimes be shown through other means, such as acts or

conduct of the parties. Id. at 1246.

The analysis typically begins with asking whether the offeree

had notice of the offer. Notice can be express, which is “direct

information,” or implied, which is “notice inferred from the fact

that the person had means of knowledge.” Domino v. Nielsen, 322

So. 3d 691, 692 (Fla. 4th DCA 2021) (quoting Sapp v. Warner, 141

So. 124, 127 (Fla. 1932)).

To help evaluate claims of notice in the internet age, courts

have attempted to catalog and classify different kinds of web-based

contracts. See MetroPCS, 273 So. 3d at 1028; Badcock v. Neutron

Holdings, Inc., 454 F. Supp. 3d 1222, 1230 (S.D. Fla. 2020). 1 For

1 These classifications include “browsewrap,” which is “an

agreement where the user accepts a website’s terms of use merely

by browsing the site,” “clickwrap,” which is “an agreement where

the user accepts a website’s terms of use by clicking an ‘I agree’ or

‘I accept’ button, with a link to the agreement readily available,”

“scrollwrap,” which is “like the ‘clickwrap’ agreement, but the user

is presented with the entire agreement and must physically scroll

to the bottom of the agreement to find the ‘I agree’ or ‘I accept’

button,” Babcock, 454 F. Supp. 3d at 1230 n.4, and “sign-in wrap,”

which is “where a user signs up to use an internet product or

service, and the sign-up states that ‘acceptance of a separate

agreement is required before the user can access the service.” Id.

at 1230.

The parties do not claim that the Agreement falls under these web-

based contracts, and we agree. Indeed, Eglin argues that the trial

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so-called browsewrap agreements, for example, courts have asked

whether the notice is “conspicuous enough to put a reasonably

prudent person on inquiry notice.” Massage Envy Franchising,

LLC v. Doe, 339 So. 3d 481, 484 (Fla. 5th DCA 2022) (quoting

Vitacost.com, Inc. v. McCants, 210 So. 3d 761, 762 (Fla. 4th DCA

2017)); see also MetroPCS, 273 So. 3d at 1028. This is because

“[w]hile new commerce on the Internet has exposed courts to many

new situations it has not fundamentally changed the principles of

contract.” LoanFlight Lending, LLC v. Bankrate, LLC, 378 So. 3d

1280, 1286 (Fla. 2d DCA 2024) (quoting Vitacost.com, Inc., 210

So. 3d at 762). Mutual assent remains the touchstone of contract

formation. Id. And mutual assent cannot exist where a party does

not have reasonable notice that an offer is at hand. In other words,

reasonable notice of an offer is a necessary precondition to mutual

assent. And requiring mutual assent ensures consumers know

they are entering into an agreement. See Glosser v. Vasquez, 898

So. 2d 1179, 1181 (Fla. 3d DCA 2005) (“Thus, to create a contract

and trigger contractual obligations, the parties must have a

definite and distinct understanding, without which there is no

assent and no contract.”).

Notice can come in many forms. See Hallman v. Carnival

Cruise Lines, Inc., 459 So. 2d 378, 380–81 (Fla. 3d DCA 1984)

(holding a passenger ticket warning passenger of the conditions of

the contract was reasonable because of “the conspicuousness and

clarity of notice on the face of the ticket”); Sgouros v. TransUnion

Corp., 817 F.3d 1029, 1033–34 (7th Cir. 2016) (explaining that a

clickwrap agreement can signify acceptance of contract if “the

layout and language of the site gives the user reasonable notice

that a click will manifest assent to an agreement”). Whether a

party received reasonable notice is a fact-intensive inquiry, and for

internet transactions “the design and content of the relevant

interface” are especially relevant. Meyer v. Uber Technologies,

Inc., 868 F.3d 66, 75 (2d Cir. 2017).

With these principles in hand, we turn to Eglin’s notice to

Baird. It was a hyperlink buried in a routine monthly account

court erroneously relied on a case interpreting a “clickwrap”

agreement. We merely point to these web-based variations and

classifications as the backdrop of our decision today.

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statement email. The hyperlink indicated only that it would link

to Eglin’s quarterly newsletter. The email said nothing about

Eglin changing the terms of the agreement or that Baird should

follow the hyperlink for important updates. The email made no

mention of the Provision and Waiver. And even if Baird had

followed the link, the newsletter did not provide the new terms

either. These facts fail to show that Baird received reasonable

notice of Eglin’s offer. And without reasonable notice of the offer,

mutual assent is impossible.

We, therefore, affirm the trial court’s order concluding that

Eglin and Baird did not enter into an enforceable arbitration

agreement. We turn now to the trial court’s order as to Stokes.

III.

A.

To begin, we find that Stokes received notice of Eglin’s offer to

arbitrate. The record reflects that Eglin mailed Stokes a cover

letter, the Provision and Waiver, and clear instructions on how to

reject arbitration through the opt-out form, notifying her that

continued use of the account would constitute assent to

arbitration. Evidence of mail properly addressed, stamped, and

mailed creates a rebuttable presumption of receipt. See Brown v.

Giffen Indus., Inc., 281 So. 2d 897, 900 (Fla. 1973). Stokes does

not dispute that she received the mailing. Rather, she claims the

mailing is not sufficient notice because it lacks clarity and

conspicuousness. We disagree.

