Doe v. Massage Envy Franchising, LLC ( 2020 )

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
MARY DOE (a fictitious name),
Plaintiff,
7 C.A. No. $20C-05-005 RFS
MASSAGE ENVY FRANCHISING,
LLC
and
DDW ENTERPRISES, LLC
and
RED ENTERPRISES, INC. D/B/A
MASSAGE ENVY — REHOBOTH
BEACH AND D/B/A MASSAGE
ENVY-LEWES
and
RICHARD DULEY,
Defendants.
ORDER
Submitted: 12/10/2020
Decided: 12/21/2020
Philip T. Edwards, Esq., 1011 Centre Rd., Suite 210 Wilmington, DE 19805 and V. Paul
Bucci, II, Esq. and M. Stewart Ryan, Esq., 1435 Walnut Street, Suite 700 Philadelphia, PA
19102, Attorneys for Plaintiff.
Brian Cunningham, Esq., 405 N. King Street, Suite 800 Wilmington, DE 19801, Attorney
for Defendant, Massage Envy Franchising, LLC.
I. INTRODUCTION
Before this Court is Massage Envy Franchising, LLC’s (“MEF”) Motion to Dismiss. For
the reasons that follow, MEF’s Motion to Dismiss is GRANTED.
II. FACTUAL AND PROCEDURAL HISTORY
MEF is an Arizona-based franchisor of Massage Envy branded franchisees located
throughout the United States. On October 16, 2017, Plaintiff checked into the Rehoboth Beach
franchise (the “Franchise”) for a massage. Upon arrival, the Franchise provided Plaintiff with an
electronic tablet to complete a number of intake forms. Included within those forms, was the
Terms of Use Agreement (the “Agreement”). To access the Agreement, Plaintiff was required to
click on a hyperlink located next to a box with the sentence: “I agree and assent to the Terms of
Use Agreement.”! The words “Terms of Use Agreement” were underlined to reflect the
hyperlink, which would take the client to a page displaying the entirety of the Agreement. In
order to continue with the intake process, Plaintiff checked the box indicating she assented to the
Agreement.
When the Agreement opened up, the below relevant text was located at the top of the
page in bold and capitalized font:
IMPORTANT NOTICE: THIS TERMS OF USE AGREEMENT
(“AGREEMENT”) CONTAINS A BINDING ARBITRATION PROVISION
AND A CLASS ACTION WAIVER. PLEASE READ IT CAREFULLY
BECAUSE IT AFFECTS YOUR LEGAL RIGHTS AS DETAILED IN THE
BINDING INDIVIDUAL ARBITRATION SECTION BELOW.”
Further down the Agreement, there is a section titled “BINDING INDIVIDUAL
ARBITRATION.” Following the title, the below text is provided in bold, capitalized font:
' Def.’s Mot. Ex. A-].
2 Id. Ex. A-2.
PLEASE READ THIS SECTION CAREFULLY-IT MAY SIGNIFICANTLY
AFFECT YOUR LEGAL RIGHTS, INCLUDING YOUR RIGHT TO FILE A
LAWSUIT IN COURT.
The paragraphs following the above text provide that Plaintiff is agreeing to arbitrate
disputes against MEF that arise out of or relate to services.’ It further provides that “validity,
enforceability, or scope” of the arbitration provision is to be decided by the arbitrator.°
Following completion of the intake process, Plaintiff went to receive a massage from a
massage therapist at the Franchise. During the course of the massage, Plaintiff alleges she was
sexually assaulted.
On May 6, 2020, Plaintiff filed her complaint in this Court seeking damages. Plaintiff
puts forth multiple causes of actions against MEF: (1) Vicarious Liability; (2) Negligence; (3)
Negligent Performance of Undertaking to Render Services; (4) Negligent Misrepresentation; (5)
Civil Conspiracy; (6) Negligence Per Se; and (7) Negligent Infliction of Emotional Distress.
Ill. DISCUSSION
Superior Court Civil Rule 12(b)(6) provides that a defendant may bring a motion to
dismiss if the claimant fails to state a claim upon which relief can be granted.° “Delaware courts
lack subject matter jurisdiction to resolve disputes that litigants have contractually agreed to
47d.
‘ Id. The provision states:
[A]II Disputes between you and any ME Entity. The term “Disputes” is to be given the broadest
possible meaning that will be enforced that means any dispute, claim, or controversy of any kind
between you and any of the ME Entities that arise out of or in any way relate to. . . (4) any
product or service provided by or purchased from an independently owned and operated Massage
Envy® franchised location... (5) this Agreement, including the validity, enforceability or scope of
this Binding Individual Arbitration Section..., whether based in contract, statute, regulation,
ordinance, tort (including, but not limited to, fraud, misrepresentation, fraudulent inducement, or
negligence), or any other legal or equitable theory.
