Soni v. Solera Holdings ( 2022 )

Case: 21-10428 Document: 00516306441 Page: 1 Date Filed: 05/04/2022
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
May 4, 2022
No. 21-10428
Lyle W. Cayce
Clerk
Radley Soni,
Plaintiff—Appellant,
versus
Solera Holdings, L.L.C.,
Defendant—Appellee.
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 3:20-CV-2925
Before Barksdale, Stewart, and Dennis, Circuit Judges.
Per Curiam:*
Radley Soni challenges the district court’s: granting the motion by
Solera Holdings, L.L.C. (Solera), to dismiss and compel arbitration,
including denying his hearsay objection to Solera’s declaration in support of
that motion. AFFIRMED.
*
Pursuant to 5th Circuit Rule 47.5, the court has determined that this
opinion should not be published and is not precedent except under the limited
circumstances set forth in 5th Circuit Rule 47.5.4.
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I.
In 2018, Soni accepted an offer from Solera to work as a sales manager
for one of its subsidiaries (collectively Solera). Soni’s action in 2020 for
asserted wrongful discharge that year presents claims under: the Age
Discrimination in Employment Act of 1967; 42 U.S.C. § 1981; Title VII of
the Civil Rights Act of 1964; and the Texas Labor Code. He also demanded
a jury trial.
Solera moved to dismiss and compel arbitration under the arbitration
agreement (agreement) Soni was required to sign during his new-employee
onboarding; it provides: “all disputes and claims between [Soni and Solera]
shall be determined exclusively by final and binding arbitration before a
single, neutral arbitrator”.
Solera attached to its motion the sworn declaration of a human-
resources (HR) specialist (Solera declaration), which states the specialist,
having been employed by Solera since 2016, is knowledgeable of Solera’s
employee-onboarding process. The Solera declaration also states: the
onboarding process requires all new employees to sign an arbitration
agreement in Solera’s online platform (platform) before beginning work; Soni
created an account for the platform; after the employment offer was made to
Soni, Solera emailed him instructions to sign the agreement in the platform;
and he electronically did so on 1 March 2018 at 1:00 p.m. by checking a box
in the agreement.
The Solera declaration’s two exhibits—the agreement electronically
signed by Soni and a platform record showing Soni “completed” the
agreement—both corroborate Soni signed on that day and time by checking
in red a box labeled “Signature” with an instruction below that box stating
checking it was “equivalent to a handwritten signature”. And, in the
agreement, Soni’s name, and the date and time of his electronic signature,
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appear between the box and the instruction. The agreement thrice references
signatures: “Except as provided below, Employee and the undersigned
employer . . . agree all disputes and claims between them shall be determined
exclusively by final and binding arbitration . . .”; “By signing this Agreement,
Employee acknowledges . . .”; and providing two signature boxes to check—
one for Solera and one for Soni.
As discussed, Soni’s electronic signature appears on the agreement
attached to the Solera declaration. But, Solera’s representative’s electronic
signature does not appear (its box is not checked).
Soni’s response contended: the Solera declaration constitutes
hearsay, not falling within Federal Rule of Evidence 803(6)(E)’s exception
for records of regularly conducted activity because it is not trustworthy; and
the agreement is unenforceable because it was not validly executed. Soni’s
sworn declaration in support of his response states, inter alia: he “do[es] not
recall reading or signing any arbitration agreement”; he “believe[s he] would
have saved a copy if [he] had signed such an agreement”; he did not interact
with the HR specialist who provided Solera’s declaration; and
inconsistencies exist between his personal records and Solera’s, including
that, contrary to Solera’s email and platform records, the agreement was
never provided to him, either before or after Solera alleges he signed it
electronically.
Attached to Soni’s declaration is his email, dated 1 March 2018 at 3:44
p.m. to a Solera employee, which states: “I have completed all tasks through
the web portal”—the platform. (That time of day is two hours and 44
minutes after the time provided with Soni’s electronic signature to the
agreement.)
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In its comprehensive and well-reasoned order/opinion, the court:
overruled Soni’s objection to the Solera declaration and, therefore,
considered it; and granted Solera’s motion to dismiss and compel arbitration.
II.
Soni contends the court erred by: considering the Solera declaration
because it constitutes hearsay; and compelling arbitration because the
agreement was not validly executed. Essentially for the reasons stated by the
district court, Soni’s challenges fail.
A.
Soni’s hearsay objection’s being denied is reviewed for abuse of
discretion. E.g., Abner v. Kansas City S. R. Co., 513 F.3d 154, 168 (5th Cir.
2008). One of the exceptions to hearsay’s being inadmissible is if it
constitutes a record of regularly-conducted activity. Fed. R. Evid. 802,
803(6).
Rule 803(6) predicates admissibility on, inter alia, “the opponent[’s]
. . . not show[ing] that the source of information or the method or
circumstances of preparation indicate a lack of trustworthiness”. In district
court, Soni challenged only the Solera declaration’s trustworthiness; any
other challenge under the rule is, therefore, waived. E.g., LeMaire v. La.
