Hoang v. Citibank, N.A.

Background

Tuong Hoang sued Citibank over an alleged fraudulent transfer of $104,600 from her account. The complaint asserted claims under the Electronic Fund Transfer Act, Section 11204 of the California Commercial Code, negligence, and breach of contract. Citibank removed the case from state court and later moved to compel arbitration.

Citibank relied on an arbitration provision in its Client Manual for consumer accounts. The bank did not produce a signature card signed by Hoang and did not claim that she signed one. Instead, Citibank relied on a declaration from branch manager Philip Adame stating that the bank’s custom and practice was to provide new branch customers with a paper copy of the Client Manual. Adame also stated that Hoang received the manual as part of the standard account-opening process.

Hoang said she did not remember whether she received the manual and did not currently have a copy. She argued that Citibank had not proved that she ever received the agreement or assented to its arbitration provision.

Legal standard

Under the Federal Arbitration Act, courts enforce arbitration agreements as contracts, but they cannot require arbitration when the parties did not agree to it. The initial question was therefore whether Hoang and Citibank formed an agreement containing an arbitration requirement.

When the facts about formation of an arbitration agreement are genuinely disputed, the statute requires a trial on that issue. The court must hold the motion to compel arbitration in abeyance until the factual dispute is resolved. The court applied the summary-judgment standard, which requires it to give Hoang the benefit of reasonable doubts and inferences.

Court’s analysis

The court concluded that Citibank could potentially prove assent through Hoang’s conduct, such as continuing to use her account, even if she did not sign or read the Client Manual. But the court held that Citibank first had to establish that Hoang was given or sent a copy of the agreement. Without access to the agreement, her continued account use could not establish that she assented to its terms.

The court found Citibank’s evidence insufficient to resolve that issue without a trial. Citibank’s description of its custom and practice did not explain important details, including when customers received the manual, whether they had an opportunity to review it, whether they were required to sign a signature card, and how the bank ensured that employees followed the procedure. The manual itself stated that customers signed a sample signature card at account opening, but Citibank did not produce a card signed by Hoang or claim that she signed one.

The court also construed Adame’s declaration as describing only Citibank’s general practices, rather than as testimony based on personal knowledge that Hoang actually received the manual. The court therefore held that Citibank had not proved beyond a genuine factual dispute that Hoang received or had access to the manual. At the same time, the evidence did not establish as a matter of law that no arbitration agreement was formed.

Disposition

The court held Citibank’s motion to compel arbitration in abeyance. It did not compel arbitration and did not rule that the parties had no arbitration agreement. Because a genuine dispute remained about whether Hoang received the Client Manual and formed an arbitration agreement, the court ordered that issue to proceed to trial.

The court also scheduled a case-management conference for January 25, 2024, required an updated joint case-management statement, and directed the parties to meet and confer about early neutral evaluation, mediation, or private alternative dispute resolution.