Tavitas, J.
Case Summary
Cliff Decker and Wendy Decker (“the Deckers”), individually and on behalf of all others similarly situated, brought a class action complaint against their bank, Star Financial Group, Inc. (“Star Financial”), for the allegedly improper assessment and collection of overdraft fees. The Deckers appeal the trial court’s grant of a motion to compel arbitration filed by Star Financial. The arbitration provision was part of a modification of the Terms and Conditions of the account and was attached to the end of the Deckers’ monthly statement, which was provided electronically. The Deckers contend, in part, that they did not receive reasonable notice of the addition of the arbitration provision, and reasonable notice was required by the Terms and Conditions. We conclude that the Deckers did not receive reasonable notice of the arbitration provision and, thus, the trial court erred by granting Star Financial’s motion to compel arbitration. Accordingly, we reverse and remand.
Issue
The Deckers raise several issues. We find one issue dispositive and restate the issue as whether Star Financial provided the Deckers with reasonable notice of the addition of an arbitration provision to the Terms and Conditions of the Deckers’ account with Star Financial.
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We note that, in general, an arbitration agreement, like a typical contract, requires “offer, acceptance of the offer and consideration.” Reitenour, 176 N.E.3d at 511. “If these elements are present, the parties are generally bound by the terms of the agreement.” Id. “A mutual assent or a meeting of the minds on all essential elements or terms must exist in order to form a binding contract.” DiMizio v. Romo, 756 N.E.2d 1018, 1022 (Ind. Ct. App. 2001), trans. denied. “[A]ssent to those terms of a contract may be expressed by acts which manifest acceptance.” Id. “If these elements are present, the parties are generally bound by the terms of the agreement.” Reitenour, 176 N.E.3d at 511. “[A]rbitration agreements will not be extended by construction or implication.” Showboat Marina Casino P’ship v. Tonn & Blank Const., 790 N.E.2d 595, 598 (Ind. Ct. App. 2003).
Star Financial attempted to modify the Terms and Conditions to add an arbitration provision. “[T]he modification of a contract, because it is also a contract, requires all of the requisite elements of a contract.”…
Here, the original Terms and Conditions entered into by the parties did not contain an arbitration provision, and there is no dispute that the Deckers agreed to the initial Terms and Conditions. Under the Terms and Conditions, Star Financial could “change a term of this agreement” but was required to give “reasonable notice in writing or by any other method permitted by law. . . .” Appellants’ App. Vol. II p. 57 (emphasis added). The Terms and Conditions did not define “reasonable notice” and merely noted that what constitutes reasonable notice “depends on the circumstances.” Id. Pursuant to those Terms and Conditions, if Star Financial notified the customer of a “change in any term” and the customer continued to have the account “after the effective date of the change,” the customer “agreed to the new term(s).” Id. Accordingly, the question here is whether Star Financial gave the Deckers “reasonable notice” of the Addendum.
…. We conclude that the “reasonable notice” here must have been notice reasonably calculated to reach the intended audience.
The Deckers received an email with a link to their regular monthly statement. The email noted links to the updated Miscellaneous Fee Schedule and the Privacy Notice but did not mention changes to the account’s Terms and Conditions. After clicking the link and logging into their account, the Deckers would have received a fourteen-page statement, which included eleven pages of information on transactions for the account; a page of images of the checks written that month; and an Arbitration and No Class Action Clause Addendum on pages thirteen and fourteen. The beginning of the Addendum was in bold capital letters and noted that the Addendum would become effective in ten days if the customer still had an account with Star Financial at that time.
The Deckers contend that the Addendum was “bur[ied]” at the “at the end of an account statement in an online portal—with no other notice whatsoever that it was located there and that action was required . . . .” Appellants’ Br. p. 45. The Deckers acknowledge that “[p]arties can be bound by terms they choose not to read, but not by terms they have no reasonable notice even exist or require action or attention.” Id. at 55.
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We find the Deckers’ arguments persuasive. The Terms and Conditions, which were created by Star Financial, required it to provide customers with “reasonable notice” of a change to the Terms and Conditions. Star Financial provided notice to the Deckers by sending them an email with a link to the Deckers’ monthly statement. We note that customers do not have a deadline to review their monthly statements for a bank account, and a monthly statement is not a contract. Although the email itself included links to an updated Miscellaneous Fee Schedule and the Privacy Notice, the email did not mention time-sensitive changes to the account’s Terms and Conditions or the addition of an arbitration provision. Moreover, when the Deckers would have clicked the link to their monthly statement and logged in, the first page of the monthly statement did not mention changes to the account’s Terms and Conditions or the addition of an arbitration provision. Rather, the arbitration provision was placed on pages thirteen and fourteen of the monthly statement. The Deckers would have found the arbitration provision only by scrolling to the end of the monthly statement, which they may or may not have reviewed within ten days. Nothing in the email or monthly statement alerted the Deckers that a time-sensitive modification to the Terms and Conditions, which included an arbitration provision, was included at the end of the monthly statement.
We conclude that Star Financial failed to provide the Deckers with reasonable notice of the arbitration provision. Placing the Addendum, which contained the arbitration provision and time-sensitive opt out provision, at the end of the routine monthly statement with no notice to the Deckers that something was unusual about the monthly statement was not reasonably calculated to provide the Deckers with notice. Under these circumstances, we conclude that the Deckers were not provided with reasonable notice, which was required by the Terms and Conditions. Accordingly, the Deckers did not assent to the arbitration provision. The trial court, thus, erred by granting Star Financial’s motion to compel.
Conclusion
Star Financial failed to provide the Deckers with reasonable notice of the addition of the arbitration provision to the Terms and Conditions. Accordingly, the trial court erred by granting Star Financial’s motion to compel arbitration, and we reverse and remand.
Reversed and remanded.
Bradford, C.J., concurs.
Crone, J., dissents with opinion.
Crone, Judge, dissenting.
As mentioned above, “[s]tate law contract principles apply to determine whether parties have agreed to arbitrate.” Earley, 105 N.E.3d at 1099. “[U]nder Indiana law, a failure to read a contract does not relieve a party from the obligations and limitations of the document.” Urschel Farms, Inc. v. Dekalb Swine Breeders, Inc., 858 F. Supp. 831, 838 (N.D. Ind. 1994). Pursuant to the Terms and Conditions of the Deckers’ account with Star Financial—of which the Deckers had at least constructive notice—their August 2020 monthly statement was “a contract that establishe[d] rules which control [their] account[.]” Appellants’ App. Vol. 2 at 53. The statement changed the existing rules by requiring arbitration of most claims and prohibiting initiation of or participation in class actions. The change notice was printed in bold type and capital letters and appeared in the account statement itself, not in an electronic version of a “bill stuffer.” In my view, the Deckers’ failure to seasonably read the change notice does not relieve them from their contractual obligations. I am unpersuaded by the majority’s reliance on cases from different jurisdictions with different facts, so I must respectfully dissent. If the time has come when the failure to read a written notice within ten days of receipt renders that notice unreasonable as a matter of law, then we have entered a new era of contract law with which I am unfamiliar.