Elliott v. Essex Motors, LLC
AMENDED ORDER GRANTING MOTION TO COMPEL ARBITRATION. This order SUPPLANTS and SUPERSEDES the Order Granting Motion To Compel Arbitration 30 . By Judge Robert E. Blackburn on 3/18/13. (kfinn, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Robert E. Blackburn
Civil Action No. 12-cv-01078-REB-KLM
ESSEX MOTORS, LLC,
AMENDED1 ORDER GRANTING MOTION TO COMPEL ARBITRATION
The matters before me are (1) Defendant’s Motion To Compel Arbitration And
Stay Proceedings [#8]2 filed May 15, 2012; and (2) Plaintiff’s Motion for Partial
Summary Judgment [#25] filed January 10, 2013. I grant the motion to compel
arbitration3, and I deny as moot the motion for partial summary judgment.
I have putative jurisdiction over this matter under 28 U.S.C. §§ 1331 (federal
I enter this amended order to correct the chronology of relevant actions described in footnote two
in the order [#30] entered March 18, 2013. The motion was filed and referred on May 15, 2012. The
referral was withdrawn the next day. Thus, the magistrate judge has never had primary responsibility for
consideration of the motion. I apologize to the magistrate judge for indicating the contrary.
“[#8]” is an example of the convention I use to identify the docket number assigned to a specific
paper by the court’s electronic case filing and management system (CM/ECF). I use this convention
throughout this order.
On the same day this motion was filed, it was referred to the magistrate judge for
recommendation. See [#9] entered May 15, 2012. However, on May 16, 2012, in an unnumbered entry in
CM/ECF, the referral was inexplicably withdrawn.
question) and 1367 (supplemental jurisdiction) and under 9 U.S.C. §§ 1 and 2.
II. STANDARD OF REVIEW
The decision whether to enforce an arbitration agreement involves a two-step
inquiry. First, I must determine whether the parties agreed to arbitrate the dispute.
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, 473 U.S. 614, 626, 105 S.Ct.
3346, 3353, 87 L.Ed.2d 444 (1985); Williams v. Imhoff, 203 F.3d 758, 764 (10th Cir.
2000). I then must consider whether any statute or policy renders the claims nonarbitrable. Mitsubishi Motors Corp., 105 S.Ct. at 3355; Williams, 203 F.3d at 764.
The history and chronology of relevant facts are essentially undisputed and are
presented in the motion. See Motion at 1-3. The basis of the claims of the plaintiff relate
to her purchase on November 13, 2010, of a 1999 Dodge Durango from defendant.
Plaintiff asserts claims federal claims for a violation of the Truth in Lending Act (“TILA”),
15 U.S.C. §1601 et seq. (Count I) and state claims for Civil Theft, under §18-4-405,
C.R.S. (Count II), for an Illegal Balloon payment under §5-3-208, C.R.S., (Count III), and
for violation of the Colorado Consumer Protection Act (“CCPA”), under §6-1-105,
C.R.S., (Count IV). Defendant argues that under the apposite contracts governing the
transaction, these claims are subject to mandatory, binding arbitration.
The question whether the parties agreed to arbitrate focuses on two
considerations: (1) whether there is a valid agreement to arbitrate; and (2) whether the
dispute falls within the scope of that agreement. See National American Insurance
Co. v. SCOR Reinsurance Co., 362 F.3d 1288, 1290 (10th Cir. 2004); Via Fone, Inc. v.
Western Wireless Corp., 106 F.Supp.2d 1147, 1150 (D. Kan. 2000). “The existence of
an agreement to arbitrate is a threshold matter which must be established before the
FAA can be invoked.” Avedon Engineering, Inc. v. Seatex, 126 F.3d 1279, 1287 (10th
Cir. 1997). State law principles of contract formation govern whether a valid arbitration
agreement exists. Hardin v. First Cash Financial Services, Inc., 465 F.3d 470, 475
(10th Cir. 2006). There is no presumption in favor of arbitration with respect to this
prong of the test. See Axis Venture Group, Inc. v. 1111 Tower, LLC, 2010 WL
1278306 at *2 (D. Colo. March 30, 2010). Defendant bears the initial burden to present
evidence sufficient to suggest that an enforceable agreement to arbitrate exists. Id. at
*3. If it does so, the burden then shifts to plaintiff to demonstrate a genuine issue of
material fact as to the making of the agreement. Id.
Plaintiff and defendant executed two different Retail Installment Sales Contracts
(RISC). See Motion at Plaintiff’s Exhibit 1 [#8-1] and Plaintiff’s Exhibit 2 [#8-2]. Both
RISCs contain an Arbitration Provision which states:
Any claim, dispute or controversy (“claim”) arising under or relating to this
contract or the vehicle purchase agreement (except where the purchase
agreement includes its own dispute resolution provisions, in which case
such provisions shall control any claim arising under or relating to the
purchase agreement), whether in contract or tort, including without
limitation constitutional, statutory, common law, regulatory and equitable
claims and claims regarding the validity, enforceability or scope of the
contract shall, at your or our election, be resolved by binding arbitration.
