Blinco v. Green Tree Servicing LLC, No. 04-10888.

• Decision Date: 24 February 2005
• Docket Number: No. 04-10888.,No. 04-14253.
• Parties: Jack BLINCO, Jr. on behalf of himself and others similarly situated, Deborah Blinco, on behalf of herself and others similarly situated, Plaintiffs-Appellees, v. GREEN TREE SERVICING LLC, Defendant-Appellant. Jack Blinco, Jr., on behalf of himself and others similarly situated, Deborah Blinco, on behalf of herself and others similarly situated, Plaintiffs-Appellees, v. Green Tree Investment Holdings, LLC, f.k.a. CFN Investment Holdings LLC, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

400 F.3d 1308

Jack BLINCO, Jr. on behalf of himself and others similarly situated, Deborah Blinco, on behalf of herself and others similarly situated, Plaintiffs-Appellees, v. GREEN TREE SERVICING LLC, Defendant-Appellant.

Jack Blinco, Jr., on behalf of himself and others similarly situated, Deborah Blinco, on behalf of herself and others similarly situated, Plaintiffs-Appellees, v. Green Tree Investment Holdings, LLC, f.k.a. CFN Investment Holdings LLC, Defendant-Appellant.

No. 04-10888.

No. 04-14253.

United States Court of Appeals, Eleventh Circuit.

February 24, 2005.

COPYRIGHT MATERIAL OMITTED

Mary Ruth Houston, Craig R. Bermingham, Shutts & Bowen, LLP, Orlando, FL, Stephen Trivett Maher, Shutts & Bowen, LLP, Miami, FL, for Defendant-Appellant.

Albert H. Mickler, Jacksonville, FL, for Plaintiffs-Appellees.

Appeals from the United States District Court for the Middle District of Florida.

Before DUBINA and FAY, Circuit Judges, and GOLDBERG^*, Judge.

PER CURIAM:

Defendant-Appellants, Green Tree Servicing LLC ("Green Tree Servicing") and Green Tree Investment Holdings, LLC ("Green Tree Investment") (together, "Green Tree") appeal the district court's orders denying their Motions to Stay Litigation and Compel Arbitration in the actions brought by Plaintiff-Appellees Jack Blinco, Jr. and Deborah Blinco (together, the "Blincos"), husband and wife, alleging Appellants violated the Real Estate Settlement Procedures Act, 12 U.S.C. § 2605 ("RESPA").

I. Facts

On November 17, 1999, the Blincos, together, signed and executed a mortgage (the "Mortgage"). On the same day, Mr. Blinco, alone, signed and executed a promissory note (the "Note") in favor of Conseco Finance Servicing Corporation ("CFSC") as lender. The Note contains the following arbitration clause (in pertinent part):

All disputes, claims or controversies arising from or relating to this contract or the relationships which result from this contract ... shall be resolved by binding arbitration by one arbitrator.... The parties agree and understand that all disputes arising under case law, statutory law, and all other laws including, but not limited to, all contract, tort, and property disputes, will be subject to binding arbitration in accord with this contract.

The Note's named lender, CFSC, is a subsidiary of Conseco, Inc. ("Conseco"). Conseco and a number of its subsidiaries, including CFSC, filed for Chapter 11 bankruptcy in 2003. As part of the Conseco group's court-approved plan of reorganization, CFSC transferred certain assets to CFN Investment Holdings, LLC ("CFN"), now known as Green Tree Investment (and its affiliates). In December 2003, the Blincos brought a putative class action against Green Tree Servicing in Florida state court alleging failure to provide the notice required by Section 6 of RESPA in connection with what the Blincos characterize as a transfer to CFN of the servicing of their loan. Green Tree Servicing removed the case to federal court and simultaneously filed a Motion to Stay Litigation and Compel Arbitration. The district court denied the motion. In April 2004, the Blincos brought a nearly identical putative class action against Green Tree Investment in Florida state court. Green Tree Investment removed the action to federal court and filed a Motion to Stay Litigation and Compel Arbitration. The district court denied the motion. Before the Court is a consolidated appeal of the district court's orders on these motions.

II. Scope of Claims Subject to Arbitration Clause

Appellants argue that invocation of the Note's arbitration clause to resolve Appellees' RESPA claims is appropriate because servicing of the Blincos' loan arises from and/or relates to the Note or the relationships resulting from the Note. Green Tree argues that without the Note evidencing the loan, no servicing relationship between Green Tree and the Blincos would exist. The Blincos counter that it is Green Tree's independent statutory status as loan servicer that gives rise to their claims, not the Note or the Mortgage. The Blincos argue that servicing is severable from the Note and Mortgage and accordingly do not rely upon the Note and/or Mortgage in making their RESPA claims. Therefore, the Blincos contend that the Note's arbitration clause has no nexus with their claims and cannot be invoked.

The Court concludes that the Blincos' RESPA claims arise from the Note and are subject to the arbitration clause therein. In resolving this issue, it is important to first note the unquestionably strong federal policy favoring arbitration. Moses H. Cone Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25, 103 S.Ct. 927, 941, 74 L.Ed.2d 765, 784 (1983); Anders v. Hometown Mortgage Servs., Inc., 346 F.3d 1024, 1029 (11th Cir.2003). "Any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration." Moses H. Cone Hosp., 460 U.S. at 24-25, 103 S.Ct. at 941, 74 L.Ed.2d at 785. The arbitration clause at issue here is broadly drafted to cover "[a]ll disputes, claims or controversies arising from or relating to th [e] contract or the relationships which result from th[e] contract." Although the district court found that the Blincos' RESPA claims were separate from the Note, this conclusion is not compelled by the text of RESPA or the Note. Rather, the Blincos' RESPA claims arise from Green Tree's alleged obligation to service the Note and the statutory requirements that coincide with that obligation. Indeed, it is difficult to understand how Green Tree could be a servicer if there were no Note, and more importantly, how Green Tree could face statutory servicer liability if there were no Note to service. In light of this conclusion and strong federal policy favoring arbitration, it is appropriate to compel arbitration of the Blincos' RESPA claims.

III. Green Tree's Ability to Invoke Arbitration Clause

Green Tree Servicing argues that it may compel arbitration under the Note because it is the same entity as CFSC, the named lender in the Note. Further, Green Tree Servicing and Green Tree Investment contend that, regardless of their signatory status, the arbitration clause is broad enough to require the Blincos to arbitrate their RESPA claims against non-signatories. The Blincos dispute Green Tree Servicing's claim that it is a successor to the original lender under the Note. The Blincos further argue that the asset transfer which occurred as part of Conseco's reorganization resulted in the assignment of the Mortgage and Note to a separate entity and the extinguishment of any Green Tree entity's right to invoke the Note's arbitration clause.

The Court concludes that the language of the arbitration clause at issue is broad enough to permit both Green Tree entities to invoke it, regardless of their signatory status....