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Credit Acceptance Corporation v. Vansteenburgh

United States District Court, N.D. Mississippi, Aberdeen Division

October 12, 2017



         Presently before the Court is Plaintiff Credit Acceptance Corporation's motion to compel arbitration [6]. Upon due consideration, the Court finds that the motion should be granted.

         I. Factual and Procedural Background

         On March 13, 2017, Plaintiff Credit Acceptance Corporation ("Credit Acceptance") filed this suit against Defendant Robie Vansteenburgh, also known as Robbie Vansteenburgh ("Vansteenburgh"). On March 24, 2017, Vansteenburgh filed an answer [5] to the complaint [1]. Subsequently, on April 3, 2017, Vansteenburgh filed the present motion to compel arbitration [6]. Credit Acceptance filed a response in opposition [9], and Vansteenburgh filed a reply [10]. The matter is now ripe for review.

         On July 28, 2015, Vansteenburgh electronically executed a Retail Installment Contract for the purchase of a 2004 GMC Sonoma (the "vehicle") from Jerry Willis Motors LLC ("Jerry Willis Motors"). It is undisputed that the Retail Installment Contract, which was assigned to Credit Acceptance, includes an arbitration agreement. Credit Acceptance avers that Vansteenburgh attempted to circumvent this arbitration agreement by filing suit against Credit Acceptance, Jerry Willis Motors, and Jerry Willis in the Circuit Court of Itawamba County in Civil Action No. CV17- 038PI, wherein Vansteenburgh alleged that those parties unlawfully and wrongfully repossessed the vehicle. Credit Acceptance maintains that the alleged arbitration agreement applies to the claims asserted by Vansteenburgh in the state court action, that Vansteenburgh validly agreed to arbitrate, and that Vansteenburgh is bound by the terms of the arbitration agreement. Vansteenburgh argues in response that his state court claims do not fall within the scope of the arbitration agreement, and thus, that arbitration of his state court claims is not warranted.

         II. Analysis and Discussion

         As stated above, Credit Acceptance moves the Court to compel arbitration under 9 U.S.C. § 4 of the Federal Arbitration Act (the "FAA") based on the arbitration agreement contained in the Retail Installment Contract, and specifically argues, inter alia, that the arbitration agreement is valid and enforceable with respect to Vansteenburgh's state court claims against Credit Acceptance inter alii.

         A. Background of the Law on Arbitration

         In 1925, Congress enacted the FAA in response to the longstanding, widespread judicial hostility to arbitration agreements that existed at English common law and was adopted by American courts. See, e.g., Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991); Am. Bankers Ins. Co. of Fla. v. Inman, 436 F.3d 490, 492-93 (5th Cir. 2006).[1]"The FAA provides that a 'written provision in... a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.' " Marmet Health Care Ctr., Inc. v. Brown, 565 U.S. 530, 532, 132 S.Ct. 1201, 182 L.Ed.2d 42 (2012) (quoting 9 U.S.C. § 2). It "requires courts to enforce the bargain of the parties to arbitrate, " Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 217, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985), and "reflects an emphatic federal policy in favor of arbitral dispute resolution, " KPMG LLP v. Cocchi, 565 U.S. 18, 21, 132 S.Ct. 23, 25, 181 L.Ed.2d 323 (2011) (per curiam) (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth Inc., 473 U.S. 614, 631, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985) (internal quotation marks omitted)). The FAA

does not mandate the arbitration of all claims, but merely the enforcement-upon the motion of one of the parties-of privately negotiated arbitration agreements. The House Report accompanying the [FAA] makes clear that its purpose was to place an arbitration agreement "upon the same footing as other contracts, where it belongs, " H.R. Rep. No. 96, 68th Cong., 1 st Sess., 1 (1924), and to overrule the judiciary's longstanding refusal to enforce agreements to arbitrate.

Dean Witter Reynolds, Inc., 470 U.S. at 219-20, 105 S.Ct. 1238. Because "arbitration is a matter of contract, " courts must "rigorously enforce arbitration agreements according to their terms." Am. Express Co. v. Italian Colors Rest., ___ U.S. ___, ___, 133 S.Ct. 2304, 2309, 186 L.Ed.2d 417 (2013). Thus, arbitration may be compelled only if the parties agreed to arbitrate the dispute in question. See 9 U.S.C. § 4; Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 67-68, 130 S.Ct. 2772, 177 L.Ed.2d 403 (2010); Janvey v. Alguire, 847 F.3d 231, 240 (5th Cir. 2017) (per curiam).

