Grant-Fletcher v. Collecto, Inc.

• Decision Date: 09 May 2014
• Docket Number: Civil Action No. RDB-13-3505
• Parties: LUCIENA S. GRANT-FLETCHER, Plaintiff, v. COLLECTO, INC., Defendant.
• Court: U.S. District Court — District of Maryland

LUCIENA S. GRANT-FLETCHER, Plaintiff, v. COLLECTO, INC., Defendant.

Civil Action No. RDB-13-3505

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

Dated: May 9, 2014

MEMORANDUM OPINION

The Plaintiff Luciena S. Grant-Fletcher, on behalf of herself and others similarly situated, sued the Defendant Collecto, Inc., doing business as EOS CCA, for violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, at seq., and the Maryland Consumer Debt Collection Act, Md. Code, Com. Law § 14-201, et seq. Pending before this Court is the Defendant's Motion to Compel Arbitration and Stay Further Proceedings (ECF No. 15). The parties' submissions have been reviewed and no hearing is necessary. See Local Rule 105.6 (D. Md. 2011). For the reasons that follow, the Defendant's Motion is GRANTED.

BACKGROUND

Plaintiff Grant-Fletcher entered a contract for cellular telephone service with Cingular Wireless in 2004. Compl. ¶¶ 1-2; Pl.'s Opp. 7, ECF No. 18. In or about 2007, Cingular became AT&T Wireless. Grant-Fletcher entered a further contract with AT&T on February 1, 2009. See Wireless Service Agreement, ECF No. 15-3. The Plaintiff does not deny entering the 2009 contract with AT&T. The Plaintiff argues, however, that the signature on the confirmation page, bearing her telephone number "2402812287" and attached to theDefendant's Motion, is not hers. Affidavit of Luciena Grant-Fletcher, ECF No. 18-1; Wireless Service Contract, ECF No. 15-3. She states that she does not recall whether she signed the electronic signature pad or even visited an AT&T store in 2009, but that she "may have" electronically signed in the store with her daughter who was a minor and had a cellular phone on the same account at the time. Pl.'s Aff., ECF No. 18-1.

The contract specifically references "AT&T's current Terms of Service #FMSTCT02090123E including its binding arbitration clause," contains an acknowledgement that the Terms of Service were provided separately to the Plaintiff before the contract was signed, and contains an express agreement to be bound by those "separate Terms of Service." ECF No. 15-3. The Terms of Service include a section entitled "DISPUTE RESOLUTION BY BINDING ARBITRATION." The document instructs the customer to "Please read carefully. It affects your rights" and, in a plain language summary, provides in pertinent part:

In the unlikely event that AT&T's customer service department is unable to resolve a complaint you may have to your satisfaction (or if AT&T has not been able to resolve a dispute it has with you after attempting to do so informally), we each agree to resolve those disputes through binding arbitration or small claims court instead of courts of general jurisdiction. Arbitration is more informal than a lawsuit in court. Arbitration uses a neutral arbitrator instead of a judge or jury, allows for more limited discovery than in court, and is subject to very limited review by courts. Arbitrators can award the same damages and relief that a court can award. Any arbitration under this Agreement will take place on an individual basis; class arbitrations and class actions are not permitted. For any non-frivolous claim that does not exceed $75,000, AT&T will pay all costs of the arbitration. Moreover, in arbitration you are entitled to recover attorneys' fees from AT&T to at least the same extent as you would be in court.

Terms of Service, ECF No. 15-4. The arbitration clause itself states in pertinent part:

(1) AT&T and you agree to arbitrate all disputes and claims between us. This agreement to arbitrate is intended to be broadly interpreted. It includes, but is not limited to:

• claims arising out of or relating to any aspect of the relationship between us, whether based in contract, tort, statute, fraud, misrepresentation or any other legal theory;

• claims that arose before this or any prior Agreement (including, but not limited to, claims relating to advertising);

• claims that are currently the subject of purported class action litigation in which you are not a member of a certified class; and

• claims that may arise after the termination of this Agreement.

References to "AT&T," "you," and "us" include our respective subsidiaries, affiliates, agents, employees, predecessors in interest, successors, and assigns, as well as all authorized or unauthorized users or beneficiaries of services or Devices under this or prior Agreements between us. . . . You agree that, by entering into this Agreement, you and AT&T are each waiving the right to a trial by jury or to participate in a class action. This Agreement evidences a transaction in interstate commerce, and thus the Federal Arbitration Act governs the interpretation and enforcement of this provision. This arbitration provision shall survive the termination of this Agreement.

* * *

ECF No. 15-4 (all emphasis in original). The above provisions, collectively, comprise the "Arbitration Agreement" at issue in this case. The Plaintiff states that she was not given a hard copy of the Arbitration Agreement or other documentation by Cingular or by AT&T.

