New Jersey Court Finds Plaintiffs Did Not Agree to Arbitration

Plaintiffs Olga Martinez, aged 94 at the time of the decision, and her goddaughter, Norma Pacheco, acting in her capacity of  power of attorney for Ms. Martinez, allege that they were swindled out of $1.4 million by people who claimed to work for various financial institutions, including BOP Financial Group, LLC (BOP) and Primerica (collectively Defendants). Plaintiffs sued in a New Jersey state court, and Defendants moved to compel arbitration.

In an unpublished opinion in Morales v. BOP Financial Group, LLC, the Superior Court, Appellate division affirmed. Plaintiffs deny ever having agreed to arbitration. In the reply brief on its motion to dismiss and compel arbitration, Primerica claimed that plaintiffs had agreed to arbitration through electronic forms. The Court determined that the webpage at issue was a form of browsewrap. While a new user is presented with a hyperlink labeled “terms and conditions,” they do not have to click on that link in order to register on the site and open an account.

Even if that hyperlink sufficed to put the plaintiffs on inquiry notice of Primerica’s terms and conditions, the website included no mechanism enabling a person to signal assent to those terms and conditions. There was a no box to check, and so plaintiffs never had an opportunity to agree to arbitration, even if they clicked on the hyperlink.

Nor was the Court persuaded that plaintiffs had agreed to Primerica’s terms by using its brokerage services for five years. It is reasonable to assume, argued Primerica, that the relationship between the parties was governed by a written agreement, and so plaintiffs should have known that they were bound. However, plaintiffs seem to have never received notice that they were bound to an arbitration agreement. It is quite a stretch to assume that they knew that.