Wolcott Family Living Trust v. CASL, LLC

376 November 4, 2026 No. 1063 IN THE COURT OF APPEALS OF THE STATE OF OREGON THE WOLCOTT FAMILY LIVING TRUST; Tyche Investment Fund, LLC; Noelle Wolcott; and Ryan Weber, Plaintiffs-Respondents, v. CASL, LLC et al., Defendants, and Christopher ARENDS, Defendant-Appellant. Multnomah County Circuit Court 23CV20953; A183856 Chanpone P. Sinlapasai, Judge. Argued and submitted October 2, 2025; on respondents’ motion to take judicial notice filed January 29, 2025, appel- lant’s response filed February 11, 2025, and respondents’ reply filed February 18, 2025. James L. Buchal argued the cause for appellant. Also on the briefs was Murphy & Buchal LLP. Carsen S. Nies argued the cause for respondents. Also on the brief were Erin E. Roycroft, Steve D. Larson, and Stoll Stoll Berne Lokting & Shlachter P.C. Before Aoyagi, Presiding Judge, Egan, Judge, and Pagán, Judge. EGAN, J. Motion to take judicial notice granted; affirmed. Cite as 354 Or App 376 (2026) 377 378 Wolcott Family Living Trust v. CASL, LLC EGAN, J. Defendant Arends appeals from an order of the trial court denying his petition to compel arbitration on plaintiffs’ statutory security fraud claims. See ORS 36.730 (providing that an appeal may be taken from an order denying a peti- tion to compel arbitration).1 Defendant contends in his first assignment of error that the trial court erred in denying the petition. In a second assignment of error, defendant con- tends that, because plaintiffs did not first pursue mediation and arbitration as required by the parties’ agreement, the trial court erred in denying his motion to dismiss plaintiffs’ claims.2 The primary issue presented by defendant’s assign- ments of error is whether the parties entered into an agree- ment to mediate and arbitrate claims such as those brought by plaintiffs. That is ultimately a legal question for the court, Bates v. Andaluz Waterbirth Center, 298 Or App 733, 738, 447 P3d 510 (2019), rev den, 366 Or 292 (2020), and we review a trial court’s denial of a petition to compel arbitration for legal error, Citigroup Smith Barney v. Henderson, 241 Or App 65, 69, 250 P3d 926 (2011). However, in the context of the deter- mination whether there is an agreement to arbitrate, the question whether there has been assent to an agreement to arbitrate is a question of fact for the court, Martin v. Comcast of California, 209 Or App 82, 97, 146 P3d 380 (2006), and we will affirm a trial court’s finding—either implicit or explicit— that is supported by any evidence in the record, Harnisch v. College of Legal Arts, Inc., 243 Or App 16, 22-23, 259 P3d 67 (2011). For the reasons explained in this opinion, we conclude that the trial court’s implicit finding on the issue of assent is supported by evidence in the record and that the trial court therefore did not err in concluding that plaintiffs did not assent to an agreement to arbitrate; we therefore affirm. 1 Plaintiffs brought their claims against Arends, CASL, LLC (CASL), the LLC of which Arends was a member, and several other individuals. Throughout this opinion, references to “defendant” are to Arends. 2 Plaintiffs have filed a motion to take judicial notice of “an authenticated copy of an Order on Motion to Compel in JAMS Arbitration Case No. 5160000388” dated July 19, 2024. (JAMS is a private provider of alternative dispute resolution services.) We allow the motion, but the order does not have any bearing on our analysis here. Cite as 354 Or App 376 (2026) 379 In determining the arbitrability of the dispute, we assume the truth of the allegations of plaintiffs’ complaint. Livingston v. Metro Pediatrics, LLC., 234 Or App 137, 140, 227 P3d 796 (2010). Thus, we draw our summary of the rel- evant facts from the allegations of the complaint. Plaintiffs allege in their complaint that they were solicited by defendant and CASL, LLC (CASL) to invest in a cryptocurrency hedge fund. Plaintiffs allege that the terms of the investment were explained to them orally by defen- dant: Defendant promised plaintiffs that their money would be invested in arbitrages on currencies of foreign exchanges and cryptocurrencies on crypto exchanges. In exchange for plaintiffs’ significant cash