Spinner v. Credit One Bank, N.A.
Filing
27
ORDER granting 23 Motion to compel arbitration. This case is STAYED pending arbitration. See Order for details. Signed by Judge Roy B. Dalton, Jr. on 12/29/2017. (ZRR)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION
JEANNINE SPINNER,
Plaintiff,
v.
Case No. 6:17-cv-340-Orl-37TBS
CREDIT ONE BANK, N.A.,
Defendant.
_____________________________________
ORDER
Before the Court is Defendant’s Motion to Dismiss Complaint and Compel
Arbitration and Incorporated Memorandum of Law (Doc. 23 (“Motion to Compel”)), to
which Plaintiff responded (Doc. 24). For the following reasons, the Motion to Compel is
due to be granted, and the action is due to be stayed.
I.
BACKGROUND
On February 28, 2017, Plaintiff initiated this action against Defendant for
violations of the Telephone Consumer Protection Act and Florida’s Consumer Collection
Protection Act. (Doc. 1 (“Complaint”).) After successfully moving for an extension
(Doc. 14), Defendant answered the Complaint on June 19, 2017, and asserted several
affirmative defenses, including its intent to arbitrate based on a binding arbitration
provision in Plaintiff’s cardholder agreement (Doc. 18 (“Answer”)). Now—more than six
months after its Answer—Defendant moves the Court pursuant to Federal Rule of Civil
Procedure 12(b)(1) or 12(b)(3) to compel arbitration and dismiss this action or,
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alternatively, to stay it pending the outcome of the forthcoming arbitration proceedings.1
(Doc. 23.)
According to the Motion to Compel, Plaintiff applied for and received a credit card
from Defendant in February of 2014. (See Doc. 23-1, 12.) Attached to its standard
cardholder agreement is an arbitration agreement (“Arbitration Agreement”), which
provides:
PLEASE READ THIS PROVISION OF YOUR CARD
AGREEMENT CAREFULLY. IT PROVIDES THAT
EITHER YOU OR WE CAN REQUIRE THAT ANY
CONTROVERSY OR DISPUTE BE RESOLVED BY
BINDING ARBITRATION. ARBITRATION REPLACES
THE RIGHT TO GO TO COURT, INCLUDING THE
RIGHT TO A JURY AND THE RIGHT TO PARTICIPATE
IN A CLASS ACTION OR SIMILAR PROCEEDING. IN
ARBITRATION, A DISPUTE IS RESOLVED BY A
NEUTRAL ARBITRATOR INSTEAD OF A JUDGE OR
JURY. ARBITRATION PROCEDURES ARE SIMPLER
AND MORE LIMITED THAN RULES APPLICABLE IN
COURT. IN ARBITRATION, YOU MAY CHOOSE TO
HAVE A HEARING AND BE REPRESENTED BY
COUNSEL
Agreement to Arbitrate: You and we agree that either you or
we may, without the other’s consent, require that any
controversy or dispute between you and us (all of which are
called “Claims”), be submitted to mandatory, binding
arbitration. This arbitration provision is made pursuant to a
transaction involving interstate commerce, and shall be
governed by, and enforceable under, the Federal Arbitration
Act (the “FAA”), 9 U.S.C. § 1 et seq., and (to the extent State
law is applicable), the State law governing this Agreement.
The U.S. Court of Appeals for the Eleventh Circuit has expressed a preference
that district courts stay rather than dismiss arbitral claims. Bender v. A.G. Edwards & Sons,
Inc., 971 F.2d 698, 699 (11th Cir. 1992). Accordingly, the Court construes the Motion to
Compel as one seeking a stay rather than dismissal. (See Doc. 23, p. 1.)
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(Doc. 23-4, p. 7) (emphasis in original).
The Arbitration Agreement also sets forth a very broad scope, covering, among
others, claims involving “any disclosures or other documents or communications relating
to your account; any transactions or attempted transactions involving your account,
whether authorized or not; billing, billing errors, credit reporting, the posting of
transactions, payment or credits, or collections matters relating to your account” or
“based on any theory of law, any contract, statute, regulation, ordinance, tort . . . [and]
any allegations of fact, including an alleged act, inaction, omission, suppression,
representation, statement, obligation, duty, right, condition, status or relationship.”
Based on the Arbitration Agreement, Defendant requests that the Court compel
arbitration on the grounds that: (1) it is enforceable; and (2) Plaintiff’s claims fall within
its scope. (Doc. 23, pp. 9–12.) As the matter is fully briefed (see Doc. 24), it is ripe for the
Court’s consideration.
II.
LEGAL STANDARDS
Under the Federal Arbitration Act (“FAA”), arbitration agreements are
presumptively valid and enforceable. See 9 U.S.C. § 2. So “courts must rigorously enforce
arbitration agreements according to their terms.” Am. Express Co. v. Italian Colors Rest.,
133 S. Ct. 2304, 2309 (2013). With this, upon the motion of any party to a valid arbitration
agreement, courts must stay or dismiss litigation of all claims that fall within the
agreement’s scope and compel arbitration according to the agreement’s terms. See
9 U.S.C. §§ 3–4.
“[D]espite the strong policy in favor of arbitration, a party may, by its conduct,
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waive its right to arbitration.” Garcia v. Wachovia Corp., 699 F.3d 1273, 1277 (11th Cir. 2012)
(quoting S & H Contractors, Inc. v. A.J. Taft Coal Co., 906 F.2d 1507, 1514 (11th Cir. 1990));
see also Krinsk v. SunTrust Banks, Inc., 654 F.3d 1194, 1200 (11th Cir. 2011). Waiver of an
arbitration right occurs when both: (1) the party seeking arbitration ‘substantially
participates in litigation to a point inconsistent with an intent to arbitrate’; and (2) ‘this
participation results in prejudice to the opposing party.’” In re Checking Account Overdraft
Litig., 754 F.3d 1290, 1294 (11th Cir. 2014) (quoting Morewitz v. W. of Eng. Ship Owners Mut.
