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Macasero v. Ent Credit Union.

2023 COA 40. No. 21CA1421. Contracts—Arbitration Provision—Constructive Notice—Email Correspondence.

May 4, 2023

Macasero financed a car with an automobile dealer, who assigned the financing agreement to Ent Credit Union (Ent). To complete the assignment, Macasero became an Ent member by opening a savings account and signing an account application and signature card, by  which she agreed to accept information from Ent, including updates to its membership terms, by electronic delivery. When Macasero purchased her car, she also purchased a Guaranteed Automobile Protection (GAP) waiver, which provided that if the purchaser’s automobile insurance payout on a “total loss” claim did not cover the remaining loan balance, the creditor would waive the difference. Macasero’s GAP cost was added to the principal balance of her finance agreement, which she paid in monthly installments. Macasero paid off her finance agreement in 2018. In 2019, Ent amended its membership agreement’s terms to add an arbitration provision by which members agreed to settle disputes with Ent through arbitration. Ent’s email notice to members of this amendment included an opt-out provision. Macasero did not exercise her right to opt out of the arbitration agreement and continued to use her account after she received Ent’s email containing the notice of updated terms. In 2020, Macasero filed a class action complaint and jury demand in district court alleging breach of contract on behalf of herself and class members who entered into finance agreements with GAP waivers, paid off their agreements ahead of schedule, and were not refunded the unearned GAP waiver fees. In 2021, Ent moved to dismiss the complaint and compel arbitration. The district court denied Ent’s motion, concluding that Macasero did not have actual or constructive notice of the arbitration agreement.

On appeal, Ent contended that the district court erred in determining that its email did not place Macasero on constructive notice of the arbitration agreement and her right to opt out because its notice was sufficiently clear and conspicuous. When determining whether a plaintiff had constructive notice of an arbitration agreement based on email correspondence, courts consider (1) the parties’ prior course of dealing, (2) whether the email was designed such that the notice or hyperlink was reasonably conspicuous, and (3) the accessibility of the change in terms. Here, (1) Macasero’s and Ent’s course of dealing shows that an email notice was sent in the exact manner to which the parties had agreed; (2) the email’s design is basic, not confusing or distracting, and the member is directed to the blue, underlined hyperlink for more information about the updates, so the notice was reasonably conspicuous; and (3) the notice was easily accessible by using the included hyperlinks. Accordingly, Macasero had constructive notice that Ent had updated membership agreement’s terms to include an arbitration agreement, and that she had the right to opt out of the arbitration agreement within a certain time period. Therefore, the district court erred.

Macasero also contended that even if Ent’s notice was reasonably conspicuous, adding an arbitration provision was not the type of change the parties contemplated when they entered into the membership agreement. She maintained that Ent could not amend the agreement to add the arbitration provision without her express and affirmative consent. However, Macasero’s express and affirmative consent was not required for Ent to amend the agreement to add the arbitration provision because she was constructively notified of the change; she did not opt out; and she continued to use Ent’s services, which she agreed would act as her consent to any amendments to the agreement. Under the totality of these circumstances, Macasero is deemed to have assented to the addition of the arbitration agreement.

The order denying Ent’s motion to dismiss and compel arbitration was reversed, and the case was remanded for further proceedings.

Official Colorado Court of Appeals proceedings can be found at the Colorado Court of Appeals website.

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