In approximately April or May of 2009, as a result of a billing and service dispute, Grant-Fletcher terminated her account. Compl. ¶ 6; Pl.'s Aff., ECF No. 18-1. AT&T claimed that the Plaintiff owed $879.59 on her bill. Compl. ¶ 7; AT&T Wireless Statement for 07/10/12 - 08/09/12, ECF No. 18-4. The Plaintiff disputes the amount of her account balance, Compl. ¶ 8, and did not make further payments. On August 20, 2012, AT&T sold the Plaintiff's debt to non-party US Asset Management. Aff. of AT&T Mobility, Inc., ECF No. 15-2; Affidavit of John Burns ¶ 5, ECF No. 15-5. US Asset Management is a wholly-owned subsidiary of Defendant Collecto. Def.'s Mem. 3, ECF No. 15-1. US Asset Management then directed Collecto to collect the Plaintiff's account. Burns Aff. ¶¶ 6-7.

The Plaintiff alleges that Collecto, doing business as EOS CCA, attempted to collect the debt from her. See ECF No. 18-5 In the process, she alleges that Collecto "added additional, unauthorized and illegal charges to [her] bill; Defendant added $209.94 in interest charges which were not authorized by contract, and Defendant added a collection fee of $158.33 to the bill, when no contract authorized the charge and when AT&T had not incurred any such costs." Compl. ¶ 11. Collecto claimed that the total amount due was $1,240.86. Id. ¶ 23. Grant-Fletcher notes that the "Fees/Coll[ection] Costs" in the amount of $158.33 is equal to 18% of the alleged principal balance due. Id. ¶ 24. She further asserts that AT&T continued to send her bills that did not charge any interest or collection fees. Id. ¶¶ 12-13; AT&T Bill, ECF No. 18-4.

On September 30, 2013, the Plaintiff filed a class action complaint in the Circuit Court for Howard County, Maryland, alleging violations of the Fair Debt Collection Practices Act and the Maryland Consumer Debt Collection Act. The Plaintiff defines the class of similarly situated consumers as:

All persons who reside in Maryland, the District of Columbia and 19 other states listed in the AT&T on-line service agreement number FMSTCT02090123E who: (a) had wireless service agreements with AT&T (b) entered into the agreements primarily for personal, household, or family purposes; (c) failed to make all contract payments to AT&T, and; (d) were contacted by EOS CCA in an attempt to collect amounts allegedly due on their AT&T accounts, on or after October 1, 2012.

Compl. ¶ 15. The Complaint contains allegations that Collecto added interest charges that "were not authorized by contract" and collection fees "when no contract authorized thecharge." Compl. ¶ 11; see also id. ¶ 14 ("In written communications with the Plaintiff, the Defendant attempted to collect from the Plaintiff sums that she did not legitimately owe and which AT&T may not impose as a matter of contract and a matter of law, and which Defendant is barred from collecting."), ¶ 29 ("[T]he attempted inflation of account balances is unauthorized by the contract between the debtor and the original creditor."), ¶ 36 ("Defendant's letters and other communications with the subclass [of Maryland plaintiffs] relied on improperly inflated debts that attempted to impose costs and fees not authorized by contract and not authorized by law."). Grant-Fletcher also alleges that Collecto charged fees in excess of the limits established in Section 14-1315 of the Commercial Law Article of the Annotated Code of Maryland. Id. ¶ 28.

The Defendant removed the case to this Court on the basis of federal question jurisdiction. 28 U.S.C. §§ 1331, 1441. The Defendant then moved to stay this case and compel arbitration.

STANDARD OF REVIEW

This Court has previously noted that "motions to compel arbitration exist in the netherworld between a motion to dismiss and a motion for summary judgment." Caire v. Conifer Value Based Care, LLC, ___ F. Supp. 2d ___, 2013 WL 5973151, at *5 (D. Md. 2013) (citing Shaffer v. ACS Gov't Servs., Inc., 321 F. Supp. 2d 682, 683 (D. Md. 2004)). Where, as here, the formation or validity of the arbitration agreement is in dispute, a motion to compel arbitration is treated as one for summary judgment. Id. at *5; Rose v. New Day Fin., LLC, 816 F. Supp. 2d 245, 251 (D. Md. 2011). Rule 56 of the Federal Rules of Civil Procedure provides that a court "shall grant summary judgment if the movant shows that there is nogenuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). A material fact is one that "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A genuine issue over a material fact exists "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. In considering a motion for summary judgment, a judge's function is limited to determining whether sufficient evidence exists on a claimed factual dispute to warrant submission of...