Credit Acceptance Corp. v. Davisson

• Decision Date: 30 June 2009
• Docket Number: Case No.: 1:08 CV 107.
• Citation: 644 F.Supp.2d 948
• Parties: CREDIT ACCEPTANCE CORPORATION, Plaintiff v. Debra G. DAVISSON, Defendant.
• Court: U.S. District Court — Northern District of Ohio

Page 948

644 F.Supp.2d 948

CREDIT ACCEPTANCE CORPORATION, Plaintiff v. Debra G. DAVISSON, Defendant.

Case No.: 1:08 CV 107.

United States District Court, N.D. Ohio, Eastern Division.

June 30, 2009.

Martin C. Bryce, Jr. and Jesse N. Silverman, Ballard Spahr Andrews & Ingersoll, Philadelphia, PA, Kathleen A. Nitschke, Michele A. Smolin, Giffen & Kaminski, Cleveland, OH, for Plaintiff.

Jack A. Malicki, Elyria, OH, Thomas R. Theado, Gary, Naegele & Theado, Lorain, OH, for Defendant.

ORDER

SOLOMON OLIVER, JR., District Judge.

Plaintiff Credit Acceptance Corporation ("Plaintiff" or "Credit Acceptance"), a Michigan corporation with its principal place of business in Michigan, filed a debtcollection action against Defendant Debra G. Davisson ("Defendant" or "Davisson"), an Ohio citizen, in the Lorain County Court of Common Pleas on August 27, 2007, seeking to recover $2,538.06. (N.D. Ohio, Case No. 1:08 CV 093, Notice of Removal Ex. A "State Court Compl." at 1, ECF No. 1-1.) Defendant filed her Answer on December 14, 2007, denying that she owed Plaintiff any money, and asserted state-law Counterclaims on behalf of herself and a putative class of other customers whose vehicles were repossessed by Plaintiff. (Id. Ex. B "State Court Countercl." at 3, 5, ECF No. 1-2.) Plaintiff removed the suit to this court on January 11, 2008. (Id. 1, ECF No. 1.) The court granted Defendant's Motion to Remand based on its conclusion that removal had been improper because it was initiated by Plaintiff, not Defendant. (N.D. Ohio, Case No. 1:08 CV 093, Order 1-2, 4, July 15, 2008, ECF No. 21.)

Before the court remanded Plaintiff's debt-collection action, Plaintiff brought this independent federal lawsuit (Case No. 1:08 CV 107) on January 14, 2008, which sought to obtain a declaratory judgment compelling the parties to submit their dispute to binding arbitration. (Compl. at 8, ECF No. 1.) Plaintiff filed a Motion to Compel Arbitration on January 17, 2008. (Mot. Compel Arbitration 1, ECF No. 5.) On April 11, 2008, Defendant moved to dismiss for lack of subject-matter jurisdiction or on abstention grounds, or, in the alternative, to stay the action pending disposition of the earlier-filed case. (Mot. Dismiss or Stay 1, ECF No. 13.) The court issued an order denying Defendant's Motion to Dismiss or Stay. (Order 2, Nov. 24, 2008, ECF No. 22.) The court determined that it had subject-matter jurisdiction over the case pursuant to 28 U.S.C. § 1332 because the parties are diverse and the amount-in-controversy requirement is met because an arbitrator could award Defendant more than $75,000 for her Counterclaims (Id. 6-11).

On March 11, 2009, Defendant filed a Second Motion to Dismiss for Lack of Subject-Matter Jurisdiction or for Reconsideration of Defendant's First Motion to Dismiss ("Motion for Reconsideration") (Mot. Reconsideration 1, ECF No. 38.) Defendant also filed a Motion to Stay Immediately All Proceedings on Plaintiffs Motion to Compel Arbitration pending the court's disposition of her Motion for Reconsideration ("Motion to Stay") on March 11, 2009. (Mot. Stay 1, ECF No. 39.) The ground for Defendant's Motion for Reconsideration is the Supreme Court's recent decision in Vaden v. Discover Bank, ___ U.S. ___, 129 S.Ct. 1262, 173 L.Ed.2d 206 (2009).

Now pending before the court are: (1) Plaintiffs Motion to Compel Arbitration (ECF No. 5); (2) Defendant's Motion for Reconsideration (ECF No. 38); and (3) Defendant's Motion to Stay (ECF No. 39). For the reasons discussed below, the court denies Defendant's Motion for Reconsideration, denies as moot Defendant's Motion to Stay, and grants Plaintiffs Motion to Compel Arbitration.