contributions, defendant prom- ised that CASL would invest the funds and, every 42 busi- ness days, would repay the principal along with 5 percent interest. Defendant also promised that plaintiffs’ invest- ments would remain liquid and that, upon request, they could receive a full return of their principal within 30 days. Plaintiffs agreed to invest funds with CASL pur- suant to defendant’s representations and used CASL’s web- site to complete an “onboarding” of their account. They then invested significant funds in the offered investments. CASL provided plaintiffs with promissory notes for the return on their investments. When plaintiffs learned that their funds were not being invested as promised, they demanded a return of their principal. Defendant and CASL have not returned plaintiffs’ money. Plaintiffs brought this action against CASL, defen- dant, and other members of the LLC. As to defendant, plaintiffs alleged violations of Oregon’s securities laws, ORS 59.115(1), (3), based on defendant’s alleged control of CASL and his material misrepresentations and failure to disclose material facts when soliciting plaintiffs’ investments. Defendant filed a petition to compel arbitration, con- tending that plaintiffs’ investments were subject to a “Note Purchase Agreement” with CASL that included a provision for mediation and mandatory binding arbitration under the pro- visions of the Federal Arbitration Act (FAA), 9 USC sections 380 Wolcott Family Living Trust v. CASL, LLC 1 to 16. He argued that he was a third-party beneficiary of the arbitration provision. Defendant further moved to dismiss the complaint for lack of subject matter jurisdiction, asserting that plaintiffs had failed to first engage in mediation and then arbitration, as required by the Note Purchase Agreement.3 Plaintiffs responded that their dispute was not sub- ject to arbitration, because the arbitration provision had never been disclosed to them. Plaintiffs further asserted that their claims against defendant are outside the scope of the arbitration provision and, in any event, that the arbitra- tion provision is unconscionable. After a hearing on the applicability of the arbi- tration provision, in a rather cryptic order, the trial court denied defendant’s petition to compel arbitration and motion to dismiss. This appeal followed. On appeal, defendant contends that the trial court erred in rejecting their petition and their motion to dismiss, because the evidence, as a matter of law, requires the find- ing that, through their “onboarding” on CASL’s website, plaintiffs agreed to the arbitration provision. Defendant notes that, in order to proceed with their online onboard- ing and investments, plaintiffs were required to check a box on CASL’s website through which defendant asserts plain- tiffs “signed” and agreed to the Note Purchase Agreement, the terms of which were provided through an adjacent blue hyperlink. Defendant points out that, if a person attempted to click on the blue “Confirm” button without first checking the box, they were prompted by a banner at the top of the page stating, “You must agree to the terms to proceed.” After the investor checked the box, CASL’s website then placed 3 The Note Purchase Agreement provided that “any and all disputes, claims, or controversies arising out of or relating to the Transaction Documents shall first be submitted to JAMS, or its successor, for mediation, and if the matter is not resolved through mediation, then it shall be submitted to JAMS, or its successor, for final and binding arbitration pursuant to the arbitration clause set forth above.” The arbitration provision stated, in turn, that “any dispute, controversy, or claim arising out of or relating to the Transaction Documents or the breach, termination, enforcement, interpretation, or validity thereof, including the determination of the scope or applicability of this agree- ment to arbitrate, shall be resolved exclusively through binding arbitration[.]” Cite as 354 Or App 376 (2026) 381 the investor’s typed name and the date on a Note Purchase Agreement.4 Plaintiffs respond that they received all of their information about the terms of their agreement orally from defendant, and that he never