Conway ex rel. Conway v. Done Rite Recovery Servs., Inc.

• Decision Date: 30 April 2015
• Docket Number: Case No. 14-cv-5182
• Court: U.S. District Court — Northern District of Illinois
• Parties: MELVIN CONWAY, THE STATE OF ILLINOIS ex rel. MELVIN CONWAY, Plaintiffs, v. DONE RITE RECOVERY SERVICES, INC., AND CREDIT ACCEPTANCE CORP., Defendants.

MELVIN CONWAY,THE STATE OF ILLINOIS ex rel. MELVIN CONWAY, Plaintiffs, v. DONE RITE RECOVERY SERVICES, INC.,AND CREDIT ACCEPTANCE CORP., Defendants.

Case No. 14-cv-5182

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

April 30, 2015

Judge Robert M. Dow, Jr.

MEMORANDUM OPINION AND ORDER

Plaintiff alleges violations of the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227 et seq., the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq., the Illinois Collection Agency Act ("ICAA"), 225 ILCS 425/1 et seq., and the Illinois Consumer Fraud and Deceptive Practices Act ("ICFDPA"), 815 ILCS 505/1 et seq.; he also brings a conversion claim under Illinois law. Before the Court are Defendants' motion to compel arbitration [18] and Plaintiff's "demand" that the Court deny the motion to compel arbitration [23].¹ For the reasons that follow, the Court grants Defendants' motion [18] in part, compelling arbitration and staying this litigation in the interim, and denies Plaintiff's demand [23]. The parties are instructed to file a joint status report within seven days after the arbitrator issues a final decision, after which time the Court will set this case for a further status hearing. Plaintiff's other pending motion to reset a prior hearing date [13] is stricken as moot.

I. Background²

Pro se Plaintiff alleges that he purchased a 2004 Nissan Altima on July 6, 2012, taking out a loan from the dealer, Ideal Motors, Inc., to finance the purchase. Ideal Motors assigned the debt agreement to Defendant Credit Acceptance, Corp. ("CAC"). When Plaintiff defaulted on his loan, CAC made various collection attempts, giving rise to this complaint.

Plaintiff alleges that during the collection process, CAC made various misrepresentations in violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq. and the Illinois Consumer Fraud and Deceptive Practices Act ("ICFDPA"), 815 ILCS 505. More specifically, Plaintiff alleges that CAC misrepresented that the debt was a consumer loan; that he was obligated to repay the loan; that CAC was a debt collector attempting to collect a debt; that CAC had a right to collect payments from him; and that CAC had an enforceable security interest in Plaintiff's car, among other alleged misrepresentations.

Plaintiff also alleges that CAC's collection attempts violated the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227 et seq. Specifically, he alleges that within 30 days of receiving the initial communication from CAC regarding the collection of his repossessed car, Plaintiff disputed the debt in writing. The writing allegedly contained an express revocation of any prior consent given to CAC to call him on his cell phone or any other phone. Yet CAC continued to call Plaintiff's cell phone, using automatic dialing and/or leaving automated messages.

On or around June 12, 2014, CAC allegedly assigned, transferred or otherwise engaged the services of Defendant Done Rite. On April 10, 2014, Done Rite repossessed Plaintiff's car for failure to make payments. Plaintiff allegedly redeemed the loan with a cash payment in anamount proposed by CAC but did not receive his car in return. According to the complaint, neither CAC nor Done Rite were registered debt collectors, so their collection attempts and repossession violated the Illinois Collection Agency Act ("ICAA"), 225 ILCS 425. Plaintiff also alleges that Defendants' repossession of his car constituted conversion.

CAC has attached the underlying Retail Installment Contract ("RIC") to its motion to compel arbitration and reply brief. The RIC includes an arbitration clause, providing the following:

In this Arbitration Clause, "We" and "Us" mean Seller and/or Seller's assignee (including, without limitation, Credit Acceptance Corporation) or their employees, assignees, or any third party providing any goods or services in connection with the origination, servicing and collection of amounts due under the Contract if such third party is named as a party between You and US * * *

A "Dispute" is any controversy or claim between You and Us arising out of or in any way related to this Contract, including, but not limited to, any default under this Contract, [and] the collection of amounts due under this Contract[.] * * * * "Dispute" shall have the broadest meaning possible, and includes * * * claims based on tort, violations of laws, statutes, ordinances or regulations or any other legal or equitable theories. * * * You and We agree that all Disputes must be resolved on an individual basis through arbitration * * * *

Your Right to Reject: If You don't want this Arbitration Clause to apply, You may reject it by mailing Us at P.O. Box 5070, Southfield, Michigan 480865070 a written rejection notice which describes the Contract and tells Us that You are rejecting this Arbitration Clause. * * * If You don't reject this Arbitration Clause, it will be effective as of the date of this Contract.

