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Pinto v. USAA Insurance Agency Inc. of of Texas FN

United States District Court, D. Arizona

July 26, 2017

Guy Pinto, Plaintiff,
USAA Insurance Agency Incorporated of Texas FN, et al., Defendants.


          David G. Campbell, United States District Judge

         Defendants have filed a motion to dismiss Plaintiff's third amended complaint (“Complaint”) and compel arbitration. Doc. 8. The motion is fully briefed. Docs. 10, 14. No party requests oral argument. The Court will grant the motion.

         I. Background.

         In February 2004, Plaintiff Guy Pinto was hired by Defendant United Services Automobile Association (“USAA”), a provider of insurance products, credit cards, financial planning, investments, and banking products. Doc. 1-2 at 32, ¶ 2. In December 2014, USAA terminated Plaintiff's employment. Id. At the time of his termination, Plaintiff was a Financial Foundations Relationship Specialist working for USAA's Financial Planning Services Insurance Agency, Inc. Doc. 8 at 2. Plaintiff's Complaint alleges two counts: willful misconduct under A.R.S. § 23-1022(B) (Count One), and “discrimination and/or violations” of the Family Medical Leave Act, 29 U.S.C. § 2615 et seq. (Count Two). Doc. 1-2 at 40, ¶¶ 43-77.

         USAA asks the Court to compel arbitration of Plaintiff's claims and to dismiss the Complaint in its entirety. See Doc. 8. USAA submits evidence that, in August 2004, USAA implemented the Dialogue Dispute Resolution Program (“Dialogue”), which provides in part that all employment-related disputes between USAA and its employees (with some exceptions not relevant here) that are not resolved through Dialogue must be submitted to binding arbitration using, where applicable, the Employment Dispute Resolution Rules of the American Arbitration Association. Id. at 2. Further, USAA asserts that in June 2004, USAA “posted the Dialogue Program materials on its intranet referred to as ‘Connect, '” and “[s]ince June 2004, Dialogue Program materials including but not limited to the Dialogue Rules and Dialogue Guide have been available to all USAA employees, including Plaintiff, on Connect.” Doc. 14 at 4; Doc. 8 at 3. USAA submits evidence that Plaintiff acknowledged he had received, reviewed, and understood the Dialogue materials and consented to be bound to Dialogue. Doc. 8 at 3-4.

         Plaintiff argues that he “never agreed to USAA's Dialogue Program or its arbitration requirement[, ]” and “Defendants have produced no signature evidencing Plaintiff's assent[.]” Doc. 10 at 5-6. Plaintiff also contends that “[t]he Dialogue Program is procedurally unconscionable because it is a contract of adhesion, it is not irrevocable, and because it did not specify what the rules and procedures of arbitration would be.” Id. at 9. Plaintiff further argues that “USAA's actions and inactions demonstrate that if the program even applied to Plaintiff, USAA waived its Dialogue Program by avoiding and proceeding in disregard of its Dialogue program.” Id. at 11.

         II. Legal Standard.

         The Federal Arbitration Act (“FAA”) “provides that arbitration agreements ‘shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.'” Chalk v. T-Mobile USA, Inc., 560 F.3d 1087, 1092 (9th Cir. 2009) (quoting 9 U.S.C. § 2). The FAA “leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed.” Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985). “The court's role under the [FAA] is therefore limited to determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue.” Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000). “If the court finds that an arbitration clause is valid and enforceable, the court should stay or dismiss the action to allow the arbitration to proceed.” Kam-Ko Bio-Pharm Trading Co. Ltd-Australasia v. Mayne Pharma, 560 F.3d 935, 940 (9th Cir. 2009).

         III. Analysis.

         Plaintiff does not dispute that Dialogue, if valid, encompasses the dispute at hand. Accordingly, the Court need only decide whether a valid agreement to arbitrate exists. See Chiron, 207 F.3d at 1130.

         A. Agreement to Arbitrate.

         USAA argues that Plaintiff agreed to arbitrate claims when he agreed to participate in Dialogue. Doc. 8 at 3. Plaintiff argues that he never agreed to Dialogue or its arbitration agreement, and USAA has not produced a document containing his signature. Doc. 10 at 5-8. Plaintiff also argues that the arbitration provision is substantively unconscionable, and that USAA has waived its right to proceed under Dialogue. Id. at 9-11.

         1. Electronic Signature.

         Plaintiff argues that “Arizona law requires an electronic signature for a person to assent to a contract via email.” Doc. 10 at 6. The Court does not agree. The statute cited by Plaintiff, A.R.S. § 44-7007, confirms that electronic records can be used to create a contract, and, with respect to signatures, provides only that an electronic signature can satisfy any law that requires a signature:

A. A record or signature in electronic form cannot be denied legal effect and enforceability solely because the record or signature is in electronic form.
B. A contract formed by an electronic record cannot be denied legal effect and enforceability solely because an electronic ...

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