Such binding arbitration shall be conducted before a single arbitrator
appointed in accordance with its applicable rules by the organization you
select among the following: the Better Business Bureau, American
Arbitration Association, Legal Resolution Center, Judicial Arbiter Group or
Judicial Arbitration and Mediation Services. A party invoking arbitration
after the filing of a court action must do so within thirty (30) days of service
of the Complaint or other pleading initiating the action. The arbitration
hearing shall be conducted in the applicable arbitration organization’s
office that is located nearest to where this Contract was executed. The
arbitrator shall apply governing substantive law in making an award. If the
applicable arbitration rules conflict with this arbitration provision, than this
arbitration provision shall control. You agree to pay any administrative
fees and arbitrator’s fees and costs up to a maximum of $125. We shall
pay any administrative fees and arbitrator’s fees and costs in excess of
$125. Each party shall be responsible for its own attorney, expert and
other fees and costs. If a party unsuccessfully challenges the arbitrator’s
award or fails to comply with it, the other party is entitled to recover the
costs, including reasonable attorneys’ fees, of defending or enforcing the
award. The parties expressly agree that this arbitration provision involves
and concerns interstate commerce and is governed by the Federal
Arbitration Act (9 U.S.C. §1, et seq.) to the exclusion of any different or
inconsistent state or local law or judicial rule. You and we unconditionally
waive the right to litigate all claims in court, including the right to a jury
trial, to participate as a member of any class in any class action, including
class arbitration, and to consolidate your arbitration with others. You and
we retain any rights to self-help remedies, such as repossession, and to
file a replevin action in court. Neither you nor we waive the right to
arbitrate by using self-help remedies or by filing a replevin action in court.
This arbitration provision shall survive any termination payoff or transfer of
Applying the foregoing principles of analysis to the undisputed facts, I find and
conclude that the relevant provisions of both RISCs constitute valid and enforceable
agreements to arbitrate to which both parties are bound. There is a valid agreement to
arbitrate, and the dispute falls within the scope of that agreement. The plaintiff has not
established a genuine issue of material fact concerning the making or enforceability of
the agreement to arbitrate. Defendant has countered cogently each argument advanced
by the plaintiff in her response. Thus, defendant’s motion to stay this case pending
arbitration will be granted. See 9 U.S.C. § 3.4 However, under D.C.COLO.LCivR. 41.2,
Despite the seemingly mandatory language of section 3, the majority of federal courts hold that
a district court may dismiss rather than stay a complaint when all claims therein are arbitrable. See, e.g.,
Choice Hotels International, Inc. v. BSR Tropicana Resort, Inc., 252 F.3d 707, 709-10 (4th Cir. 2001);
Green v. Ameritech Corp., 200 F.3d 967, 973 (6th Cir. 2000); Fedmet Corp. v. M/V BUYALYK, 194 F.3d
674, 678 (5th Cir. 1999); Bercovitch v. Baldwin School, Inc., 133 F.3d 151, 156 & n.21 (1st Cir. 1998);
Sparling v. Hoffman Construction Co., 864 F.2d 635, 638 (9th Cir. 1988); Black and Veatch
International Co. v. Wartsila NSD North America, Inc., 1998 WL 953966 at *4 (D. Kan. Dec. 17, 1998).
But see Lloyd v. Hovensa, LLC, 369 F.3d 263, 269-71 (3rd Cir. 2004). Although the Tenth Circuit has not
addressed this issue directly, it has intimated that a district court may dismiss when a party specifically
requests dismissal rather than a stay. See Armijo v. Prudential Insurance Co. v. America, 72 F.3d 793,
796-97 (10th Cir. 1995) (finding appellate jurisdiction from order dismissing a case in which all claims were
referred to arbitration and distinguishing Adair Bus Sales, Inc. v. Blue Bird Corp., 25 F.3d 953, 954-55
(10th Cir. 1994), in which appellate jurisdiction of order compelling arbitration was found lacking because
defendant had requested a stay, not dismissal).
Because defendant here does not request dismissal, either principally or in the alternative, I am
foreclosed by Adair from doing other than staying this action.
I will direct the clerk to administratively close this case, subject to reopening for good
THEREFORE, IT IS ORDERED as follows:
1. That Defendant’s Motion To Compel Arbitration And Stay Proceedings
[#8] filed May 15, 2012 is GRANTED insofar as consistent with the following orders;
2. That Plaintiff’s Motion for Partial Summary Judgment [#25] filed January
10, 2013, is DENIED as moot;
3. That as soon as practicable, the parties SHALL PROCEED to arbitration;
4. That this case is STAYED pending the outcome of the arbitration of the claims
of the plaintiff;
5. That the Trial Preparation Conference set May 3, 2013, at 3:00 p.m., and the
trial set to commence on May 20, 2013, are VACATED;
6. That under D.C.COLO.LCivR 41.2, the clerk is DIRECTED to close this case
administratively, subject to reopening for good cause; and
7. That this order SUPPLANTS and SUPERSEDES the Order Granting Motion
To Compel Arbitration [#30] entered March 18, 2013.
Dated March 18, 2013, at Denver, Colorado.
BY THE COURT:
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