A recent appellate decision from the Fourth Appellate District in San Diego teaches that a party who allegedly signs a document electronically can still successfully challenge her signature. In Fabian vs Renovate America, Inc., Court of Appeal, Fourth Appellate District, Case No. D075519 ( issued November 19, 2019; published December 4, 2019) the appellate court affirmed the trial court’s order denying a petition to compel arbitration against a homeowner on the grounds that it failed to prove that the electronic signature was indeed hers.
Plaintiff Rosa Fabian sued defendant Renovate America Inc. (Renovate) alleging that the solar panels she purchased from defendant were improperly installed. She contends that all her communications with defendant were by telephone and that she never signed any documents electronically. Contending otherwise, Fabian incorporated the solar panel payments set forth in the financial agreement it contended was signed by Fabian, into her mortgage loan payments. So, Fabian sued Renovate alleging violation of the Consumers Legal Remedies Act, the Unfair Competition Law and the California Contract Translation Act. (Id. at 2.)
In response Renovate moved to compel arbitration pursuant to the terms of its alleged agreement with Fabian. At the hearing, the trial court continued the hearing to allow the parties to conduct discovery. At the continued hearing, the trial court denied the petition concluding that Renovate failed to establish by a preponderance of evidence that Fabian had indeed signed the documents electronically. (Id. at 2-5.)
The appellate court affirmed noting that to authenticate an electronic signature, two things must be shown: (1) present evidence of the contents of the contract in question and (2) the circumstances surrounding the contract’s execution. (Id. at 7-8.)
Here, Renovate offered the contract purporting to bear Fabian’s electronic signature but
….offered no evidence about the process used to verify Fabian’s electronic signature via DocuSign, including who sent Fabian the Contract, how the Contract was sent to her, how Fabian’s electronic signature was placed on the Contract, who received the signed the signed the[sic] Contract, how the signed Contract was returned to Renovate, and how Fabian’s identification was verified as the person who actually signed the Contract. We thus find Renovate’s DocuSign authentication argument unsupported and unresponsive. (Id. at 9.)
The appellate court next considered the declaration of Mike Anderson, Renovate’s Senior Director of Compliance Operations and found it lacking. It failed to provide “…any specific details about the circumstances surrounding the Contract’s execution” and thus, “…offered little more than a bare statement that Fabian “entered into” the Contract without offering any facts to support that assertion.” (Id. at 11.) To the Court, “this left a critical gap in the evidence supporting Renovate’s petition.” (Id.)
As a result, the appellate court concluded that the trial court did not commit error in denying Renovate’s petition to compel arbitration. (Id. at 11-12.)
While the above case involved the ability to arbitrate, it applies with equal force to settlement agreements. Often, parties and their counsel are not all in the same place at the same time and so a settlement agreement may be signed electronically. More times than not, this does not present an issue; everyone agrees that the matter was settlement and the terms of the settlement are implemented. But every once in a while, there may be that one party who suddenly decides she does not want to settle and wants to renege on the settlement. In any potential motion to enforce that settlement, the authenticity of the electronic signature will be front and center and the lesson of this appellate opinion will be crucial. So.. for that one in a zillion chance when this issue may arise, be wary of electronic signatures.
… Just something to think about.
And… again, I want to wish everyone a happy and healthy and prosperous 2020!
P.S. I am now a member of The National Academy of Distinguished Neutrals. Please click the following link to see my availability to schedule mediations.
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