14-2491-cv
Hirsch v. Citibank

                                 UNITED STATES COURT OF APPEALS
                                     FOR THE SECOND CIRCUIT

                                           SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED
BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY
MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE
NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY
OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.


        At a stated Term of the United States Court of Appeals for the Second Circuit, held at the
Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York on the
13th day of May, two thousand fifteen.

Present:    DENNIS JACOBS,
            ROSEMARY S. POOLER,
            PETER W. HALL,
                        Circuit Judges.
_____________________________________________________

BERTRAM HIRSCH and IGOR ROMANOV, on behalf of themselves and all others similarly
situated,

                                    Plaintiffs-Appellees,

                            v.                                                     14-2491-cv

CITIBANK, N.A.,

                        Defendant-Appellant.1
_____________________________________________________

Appearing for Appellant:            Julia B. Strickland, Stroock & Stroock & Lavan LLP (Joseph E.
                                    Strauss, New York, N.Y., on the brief) Los Angeles, CA.

Appearing for Appellees:            James C. Kelly, The Law Office of James C. Kelly (Samuel P.
                                    Sporn, Schoengold & Sporn, P.C., New York, N.Y., on the brief)
                                    New York, N.Y.



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               The Clerk of the Court is directed to amend the caption as above.
Appeal from the United States District Court for the Southern District of New York (Batts, J.).

     ON CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the order of said District Court be and it hereby is AFFIRMED.

        Citibank, N.A. appeals from the June 10, 2014 memorandum and order of the United
States District Court for the Southern District of New York (Batts, J.) denying its motion to
compel arbitration. We assume the parties’ familiarity with the underlying facts, procedural
history, and specification of issues for review.

        We review a district court’s denial of a motion to compel arbitration de novo. Arciniaga
v. Gen. Motors Corp., 460 F.3d 231, 234 (2d Cir. 2006). “The question of whether the parties
have agreed to arbitrate is also reviewed de novo to the extent that the district court’s conclusion
was based on a legal determination, but findings of fact, if any, bearing on this question are
reviewed under a clearly erroneous standard.” Schnabel v. Trilegiant Corp., 697 F.3d 110,
118–19 (2d Cir. 2012) (internal quotation marks omitted).

        Citibank first argues that the district court improperly focused its analysis on arbitration
and imposed a “special notice” requirement on the arbitration provisions. However, our previous
summary order noted that the record before us lacked “evidence to indicate whether new
customers are alerted to the fact that their accounts are governed by the terms and conditions
included in the Client Manual or that the Client Manual contains an arbitration clause.” Hirsch v.
Citibank, N.A., 542 F. App’x 35, 37 (2d Cir. 2013). We also noted that “[w]hile it is true that a
party cannot avoid the terms of a contract on the ground that he or she failed to read it before
signing, . . . an exception to this general rule exists when the writing does not appear to be a
contract and the terms are not called to the attention of the recipient. In such a case no contract is
formed with respect to the undisclosed term.” Id. (internal alterations and quotation marks
omitted) (omission in original). If our Court highlights issues that need to be resolved and
remands so that the district court may consider such issues, it is to be expected that those issues
will be the focus of the district court’s attention.

        Nor do we find clear error in the district court’s factual findings. The Client Manual does
not, on its cover, state that it is an agreement, or otherwise indicate on its face that it includes
terms and conditions governing the accounts at issue. Further, the signature cards were so
broadly worded that a reasonable person would not be on notice as to what external terms and
conditions applied to the agreement to open the account. See, e.g., Crewe v. Rich Dad Educ.
LLC, 884 F. Supp. 2d 60, 66, 73 (S.D.N.Y. 2012) (holding customers to arbitration
agreement set forth in an external document where customers signed document stating “that it
incorporates ‘the accompanying Terms and Conditions,’” and the document directed signatories
to “Read the Agreement and the accompanying Terms and Conditions in their entirety before
signing”); Samuel L. Hagan II, P.C. v. J.P. Morgan Chase Bank, N.A., 939 N.Y.S.2d 744 (Sup.
Ct. 2011) (underlying agreement incorporated by reference where the incorporating contract
explicitly identified the underlying agreement by name and was annexed to the underlying
agreement); Chiacchia v. Nat’l Westminster Bank, 507 N.Y.S.2d 888, 889-90 (2d Dep’t 1986)
(rental agreement failed to incorporate by reference the underlying agreement because the rental

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agreement included sweeping language and the plaintiff did not receive underlying agreement);
Larrus v. First Nat’l Bank of San Mateo Cty., 122 Cal. App. 2d 884, 886 (Cal. App. 1954)
(signature card that the court found bound the account holder to external terms and conditions
stated specifically that the account was “governed by the by-laws, regulations, rules and
practices of the bank”).

         Even assuming arguendo that Citibank established it was entitled to a presumption of
receipt, the district court’s factual findings in this regard are not clearly erroneous. There is
ample record support for the district court’s finding that “[i]f Citibank had a corporate policy
regarding account openings, the record makes clear that its employees consistently ignored parts
of the policy.” App’x at 52.

       Finally, we agree with the district court that Citibank waived its rights to raise the
estoppel argument in exchange for Appellees’ narrowing the issues for which discovery was
going to be conducted, and that Citibank could not undo that agreement. However, Citibank’s
waiver extended only to the issue before the district court during the proceedings on the motion
to compel and does not extend to any other issues that may be implicated as the litigation
continues.

       We have considered the remainder of Citibank’s arguments and find them to be without
merit. Accordingly, the order of the district court hereby is AFFIRMED.

                                                    FOR THE COURT:
                                                    Catherine O’Hagan Wolfe, Clerk




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