Arbitration Agreement Enforceable Against Non-Signatory Spouse Because Community Property

You know how the vows go: “for richer or for poorer, in sickness and in health, in district court or in arbitration…”  Wait a minute.

Last Wednesday, a federal district court in Arizona held that a TCPA plaintiff was compelled to arbitrate his dispute against the holder of his wife’s lease solely because his wife had agreed to an arbitration agreement in connection with the lease.  The Court reasoned that when plaintiff married his wife, he’d entered into a community property estate that included the legal terms and conditions of a lease contract that she agreed to four days after their wedding.  Thus, “[b]y signing the Lease…[wife] bound herself, the marital community and [plaintiff] through the marital community to the provisions of the Lease, including the arbitration provision.”  The case is Rumpf v. Prog Leasing LLC, No. 17-cv-00111, 2017 U.S. Dist. LEXIS 83189 (D. Ariz. May 31, 2017).

Notice that the Court did not hold that the wife was plaintiff’s agent for purposes of entering into the agreement, or that he had directly or indirectly agreed to the arbitration provision himself.  Rather, it was merely the fact that the vehicle was a community property asset that gave the leasing company the power to compel the plaintiff to arbitrate his dispute.

 Something to keep in mind next time you want to get married.

 

 

Dorsey & Whitney

Dorsey & Whitney

Dorsey is a business law firm, applying a business perspective to clients' needs. We make it our first priority to know the context in which you do business - your market, your competitors, your industry.

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