mentioned arbitration. Plaintiffs further point out that the instruction for the checkbox, by which defendant contends plaintiffs assented to the terms of the Note Purchase Agreement, stated only, “By checking this box you certify that the information you entered is correct.” CASL’s webpage appeared as follows: As plaintiff asserts, it did not state that checking the box indicated assent to the terms of the Note Purchase Agreement. Plaintiffs submitted declarations that they never noticed or used the blue hyperlink to view the Note Purchase Agreement and did not see the agreement until this litigation. Therefore, plaintiffs contend, they never assented to arbitration and the arbitration provision is not a part of the parties’ agreement. 4 Defendant submitted a declaration describing the page: “6. Page 6 is Step 5 of the process, entitled ‘Confirmation,’ which specifically asks the user to ‘review terms and conditions’. There is a checkbox on the page next to the hyperlink, labeled ‘Onboarding Agreement,’ which provides a link to the Note Purchase Agreement. If the user does not check the box, the red message at the top of the page appears: ‘You must agree to the terms to proceed’. It should be conspicuous to any users that they are agreeing to the terms and conditions in the Note Purchase Agreement. “7. The Agreement is at all relevant times available for the user to download in the Documents section, reproduced at Page 7 of Exhibit 1, through the link ‘Documents’ in the left hand column; the importance of this section is called out at all times with a red symbol. “8. If the user presses that link, the information on page 8 appears, which allows downloading of the Note Purchase Agreement. “9. All the plaintiffs (or their agents responding to the e-mails) * * * went through the process above, and saw the website designs providing con- spicuous notice that they were agreeing to the terms of the Note Purchase Agreement.” 382 Wolcott Family Living Trust v. CASL, LLC The Federal Arbitration Act (FAA), 9 USC § 2 (FAA), creates a body of federal substantive law of arbitra- bility that applies even in the context of state-law claims brought in state courts. Industra/Matrix Joint Venture v. Pope & Talbot, 341 Or 321, 329, 142 P3d 1044 (2006) (quot- ing Buckeye Check Cashing v. Cardegna, 546 US 440, 445, 126 S Ct 1204, 163 L Ed 2d 1038 (2006)). Although the FAA establishes a strong policy favoring arbitration, Mitsubishi Motors v. Soler Chrysler-Plymouth, 473 US 614, 631, 105 S Ct 3346, 87 L Ed 2d 444 (1985), that policy does not override the parties’ intent or require arbitration when the parties have not agreed to arbitrate, Mastrobuono v. Shearson Lehman Hutton, Inc., 514 US 52, 57, 115 S Ct 1212, 131 L Ed 2d 76 (1995) (“[T]he FAA’s proarbitration policy does not operate without regard to the wishes of the contracting parties.”). Under the FAA, arbitration is fundamentally “a matter of contract and consent.” Coinbase, Inc. v. Suski, 602 US 143, 145, 144 S Ct 1186, 218 L Ed 2d 615 (2024). “[P]arties may not be required to arbitrate disputes that they did not agree to arbitrate[.]” Adair Homes, Inc. v. Dunn Carney, 262 Or App 273, 286, 325 P3d 49, rev den, 355 Or 879 (2014). When parties dispute the formation of an agree- ment, both federal and Oregon law provide that the court, not an arbitrator, must decide that threshold question. 9 USC §2; Henry Schein, Inc. v. Archer and White Sales, Inc., 586 US 63, 69, 139 S Ct 524, 202 L Ed 2d 480 (2019) (“[T]he court determines whether a valid arbitration agree- ment exists.”); Granite Rock Co. v. International Broth. of Teamsters, 561 US 287, 296, 130 S Ct 2847, 177 L Ed 2d 567 (2010) (“[W]here the dispute at issue concerns contract formation, the dispute is generally for courts to decide.”); ORS 36.620(2) (“[T]he court shall decide whether an agree- ment to arbitrate exists.”); ORS 36.625(2) (If a party alleges there is no agreement to arbitrate, “the court shall proceed summarily to decide the issue.”); Cornelio v. Premere Rehab, LLC, 342 Or App 399, 405, 577 P3d 847, rev den, 374 Or 616 (2025); see also Godon v. Bend-CDJR, LLC, 348 Or App 61, 64, 589 P3d 1117 (2026) (“ ‘When the parties dispute the formation of an agreement, the court, and not an arbitrator, must decide that threshold question.’ ” (citing Cornelio, 342 Or App at 405)). Cite as 354 Or App 376 (2026) 383 Under the FAA, a state’s substantive contract law applies in determining whether the parties entered a legally enforceable agreement to arbitrate. 9 USC § 2 (providing that the enforceability of an arbitration clause may be chal- lenged in state court “upon such grounds as exist at [state] law or in equity for the revocation of any contract”); see First Options of Chicago, Inc. v. Kaplan, 514 US 938, 944, 115 S Ct 1920, 131 L Ed 2d 985 (1995) (courts apply state contract law to determine whether parties agreed to arbitrate under the FAA); Harnisch, 243 Or App at 22-23 (applying Oregon contract law to determine whether the parties agreed to arbitrate under the FAA). Thus, it is the court’s responsibility to determine whether the parties have agreed to arbitrate, as a mat- ter of contract interpretation. Bates, 298 Or App at 738 (Arbitration arises “as a matter of contract and a party can- not be required to submit to arbitration any dispute which he has not agreed to so submit.” (Quoting Drury v. Assisted Living Concepts, Inc., 245 Or App 217, 221, 262 P3d 1162 (2011).)); EWEB v. MWH Americas, Inc., 293 Or App 41, 54, 426 P3d 142 (2018) (citing DeLashmutt v. Parker Group Investments LLC, 276 Or App 42, 46, 366 P3d 769 (2016) (internal quotation marks omitted)). Under Oregon law, a contract is formed when there is “a ‘bargain in which there is a manifestation of mutual assent to the exchange.’ ” Homestyle Direct, LLC v. DHS, 354 Or 253, 262, 311 P3d 487 (2013) (quoting Restatement (Second) of Contracts § 17 (1981)). Mutual assent may be expressed “in words or inferred from the actions of the par- ties[,]” id., “a standard that is measured by the objective manifestations of intent by both parties to bind themselves to an agreement[,]” Rick Franklin Corp. v. State Dept. of Transportation, 207 Or App 183, 190, 140 P3d 1136, rev den, 342 Or 116 (2006) (citing Vanderselt v. Pope, 155 Or App 334, 339, 963 P2d 130, rev den, 328 Or 194 (1998)). Whether a statement or act is a manifestation of assent to an agreement is a question of fact. Bennett v. Farmers Ins. Co. of Oregon, 332 Or 138, 148, 26 P3d 785 (2001). We will affirm a trial court’s finding regarding mutual assent if there is any evidence in the record to 384 Wolcott Family Living Trust v. CASL, LLC support it. Harnisch, 243 Or App at 23 (citing Martin, 209 Or App at 97 (2006)). As the party seeking to enforce the arbitration clause, defendant bore the burden to prove the existence of an agreement to arbitrate. Keebaugh v. Warner Bros. Ent. Inc., 100 F4th 1005, 1014 (9th Cir 2024) (“The party seeking to compel arbitration bears the burden of proving the exis- tence of an agreement to arbitrate by a preponderance of evi- dence.” (Citing Johnson v. Walmart Inc., 57 F4th 677, 681 (9th Cir 2023).)); see Employers Insurance of Wausau v. Tektronix, Inc., 211 Or App 485, 514, 156 P3d 105 (2007) (“Typically, in the context of contractual disputes, Oregon courts have required the party seeking the benefit of a particular provi- sion to bear the burden of proving its application.”) Defendant asserts that he met that burden with evidence of the checkbox on CASL’s website next to the blue hyperlink to the Note Purchase Agreement, which, in turn, included the arbitration provision. Defendant further con- tends that an inference can be drawn that plaintiffs read the Note Purchase Agreement and were aware of its terms and its arbitration clause, because they are knowledgeable investors and in fact, modeled an agreement on one of the plaintiffs’ own websites after CASL’s onboarding agreement and Note Purchase Agreement, including its arbitration clause. Defendant also contends that, in their pleadings, plaintiffs acknowledged and even pleaded that they entered into Note Purchase Agreements with CASL and therefore are not in a position to contend that they did not agree to the Note Purchase Agreement. That, in itself, defendant con- tends, is sufficient evidence on which to find that plaintiffs agreed to the arbitration provisions in the Note Purchase Agreements. Oregon has not yet addressed