Alexander v. Acceptance Now
| Docket Number | 1:22-CV-00338-SPB-RAL |
| Decision Date | 03 July 2023 |
| Parties | MICHAEL F. ALEXANDER, Plaintiff v. ACCEPTANCE NOW, AMERICAN EXPRESS, BRIDGECREST FORMERLY DRIVETIME, CAPITAL ONE, CAPITAL ONE AUTO FINANCE, CREDENCE RESOURCE MANAGEMENT, ENHANCED RECOVERY COMPANY, FIRST PREMIER BANK, MIDLAND CREDIT MANAGEMENT, INC., PORTFOLIO RECOVERY, TBOM/OLLD CARD SERVICES, CHEX SYSTEM, INC., U.S. BANK CORPORATION, Defendants |
| Court | U.S. District Court — Western District of Pennsylvania |
MEMORANDUM OPINION ON DEFENDANT ACCEPTANCE NOW'S MOTION TO COMPEL ARBITRATION
Plaintiff Michael F. Alexander (“Alexander”) initiated this pro se action against thirteen Defendants, including Rent-A-Center East, Inc. (“RAC”),[1] alleging violations of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq. the Fair Debt Collection Practices Act (“FDCPA”) 15 U.S.C. § 1692 et seq, and the Equal Credit Opportunity Act (“ECOA”), 15 U.S.C. § 1691, et seq.[2] See ECF No. 1-1. Alexander bases his claims against RAC on allegations that it fraudulently reported to Credit Reporting Agencies (“CRAs”) that he owed a debt in the amount of $1,276 debt on RAC account # 8063920006789RO63920. His Complaint attaches a credit report generated by CRA TransUnion that includes this alleged debt. See ECF No. 1-1, p. 6, pp. 30-33. Alexander alleges that “[he] never did business with this Defendant [RAC] nor did [he] have an account with them.” Id. For relief, he seeks compensatory and punitive damages as well as the removal of the contested debt from his credit reports.
RAC responded to the Complaint with a motion to compel arbitration and stay the proceedings pending the disposition of the above-captioned action. ECF No. 59. The Court then issued an order directing Alexander to respond to the motion by April 24, 2023. ECF No. 61. When the Court by May 8 had not received a response, it ordered Alexander to to respond by May 22 or show cause for this failure. ECF No. 64. Alexander still has not responded to RAC's motion or indicated that he intends to so.[3] For the reasons that follow, the motion will be GRANTED.[4]
“The Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq., governs written agreements to arbitrate in contracts involving interstate commerce,” such as the one at issue here. Murphy v. Epiq Glob. Bus. Transformation Sols., LLC, 2022 WL 17578821, at *3 (W.D. Pa. Dec. 12, 2022). See also ECF No. 59-4. The Supreme Court has repeatedly emphasized “that the central or ‘primary' purpose of the FAA is to ensure that ‘private agreements to arbitrate are enforced according to their terms.'” Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 559 U.S. 662, 682 (2010) (citations omitted). See also 9 U.S.C. § 4. Indeed, Section 2 of the FAA, which “embodies the national policy favoring arbitration,” specifies that agreements to arbitrate “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 444 (2006) (quoting 9 U.S.C. § 2).
Pursuant to “the FAA, a party to an arbitration agreement may petition a United States district court for an order directing that ‘arbitration proceed in the manner provided for in such agreement.'” Stolt-Nielsen, 559 U.S. at 682 (quoting 9 U.S.C. § 4). But because arbitration is “strictly a matter of contract... the courts have no authority to mandate” a party to arbitrate “[i]f a party has not agreed to arbitrate.” Sanford v. Bracewell & Guiliani, LLP, 618 Fed.Appx. 114, 117 (3d Cir. 2015) (quoting Bel-Ray Co., Inc. v. Chemrite (Pty) Ltd., 181 F.3d 435, 444 (3d Cir.1999)). As such, the FAA permits the Court to compel arbitration only once it has determined that (1) “there is a valid agreement to arbitrate between the parties and, if so,” (2) “the merits-based dispute in question falls within the scope of that valid agreement.” Zirpoli v. Midland Funding, LLC, 48 F.4th 136, 142 (3d Cir. 2022) (quoting Flintkote Co. v. Aviva PLC, 769 F.3d 215, 220 (3d Cir. 2014)) (internal quotation marks omitted).
The standard of review to be applied “when determining whether, in a specific case, an agreement to arbitrate was actually reached” depends upon the record before the court. Id. at 771. The Court of Appeals for the Third Circuit has specifically instructed:
Motions to compel arbitration are reviewed under Rule 12(b)(6) “[w]here the affirmative defense of arbitrability of claims is apparent on the face of a complaint (or ... documents relied upon in the complaint).” If the motion to compel arbitration is not based on a complaint “with the requisite clarity” to establish arbitrability or “the opposing party has come forth with reliable evidence that is more than a naked assertion ... that it did not intend to be bound by the arbitration agreement, even though on the face of the pleadings it appears that it did,” resort to discovery and Rule 56 is proper.
