Porter v. Dollar Financial Group, Inc. et al
Filing
17
ORDER signed by Senior Judge William B. Shubb on 9/2/2014 DENYING without prejudice 8 Defendant's Motion to Compel Arbitration and to Dismiss or, alternatively, Stay Proceedings Pending Arbitration. (Kirksey Smith, K)
1
2
3
4
5
6
7
8
UNITED STATES DISTRICT COURT
9
EASTERN DISTRICT OF CALIFORNIA
10
----oo0oo----
11
12
JOSETTE PORTER,
13
14
15
16
17
18
CIV. NO. 2:14-1638 WBS AC
Plaintiff,
MEMORANDUM AND ORDER RE:
MOTION TO COMPEL ARBITRATION
v.
DOLLAR FINANCIAL GROUP, INC.;
DFC GLOBAL CORPORATION, d/b/a
MONEY MART; MONETARY MANAGEMENT
OF CALIFORNIA, INC., d/b/a MONEY
MART,
Defendants.
19
20
21
22
23
24
25
26
----oo0oo---Plaintiff Josette Porter brought this action against
defendants Dollar Financial Group, Inc., DFC Global Corporation,
and Monetary Management of California, Inc., alleging violations
of federal and California state law arising from defendants’
efforts to collect on a consumer debt.
Defendant now moves to
compel arbitration and to dismiss or stay proceedings pending
27
28
1
1
2
arbitration.1
I.
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
On December 29, 2011, plaintiff signed a Deferred
Deposit Loan Note in which defendants agreed to provide plaintiff
with a loan of $120.00 and plaintiff agreed to make a payment of
$141.18 on January 7, 2012. (Peterson Decl. Ex. A (“Agreement”)
at 1 (Docket No. 9).)
21
22
23
24
The Agreement contained an arbitration
provision, which requires arbitration of, among other things,
“all federal or state law claims, disputes or controversies
arising from or relating directly or indirectly to any
transactions with Lender or any injury to either party as a
result of such transactions,” “all claims based upon a violation
of any state or federal constitution, statute, or regulation,”
and “all claims asserted by [plaintiff] individually against
Lender and/or any of Lender’s employees, agents, officers,
members, governors, directors, managers, shareholders or
affiliated entities . . . including claims for money damages
and/or equitable or injunctive relief.”
19
20
Factual and Procedural Background
(Id. at 2.)
Plaintiff alleges that in 2012 she began receiving
calls from defendants on her cell phone, in which defendants
asked for someone by another name.
(“Compl.”) ¶ 35 (Docket No. 1).)
(Not. of Removal Ex. A
According to plaintiff, she
immediately informed defendants that they were calling a number
that did not belong to the individual with whom they wished to
25
26
27
28
Both sides requested permission to appear by telephone at
the hearing on this motion. Because oral argument by telephone
would not be of material assistance, the court orders this matter
submitted on the briefs. E.D. Cal. L.R. 230(g).
2
1
1
2
3
speak.
6
7
8
would cease.
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
(Id. ¶ 37.)
The calls did not cease.
(Id. ¶¶ 38-39.)
Plaintiff
alleges that she has received over two hundred calls on her cell
phone from defendants, even after she repeatedly told defendants
that they were calling the wrong person and installed a call
blocking application on her phone. (Id. ¶¶ 40-41.)
9
10
Defendants then allegedly told plaintiff
they would remove her from their call list and that the calls
4
5
(Id. ¶ 36.)
On June 4, 2014, plaintiff filed a complaint in San
Joaquin County Superior Court bringing claims for (1) negligent
violation of the Telephone Consumer Protection Act (“TCPA”), 47
U.S.C. §§ 227 et seq.; (2) willful violation of the TCPA, id.;
(3) violations of the California Rosenthal Fair Debt Collection
Practices Act, Cal. Civ. Code §§ 1788.17 et seq.; (4) invasion of
privacy; and (5) intentional infliction of emotional distress.
(Compl. ¶¶ 57-86.)
Defendant removed to federal court on June
11, 2014, (Docket No. 1), and now moves to compel arbitration and
to dismiss or stay proceedings pending arbitration under the
Federal Arbitration Act (“FAA”).
II.
(Docket No. 8.)
Analysis
The FAA provides that a written provision in a
“contract evidencing a transaction involving commerce to settle
by arbitration a controversy thereafter arising out of such
contract . . . 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.
It permits a “party aggrieved
by the alleged failure, neglect, or refusal of another to
28
3
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
arbitrate under a written agreement for arbitration [to] petition
any United States district court . . . for an order directing
that . . . arbitration proceed in the manner provided for in
[the] agreement.”
Id. § 4.
“The FAA ‘mandates that district courts shall direct
the parties to proceed to arbitration on issues as to which an
arbitration agreement has been signed.’”
Kilgore v. KeyBank,
Nat’l Ass’n, 718 F.3d 1052, 1058 (9th Cir. 2013) (quoting Dean
Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985)).
“The
basic role for courts under the FAA is to determine ‘(1) whether
a valid agreement to arbitrate exists and, if it does, (2)
whether the agreement encompasses the dispute at issue.’”
Id.
(quoting Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d
1126, 1130 (9th Cir. 2000)).
Plaintiff appears to concede that a valid agreement to
arbitrate exists as to the December 2011 loan.
Plaintiff
nonetheless argues that her claims are not subject to the
arbitration agreement because they arise from calls to collect an
unrelated third party’s debt with defendants.
The issue thus is
whether the agreement encompasses claims relating to efforts to
collect on a loan that was not plaintiff’s.