the issue of contrac- tual assent through an online interaction. Federal courts, however, have said that the same principles that govern mutual assent and objective manifestations of intent by both parties to bind themselves to an agreement apply in the context of online contracting. See Nguyen v. Barnes & Noble Inc., 763 F3d 1171, 1175 (9th Cir 2014) (“While new commerce on the Internet has exposed courts to many new Cite as 354 Or App 376 (2026) 385 situations, it has not fundamentally changed the principles of contract.” (Quoting Register.com, Inc. v. Verio, Inc., 356 F3d 393, 403 (2d Cir 2004).)). In support of his position that it is possible to manifest assent to an agreement through a website click-box, defendant cites Berman v. Freedom Fin. Network, LLC, 30 F4th 849, 856 (9th Cir 2022) (“[I]f a web- site offers contractual terms to those who use the site, and a user engages in conduct that manifests her acceptance of those terms, an enforceable agreement can be formed.”), which sets out criteria for determining whether an online contract has been formed, and he contends that CASL’s website met those criteria. Plaintiffs agree that the crite- ria articulated in Berman are relevant but assert that they weigh in favor of a determination that there was no assent in this case to the arbitration provision. We agree with the parties that Berman provides persuasive criteria for determining whether a party has manifested assent to an agreement or a contract provision through a website click-box. But, as we read Berman, the articulated criteria favor plaintiffs’ position here. The Berman court first described one type of online interaction from which an enforceable agreement may arise: “The most straightforward application of these principles in the online world involves so-called ‘clickwrap’ agreements, in which a website presents users with specified contrac- tual terms on a pop-up screen and users must check a box explicitly stating ‘I agree’ in order to proceed. * * * In that scenario, the consumer has received notice of the terms being offered and, in the words of the Restatement, ‘knows or has reason to know that the other party may infer from his conduct that he assents’ to those terms. Restatement (Second) of Contracts § 19(2). As a result, courts have rou- tinely found clickwrap agreements enforceable.” Berman, 30 F4th at 856. The court contrasted the “click- wrap” agreement, which is routinely found to be enforceable, with “so-called browsewrap” agreements, “in which a website offers terms that are disclosed only through a hyperlink and the user supposedly manifests assent to those terms simply by continuing to use the website. See Nguyen, 763 F3d at 1176. Courts are more 386 Wolcott Family Living Trust v. CASL, LLC reluctant to enforce browsewrap agreements because con- sumers are frequently left unaware that contractual terms were even offered, much less that continued use of the web- site will be deemed to manifest acceptance of those terms. Id. at 1178 (noting ‘courts’ traditional reluctance to enforce browsewrap agreements against individual consumers’).” Id. The Berman court then described the criteria that should apply in determining whether an online agreement is enforceable: “To avoid the unfairness of enforcing contractual terms that consumers never intended to accept, courts confronted with online agreements such as those at issue here have devised rules to determine whether meaningful assent has been given. Unless the website operator can show that a consumer has actual knowledge of the agreement, an enforceable con- tract will be found based on an inquiry notice theory only if: (1) the website provides reasonably conspicuous notice of the terms to which the consumer will be bound; and (2) the consumer takes some action, such as clicking a button or checking a box, that unambiguously manifests his or her assent to those terms. See Meyer [v. Uber Techs., Inc., 868 F3d 66, 75 (2d Cir 2017)]; Nguyen, 763 F3d at 1173 (refusing to enforce an arbitration provision to which the consumer ‘did not unambiguously manifest assent’). As the Second Circuit has explained, ‘[r]easonably conspicuous notice of the existence of contract terms and unambiguous manifestation of assent to those terms by consumers are essential if elec- tronic bargaining is to have integrity and credibility.’ Specht [v. Netscape Communs. Corp., 306 F3d 17, 35 (2d Cir 2002)].” Id (emphasis added). In defendant’s view, the blue hyperlink to “Onboarding Agreement” next to the checkbox was reasonably conspicu- ous; clicking on the hyperlink would have disclosed the Note Purchase Agreement and its arbitration provision; and plain- tiffs necessarily assented to both by checking the box next to the hyperlink and clicking the blue box that said “Confirm.”5 Defendant further notes that, in their pleadings, plaintiffs allege that they “signed” a “Note Purchase Agreement,” thus 5 Defendant argued below: “That’s a matter of the way the world works now. And has worked for perhaps the last 20 years or more. People know that if they’re told to review conditions and there’s a hyperlink there, that’s what it is.” Cite as 354 Or App 376 (2026) 387 admitting that they assented to the terms of the agreement, including the arbitration provision. Plaintiffs respond that the checkbox on which they clicked only asked that they confirm that the information they entered was correct and that they did not notice the blue hyperlink and did not read the Note Purchase Agreement until this litigation. They argue that the evidence supports the trial court’s implicit determination that plaintiffs did not assent to the arbitration provision. As we have noted, the trial court’s ruling denying the petition to arbitrate and motion to dismiss was cryptic; but in support of its ruling, the court cited Granite Rock Co., 561 US at 302, which states that the policy favoring arbitra- tion does not override the principle that “a court may submit to arbitration “only those disputes * * * that the parties have agreed to submit.” That citation leads us to conclude that the court based its ruling at least in part on a determination that the arbitration provision was not a part of the parties’ agreement. Encompassed within that determination was an implicit finding that defendant did not satisfy his burden to show that plaintiffs affirmatively assented to binding arbi- tration, and we agree with plaintiffs that the evidence in the record supports the trial court’s finding. Although CASL’s website included links to the Note Purchase Agreement on its website, CASL’s website presented the Note Purchase Agreement more as a “browsewrap” than as a “clickwrap.” The agreement was accessible only through the blue hyperlink or through browsing CASL’s website. Even if, as defendant argues, those provisions were “reasonably conspicuous,” “[r]easonable conspicuousness alone is not suf- ficient to bind a user—a user must agree to the terms, not merely see them.” Chabolla v. Classpass Inc., 129 F4th 1147, 1158 (9th Cir 2025). In Chabolla, the court quoted Berman: “ ‘A user’s click of a button can be construed as an unam- biguous manifestation of assent only if the user is explicitly advised that the act of clicking will constitute assent to the terms and conditions of an agreement.’ Berman, 30 F4th at 857. ‘[T]he notice must explicitly notify a user of the legal significance of the action she must take to enter into a con- tractual agreement.’ Id. at 858.” 388 Wolcott Family Living Trust v. CASL, LLC Chabolla, 129 F4th at 1158. There was no requirement on the CASL website to agree to or confirm acceptance of the terms of the Note Purchase Agreement and its arbitration provision. The checkbox on which plaintiffs clicked reason- ably could be understood by plaintiffs to confirm only that the information plaintiffs provided was correct, not to agree to all of the provisions of the Note Purchase Agreement. Thus, we conclude that the trial court’s determination that there was no assent is supported by evidence in the record, and we therefore affirm the court’s determination that the arbitration provision is not a part of the parties’ agreement and is therefore severed from the Note Purchase Agreement. See Buckeye, 546 US at 445 (“[A]s a matter of substantive federal arbitration law, an arbitration provision is severable from the remainder of the contract.”). Motion to take judicial notice granted; affirmed.