Inetianbor v. Cashcall, Inc. et al

Filing 59

ORDER granting 53 Motion to Compel Arbitration; granting 53 Motion to Stay. Signed by Judge James I. Cohn on 5/17/2013. (ams)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 13-60066-CIV-COHN/SELTZER
ABRAHAM INETIANBOR,
Plaintiff,
v.
CASHCALL, INC.,
Defendant.
________________________/
ORDER COMPELLING ARBITRATION
THIS CAUSE is before the Court upon Defendant CashCall, Inc’s Renewed
Motion to Compel Arbitration and Dismiss or Stay Case [DE 53]. The Court has
considered the motion, Plaintiff’s response [DE 56], Defendant’s reply [DE 57], 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. On December 17, 2012, Plaintiff filed an Amended

Complaint in state court. CashCall then removed the action to this Court on January
11, 2013. DE 1 at 2-3. On January 24, 2013, CashCall responded to the Amended
Complaint with 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 agreement further
provides that
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.
Id. at 6. On February 15, 2013, the Court issued an Order (“February 15 Order”)
granting the motion to compel, and directing the parties to submit the claims to
arbitration. See DE 33 at 8.
Then, on March 12, 2013, Plaintiff filed a Motion to Reopen Case [DE 37], in
which he advised the Court that, subsequent to the February 15 Order, 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 “the Cheyenne River Sioux Tribe . . . 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.
Plaintiff argued that arbitration before the designated forum was unavailable, and
requested that the Court reopen the case. CashCall responded that arbitration could
2

still be conducted by tribe members on the reservation, but failed to clarify how this
contention was consistent with the letter from the tribal court. See DE 39. The Court
determined that Plaintiff had provided persuasive evidence that the arbitral forum
designated in the loan agreement was unavailable, and that the choice of forum was
integral to the agreement to arbitrate. Accordingly, the Court granted Plaintiff’s motion
and reopened the case. See DE 45.
In the instant motion, CashCall once again seeks to compel arbitration, and
submits evidence that Robert Chasing Hawk, Sr., a Tribal Elder of the Cheyenne River
Sioux Tribal Nation, has agreed to serve as arbitrator for the case and to apply tribal
law. See DE 57-1 at 2. Plaintiff opposes the motion.
II. LEGAL STANDARD
In considering a motion to compel arbitration, the Court looks first to the Federal
Arbitration Act, 9 U.S.C. § 1, et seq. (“FAA”), which governs the interpretation and
enforceability of arbitration provisions. See Moses H. Cone Mem’l Hosp. v. Mercury
Constr. Corp., 460 U.S. 1, 24 (1983) (noting that the FAA “[creates] a body of federal
substantive law of arbitrability, applicable to any arbitration agreement within the
coverage of the Act.”). Section 2 of the FAA provides that
“[a] written provision in any . . . contract evidencing a transaction involving
commerce to settle by arbitration a controversy thereafter arising out of
such contract or transaction . . . 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. Further, § 3 requires federal courts to stay proceedings when an issue in
the proceeding is referable to arbitration; and § 4 directs courts to compel arbitration
when one party has failed to comply with an agreement to arbitrate. EEOC v. Waffle
3

