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LLC v. Belcaro Group, Inc.

United States District Court, D. Colorado

September 6, 2018

BIGBEN 1613, LLC, a Florida limited liability company, Plaintiff,
BELCARO GROUP, INC., d/b/a, Defendant.



         This matter is before the Court on Defendant Belcaro Group, Inc.'s Motion to Compel Arbitration and Dismiss the Complaint Under Federal Rules of Civil Procedure 9(b) and 12(b)(6) [Docket No. 24]. The Court has jurisdiction pursuant to 28 U.S.C. § 1332.

         I. BACKGROUND

         Defendant operates, a website that provides consumers with cash back on qualifying purchases made through participating online retailers. Docket No. 1 at 2-3, ¶¶ 10-12. In order to take advantage of defendant's cash-back portal, an individual must create an account on and “purchase items by linking through [defendant's] website to the applicable online store.” Id. at 3, ¶ 13.

         Plaintiff has held an account on since late 2014. Id. at 4, ¶ 21. On Friday, November 25, 2016, advertised twelve percent cash back on online purchases from Walmart made via Id. at 4, ¶ 22. Relying on this cash back offer, plaintiff purchased approximately $5, 400, 000 in products from through the website. Id., ¶ 23. Shortly thereafter, defendant froze plaintiff's account. Id. at 4-5, ¶ 24. Defendant sent plaintiff an email stating that defendant would seize the unpaid balance in plaintiff's cash back account because plaintiff had violated's prohibition against “purchases made for resale or commercial use of any kind.” Id. at 5, ¶ 26.

         Plaintiff filed this lawsuit on January 27, 2017 asserting Colorado state law claims for unjust enrichment, conversion, civil theft, and violation of the Colorado Consumer Protection Act, Colo. Rev. Stat. § 6-1-101 et seq. Id. at 6-8. On March 8, 2017, defendant moved to compel arbitration or, alternatively, to dismiss the complaint under Federal Rules of Civil Procedure 9(b) and 12(b)(6). Docket No. 24. Plaintiff filed a response to the motion on March 29, 2017, Docket No. 28, to which defendant replied on April 12, 2017. Docket No. 31.


         Defendant moves to compel arbitration pursuant to an arbitration provision on the Terms and Conditions (“T&C”) page of the website. See Docket No. 24 at 6. The Federal Arbitration Act (“FAA”) “manifests a liberal federal policy favoring arbitration.” Comanche Indian Tribe v. 49, L.L.C., 391 F.3d 1129, 1131 (10th Cir. 2004) (quoting Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 25 (1991)).[1] Consequently, the Court must “resolve ‘any doubts concerning the scope of arbitrable issues . . . in favor of arbitration.'” P & P Industries, Inc. v. Sutter Corp., 179 F.3d 861, 866 (10th Cir. 1999) (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983)). “In addition, this liberal policy ‘covers more than simply the substantive scope of the arbitration clause,' and ‘encompasses an expectation that [arbitration] procedures will be binding.'” Id. (citation omitted).

         “[A]lthough the presence of an arbitration clause generally creates a presumption in favor of arbitration, this presumption disappears when the parties dispute the existence of a valid arbitration agreement.” Bellman v. i3Carbon, LLC, 563 Fed.Appx. 608, 613 (10th Cir. 2014) (unpublished) (citations omitted). Determining whether a dispute is subject to arbitration “is similar to summary judgment practice.” Id. at 612 (quoting Hancock v. Am. Tel. & Tel. Co., 701 F.3d 1248, 1261 (10th Cir. 2012)). The party moving to compel arbitration must present “evidence sufficient to demonstrate the existence of an enforceable agreement.” Id. The burden then shifts to the nonmoving party “to raise a genuine dispute of material fact regarding the existence of an agreement.” Id.

         Defendant also moves to dismiss plaintiff's claims under Federal Rules of Civil Procedure 9(b) and 12(b)(6). See Docket No. 24 at 9. To survive a motion to dismiss under Rule 12(b)(6), a complaint must allege enough factual matter that, taken as true, makes the plaintiff's “claim to relief . . . plausible on its face.” Khalik v. United Air Lines, 671 F.3d 1188, 1190 (10th Cir. 2012) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not shown-that the pleader is entitled to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (internal quotation marks and alteration marks omitted); see also Khalik, 671 F.3d at 1190 (“A plaintiff must nudge [his] claims across the line from conceivable to plausible in order to survive a motion to dismiss.” (quoting Twombly, 550 U.S. at 570)). If a complaint's allegations are “so general that they encompass a wide swath of conduct, much of it innocent, ” then plaintiff has not stated a plausible claim. Khalik, 671 F.3d at 1191 (quotations omitted). Thus, even though modern rules of pleading are somewhat forgiving, “a complaint still must contain either direct or inferential allegations respecting all the material elements necessary to sustain a recovery under some viable legal theory.” Bryson v. Gonzales, 534 F.3d 1282, 1286 (10th Cir. 2008) (alteration marks omitted).

         III. ANALYSIS

         The Court begins by considering whether plaintiff's claims are subject to arbitration. To meet its initial burden of demonstrating an enforceable arbitration agreement, defendant has attached copies of the Terms and Conditions from the website, Docket Nos. 24-2, 31-2, along with declarations from defense counsel Luke Connelly and Belcaro Group's Chief Financial Officer, Rebecca L. Shepherd, attesting to the copies' authenticity. Docket Nos. 24-1, 31-1. Defendant argues that plaintiff consented to the Terms and Conditions when it registered an account on the website. Docket No. 24 at 6-8; Docket No. 24-2 at 1 (“By using the Site . . ., you agree that you have read and you understand, and consent to the following Terms and Conditions . . . .”); see also Docket No. 1 at 4, ¶ 21 (alleging that plaintiff has maintained an account on since late 2014).

         Plaintiff opposes defendant's motion to compel arbitration on two grounds. First, plaintiff argues that the motion is procedurally defective because it relies on extrinsic evidence that was not properly authenticated or referenced in the complaint. Docket No. 28 at 3-7. Second, plaintiff contends that the arbitration agreement is unenforceable. Id. at 7.

         A. Terms ...

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