> Jd. The Agreement further provided that Plaintiff had the ability to opt out of the arbitration provision within 30
days; however, neither Plaintiff nor MEF claim Plaintiff opted out.
® Super. Ct. Civ. R. 12.
arbitrate.”’ The Court may dismiss a complaint for lack of subject matter jurisdiction after
determining (1) whether a valid and enforceable arbitration agreement exists and (2) whether the
scope of that agreement covers the plaintiff's claims.*
The public policy of Delaware favors arbitration.’ “Arbitration is the preferred
mechanism for resolving disputes in this State and the court should ‘ordinarily resolve any doubt
as to arbitrability in favor of arbitration.’”'° If Plaintiff agreed to arbitrate her claims, the Court
must dismiss or stay the matter pending a decision by the arbitrator.
The Agreement expressly lays out that the agreement to arbitrate is governed by the
Federal Arbitration Act (“FAA”).'' The two questions a court must assess when deciding to
dismiss a complaint in favor of arbitration are: (1) whether a valid and enforceable arbitration
agreement exists and (2) whether the scope of that agreement covers the plaintiff's claims. '*
The Court begins its analysis by determining whether the Plaintiff was presented with a
valid enforceable “clickwrap” agreement. MEF argues the Agreement was in the form of a valid
“clickwrap” agreement. . “A clickwrap agreement is an online agreement that requires a
“webpage user [to] manifest assent to the terms of a contract by clicking an ‘accept’ button in
order to proceed.’”'? Clickwrap agreements are routinely recognized by courts and are
enforceable under Delaware law.!*
’ NAMA Holdings, LLC y, Related World Market Center, LLC, 922 A.2d 417, 429 (Del. Ch. 2007) (citing Elif
Atochem N. Am., Inc. v. Jaffari, 727 A.2d 286, 295 (Del.1999)).
° Dewey v. Amazon.com, Inc., 2019 WL 3384769, at *3 (Del. Super. Ct. July 25, 2019).
° SBC Interactive, Inc. v. Corp. Media Partners, 714 A.2d 758, 761 (Del. 1998).
'° Behn v. Am. Int'l Grp., Inc., 2013 WL 3981663, at *5 (Del. Super. Ct. July 30, 2013) (citing Parfi Holding AB v.
Mirror Image Internet, Inc., 817 A.2d 149, 156 (Del.2002)).
" Id. Ex. A-2. (Delaware arbitration law mirrors federal law. Behm v. Am. Int'l Grp., Inc., 2013 WL 3981663, at *6
(Del. Super. Ct. July 30, 2013).
'2 Dewey v. Amazon.com, Inc., supra at *3.
'3 Newell Rubbermaid Inc. v. Storm, 2014 WL 1266827, at *1 (Del. Ch. Mar. 27, 2014) (citing Van Tassell v. United
Mktg. Gp., LLC, 795 F. Supp. 2d 770, 790 (N.D.II.2011)).
'4 Newell Rubbermaid, 2014 WL 1266827, at *1.
Plaintiff argues she was not presented with a clickwrap agreement; rather, she was
presented with an unenforceable “browsewrap” agreement. Plaintiff argues the agreement
presented to her did not require the client to acknowledge the contents of the Agreement.
Further, Plaintiff contends the Agreement does not put clients on notice of the contents actually
located within the Agreement, which is located in a separate area of the website. A browsewrap
agreement “involve[s] a situation where notice on a website conditions use of the site upon
compliance with certain terms or conditions, which may be included on the same page as the
notice or accessible via a hyperlink. Thus, a party gives ... assent simply by using the website.” >
Such agreements are generally unenforceable.
In Newell Rubbermaid Inc., v. Storm, the Chancery Court held that an agreement
modifying an employee’s post-employment rights was enforceable.'® The court determined that
the agreement was a valid clickwrap agreement that required the defendant to affirmatively click
a box next to a conspicuous sentence agreeing to the terms.'’ The requirement to check the box
signifies the user’s assent. Here, Plaintiff manifested her assent by checking the box located next
to the sentence “I agree and assent to the Terms of Use Agreement.” The sentence is directly
located next to the check box and includes a hyperlinked “Terms of Use Agreement.” The
hyperlink is signaled by underlined text that is in a different colored font.'* Because Plaintiff was
required to check a box to manifest her assent, similar to the agreement in Newell Rubbermaid,
the Court concludes Plaintiff was presented with a clickwrap agreement.
'° Newell Rubbermaid, 2014 WL 1266827, at *1 (citing Van Tassell v. United Mktg. Gp., LLC, 795 F. Supp. 2d 770,
790 (N.D.11.2011)).
'S Newell Rubbermaid, 2014 WL 1266827, at **6—7.
17 Id.
'8 Def.’s Mot. Ex. A-1.
Here, the Court finds a valid and enforceable arbitration agreement exists. As soon as
Plaintiff is presented with the Agreement, Plaintiff is put on notice that she would be altering her
legal rights. The arbitration provision itself is conspicuous within the Agreement. It is in bold
capitalized text, instructing Plaintiff to read the section carefully.!
