Inetianbor v. Cashcall, Inc. et al
Filing
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ORDER granting 37 Plaintiff's Motion to Reopen Case. The stay in this case is LIFTED. Signed by Judge James I. Cohn on 4/1/2013. (ams)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 13-60066-CIV-COHN/SELTZER
ABRAHAM INETIANBOR,
Plaintiff,
v.
CASHCALL, INC.,
Defendant.
______________________________/
ORDER GRANTING PLAINTIFF’S MOTION TO REOPEN CASE
THIS CAUSE is before the Court upon Plaintiff’s Notice of Compliance with
Order Compelling Arbitration and Report Regarding Status of the Case [DE 36]
(“Plaintiff’s Notice”), and Plaintiff’s Motion to Reopen Case [DE 37]. The Court has
considered the notice and the motion, the parties’ responses and replies, the record in
this case, and is otherwise fully advised in the premises.
I. BACKGROUND
On January 5, 2011, Plaintiff Abraham Inetianbor entered into a consumer loan
agreement with Western Sky Financial, LLC, for $2,525.00, with an annual interest rate
of 135%. DE 16-2 at 3-4. Defendant CashCall, Inc. (“CashCall”), is the servicer,
handler, and collector on the loan. DE 16 at 2. Plaintiff claims that he has paid off the
loan in full, but that CashCall has continued to report to credit bureaus that he has
upcoming or late payments. DE 1-3 at 2.
On July 12, 2012, Plaintiff brought suit in the Seventeenth Judicial Circuit Court,
Broward County, Florida, alleging that CashCall had defamed Plaintiff’s character by
misrepresenting his creditworthiness to credit reporting agencies. See DE 1-2 at 3-4.
CashCall removed the action to this Court on January 11, 2013. DE 1 at 2-3. On
January 24, 2013, CashCall filed a Motion to Compel Arbitration and Dismiss or Stay
Case [DE 16]. The subject loan agreement requires that all disputes arising out of the
agreement “be resolved by Arbitration, which shall be conducted by the Cheyenne River
Sioux Tribal Nation by an authorized representative in accordance with its consumer
dispute rules and the terms of this Agreement.” DE 16-2 at 5. The Court granted the
motion on February 15, 2013, and directed the parties to submit the claims presented in
this action to arbitration. See DE 33 at 8.
In his Motion to Reopen Case, Plaintiff represents that he attempted to submit
the case for arbitration to the Cheyenne River Sioux Tribal Nation (“the tribe”).
However, the tribe, through Judge Mona R. Demery, responded with a letter dated
March 8, 2013, stating that it “does not authorize Arbitration as defined by the American
Arbitration Association (“AAA”) here on the Cheyenne River Sioux Reservation located
in Eagle Butte, SD 57625.” DE 37 at 5. Rather, the tribe only has a mediation
program. Id. Thus, because the arbitrator named in the agreement appears to be
unavailable, Plaintiff asserts that the arbitration agreement is void. Accordingly, he
seeks to reopen the case before this Court. CashCall opposes the motion.
II. LEGAL STANDARD
The unavailability of an arbitrator named in an arbitration agreement does not
necessarily void the agreement. Pursuant to Section 5 of the Federal Arbitration Act
(“FAA”), the Court may appoint an arbitrator “if for any [ ] reason there shall be a lapse
in the naming of an arbitrator” under the terms of the arbitration agreement. 9 U.S.C.
2
§ 5. However, “if the choice of forum is an integral part of the agreement to arbitrate,
rather than ‘an ancillary logistical concern,’ [then] the failure of the chosen forum [will]
preclude arbitration.” Brown v. ITT Consumer Fin. Corp., 211 F.3d 1217, 1222 (11th
Cir. 2000) (citing Zechman v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 742 F. Supp.
