Cayanan v. Citi Holdings, Inc.

• Decision Date: 01 March 2013
• Docket Number: No. 12–CV–1476–MMA(JMA).,12–CV–1476–MMA(JMA).
• Citation: 928 F.Supp.2d 1182
• Parties: Elsie CAYANAN, et al., Plaintiffs, v. CITI HOLDINGS, INC., et al., Defendants.
• Court: U.S. District Court — Southern District of California

928 F.Supp.2d 1182

Elsie CAYANAN, et al., Plaintiffs,

v.CITI HOLDINGS, INC., et al., Defendants.

No. 12–CV–1476–MMA(JMA).

United States District Court,

S.D. California.

March 1, 2013.

Beth Ellen Terrell, Kimberlee L. Gunning, Terrell, Marshall, Daudt & Willie, PLLC, Seattle, WA, Jonathan Selbin, Lieff Cabraser Heimann & Bernstein LLP, New York, NY, Mark D. Ankcorn, Casey, Gerry, Schenk, Francavilla, Blatt & Penfield, LLP, San Diego, CA, Matthew Wilson, Meyer Wilson Co., LPA, Columbus, OH, for Plaintiffs.

Julia Beatrice Strickland, Stroock & Stroock & Lavan, Los Angeles, CA, for Defendants.

ORDER GRANTING DEFENDANTS' MOTION TO COMPEL ARBITRATION AND STAY ACTION

MICHAEL M. ANELLO, District Judge.

Plaintiffs Elsie Cayanan, Kimberly Baker, and Jesse McKay bring this putative class action for alleged violations of the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. §§ 227 et seq. Defendants Citibank, N.A.; Citigroup, Inc.; and CitiFinancial Services, Inc., move to compel arbitration of Plaintiffs' claims in separate, individual arbitrations, in accordance with agreements requiring individual arbitration of all claims related to Plaintiffs' consumer credit accounts held by Defendants. The Court finds this matter suitable for decision on the papers and without oral argument pursuant to Civil Local Rule 7.1.d.1. For the reasons set forth below, the Court GRANTS Defendants' motion.

I. Background

A. Plaintiff Elsie Cayanan

Plaintiff Cayanan, a resident of California, obtained two personal loans from CitiFinancial.First, on March 7, 2007, Cayanan borrowed $5,353.34, and in the process signed two documents entitled “Disclosure Statement, Note and Security Agreement” (the “2007 Note”) and “Arbitration Agreement.” [Baer Decl., Doc. No. 16–2 at ¶ 3; Baer Suppl. Decl., Doc. No. 26–1 at ¶ 2.] Then, on January 15, 2008, Cayanan borrowed another $5,045.38 from CitiFinancial and again signed new “Disclosure Statement, Note and Security Agreement” (the “2008 Note”) and “Arbitration Agreement” documents. [Baer Decl. at ¶ 69; Baer Suppl. Decl. at ¶ 3.] Both the 2007 Note and 2008 Note contained the following language above their signature blocks: “ARBITRATION. Borrower ... and Lender have entered into a separate Arbitration Agreement on this date, the terms of which are incorporated and made a part of this Disclosure Statement, Note and Security Agreement by this reference.” [Exs. 1, 3 to Baer Decl., Doc. No. 16–3 at 5, 12 (formatting in original).] ¹ The two arbitration agreements that bear Cayanan's signatures both contain the following language:

THIS ARBITRATION AGREEMENT PROVIDES THAT ALL DISPUTES BETWEEN BORROWER AND CERTAIN OTHER PERSONS ON THE ONE HAND AND LENDER AND CERTAIN OTHER PERSONS AND ENTITIES ON THE OTHER HAND EXCEPT THOSE SPECIFIED BELOW WILL BE RESOLVED BY MANDATORY BINDING ARBITRATION. YOU THUS GIVE UP YOUR RIGHT TO GO TO COURT TO ASSERT OR DEFEND YOUR RIGHTS (EXCEPT FOR MATTERS THAT ARE EXCLUDED FROM ARBITRATION AS SPECIFIED BELOW). YOUR RIGHTS WILL BE DETERMINED BY A NEUTRAL ARBITRATOR AND NOT A JUDGE OR JURY. YOU ARE ENTITLED TO A FAIR HEARING BUT THE ARBITRATION PROCEDURES ARE SIMPLER AND MORE LIMITED THAN RULES APPLICABLE IN COURT.

....

“Claim” means any case, controversy, dispute, tort, disagreement, lawsuit, or claim now or hereafter existing between You and Us. A Claim includes, without limitation, anything related to:

• The Note, this Agreement, or the enforceability, or the arbitrability of any Claim pursuant to this Agreement, including but not limited to the scope of this Agreement and any defenses to enforcement of the Note or this Agreement;

• Any Credit Transaction;

• Any past, present, or future insurance, service, or other product that is offered or purchased in connection with a Credit Transaction;

• Any documents or instruments that contain information about any Credit Transaction, insurance, Service, or product;

• Any act or omission by any of Us;

• Fraud or misrepresentation, including claims for failing to disclose material facts;

• Any federal or state statute or regulation, or any alleged violation thereof, including without limitation insurance, usury, and lending laws;

• Any party's execution of this Agreement and/or willingness to be bound by its terms and provisions; or

• Any dispute about closing, servicing, collecting, or enforcing a Credit Transaction. ....