Sanford, 618 Fed.Appx. at 117 (3d Cir. 2015) (quoting Guidotti v. Legal Helpers Debt Resol., L.L.C., 716 F.3d 764, 773-74 (3d Cir. 2013)) (alterations in original).
Here, the Complaint and attached documents do not indicate the existence of an agreement to arbitrate. On the contrary, Alexander premises his legal claims upon the assertion that he has never done business with RAC, which, if true, would negate the existence of such an agreement. Thus, the arbitrability of Alexander's claims does not appear on the face of the Complaint or documents relied upon therein. Accordingly, the Court will employ the Rule 56 summary judgment standard to resolve the pending motion. See e.g., Cepikoff v. Stifel Fin. Corp., 2020 WL 4937499, at *1 (W.D. Pa. Aug. 24, 2020).
Summary judgment on the motion to compel “is only proper if ‘there is no genuine dispute as to any material fact” regarding arbitrability “and the movant is entitled to judgment as a matter of law.” Antkowiakv. TaxMasters, 455 Fed.Appx. 156,159 (3d Cir. 2011) (quoting Fed.R.Civ.P. 56(a)). The moving party bears the burden of “demonstrate[ing] both that a valid agreement exists and that its scope encompasses a particular dispute.” Hinnant v. Am. Ingenuity, LLC, 554 F.Supp.2d 576, 581 (E.D. Pa. 2008) (footnote omitted). See Egan v. Live Nation Worldwide, Inc., 764 Fed.Appx. 204, 208 (3d Cir. 2019) (). Once the moving party meets its burden, the burden shifts to the party disputing arbitration to invalidate the arbitration agreement or establish that the claims: at issue fall outside the agreement. See Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 92 (2000). That said, the non-moving party receives “the benefit of all reasonable doubts and inferences that may arise.” Kaneff v. Delaware Title Loans, Inc., 587 F.3d 616, 620 (3d Cir. 2009) (quoting Par-Knit Mills, Inc. v. Stockbridge Fabrics Co., Ltd, 636 F.2d 51, 54 (3d Cir. 1980)).
Ordinarily under the Rule 56 standard, “the non-movant ‘must be given the opportunity to conduct limited discovery on the narrow issue concerning the validity' of the arbitration agreement” before the Court decides the motion. Guidotti, 716 F.3d at 774 (3d Cir. 2013) (quoting Deputy v. Lehman Bros., Inc., 345 F.3d 494, 511 (7th Cir. 2003)) (internal footnote omitted). See also Juric v. Dick's Sporting Goods, Inc., 2020 WL 4450328, at *2 (W.D. Pa. Aug. 3, 2020) (quoting Morina v. Neiman Marcus Grp., Inc., 2014 WL 4933022, at *6 (E.D. Pa. Oct. 1, 2014)) (if “‘the complaint and its supporting documents are unclear regarding the agreement to arbitrate ... then the Court should permit limited discovery on the factual issue of whether there is a valid arbitration agreement.”) (internal quotations omitted); Cepikoff, 2020 WL 4937499, at *1 (). But Alexander has not sought leave to conduct limited discovery and his failure to file a response to RAC's motion both waives this opportunity and permits the Court to treat RAC's factual assertions as undisputed. Furthermore, after careful review, the Court finds the record sufficient to allow a proper assessment of RAC's motion under the applicable standard.
RAC argues that Alexander agreed to arbitrate the claims asserted against it when he signed “[Lease]-Purchase Agreement Number fyu03237 for the rental of a bed” and the accompanying arbitration agreement on March 10, 2019. ECF No. 60, p. 1. RAC also contends that Alexander's FCRA, FDCPA, and ECOA claims fall within the scope of the arbitration agreement. RAC appended to the instant motion copies of a signed Lease Purchase Agreement (ECF No. 59-3), an arbitration agreement (ECF No. 59-4), and Alexander's RAC account information and history (59-5). RAC has also provided a declaration from Joel Sawyer, RAC's Senior Director of Compensation & Human Resources Information Systems, wherein he authenticates the Agreements and account history and attests to the material assertions of RAC's motion. ECF No. 59-2.
To ascertain whether “the parties entered a valid agreement to arbitrate,” the Court “look[s] to the relevant state law of contracts.” Alexander v Anthony Int'l, L.P., 341 F.3d 256, 264 (3d Cir. 2003) (citing Blair v. Scott Specialty Gases, 283 F.3d 595, 603 (3d Cir. 2002)). Contract formation in Pennsylvania requires: “(1) a mutual manifestation of an intention to be bound, (2) terms sufficiently definite to be enforced, and (3) consideration.” Dicent v. Kaplan Univ., 2018 WL 4171600, at *4 (M.D. Pa. June 15, 2018), report...
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