         Against this backdrop, the Court assesses whether the parties agreed to arbitrate the dispute in question using a two-step process: (1) whether there is a valid agreement to arbitrate between the parties; and (2) whether the dispute in question falls within the scope of that arbitration agreement. See Robinson v. J & K Admin. Mgmt. Servs., Inc., 817 F.3d 193, 195 (5th Cir.), cert. denied, 137 S.Ct. 373, 196 L.Ed.2d 292 (2016). If the Court finds that the parties have a valid agreement to arbitrate and that the dispute is within the scope of the arbitration agreement, the Court generally examines whether any legal constraints foreclose arbitration of those claims. See Brown v. Pac. Life Ins. Co., 462 F.3d 384, 396 (5th Cir. 2006) (citing Mitsubishi Motors Corp., A13 U.S. at 628, 105 S.Ct. 3346). Courts must "apply the federal policy favoring arbitration when addressing ambiguities regarding whether a question falls within an arbitration agreement's scope, but... do not apply this policy when determining whether a valid agreement exists." Sherer v. Green Tree Servicing LLC, 548 F.3d 379, 381 (5th Cir. 2008). See Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Jr. Univ., 489 U.S.468, 475-76, 109 S.Ct. 1248, 103 L.Ed.2d488 (1989); Banc One Acceptance Corp. v. Hill, 367 F.3d 426, 429 (5th Cir. 2004) (citing Will-Drill Res., Inc. v. Samson Res. Co., 352 F.3d 211, 214 (5th Cir. 2003)); Westmoreland v. Sadoux, 299 F.3d 462, 465 (5th Cir. 2002). The determination of whether a party is bound by an arbitration agreement is included within the broader issue of whether the parties agreed to arbitrate. Bridas S.A.P.I.C v. Gov't of Turkmenistan, 345 F.3d 347, 355 (5th Cir. 2003) (citing Smith/Enron Cogeneration Ltd. P'ship, Inc. v. Smith Cogeneration Int'l, Inc., 198 F.3d 88, 95 (2d Cir. 1999)). "The purpose of the FAA is to give arbitration agreements the same force and effect as other contracts-no more and no less." Washington Mut. Fin. Grp., LLC v. Bailey, 364 F.3d 260, 264 (5th Cir. 2004) (citing 9 U.S.C. § 2); see Pennzoil Expl. & Prod. Co. v. Ramco Energy Ltd., 139 F.3d 1061, 1064 (5th Cir. 1998) ("[arbitration is a matter of contract between the parties").

         i. Subject Arbitration Provision

         With the foregoing case law in mind, the Court examines whether the parties in the case sub judice agreed to arbitrate the dispute, that is, whether a valid arbitration agreement exists, and if so, whether the dispute is within the scope of the arbitration agreement.

         As stated above, Vansteenburgh purchased a used 2004 GMC Sonoma from Jerry Willis Motors, and as part of that transaction, electronically signed the subject Retail Installment Contract. Neither Vansteenburgh nor Credit Acceptance dispute that the Retail Installment Contract contains a valid arbitration provision or that there are no external constraints that preclude arbitration of the claims brought by Vansteenburgh in state court. Thus, the central question is whether the arbitration provision covers the claims alleged in Vansteenburgh's state court complaint. See Ford Motor Co. v. Abies,207 Fed.Appx. 443, 446 (5th Cir. 2006) (per curiam). In addressing questions of scope, this Court is mindful that" 'due regard must be given to the federal policy favoring arbitration, and ambiguities as to the scope of the arbitration clause itself must be resolved in favor of arbitration.' " See Webb v. Investacorp, Inc.,89 F.3d 252, 258 (5th Cir. 1996) (quoting Volt Info. Scis., Inc., 489 U.S. at 475-76, 109 S.Ct. 1248). "Arbitration should not be denied 'unless it can be said with positive assurance that an ...

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