Vanwechel et al v. Regions Bank et al

Filing 11

ORDER granting 5 and 6 --motions to compel arbitration; staying the action; directing the clerk to ADMINISTRATIVELY CLOSE the case; directing the parties, within ten days after the arbitral decision issues, to move to confirm or vacate the award or to dismiss this action. Signed by Judge Steven D. Merryday on 5/3/2017. (BK)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
BARRY VANWECHEL, et al.,
Plaintiffs,
v.

CASE NO. 8:17-cv-738-T-23AAS

REGIONS BANK, et al.,
Defendants.
____________________________________/

ORDER
The Vanwechels borrowed money from Regions Bank and purportedly
defaulted on the loan. After attempting unsuccessfully to collect the debt, Regions
hired Focus Receivables Management to collect. (Doc. 2 at 2) The Vanwechels sue
(Doc. 2) Regions and Focus Receivables for violating the Florida Consumer
Collection Practices Act and the Telephone Consumer Protection Act. Also, the
Vanwechels sue Focus Receivables for violating the Fair Debt Collection Practices
Act. Regions moves (Doc. 5) to compel arbitration of the claims against both
defendants, and Focus Receivables joins (Doc. 6) the motion.
DISCUSSION
If a valid and written agreement requires arbitration and if a party moves to
compel arbitration, Section 4 of the Federal Arbitration Act requires that an order

direct the parties to arbitrate. In this action, Florida law governs the validity of
the agreement. See Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 630–32 (2009)
(explaining that “state contract law” governs the validity of an arbitration
agreement). Under Florida law, a contract requires an offer, acceptance, and
consideration. Med-Star Cent., Inc. v. Psychiatric Hosp. of Hernando Cty., Inc., 639 So. 2d
636, 637 (Fla. 5th DCA 1994) (Thompson, J.). In a 2006 written agreement, the
Vanwechels received a $75,000 credit line from AmSouth Bank (Doc. 5-1 at 15),
which Regions acquired (Doc. 5-1 at 3). In a 2007 written agreement, Regions
increased the credit line to $100,000. (Doc. 5-1 at 7) The Vanwechels agreed in the
2006 contract and again in the 2007 contract that:
Except as expressly provided below, any controversy, claim, dispute
or disagreement arising out of, in connection with or relating to . . .
(4) the collection of any amounts due under this Agreement, (5) any
alleged tort or other claim arising out of or relating in any way to this
Agreement . . . will be settled by binding arbitration.

(Doc. 5-1 at 11) The Vanwechels argue that the agreement “lacks mutuality,” that is,
that insufficient consideration supports the arbitration agreement. (Doc. 10 at 16)
But Regions promised to arbitrate a claim against the Vanwechels in exchange for
the Vanwechels’ promise to arbitrate a claim against Regions. The mutual promises
to arbitrate a dispute constitute sufficient consideration. Kinko’s, Inc. v. Payne,
901 So. 2d 354, 355–56 (Fla. 2d DCA 2005) (Whatley, J.). Even if the contract
imposes on only one party the obligation to submit to arbitration, an arbitration