The mailed notice was four pages long and consisted of a cover

letter as the first page, the Provision and Waiver on the second and

third pages, and the opt-out form on the last page. The first page

stated that Eglin was offering an amendment to the Agreement

and advised the reader to look over the terms on the very next

page. This constitutes reasonable notice. Unlike the email to

Baird, the mailed notice to Stokes was sufficient to ensure the

consumer knew she was entering into an agreement to arbitrate.

Stokes was informed that continued use of the account after

the effective date of the Agreement would constitute assent. And

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after receiving reasonable notice, Stokes failed to opt out of the

Agreement and continued to use Eglin’s services. As noted above,

assent can be demonstrated by acts or conduct, including

continued use. See MetroPCS, 273 So. 3d at 1028 n.1 (explaining

that “continued use of the company’s services constituted assent to

the terms and conditions and he must arbitrate”); see also Krutchik

v. Chase Bank USA, N.A., 531 F. Supp. 2d 1359, 1364–65 (S.D. Fla.

2008) (holding that plaintiff accepted the agreement to arbitrate

where plaintiff did not overcome the presumption that the mailed

agreement was received, failed to follow the procedure for rejecting

the new terms, and continued to use services).

Stokes had reasonable notice of the Provision and Waiver.

She could have opted out of the Provision, and she could have

taken her business elsewhere if she did not assent to the Waiver.

She was informed that continued use constituted assent. Under

these circumstances, there was a valid offer and acceptance, and

thus the parties formed an agreement. The trial court, therefore,

erred in concluding that Eglin and Stokes did not enter into an

enforceable agreement to arbitrate.

B.

We turn now to the application of the Provision and Waiver to

the present claims. The trial court correctly concluded that the

terms of the Provision and Waiver did not apply retroactively to

Stokes’ claim. Our decision in All South Subcontractors, Inc. v.

Amerigas Propane, Inc., 206 So. 3d 77 (Fla. 1st DCA 2016), is

instructive. In All South, the defendants moved to compel

arbitration based on the most recent version of the defendants’

terms and conditions, which included an arbitration provision. Id.

at 80. The plaintiffs argued that, rather than the newly amended

language, the operative agreement was an older agreement from

2010. Id. They argued that the recently added provision did not

“retroactively bind [the plaintiff] to an arbitration clause that [it]

had not known existed” when the claims accrued. Id.

We held that the plaintiffs could not be compelled to arbitrate

their claims because the language of the new arbitration

agreement was not retroactive. Id. at 82. And the prior contract

did not require arbitration. Id. (“There was no assent to arbitrate

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disputes arising from the 2010 [contract] due to the lack of any

arbitration language connected to that [contract].”). We adopt our

reasoning in All South and apply it here. We will only apply an

arbitration provision to previously accrued claims when the

language of the agreement clearly demonstrates an intent for

retroactive application. All Floridians have a substantive

constitutional right to access the courts. See Art. I, § 21, Fla.

Const. Arbitration agreements act as waivers of this right. See

Seifert v. U.S. Home Corp., 750 So. 2d 633, 642 (Fla. 1999); see also

Infinity Design Builders, Inc. v. Hutchinson, 964 So. 2d 752, 755

(Fla. 5th DCA 2007) (“In deciding whether arbitration is required,

therefore, one must necessarily begin by asking whether the

parties contractually agreed to arbitrate. If they did not, then

unless there is a waiver of the right, Article I, section 21 requires

submission of the legal disputes to the courts.”). It follows that

the language of such an agreement must clearly state that it is to

apply to previously accrued claims. The Provision here provides

that it applies to claims:

[A]rising in law, equity, or otherwise, and regardless of

the type of relief sought involving your deposit account

relationships, loans (including credit card accounts, but

not loans secured by a dwelling), or any other product or

service you obtain from us, the validity, enforceability,

and scope of this Arbitration Provision and any related

account/loan documents, and any relationship that

results from any of the foregoing.

This language does not unequivocally state that it applies

retroactively. Thus, it does not govern Stokes’ claim, which arose

before the Provision became effective. We employ the same

analysis as to the Waiver. Although we agree with Eglin that

Stokes accepted the terms of the Waiver, it does not apply to her

claim because the provision does not cover previously accrued

claims. 2

2 This alternative ground also requires that we affirm as to

Baird, even if, assuming arguendo, there had been sufficient offer

and acceptance by way of the email and associated hyperlink.

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AFFIRMED.

OSTERHAUS, C.J., and ROWE, J., concur.

_____________________________

Not final until disposition of any timely and

authorized motion under Fla. R. App. P. 9.330 or

9.331.

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Geralyn M. Passaro of Litchfiled Cavo LLP, Fort Lauderdale, and

James R. Branit and Jason E. Hunter of Litchfield Cavo LLP,

Chicago, Illinois, for Appellant.

Stephen H. Echsner of Aylstock, Witkin, Kreis & Overholtz,

Pensacola, and Mark H. Troutman and Shawn K. Judge of Gibbs

Law Group LLP, Columbus, Ohio, and Sophia G. Gold of

KalielGold PLLC, Washington, D.C., for Appellee Kelsey M. Baird.

Robert E. Price of Ketterer Browne & Associates, Pensacola, for

Appellee Paula Stokes-Wilkinson.

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