1359, 1364 (N.D. Ill. 1990)). In Brown, the subject arbitration agreement provided that
the parties’ disputes would be “resolved by binding arbitration under the Code of
Procedure of the National Arbitration Forum (“NAF”) . . . .” 211 F.3d at 1220. However,
by the time the plaintiff’s claims arose, the NAF had dissolved. Id. at 1222. The court
held that, while the decision to use NAF law implied that the NAF was the chosen
forum, there was no evidence to suggest that the forum was an integral part of the
agreement to arbitrate. Id.; see also Zechman 742 F. Supp. at 1365 (finding that the
choice of forum was not integral to the agreement in part because the forum was not
explicitly named in the agreement).
The Ninth Circuit came to a similar conclusion in Reddam v. KPMG, LLP, 457
F.3d 1054, 1060-61 (9th Cir. 2006), finding that the parties implicitly chose to arbitrate
in a certain forum by agreeing that the rules of that forum would apply to their
arbitration. The forum refused to arbitrate the parties’ claims. As in Brown, the court
held that the forum’s unavailability was not sufficient to render the agreement
unenforceable. In so holding, however, the court explained that it does not “[treat] the
selection of a specific forum as exclusive of all other fora, unless the parties have
expressly stated that it was.” 457 F.3d at 1061 (emphasis added). Therefore, Brown
and Reddam stand for the proposition that where an arbitration agreement merely
selects the rules of a specific forum, and does not specify the forum itself, the
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agreement will not fail based on the unavailability of that forum. Carideo v. Dell, Inc.,
No. C06-1772JLR, 2009 U.S. Dist. LEXIS 104600, at *14 (W.D. Wa. Oct. 26, 2009)
(citing Reddam, 457 F.3d at 1059-1061). On the other hand, if the agreement includes
“an express statement designating a particular arbitral forum to administer arbitration,”
courts have generally found the forum selection to be integral to the arbitration
agreement. See Clerk v. Cash Cent. of Utah, LLC, No. 09-04964, 2011 U.S. Dist.
LEXIS 95494, at *14-15 (E.D. Pa. Aug. 25, 2011) (citing Gutfreund v. Weiner, 68 F.3d
554, 556-561 (2d Cir. 1995); and Carideo, 2011 U.S. Dist. LEXIS 104600, at *4); see
also Branch v. Sickert, No. 2:10-CV-128-RWS, 2011 U.S. Dist. LEXIS 19392, at *16
(N.D. Ga. Feb. 28 2011) (analyzing Brown and Reddam, and finding that the aribtral
forum was not integral to the subject agreement because it was not “specifically or
exclusively chosen as the forum.”).
Other courts have framed this issue as hinging on whether the parties’ “dominant
intent” was to arbitrate — and thus the designation of the arbitrator was merely a side
issue — or whether the specification of the arbitrator was “as important a consideration
as the agreement to arbitrate itself.” Khan v. Dell, Inc., 669 F.3d 350, 356 (3d Cir.
2012) (citing Brown, 211 F.3d at 1222); see also Linea Naviera de Cabotaje, C.A. v.
Mar Caribe de Navegacion, C.A., 169 F. Supp. 2d 1341, 1347 (M.D. Fla. 2001) (finding
an arbitration agreement enforceable because “[t]he dominant intent [. . . ] was to
arbitrate, with the machinery of selection of the arbitrators subordinate and incidental.”)
(quoting Lory Fabrics, Inc. v. Dress Rehearsal, Inc., 78 A.D.2d 262, 268 (N.Y. App. Div.
1980)).
Ultimately, arbitration agreements are governed by principles of contract law.
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“Even though there is [a] presumption in favor of arbitration, ‘[t]he courts are not to twist
the language of the contract to achieve a result which is favored by federal policy but
contrary to the intent of the parties.’” Doe v. Princess Cruise Lines, Ltd., 657 F.3d
1204, 1214 (11th Cir. 2011) (quoting Goldberg v. Bear, Stearns & Co., 912 F.2d 1418,
1419-20 (11th Cir. 1990)). Thus, while § 5 applies when there is a ‘lapse’ in the naming
of an arbitrator, it does not operate to force the parties to arbitrate before one forum
when they have explicitly agreed to arbitrate before a different forum. See Gutfreund v.