Dep’t of Transp. & Dev., 480 F.3d 383, 387 (5th Cir. 2007).
The parties dispute whether Solera was required to establish Rule
803(6)’s exception applies. In any event, Soni’s only preserved challenge
(trustworthiness) fails. A finding that an out-of-court statement is
trustworthy is upheld unless clearly erroneous. E.g., United States v. Briscoe,
742 F.2d 842, 846–47 (5th Cir. 1984). Soni first contends minor
inconsistencies between the Solera declaration and exhibits attached to his
declaration render it untrustworthy. “[G]reat latitude”, of course, is given
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the district court in its trustworthiness finding. E.g., Miss. River Grain
Elevator, Inc. v. Bartlett & Co., Grain, 659 F.2d 1314, 1319 (5th Cir. Unit A
Oct. 1981). “Some inconsistencies” between the evidence do not require a
finding of untrustworthiness. Westfall v. Luna, 903 F.3d 534, 543 n.3 (5th
Cir. 2018). Considering the inconsistencies Soni raises, the court’s finding
regarding the Solera declaration’s trustworthiness was not clearly erroneous,
as it is “plausible in [the] light of the record . . . as a whole”. Gonzales v.
Mathis Indep. Sch. Dist., 978 F.3d 291, 297 (5th Cir. 2020) (citation omitted).
Inter alia, his declaration exhibit (an email sent after 1:00 p.m. on 1 March,
the date of his electronic signature) states he signed all required documents
in the platform.
Soni next contends the Solera declaration is untrustworthy because
the HR specialist who provided it lacked personal knowledge of Soni’s new-
employee onboarding process. To the contrary, the witness laying the
foundation for a record of regularly-conducted activity need not “be the
author of the record or be able to personally attest to its accuracy”. United
States Commodity Futures Trading Comm’n v. Dizona, 594 F.3d 408, 415 (5th
Cir. 2010) (citation omitted).
B.
Soni presents two substantive challenges to the agreement: whether
its formation is sufficiently in issue to warrant trial; and, if not, whether it is
enforceable. The agreement falls within the scope of the Federal Arbitration
Act (FAA). See 9 U.S.C. §§ 1–2. “Where the issue is whether the parties
have a valid and enforceable agreement to arbitrate, courts apply the contract
law of the state governing the agreement.” Banks v. Mitsubishi Motors Credit
of Am., Inc., 435 F.3d 538, 540 (5th Cir. 2005). The agreement provides, and
the parties do not dispute, that Texas law governs in ascertaining its validity.
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1.
An order compelling arbitration is reviewed de novo, employing the
same standards as the district court. Am. Heritage Life Ins. Co. v. Orr, 294
F.3d 702, 708 (5th Cir. 2002). Factual findings related to the agreement’s
enforceability are reviewed for clear error. Cal. Fina Grp., Inc. v. Herrin, 379
F.3d 311, 315 (5th Cir. 2004).
Whether a party may be compelled to arbitrate is a two-step inquiry: did
“the [parties] . . . agree[] to arbitrate”; and does “any federal statute or
policy render[] the claims nonarbitrable”. Sherer v. Green Tree Servicing
LLC, 548 F.3d 379, 381 (5th Cir. 2008) (citation omitted). Soni challenges
only the first prong.
Similarly, whether the parties agreed to arbitrate is a two-step inquiry:
“is there a valid agreement to arbitrate”; and “does the dispute in question
fall within [its] scope”. Id. Soni, again challenging only the first prong,
contends a summary-judgment standard, as used by six circuits, should be
employed to determine whether the evidence shows the parties agreed to
arbitrate. E.g., Century Indem. Co. v. Certain Underwriters at Lloyd’s, London,
584 F.3d 513, 528 (3d Cir. 2009); Magnolia Cap. Advisors, Inc. v. Bear Stearns
& Co., 272 F. App’x 782, 785–86 (11th Cir. 2008).
Our court “has not articulated precisely what quantum of evidence is
necessary to prove or disprove the existence of an agreement to arbitrate”.
Gallagher v. Vokey, 860 F. App’x 354, 357 (5th Cir. 2021) (citing Dillard v.
Merrill Lynch Pierce, Fenner & Smith, Inc., 961 F.2d 1148, 1154 (5th Cir.
1992)). To answer that question, Gallagher points to the test under the FAA,
9 U.S.C. § 4 (permitting trial on arbitration agreement’s formation if “in
issue”), employed in Dillard. 860 F. App’x at 357. The test requires the
party opposing enforcement to “make at least some showing that[,] under
prevailing law, he would be relieved of his contractual obligation to arbitrate
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if his allegations proved to be true”. Dillard, 961 F.2d at 1154 (emphasis
added). The “some showing” standard requires: unequivocally denying
entering the contract, T & R Enters., Inc. v. Cont’l Grain Co., 613 F.2d 1272,
1278 (5th Cir. 1980); and producing evidence sufficient to substantiate that
allegation, Dillard, 961 F.2d at 1154.