The Ninth Circuit applies a narrow construction to
arbitration clauses that only address disputes “arising under”
the contract or agreement itself, but applies a broad
construction to arbitration provisions that by their terms apply
to disputes “relating to” the agreement.
Cape Flattery Ltd. v.
Titan Mar., LLC, 647 F.3d 914, 921-22 (9th Cir. 2011).
28
4
Because
1
2
3
4
5
6
the present provision states that it includes disputes “arising
from or relating directly or indirectly to any transactions” with
the lender, (Agreement at 2), the broad construction applies, see
Cape Flattery, 647 F.3d at 922 (noting that provisions using both
“arising under” and “relating to” language receive broad
construction).
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
Applying the broad construction, plaintiff’s factual
allegations must “‘touch matters’ covered by the contract
containing the arbitration clause” in order for arbitration to be
proper.
Simula, Inc. v. Autoliv, Inc., 175 F.3d 716, 721 (9th
Cir. 1999) (quoting Mitsubishi Motors Corp. v. Soler Chrysler–
Plymouth, Inc., 473 U.S. 614, 624 n.13 (1985)).
Applying this
construction, courts have routinely held that efforts to collect
on unpaid contracts are “related to” such contracts for the
purposes of determining whether claims arising out of the
collection efforts are subject to arbitration.
See, e.g., Brown
v. DIRECTV, LLC, Civ. No. 12-8382 DMG EX, 2013 WL 3273811, at *6
(C.D. Cal. June 26, 2013) (listing cases).
These cases are
distinguishable, however, as they all involve efforts to collect
on contracts that contained the arbitration provision in
question.
Here, in contrast, plaintiff claims that defendant’s
improper calls stem from a different loan taken out by a third
party, unrelated to plaintiff’s loan or the arbitration agreement
therein.
Plaintiff’s claims more closely resemble those in In re
Jiffy Lube International Inc. Text Spam Litigation, 847 F. Supp.
2d 1253 (S.D. Cal. 2012).
In Jiffy Lube, one plaintiff had
28
5
1
2
3
4
5
6
7
8
9
10
11
12
13
14
signed an arbitration agreement with the defendant as part of a
contract for an oil change.
Id. at 1262-63.
Although the
agreement subjected to arbitration “any and all disputes,
controversies or claims” between plaintiff and defendant, the
court determined that the agreement did not apply to the
plaintiff’s TCPA claims alleging he and other class members later
received unauthorized text messages from defendant as part of a
marketing campaign.
Id. at 1263.
Even if the original contract
was the means by which defendant acquired plaintiff’s
information, and thus could be considered the “but for” cause of
the alleged TCPA violations, the court held that the original
contract was not “related to” the claims.2
Id.
Likewise,
plaintiff here alleges that defendant’s calls stem from a
different transaction than the one for which she agreed to
15
16
17
18
19
20
21
22
23
24
25
26
27
28
2
The court in Jiffy Lube also held that reading the
arbitration provision as truly encompassing “any and all
disputes” between the parties, without being limited to claims
arising out of or relating to the agreement, “would clearly be
unconscionable” and lead to absurd results. Id. at 1262-63.
Although the present arbitration provision contains similar
language in parts, (see Agreement at 2 (requiring arbitration of
“all claims based upon a violation of any state or federal
constitution, statute, or regulation”)), the court need not reach
the issue of unconscionability here because defendant does not
appear to argue that the provision in question is so broad.
Moreover, reading the provision in question as
requiring arbitration for all claims, unrelated or not, would
render superfluous the other language in the Agreement limiting
the scope of arbitration to disputes “arising from or relating
directly or indirectly to any transactions.” The court declines
to apply such a reading to the Agreement. See United States v.
1.377 Acres of Land, 352 F.3d 1259, 1265 (9th Cir. 2003) (“Courts
interpreting the language of contracts should give effect to
every provision, and an interpretation which renders part of the
instrument to be surplusage should be avoided.” (citation and
quotation marks omitted)).
6
1
2
3
4
arbitration; even if that previous agreement was the means by
which defendant acquired her contact information, that “alone is
not necessarily enough to establish that the claim arises out of
or relates to the product.”
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Defendant responds that the 2011 Agreement
“undoubtedly” encompasses plaintiff’s claims and that “the
indisputable evidence” is that the calls plaintiff complains
about related to her 2011 loan.
No. 8).)
24
25
26
27
(Def.’s Mem. at 6:17-28 (Docket
Although defendant has produced call logs purportedly
relating to plaintiff’s 2011 loan, (Peterson Decl. Ex. 2), these
documents do not necessarily contradict plaintiff’s allegations
that the calls to which she objects were intended to reach
someone else, and thus did not relate to plaintiff’s loan.
Moreover, the court must assume the truth of the allegations in
plaintiff’s complaint for the purposes of ruling on defendant’s
motion to compel arbitration.
1004, 1006 (9th Cir. 2005).
Brown v. Dillard’s, Inc., 430 F.3d
If facts are developed during the
course of this litigation which contradict or disprove
plaintiff’s allegations regarding the subject matter of the calls
upon which plaintiff bases her complaint, defendants are free at
that time to renew their motion to compel arbitration.
22
23
Id.
In sum, because plaintiff alleges she received calls
that were not related to the contract containing the arbitration
provision, the arbitration agreement does not “encompass[] the
dispute at issue.”
Kilgore, 718 F.3d at 1058.
Accordingly, the
court must deny defendant’s motion to compel arbitration at this
time.
28
7
1
2
3
4
5
IT IS THEREFORE ORDERED that defendant’s motion to
compel arbitration and to dismiss or, alternatively, stay
proceedings pending arbitration be, and the same hereby is,
DENIED without prejudice.
Dated:
September 2, 2014
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
8
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?