No Class Actions/No Joinder of Parties. You agree that any arbitration proceeding will only consider Your Claims. Claims by or on behalf of other borrowers will not be arbitrated in any proceeding that is considering Your or Our Claims. Because You have agreed to arbitrate all Claims, You may not serve as a class representative or participate as a class member in a putative class action against any party entitled to compel arbitration under this Agreement.

[Exs. 2, 4 to Baer Decl., Doc. No. 16–3 at 7, 14 (formatting in original).]

As of April 15, 2012, Cayanan was “delinquent in her monthly payments to CitiFinancial,” and, as a result, CitiFinancial began “placing collection calls to Cayanan to attempt to collect the debt” from April 16, 2012, to June 19, 2012. [Baer Suppl. Decl. at ¶¶ 4–5.] In addition to these calls in 2012, Cayanan recalls receiving collection calls in 2008, when she had lost her employment, “struggled to keep paying on the loan,” and missed one or more payments. [Cayanan Suppl. Decl., Doc. No. 27–1 at ¶ 6.] Cayanan recounts that she received numerous telephone calls in 2008 and 2012–several on the same day, sometimes in rapid succession, and at all hours of the day. [ Id. ¶¶ 6, 10.] From April through June 2012, Cayanan received at least 116 collection calls. [ Id. ¶ 5.]

B. Plaintiff Kimberly Baker

Plaintiff Baker, also a California resident, has maintained three credit card accounts serviced by Citibank. In 1997, Baker applied for and obtained a “GTE” brand credit card. [Baker Decl., Doc. No. 27–4 at ¶ 3.] It is unclear whether the GTE card application process involved execution of an arbitration agreement. [ Id. ¶ 6.] In 2000, Citibank began servicing Baker's GTE card account and eventually converted it to a Citibank Thank You credit card (the “Thank You Card”). [ Id. ¶ 8.]

In the years after Citibank began servicing the Thank You Card, Citibank periodically mailed Baker several change-of-terms notices—to which Baker refers as “bill stuffers”—that informed her of various changes to her account. The first notice was sent in April 2003 and included a complete cardmember agreement. [Barnette Decl., Doc. No. 16–6 at ¶ 7.] The notice informed Baker that Citibank intended to change the terms of her cardmember agreement and indicated that the enclosed cardmember agreement would replace any existing agreement beginning in late May 2003. [ Id. ¶ 8.] The notice provided that Baker could notify Citibank in writing of her intent not to be bound by the new cardmember agreement, that doing so would result in the closure of her account, and that she could pay off her “account under the existing terms” after the account closure. [Ex. 1 to Barnette Decl., Doc. No. 16–7 at 3.] The cardmember agreement that accompanied the notice contained the following arbitration clause:

ARBITRATION:

PLEASE READ THIS PROVISION OF THE AGREEMENT CAREFULLY. IT PROVIDES THAT ANY DISPUTE MAY BE RESOLVED BY BINDING ARBITRATION. ARBITRATION REPLACES THE RIGHT TO GO TO COURT INCLUDING THE RIGHT TO A JURY AND THE RIGHT TO PARTICIPATE IN A CLASS ACTION OR SIMILAR PROCEEDING. IN ARBITRATION A DISPUTE IS RESOLVED BY AN ARBITRATOR INSTEAD OF A JUDGE OR JURY.

ARBITRATION PROCEDURES ARE SIMPLER AND MORE LIMITED THAN COURT PROCEDURES.

Agreement to Arbitrate:

Either you or we may, without the other's consent, elect mandatory, binding arbitration for any claim, dispute, or controversy between you and us (called “Claims”).

Claims Covered:

What Claims are subject to arbitration? All Claims relating to your account, a prior related account, or our relationship are subject to arbitration, including Claims regarding the application, enforceability, or interpretation of this Agreement and this arbitration provision. All Claims are subject to arbitration, no matter what legal theory they are based on or what remedy (damages, or injunctive or declaratory relief) they seek. This includes Claims based on contract, tort (including intentional tort), fraud, agency, your or our negligence, statutory or regulatory provisions, or any other sources of law; Claims made as counterclaims cross-claims, third-party claims, interpleaders or otherwise; and Claims made independently or with other claims. A party who initiates a proceeding in court may elect arbitration with respect to any Claim advanced in that—proceeding by any other party. Claims and remedies sought as part of a class action, private attorney general or other representative action are subject to arbitration on an individual (non-class, nonrepresentative) basis, and the arbitrator may award relief only on an individual (nonclass, non-representative) basis.

....

Broadest Interpretation. Any questions about whether Claims are subject to arbitration shall be resolved by interpreting this arbitration provision in the broadest way the law will allow it to be enforced. This arbitration provision is governed by the Federal Arbitration Act (the “FAA”).

[ Id. at 14–15 (formatting in original).] Citibank does not have a record that Baker notified Citibank of her intent not to be bound by the new cardmember agreement or that the April 2003 notice was returned as undeliverable. [Barnette Decl. at ¶ 9.] Baker continued to use the Thank You Card as evidenced by a credit card statement dated May 17, 2004—more than a year after the notice was sent. [Ex. 3 to Barnette Decl., Doc. No. 16–7 at 21.] Thereafter, Citibank mailed Baker complete cardmember agreements on at least three more occasions: in April 2007 in connection with a conversion to a Citi Diamond Preferred Rewards American Express credit card (Barnet...