House, Inc., 534 U.S. 279, 289 (2002) (citing 9 U.S.C. §§ 3-4). Together, these
provisions “manifest a liberal federal policy favoring arbitration agreements.” EEOC,
534 U.S. at 829 (quoting Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24
(1991)). Because of that policy, all doubts concerning the scope of an arbitration
provision are resolved in favor of arbitration. Brandon, Jones, Sandall, Zeide, Kohn,
Chalal & Musso, P.A. v. Medpartners, Inc., 312 F.3d 1349, 1358 (11th Cir. 2002) (citing
Moses H. Cone, 460 U.S. at 24-25).
The Court’s role in deciding a dispute is quite limited when there is an agreement
to arbitrate. “[T]he threshold questions a district court must answer when determining
whether a case may be properly referred to arbitration are: (1) whether the parties
entered into a valid arbitration agreement; and (2) whether the specific dispute falls
within the scope of the agreement.” Viamonte v. Biohealth Techs., No. 09-21522-CIVGOLD/McALILEY, 2009 U.S. Dist. LEXIS 119200, *6 (S.D. Fla. Nov. 24, 2009). A
plaintiff challenging the enforcement of an arbitration agreement bears the burden to
establish, by substantial evidence, any defense to the enforcement of the agreement.
See Bess v. Check Express, 294 F.3d 1298, 1306-07 (11th Cir. 2002).
III. ANALYSIS
The Court previously resolved the threshold questions of arbitrability in the
February 15 Order, finding as follows:
The terms of the agreement are clear: all disputes between the borrower
and the holder of the Note or the holder’s servicer must be settled through
arbitration. In this suit, Plaintiff seeks damages from Cashcall, the
servicer of the note, for actions related to Cashcall’s servicing and
collecting on the note. Therefore, Plaintiff’s claims fall within the scope of
the arbitration provision.
4

See DE 33 at 6 (internal citations omitted). In the present motion, CashCall argues that
the only grounds for reopening the case was the unavailability of the arbitral forum.
CashCall asserts that because it has provided evidence that this action can be, and in
fact has been, submitted to arbitration with the designated forum, the parties are bound
to settle their claims at arbitration. Upon review of the evidence the Court agrees.
First, CashCall submits a letter from Judge Demery, dated April 4, 2013, in which
she states that:
The [Cheyenne River Sioux Tribal] Court does not provide arbitration.
Arbitration, as in a contractual agreement, is permissible. However, the
Court does not involve itself in the hiring of the arbitrator or setting dates
or time for the parties. After there is an arbitration award, the parties may
seek to confirm the award in Tribal Court.
DE 53-3 at 2. Further, the record evidence shows that CashCall sent a demand for
arbitration to Plaintiff via certified mail [DE’s 53-1, 57-2]; that Plaintiff received the
demand on May 3, 2013 [DE 57-2]; that Tribal Elder Robert Chasing Hawk, Sr., has
agreed to arbitrate the case and is in the process of scheduling a hearing on preliminary
matters [DE 57-1]; and that Plaintiff has been notified via email and phone call about
the status of arbitration [DE 57-3]. Thus, the Court finds that CashCall has properly
submitted this action to arbitration, and that the designated forum is available to
conduct arbitration.
Plaintiff attempts to avoid arbitration on four grounds, each of which is
unavailing. First, Plaintiff objects to the loan agreement’s choice-of-law provision which
provides for the application of tribal law in disputes arising under the contract.
However, as the Court pointed out in the February 15 Order:
[T]he Eleventh Circuit has summarized the case law regarding choice-of5