[49-1 at 7].

The RIC also includes an assignment provision, in which Ideal Motors gave notice of its immediate assignment of the RIC to CAC.

II. Legal Standard

The Federal Arbitration Act ("FAA"), 9 U.S.C. §§ 1-16, was enacted against "centuries of judicial hostility to arbitration agreements * * * to place arbitration agreements upon the samefooting as other contracts." Volkswagen Of Am., Inc. v. Sud's Of Peoria, Inc., 474 F.3d 966, 970 (7th Cir. 2007) (citations and internal quotation marks omitted). Reflecting a "liberal federal policy favoring arbitration agreements," Moses H. Cone Mem'l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24 (1983), the FAA provides that binding arbitration agreements "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. Accordingly, the standard for compelling arbitration is low. "Under the Federal Arbitration Act, arbitration may be compelled if the following three elements are shown: [1] a written agreement to arbitrate, [2] a dispute within the scope of the arbitration agreement, and [3] a refusal to arbitrate." Zurich Am. Ins. Co. v. Watts Indus., Inc., 417 F.3d 682, 687 (7th Cir. 2005) (citing 9 U.S.C. § 4). A party moving to compel arbitration also may move a court to stay litigation pending arbitration. 9 U.S.C. § 3. Lastly, because Plaintiff has filed this action pro se, his pleadings are "to be liberally construed." Erickson v. Pardus, 551 U.S. 89, 94 (2007); see also Estelle v. Gamble, 429 U.S. 97, 106 (1976) ("a pro se complaint, however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers") (citations and internal quotation marks omitted).

III. Analysis

As a preliminary matter, the Court dismisses the state of Illinois as a plaintiff; Plaintiff Conway may not bring a claim on behalf of Illinois, contending that Illinois is bringing the claim on his behalf. Turning to Defendants' motion to compel arbitration, the first and second requirements to compel arbitration are at issue: (1) a written agreement to arbitrate, and (2) a dispute within the scope of the arbitration agreement. Plaintiff also opposes arbitration on the ground that it would be prohibitively expensive. The Court addresses each issue in turn.

A. Agreement to Arbitrate

The Court first examines whether there is an agreement to arbitrate. At the outset, the parties contest whether the RIC attached to Defendants' motion to compel is properly before the Court. Plaintiff asks the Court to disregard the RIC because there is "no evidence existing upon the face of the record of this court supporting the purported RIC is an authentic document or that any signatures contained thereon are authentic and will be discovered when discovery is propounded." [43-1 at 4]. The Court is unpersuaded. A party moving to compel arbitration must "produce evidence sufficient to support a finding that the [arbitration agreement] is what the proponent claims it is." Fed. R. Evid. 901(a). See Achey v. BMO Harris Bank, N.A., No. 13 C 7675, 2014 WL 4099139, at *3 (N.D. Ill. Aug. 19, 2014) (finding that, where an arbitration agreement's authenticity was in dispute, a defendant moving to compel arbitration was required to authenticate the agreement pursuant to Fed. R. Evid. 901); Dillon v. BMO Harris Bank, N.A., 2014 WL 911950, at *1 (M.D.N.C. Mar. 10, 2014) (declining to order arbitration because certain defendants submitted the plaintiff's loan documents without presenting any evidence as to their authenticity). Federal Rule of Evidence 901(b) provides "examples only—not a complete list—of evidence that satisfies the requirement," including, "testimony that an item is what it is claimed to be," Fed. R. Evid. 901(b)(1), and "the appearance, contents, substance, internal patterns, or other distinctive characteristics of the item, taken together with all the circumstances," Fed. R. Evid. 901(b)(4). A proponent "is not required to rule out all possibilities inconsistent with authenticity, or to prove beyond any doubt that the evidence is what it purports to be." Achey v. BMO Harris Bank, N.A., 2014 WL 4099139, at *3 (N.D. Ill. Aug. 19, 2014) (quoting Boim v. Quranic Literacy Inst., 340 F. Supp. 2d 885, 916 (N.D. Ill. 2004)) (quotation marks omitted).

Defendants have provided sufficient evidence authenticating the RIC. Fed. R. Evid. 901(a). In her affidavit, CAC employee Kimberly Kapanka asserts that she has custody and access to the business records of CAC relating to Plaintiff, including the RIC. [30-1 at 12]. She asserts that a true and correct copy of the RIC is attached to her affidavit. And she further states that, based on her review of CAC's records, CAC did not receive any written notice from Plaintiff rejecting the arbitration provision. [30-1 at 13]. Moreover, Plaintiff's name, car, address and signature on the RIC appear identical to those included in Plaintiff's...