Prot. & Indem. Ass’n (Lux.), 62 F.3d 1356, 1365 (11th Cir. 1995)). “[A]ny party arguing
waiver of arbitration bears a heavy burden of proof.” Stone v. E.F. Hutton & Co., Inc., 898
F.2d 1542, 1543 (11th Cir. 1990).
III.
ANALYSIS
Plaintiff does not challenge the validity of the Arbitration Agreement or that her
claims fall outside its scope; instead, she contends, in conclusory fashion, that Defendant
has waived its right to compel arbitration based on its litigation conduct prior to the
Motion to Compel. 2 (Doc. 24, p. 1.) The Court disagrees.
Under the first prong of waiver, a court must “decide if, under the totality of the
circumstances, the party has acted inconsistently with the arbitration right.” Ivax Corp. v.
B. Braun of Am., Inc., 286 F.3d 1309, 1315–16 (11th Cir. 2002). A party acts inconsistently
Although not raised by the parties, the Court notes that the Eleventh Circuit has
held that whether a party has waived its right to compel arbitration based on its earlier
litigation conduct is an issue presumptively for a court, rather than an arbitrator. Grigsby
& Assocs., Inc. v. M Secs. Inv., 664 F.3d 1350, 1353 (11th Cir. 2011). As such, the Court—as
opposed to an arbitrator—will decide whether Defendant has waived its right compel
arbitration.
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with the arbitration right when that party “substantially invokes the litigation machinery
prior to demanding arbitration.” Garcia, 699 F.3d at 1277 (quoting S & H Contractors,
906 F.2d at 1514) (emphasis added).
The sum total of Plaintiff’s waiver argument rests on Defendant’s filing of the
Answer before the Motion to Compel. (Doc. 24, p. 1.) The filing of an answer, without
more, does not constitute substantial participation in litigation. See, e.g., Dockeray v.
Carnival Corp., 724 F. Supp. 2d 1216, 1222 (S.D. Fla. 2010) (finding that the defendant did
not waive its arbitration right even though it filed an answer without asserting arbitration
right and then waited nearly two months before demanding arbitration). Furthermore,
not all litigation conduct results in waiver; rather, it is a matter of degree. For instance,
the Eleventh Circuit has found waiver in cases with long delays and extensive use of
discovery or motion practice prior to the defendant’s assertion of its arbitration right. See,
e.g., Robinson v. Alston, 596 F. App’x 871, 873 (11th Cir. 2015) 3 (finding waiver where the
defendant waited eight months before demanding arbitration, during which time there
had been “numerous filings,” and the defendant ignored both the opposing party and
the Court’s invitations to initiate arbitration proceedings); Garcia, 699 F.3d at 1277–78
(finding waiver where party failed to move to compel arbitration even though the court
invited it to do so, and the party conducted discovery for more than a year, including
more than fifteen depositions and production of nearly 900,000 pages of documents).
While unpublished opinions are not binding precedent, they may be considered
as persuasive authority. See 11th Cir. R. 36-2; see also United States v. Almedina,
686 F.3d 1312, 1316 n.1 (11th Cir. 2012).
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Apart from the Answer, Plaintiff points to no other substantial conduct inconsistent with
Defendant’s intent to arbitrate, and the weight of authority counsels against a finding of
substantial participation on this record.
Even if the Court concluded that Defendant’s filing of the Answer amounted to
substantial participation, Plaintiff failed to argue, let alone demonstrate, prejudice. (See
Doc. 24.) “Prejudice has been found in situations where the party seeking arbitration
allows the opposing party to undergo the types of litigation expenses that arbitration was
designed to alleviate.” Morewitz, 62 F.3d at 1366. To determine prejudice, a court “may
consider the length of delay in demanding arbitration and the expense incurred by that
party from participating in the litigation process.” Garcia, 699 F.3d at 1277. Given the
limited nature of the proceedings, Plaintiff could not have expended more than minimal
time and resources in prosecuting this action prior to the Motion to Compel.
At bottom, Plaintiff has failed to satisfy her “heavy burden of proof” in
demonstrating that Defendant waived its right to compel arbitration, see Stone, 898 F.2d
at 1543, and, thus, the Court finds that the Motion to Compel is due to be granted.
IV.
CONCLUSION
Accordingly, it is ORDERED AND ADJUDGED as follows:
1.
Defendant Credit One Bank, N.A.’s Motion to Dismiss and Compel
Arbitration and Incorporated Memorandum of Law (Doc. 23) is
GRANTED.
2.
This case is STAYED pending arbitration.
3.
Pursuant to the Arbitration Agreement, “the party filing an arbitration must
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choose an arbitration administrator.” (Doc. 23-4, p. 7.)
4.
The parties are DIRECTED to jointly notify the Court of the status of the
arbitration proceedings on or before Thursday, March 29, 2018, and every
ninety days thereafter. The parties are further DIRECTED to immediately
notify the Court upon conclusion of the arbitration proceedings.
5.
The Clerk is DIRECTED to administratively close the file.
DONE AND ORDERED in Chambers in Orlando, Florida, on December 29, 2017.
Copies to:
Counsel of Record
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