Weiner, 68 F.3d 554, 561 (2d Cir. 1995).
III. ANALYSIS
Here, Plaintiff has made a showing that the arbitration forum specified in the
subject arbitration agreement is not available. CashCall has not offered any evidence
in rebuttal. Instead, CashCall argues that the Court should compel arbitration before a
different forum, such as the AAA or JAMS, Inc. CashCall further asserts that Plaintiff
should not be allowed to reopen the case because he did not comply with the
procedural requirements of the arbitration agreement. Both of these arguments are
without merit.
A. The Choice of Forum was Integral to the Agreement.
First, CashCall cites to Brown, and argues that the Court is required by § 5 of the
FAA to appoint a substitute arbitrator. The Court disagrees. In this case, unlike in
Brown, there is ample evidence in the loan agreement and the arbitration provisions
that the selection of the tribe as arbitrator was integral to the parties’ agreement to
arbitrate. At the very beginning of the loan agreement, it states that:
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This Loan Agreement is subject solely to the exclusive laws and
jurisdiction of the Cheyenne River Sioux Tribe, Cheyenne River
Indian Reservation. By executing this Loan Agreement, you, the
borrower, hereby acknowledge and consent to be bound to the terms of
this Loan Agreement, consent to the sole subject matter and personal
jurisdiction of the Cheyenne River Sioux Tribal Court, and further agree
that no other state or federal law or regulation shall apply to this Loan
Agreement.
DE 16-2 at 3 (emphasis in original). Later, under the section titled ‘Agreement to
Arbitrate,’ it provides that:
You agree that any Dispute, except as provided below, will be resolved by
Arbitration, which shall be conducted by the Cheyenne River Sioux Tribal
Nation by an authorized representative in accordance with its consumer
dispute rules and the terms of this Agreement.
Id. at 5. Additionally, under the ‘Choice of Arbitrator’ provision, it says that:
Any party to a dispute . . . may send the other party written notice by
certified mail return receipt requested at the address appearing at the top
of this Loan Agreement of their intent to arbitrate and setting forth the
subject of the dispute . . . . Arbitration shall be conducted in the Cheyenne
River Sioux Tribal Nation by your choice of either (i) a Tribal Elder, or (ii) a
panel of three (3) members of the Tribal Council, and shall be conducted
in accordance with the Cheyenne River Sioux Tribal Nation’s consumer
dispute rules and the terms of this Agreement. You may appear at
Arbitration via telephone or video conference, and you will not be required
to travel to the Cheyenne River Sioux Tribal Nation. The party receiving
notice of Arbitration will respond in writing by certified mail return receipt
requested within twenty (20) days. You understand that if you demand
Arbitration, you must inform us of your demand of the Arbitrator you have
selected. You also understand that if you fail to notify us, then we have
the right to select the Arbitrator.
Id. at 6. Finally, under ‘Applicable Law and Judicial Review,’ it states that:
THIS ARBITRATION PROVISION IS MADE PURSUANT TO A
TRANSACTION INVOLVING THE INDIAN COMMERCE CLAUSE OF
THE CONSTITUTION OF THE UNITED STATES OF AMERICA, AND
SHALL BE GOVERNED BY THE LAW OF THE CHEYENNE RIVER
SIOUX TRIBE.
Id. Thus, taken together, these provisions show that (1) the entire loan agreement,
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including the arbitration provisions, is subject to the sole subject-matter jurisdiction of
the tribe; (2) for purposes of the agreement, Plaintiff is subject to the sole personal
jurisdiction of the tribe; (3) disputes shall be resolved by arbitration conducted by the
tribe; (4) in selecting their arbitrator, the parties may choose either a Tribal Elder or a
panel of three members of the Tribal Council; and (5) arbitration will be conducted
pursuant to tribal laws and consumer dispute rules. Based on these factors, it is clear
that the choice of the tribal forum was integral to the parties’ agreement to arbitrate.
