Charlotte Bess v. DirecTV, INC.

SUPREME COURT CASES

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State: Illinois

Court: 5th District Appellate

Docket No: 5-05-0394 Rel

Case Date: 03/18/2008

Preview:NO. 5-05-0394
N O T IC E Decision filed 03/18/08. The text of this dec ision m ay b e changed or corrected prior to the P e t i ti o n for filing of a or the

IN THE APPELLATE COURT OF ILLINOIS

Re hea ring

FIFTH DISTRICT ________________________________________________________________________ CHARLOTTE BESS, ) Appeal from the ) Circuit Court of Plaintiff-Appellee, ) St. Clair County. ) v. ) No. 99-L-55A ) DIRECTV, INC., ) Honorable ) Robert P. LeChien, Defendant-Appellant. ) Judge, presiding. ________________________________________________________________________ JUSTICE DONOVAN delivered the opinion of the court: The defendant, DirecTV, Inc. (DirecTV), appeals from an order of the circuit court of St. Clair County denying its motion to stay proceedings and to compel arbitration. DirecTV argues that the circuit court erred in finding that the arbitration agreement was procedurally and substantively unconscionable and, therefore, unenforceable. Initially, this court issued an opinion in this case affirming the circuit court's judgment. Bess v. DirecTV, Inc., No. 5-05-0394 (July 10, 2007). After considering the merits of DirecTV's petition for rehearing, we now reverse. BACKGROUND DirecTV provides television programming services via satellite to consumers throughout the nation. To obtain these services, a potential DirecTV subscriber calls DirecTV and orders one or more of DirecTV's programming packages. DirecTV then activates the subscriber's service and mails the subscriber a copy of a contract, called "Customer Agreement" (Customer Agreement), along with the initial billing statement. The Customer Agreement sets forth the parties' rights and obligations and explains the terms and

disposition of the same.

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conditions under which DirecTV provides its service. On November 28, 1999, Charlotte Bess contracted with DirecTV for satellite television service, and DirecTV activated the requested service. The record is silent on where or how Bess acquired the equipment necessary to receive DirecTV service and whether or not she incurred any costs to acquire the equipment or have it installed. Thereafter, DirecTV mailed a copy of the October 1999 Customer Agreement and the first billing statement to Bess. The Customer Agreement provides that DirecTV will send the customer a billing statement once every 30 days, that the customer will pay each monthly bill in full, and that should DirecTV not receive the customer's payment before issuing her next statement, DirecTV may charge her an administrative late fee of up to $5. The administrative late fee is the subject of Bess's complaint. The Customer Agreement specifies that if the customer does not accept the terms of the Customer Agreement, she should notify DirecTV immediately and DirecTV will cancel her DirecTV service. A customer who does not notify DirecTV of any objections to the Customer Agreement and who continues to receive DirecTV service is deemed to have accepted the terms of the Customer Agreement. The Customer Agreement contains informal and formal dispute-resolution clauses. Under the informal dispute-resolution clause, the complaining party must first notify the other of a claim at least 60 days before starting any formal proceeding, so that the parties can attempt an informal resolution of the claim. The formal dispute-resolution clause (the arbitration provision) provides, in pertinent part: "Formal Resolution. Except as provided in Section 8(d), if we cannot resolve a Claim informally, any Claim either of us asserts will be resolved only by binding arbitration. The arbitration will be conducted under the Commercial Arbitration Rules of the American Arbitration Association that are in effect at the time the

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arbitration is initiated (referred to as the 'AAA Rules') and under the rules set forth in this Agreement. If there is a conflict between the AAA Rules and the rules set forth in this Agreement, the rules set forth in this Agreement will govern. ARBITRATION MEANS THAT YOU WAIVE YOUR RIGHT TO A JURY TRIAL. If you initiate the arbitration, you agree to pay a fee of $125 or, if less and you tell us in writing, the amount that you would pay to initiate a lawsuit against us in the appropriate court of law in your state. We agree to pay any additional fee or deposit required by the American Arbitration Association in excess of your filing fee. We also agree to pay the costs of the arbitration proceeding up to a maximum of onehalf day (four hours) of hearings. Other fees, such as attorney's fees, expenses of travel to the arbitration[,] and the costs of a proceeding that goes beyond one-half day[,] will be paid in accordance with the AAA Rules. The arbitration will be held at a location within one hundred miles of your residence unless you and we both agree to another location." The October 1999 Customer Agreement further states that it could be replaced by subsequent, updated agreements and that the customer would accept the terms of any subsequent agreements in the same manner that she agreed to the terms of the initial Customer Agreement

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