I. FACTS AND PROCEDURAL HISTORY

A. Facts

On September 17, 2005, Defendant entered into a retail installment contract ("Contract") with Tri County Cars, Inc. ("Seller") to finance the purchase of a vehicle. (Compl. ¶ 12.) Shortly thereafter, Seller assigned the Contract to Plaintiff. (Id.) The Contract includes an arbitration clause ("Arbitration Clause"), which provides that "[e]ither [Defendant] or [Plaintiff] may require any Dispute to be arbitrated." (Id. Ex. B at 4, ECF No. 1-3.) The Arbitration Clause defines "Dispute" as "any dispute, controversy or claim between [Defendant] or [Plaintiff] arising out of or in any way related to this Contract, or any default under this Contract, or the collection of amounts due under the Contract." (Id.) The Arbitration Clause further provides that:

[Plaintiff] retain[s] the right to repossess the Vehicle upon [Defendant's] default and to exercise any power of sale under this Contract. The institution and maintenance of any action for judicial relief or exercise of self-help remedies shall not waive the right to submit any Dispute to arbitration, including any counterclaim asserted in any such action, and including those controversies or claims arising from the exercise of any such judicial relief or the exercise of self-help remedies. If a demand for arbitration of any counterclaim is made, the entire Dispute shall be submitted to binding arbitration pursuant to this Arbitration Clause.

(Id.) The Arbitration Clause also specifies that: it is governed by the Federal Arbitration Act ("FAA"); representative actions, such as class actions, are prohibited; and Defendant may reject the Arbitration Clause without affecting any other provision in the Contract. (Id.) Plaintiff never received notification from Defendant that she wished to reject the Arbitration Clause. (Id. ¶ 18.) Defendant does not dispute this fact.

As part of the Contract, Defendant agreed to make monthly installment payments to Plaintiff by the 15th day of each month. (Id. ¶ 14.) Plaintiff alleges that Defendant failed to make the September 15, 2006, payment. (Id.) As a result, Plaintiff repossessed Defendant's vehicle. (Id.) Plaintiff then auctioned Defendant's vehicle and applied the proceeds against Defendant's remaining debt. (Id.) Plaintiff alleges that, after application of the sale proceeds, Defendant owes an outstanding balance of $2,538.06. (Id.)

B. Procedural History

In the Complaint currently before this court, Plaintiff states that it filed suit in the Lorain County Court of Common Pleas on August 27, 2007, to collect the outstanding balance from Defendant. (Id. ¶ 25.) On December 14, 2007, Defendant filed an Answer to the Complaint and filed Counterclaims on behalf of herself and the putative class of "all persons who entered into a retail installment contract for the purchase of a motor vehicle in Ohio which contract was assigned to [Plaintiff], and which vehicle was repossessed by [Plaintiff] on or after December 14, 2001." (Id. Ex. A at 3, 5.)

As a putative class member, Defendant asserts three Counterclaims against Plaintiff. (Id.) First, Defendant alleges that Plaintiff violated the Ohio Retail Installment Sales Act ("ORISA"), pursuant to Ohio Revised Code § 1317.12, and the Ohio Consumer Sales Practices Act ("OCSPA"), pursuant to Ohio Revised Code §§ 1345.01(A), (B)(10) and §§ 1345.03(A), (B)(1), (B)(6). (Id. 9-11.) The basis for this claim is that Plaintiff allegedly failed to notify Defendant that she was required to pay only $25.00 in repossession expenses to cure the default under the Contract, rather than the $310.00 sought by Plaintiff. (Id. 10.) Second, Defendant alleges that Plaintiff violated the Ohio Uniform Commercial Code ("OUCC"), pursuant to Ohio Revised Code § 1309.610, because Plaintiff's failure to notify Defendant of the $25.00 cure opportunity was commercially unreasonable. (Id. 11-12.) Last, Defendant asserts Ohio common law claims of conversion and trespass to chattel based upon Defendant's act of vehicle repossession. (Id. 12-13.) Defendant seeks actual damages, statutory damages, punitive damages, injunctive relief, and attorney fees. (Id. 17-22.)

Plaintiff seeks an order from this court compelling arbitration of the parties' issues. (Compl. at 8; Mem. Supp. Mot. Compel Arbitration 2, ECF No. 6.) Defendant asks the court to reconsider its order denying her Motion to Dismiss in light of the Supreme Court's recent decision in Vaden v. Discover Bank., ___ U.S. ___, 129 S.Ct. 1262, 173 L.Ed.2d 206 (2009). (Mot. Reconsideration 1.)

II. MOTION FOR RECONSIDERATION

A. Reconsideration Standard

The court notes that it has the authority to reconsider its Order denying Defendant's First Motion to Dismiss. As the Sixth Circuit has held, "[d]istrict courts have inherent power to reconsider interlocutory orders and reopen any part of a case before entry of final judgment. A district court may modify, or even rescind, such interlocutory orders." Mallory v. Eyrich, 922 F.2d 1273, 1282 (6th Cir.1991) (internal citations omitted). See also Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 12, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983) (noting that "every order short of a final decree is subject to reopening at the discretion of the district judge"); City of Los Angeles v. Santa Monica Baykeeper, 254 F.3d 882, 885 (9th Cir.2001) ("The general rule regarding the power of a district court to rescind an interlocutory order is as follows: As long as a district court has jurisdiction over the case, then it possesses the inherent procedural power to reconsider, rescind, or modify an interlocutory order for cause seen by it to be sufficient.") (internal quotations omitted). Rule 54(b) of the Federal Rules of Civil Procedure also reflects the court's authority to reconsider orders:

When more than one claim for relief is presented in an action, . . . the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment. In the absence of such determination and direction, any order . . . which adjudicates fewer than all claims . . . shall not terminate the action . . . and the order . . . is subject to...