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clause warrants enforcement if consideration supports the balance of the contract.
Avid Eng’g, Inc., v. Orlando Marketplace Ltd., 809 So. 2d 1, 4 (Fla. 5th DCA 2001)
(Pleus, J.) (“Because there was sufficient consideration to support the entire contract,
the arbitration provision was not void for lack of mutuality of obligation.”).
Regions’s promise to lend the Vanwechels money constitutes sufficient consideration
for the Vanwechels’ promise to repay the loan and interest.
The Vanwechels deny the applicability of the arbitration agreement and argue
that the claims “are separate and independent from” the agreement. (Doc. 10 at 3–7)
But the Vanwechels agreed to arbitrate “any” claim “relating to” “the collection of
any amounts due under” the agreement. Because the Vanwechels’ TCPA, FCCPA,
and FDCPA claims “relate” directly to the collection of money owed under the
agreement (the defendants allegedly violated the TCPA, FCCPA, and FDCPA while
attempting to collect the debt owed to Regions), the agreement requires the
arbitration of the Vanwechels’ claims.
Also, the Vanwechels argue that the arbitration agreement is “unconscionable”
and that “absurd results will ensue from enforcing” the agreement. (Doc. 10 at 8)
Under Florida law, a clause is unconscionable if a party lacked a choice whether to
include the clause and the contract appears so “outrageously unfair as to shock the
judicial conscience.” Gainesville Health Care Center, Inc. v. Weston, 857 So. 2d 278,
284–85 (Fla. 1st DCA 2003) (Webster, J.) (internal citations and quotation omitted).
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The Vanwechels fail to proffer evidence that they lacked a choice whether to include
the arbitration clause. In either event, the arbitration agreement triggers no “shock
[to] the judicial conscience.” Belcher v. Kier, 558 So. 2d 1039, 1043 (Fla. 2d DCA
1990) (per curiam) (explaining “substantive” unconscionability). On the contrary, an
arbitration agreement sensibly decreases the cost and the duration of a dispute. Caley
v. Gulfstream Aerospace Corp., 428 F.3d 1359, 1367 (11th Cir. 2005).
Additionally, the Vanwechels argue that the arbitration agreement contains an
“alternative jurisdiction provision” that permits litigating in the Middle District of
Florida. The agreement permits “fil[ing] an action in small claims court” as an
alternative to arbitration. (Doc. 5-1 at 12) The Vanwechels sued in the Circuit Court
of Pasco County (Doc. 1), and Regions removed (Doc. 2) the action. According to
the Vanwechels, the defendants’ removal of this action from “small claims court”
unfairly prevents the Vanwechels from invoking the “alternative jurisdiction
provision.” (Doc. 10 at 13) The Vanwechels’ argument fails for two reasons. First,
no “small claims court” exists in Florida. LaSalla v. Pools by Georgia of Pinellas Cty,
Inc., 125 So. 3d 1016, 1017 (Fla. 2d DCA 2013) (Altenbernd, J.) (explaining that the
Florida Small Claims Rules “do not create a ‘small claims court.’ They simply create
rules of procedure for use in county court when the amount in controversy is
small.”). Second, even if a county court constitutes a “small claims court,” the
Vanwechels sued in circuit court, not county court. Because the Vanwechels failed to
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sue in “small claims court,” the Vanwechels cannot invoke the “alternative
jurisdiction provision” to avoid arbitration.
Also, the Vanwechels argue that the defendants waived the right to compel
arbitration by removing the action. (Doc. 10 at 13 (“If Defendants truly intended
on asserting the arbitration clause in the Credit Agreement as a defense, then
Defendants were required to bring that claim in [circuit court].”) A defendant waives
the right to compel arbitration if the defendant acts inconsistently with the right to
compel arbitration and if the defendant’s conduct prejudices the plaintiff (for
example, by requiring the plaintiff to expend money litigating in state or federal
court). Ivax Corp. v. B. Braun of Am., Inc., 286 F.3d 1309, 1315–16 (11th Cir. 2002).
In Stone v. E.F. Hutton & Co., Inc., 898 F.2d 1542 (11th Cir. 1990), the defendant
waived the right to compel arbitration by engaging in discovery for several years and
waiting more than twenty months to request arbitration. In contrast, the defendants
in this action promptly removed the action, moved within a week of removal to
compel arbitration, and submitted no other motion. The removal establishes no
waiver of the right to compel arbitration. Halim v. Great Gatsby’s Auction Gallery, Inc.,
516 F.3d 557, 562 (7th Cir. 2008) (Bauer, J.) (“Absent any other action, removal
alone did not amount to implicit waiver of [the] right to arbitrate.”).
Finally, the Vanwechels argue that Focus Receivables, not a signatory to the
Vanwechel-Regions agreement, cannot invoke the agreement to compel arbitration of
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the claims against Focus Receivables. Although a person not party to an agreement
generally cannot enforce the agreement, several exceptions permit enforcement of an
arbitration agreement by a non-party. Lawson v. Life of the South Ins. Co., 648 F.3d
1166, 1168 (“[A] nonparty to a contract may have the legal right to enforce [the
contract’s] provisions ‘through assumption, piercing the corporate veil, alter ego,
incorporation by reference, third-party beneficiary theories, waiver, and estoppel.’”)
(quoting Arthur Anderson, 556 U.S. at 631).
The defendants correctly argue that “equitable estoppel” requires arbitration
of the claims against Focus Receivables. (Doc. 5 at 10) If a plaintiff’s claims against
a contracting party and a non-party involve “substantially interdependent and
concerted misconduct,” equity requires arbitrating the claims against both the
contracting party and the non-party. Kolsky v. Jackson Square, LLC, 28 So. 3d 965, 969
(Fla. 3d DCA 2010) (Lagoa, J.) (citing MS Dealer Serv. Corp. v. Franklin, 177 F.3d 942,
947 (11th Cir. 1999)); Lash & Goldberg LLP v. Clarke, 88 So. 3d 426, 427–28
(Fla. 4th DCA 2012) (Gross, J.). The Vanwechels allege that Focus Receivables, as
the “servant, employee, and/or other representative of Regions,” violated the TCPA,
the FDCPA, and the FCCPA while attempting to collect the debt owed to Regions.
(Doc. 2 at ¶¶ 12–14, 35–38, 51, 58, 63, 67, 74) Because the Vanwechels allege a
concerted effort by the defendants to collect the debt purportedly owed to Regions,
equity permits Focus Receivables to enforce the arbitration agreement.
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CONCLUSION
The motions (Docs. 5, 6) to compel arbitration are GRANTED, and the
action is STAYED. No later than ten days after announcement of the arbitral
decision, the parties must move to confirm or vacate the award or to dismiss this
action. The clerk is directed to ADMINISTRATIVELY CLOSE the case.
ORDERED in Tampa, Florida, on May 3, 2017.

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