Plaintiff does not recall reading the contents of the Agreement. MEF has provided a copy
of the forms completed by Plaintiff in which Plaintiff checked the box.”? Plaintiff argues she
does not remember checking the box and she did not read or understand the terms in the
Agreement; however, without checking the box, Plaintiff would not have been able to continue
the intake process.*' Therefore, Plaintiff manifested her assent to the terms. Plaintiff's failure to
read or investigate the Agreement is of no consequence on whether the claims are subject to
arbitration.
In Newell Rubbermaid, the court provided the defendant’s failure to read did not mean
she did not agree to the terms. The court stated:
Storm is understandably unhappy that she did not read the 2013 Agreements;
however, she was presented with a fair opportunity to do so, opened up the
appropriate pop-up from which she could do so, and even indicated through the
checkbox that she did so. She altered her post-employment rights in a manner she
appears to regret now, but it was her choice to modify her rights without fully
investigating the terms to which she agreed.”
Plaintiff may not remember checking the box or reading the terms; however, she could
not finish the intake process without checking the box signifying her assent to the Agreement. By
checking the box, Plaintiff assented and agreed to the arbitration clause. Even though Plaintiff
19 Id.
0 Def.’s Mot. Ex. A.
21 Idaho
2 Newell Rubbermaid, supra, at *8.
may not have read the terms, as the court in Newell Rubbermaid stated, “it was her choice to
modify her rights without investigating the terms.””?
Failure to read or recall agreeing to the Agreement will not keep this case out of
arbitration. As the court in Newell Rubbermaid provided, Plaintiff should have investigated the
terms to which she was agreeing.
Next, the Court must determine whether the scope of the Agreement covers Plaintiff's
claims. Here, the arbitrator must decide whether Plaintiff's claims fall under the Agreement.
Because the Court concludes Plaintiff assented and agreed to the Agreement, Plaintiff assented to
the arbitration clause, including having issues of arbitrability to be decided by the arbitrator.24
“[ When ... parties explicitly incorporate rules that empower an arbitrator to decide issues
of arbitrability, the incorporation serves as clear and unmistakable evidence of the parties’ intent
to delegate such issues to an arbitrator.””> The Agreement expressly provides that issues of
arbitrability would also be subject to the arbitrator, providing:
[A]ll Disputes between you and any ME Entity. The term “Disputes” is to be
given the broadest possible meaning that will be enforced that means any dispute,
claim, or controversy of any kind between you and any of the ME Entities that
arise out of or in any way relate to . . . (5)this Agreement, including the validity,
enforceability or scope of this Binding Individual Arbitration Section..., whether
based in contract, statute, regulation, ordinance, tort (including, but not limited to,
fraud, misrepresentation, fraudulent inducement, or negligence), or any other
legal or equitable theory.”°
Parties can agree to arbitrate questions of “arbitrability.”*” Again, this provision is
conspicuous, putting Plaintiff on notice. Plaintiff assented to these terms by checking the box
23 Id.
* The United States Supreme Court in Henry Schein, Inc. provided “if a valid agreement exists, and if the
agreement delegates the arbitrability issue to an arbitrator, a court may not decide the arbitrability issue.” Henry
Schein, Inc. v, Archer & White Sales, Inc., 139 S. Ct. 524, 530, 202 L. Ed. 2d 480 (2019).
* Behm v. Am. Int'l Grp., Inc. 2013 WL 3981663, at *6 (Del. Super. Ct. July 30, 2013) (citations omitted).
6 Def.’s Mot. Ex. A-2.
*” Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 68-69, 130 S. Ct. 2772, 2777, 177 L. Ed. 2d 403 (2010).
7
assenting to the Agreement. Plaintiffs assent, along with the explicit terms of the Agreement,
constitutes clear and unmistakable evidence of the parties' intent to delegate the issue of scope to
the arbitrator.
Lastly, Plaintiff raises several arguments that there is no valid contract, such as
unconscionability. “[C]hallenges to the validity of an entire contract which contains an
arbitration clause are for the arbitrator to decide.”?* Therefore, concluding Plaintiff assented to
arbitration, the Court will allow the arbitrator to address Plaintiffs arguments.
V. CONCLUSION
Considering the foregoing, Defendant’s Motion to Dismiss is granted without prejudice.
j, JE Be
Richard F. Stokes, Judge
IT IS SO ORDERED.
cc: Prothonotary’s Office
Counsel of Record
8 Gilmartin v. Whaley Royce, LLC, 2017 WL 1162939, at *5 (Del. Ch. Mar. 28, 2017) (citing Rent-A—Center, W.,
Inc. v. Jackson, 561 U.S. 63, 70-71 (2010); Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 444 (2006);
Prima Paint Corp. v. Flood & Conklin Manufacturing Co., 388 U.S. 395 (1967)).