In contrast to the arbitration agreements in Brown and Zechman, the instant
agreement does not merely designate the applicable law for arbitration. Rather, it
specifically names the arbitral forum and details whom the parties may select as their
arbitrator(s). Further, unlike the subject provision in Branch, the instant agreement
makes clear that it is to be governed solely by tribal law and that Plaintiff can consent
only to the personal jurisdiction of the tribe. Moreover, the language of the agreement
is mandatory, not permissive, stating that arbitration “shall be conducted by the
Cheyenne River Sioux Tribal Nation.” DE 16-2 at 5 (emphases added); cf. Cash Cent.
of Utah, 2011 U.S. Dist. LEXIS 95494, at *18 (finding that the forum was not ‘integral’ in
part because the language of the arbitration clause was permissive, providing that
claims “‘may be filed’ at an NAF office”). Given the repeated, specific, and exclusive
references to the tribe’s role throughout the arbitration agreement, the Court concludes
that the choice of arbitrator was as important a consideration as the agreement to
arbitrate itself. Therefore, § 5 of the FAA does not apply in this case, and the
unavailability of the designated arbitrator will void the arbitration agreement.
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B. CashCall’s Procedural Arguments are Unavailing.
Next, CashCall argues, in its Response to Plaintiff’s Notice [DE 39], that
Plaintiff has not properly sought arbitration in accordance with the loan agreement.
Specifically, CashCall objects to Plaintiff’s ‘ex parte communication’ with the tribal court,
and contends that such communication violated CashCall’s right to respond to the
arbitration demand within twenty days. This argument is without merit. The agreement
provides that the party receiving notice of arbitration has twenty days to respond.
DE 16-2 at 6. It also requires that the party demanding arbitration inform the other
party of which arbitrator he has selected. Id. It does not state that the initiating party
must wait for the other party’s response before attempting to submit its claims to the
arbitrator. Rather, it appears that Plaintiff was attempting to comply with the Court’s
Order directing the parties “to submit the claims presented in the instant action to
arbitration.” DE 33 at 8.
CashCall also contends that Plaintiff failed to send the letter by certified mail,
and that he did not send it to the address located on the agreement. The address in
the agreement is “P.O. Box 37, Timber Lake, SD 57656.” See DE 16-2 at 3. The
heading on Plaintiff’s letter lists the intended address as “1600 South Douglass Road,
Anaheim, CA 98206,” which CashCall asserts is a general mail address for CashCall.
DE 36 at 5. CashCall asserts that Plaintiff sent the letter by regular mail and that, as of
March 14, 2013, it had not received the letter at either address. Plaintiff responds that,
while the letter listed CashCall’s California address in its heading, the envelope was
addressed to the South Dakota location. Neither party has submitted a copy of the
envelope or presents any other evidence on this point. However, in light of Plaintiff’s
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showing that the tribe does not conduct arbitration — and CashCall’s complete failure
to offer any evidence to the contrary1 — the Court concludes that Plaintiff’s compliance
or lack thereof with this procedural requirement is moot. Accordingly, the Court will
grant Plaintiff’s motion.
IV. CONCLUSION
Therefore, for the foregoing reasons, it is hereby ORDERED AND ADJUDGED
that Plaintiff’s Motion to Reopen Case [DE 37] is GRANTED. The stay in this case is
LIFTED and the Clerk of Court is directed to REOPEN this case. The Court will enter a
separate Order setting the trial and calendar call dates.
DONE AND ORDERED in Chambers at Fort Lauderdale, Broward County,
Florida, on this 1st day of April, 2013.
Copies provided to:
Counsel of record via CM/ECF
Abraham Intetianbor, pro se
4271 NW 5th Street, #247
Plantation, FL 33317
1
In fact, CashCall represents that, in March 2011 — two months after Plaintiff
signed his loan agreement — CashCall amended its ‘Choice of Arbitrator’ provision to
remove the Tribal Elder and Tribal Council options. The amended version permits the
initiating party to choose from either JAMS or AAA. DE 39 at 4.
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