As in Gallagher, “we need not—and do not—decide whether the 9
U.S.C. § 4 standard in this Circuit is congruent with the summary judgment
evidentiary standard of [Federal Rule of Civil Procedure] 56”. 860 F. App’x
at 357. That well-known summary-judgment evidentiary standard includes
whether there are genuine disputes of material fact. Fed. R. Civ. P. 56(a).
(Soni’s contention that this court’s standard has been overruled, or that state
law should inform who bears the burden, is abandoned for failure to raise it
in his opening brief. “Generally, issues not raised in . . . appellant’s opening
brief are considered abandoned”. Akuna Matata Invs., Ltd. v. Tex. Nom Ltd.
P’ship, 814 F.3d 277, 282 n.6 (5th Cir. 2016) (citing Nissho-Iwai Co., Ltd. v.
Occidental Crude Sales, 729 F.2d 1530, 1539 n.14 (5th Cir. 1984) (holding issue
not raised in opening brief abandoned because “entirely separate” from
other challenges and “not raised in response to any novel argument in
[a]ppellee’s brief”)).)
2.
Soni contends the court should have proceeded to trial on the
agreement’s formation. In the alternative, he contends the agreement is
unenforceable because: neither he nor Solera signed it; and the agreement
does not comply with Texas Business & Commerce Code § 322.008(a)
(Uniform Electronic Transactions Act).
a.
As discussed supra, trial on the agreement’s formation is warranted
only if “in issue”. 9 U.S.C. § 4. Soni fails to meet the above-discussed,
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requisite “some showing” standard. The mandated unequivocal denial
requires more than “self-serving affidavits” containing “hollow, bald
assertions”. Orr, 294 F.3d at 710. Soni’s statements in his declaration are:
“not recalling” signing the agreement; and “believing” he would have saved
a copy of that allegedly electronically signed agreement had he signed it.
These statements fall far short of the requisite unequivocal denial,
considering, inter alia, the Solera declaration’s having as an exhibit the
agreement electronically signed by Soni. Cf. Chester v. DirectTV, L.L.C., 607
F. App’x 362, 363–64 & n.4 (5th Cir. 2015) (concluding party unequivocally
denied entering agreement by making similar statements when party seeking
enforcement did not provide signed agreement).
Even if Soni had unequivocally denied signing the agreement, his
presented evidence does not sufficiently support his allegations. See Dillard,
961 F.2d at 1154. For example, he fails to explain how the electronic signature
on the agreement is not his. Moreover, as reflected supra, his own evidence
undermines his allegation that he does not recall signing the agreement.
b.
For his alternative contentions that, if trial is not warranted, the
agreement is nevertheless unenforceable, Soni first relies on Solera’s not
signing it. The FAA does not expressly impose a signature requirement. 9
U.S.C. § 2. And, under Texas law, “the absence of a party’s signature does
not necessarily destroy an otherwise valid contract and is not dispositive of
the question of whether the parties intended to be bound by the terms of a
contract”. Wright v. Hernandez, 469 S.W.3d 744, 757 (Tex. App. 2015). But,
if the terms of the contract clearly require a signature, failure to sign renders
the agreement unenforceable. Id. at 757–58.
If signing is not required and “a party’s signature is absent, other
evidence must be presented to prove [that] party unconditionally and
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mutually assented to the terms of the contract”. Lujan v. Alorica, 445 S.W.3d
443, 448–49 (Tex. App. 2014). Texas courts consider “the employer’s act
of drafting the arbitration agreement, its actions in maintaining the
agreement as a business record, and its actions in moving to enforce the
agreement when the employee filed suit against it”. SK Plymouth LLC v.
Simmons, 605 S.W.3d 706, 718 (Tex. App. 2020) (citation omitted).
None of the agreement’s above-described references to a signature
clearly establish Solera’s signature was a condition precedent. The signature
box and instruction that checking it “is equivalent to a handwritten
signature” in the agreement, on their own, are not sufficient to establish a
condition precedent. Tricon Energy Ltd. v. Vinmar Intern., Ltd., 718 F.3d 448,
454 (5th Cir. 2013) (applying Texas law and noting, in concluding signatures
constituted condition precedent, that “the blank signature lines hardly stood
alone”). Moreover, the use of “undersigned employer”, does not clearly
establish the agreement would be unenforceable absent Solera’s signature.
Given Solera’s lack of signature, we must turn to whether it has
demonstrated it “unconditionally and mutually assented” to the agreement.
Lujan, 445 S.W.3d at 448–49. It has. For example, Soni was allowed to work
for Solera; and its policy was that “every new applicant for employment . . .
sign an arbitration agreement as a condition of employment”. It also drafted
the agreement, maintained it as a business record, and promptly sought to
enforce it after Soni filed this action.
Soni next contends that the agreement’s execution failed to comply
with § 322.008(a) of the Texas Uniform Electronic Transactions Act. Soni
has not demonstrated how that Act applies. By its text, it applies only if “a
law requires” one person to “deliver information in writing to another
person”. Id. The FAA, however, imposes no delivery requirement. E.g.,
9 U.S.C. §§ 2–3.
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III.
For the foregoing reasons, the judgment is AFFIRMED.
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