law provisions in arbitration agreements as follows:
(1) courts should apply a strong presumption in favor of enforcement of
arbitration and choice clauses; (2) US statutory claims are arbitrable,
unless Congress has specifically legislated otherwise; (3) choice-of-law
clauses may be enforced even if the substantive law applied in arbitration
potentially provides reduced remedies [ . . . ] than those available under
US law, and (4) even if a contract expressly says that foreign law governs
. . . courts should not invalidate an arbitration agreement at the arbitrationenforcement stage . . . . “
Lindo v. NCL (Bahamas) Ltd., 652 F.3d 1257, 1269 (11th Cir. 2011).
There is thus a strong presumption in favor of enforcing the jurisdictional
clause of the Loan Agreement. As the party challenging the enforcement
of an arbitration agreement, Plaintiff bears the burden of establishing the
invalidity of the jurisdictional clause.
DE 33 at 7. Plaintiff cites no authority and provides no evidence showing that the
choice-of-law provision is invalid, and thus fails to meet his burden on this issue.
Accordingly, the Court concludes that the choice-of-law provision is enforceable and
Plaintiff’s claims may be arbitrated pursuant to tribal law.
Second, Plaintiff contends that CashCall has repeatedly delayed the resolution
of this case. Plaintiff argues that such delays amount to bad faith and willful
misconduct, thereby waiving CashCall’s right to arbitrate. This argument is without
merit. “A party claiming waiver of arbitration must demonstrate: 1) knowledge of an
existing right to arbitrate and 2) active participation in litigation or other acts inconsistent
with the right.” Ibis Lakes Homeowners Ass’n v. Ibis Isle Homeowners Ass’n, 102 So.
3d, 722, 731 (Fla. 4th DCA 2012) (quoting Inverrary Gardens Condo. I Ass’n v.
Spender, 939 So. 2d 1159, 1161 (Fla. 4th DCA 2006)). In light of the strong federal
policy in favor of arbitration, “[a]ll doubts regarding waiver should be construed in favor
of arbitration rather than against it.” Marine Envtl. Partners, Inc. v. Johnson, 863 So. 2d
6

423, 426 (Fla. 4th DCA 2003). Here, Plaintiff fails to show that CashCall has actively
participated in litigation in a way inconsistent with its right to arbitrate. To the contrary,
CashCall responded to Plaintiff’s Amended Complaint with a Motion to Compel
Arbitration and Dismiss or Stay Case, thirteen days after removing the action to this
Court. Moreover, CashCall did not participate in discovery prior to filing its motion to
compel, and CashCall has repeatedly asserted its right to arbitrate. See Ibis Lakes,
102 So. 3d at 731-32 (summarizing relevant case law finding that substantial
participation in discovery may constitute waiver of arbitration). Accordingly, the Court
finds that CashCall has not waived arbitration.
Third, Plaintiff argues that CashCall does not have standing to compel arbitration
because it did not sign the loan agreement and is not a party thereto. This assertion,
however, is contradicted on the face of the agreement. Under the section titled
“Arbitration Defined,” the agreement provides as follows:
Arbitration is a means of having an independent third party resolve a
Dispute. A “Dispute” is any controversy or claim between you and
Western Sky or the holder of the note. . . . For purposes of this Arbitration
agreement, the term “the holder” shall include Western Sky . . . as well as
any marketing, servicing, and collection representatives and agents.
DE 16-2 at 5-6. Furthermore, under the “Choice of Arbitrator” section, it states that
“Any party to a dispute, including related third parties, may send the other party
written notice . . . of their intent to arbitrate . . . . “ Id. at 6 (emphasis added). Thus, the
arbitration provisions plainly contemplated that third parties, including servicers, could
compel arbitration for disputes arising under the loan agreement. CashCall, as servicer
on the loan, therefore has standing to compel arbitration in this action.
Finally, Plaintiff argues that the arbitration provision is unenforceable because it
7

is unconscionable. “The Supreme Court has recognized that ‘generally applicable
contract defenses, such as fraud, duress, or unconscionability may be applied to
invalidate arbitration agreements.’” Jenkins v. First American Cash Advance of
Gerogia, LLC, 400 F.3d 868, 875 (11th Cir. 2005) (quoting Doctor’s Assocs., Inc. v.
Casarotto, 517 U.S. 681, 687 (1996)). Here, Plaintiff contends that the arbitration
provision is unconscionable because it allows CashCall to unilaterally choose the pool
of arbitrators. In support, Plaintiff cites to Pokorny v. Quixtar, Inc., 601 F.3d 987, 100204 (9th Cir. 2010), in which the court found an arbitration selection process was
unconscionable in part because the plaintiff was forced to choose its arbitrator from a
list of arbitrators trained by the defendant, or pay a higher arbitration fee. The court in
Quixtar was concerned that the use of arbitrators trained by the defendant would give
the defendant an unfair advantage. Thus, by charging a higher fee for using arbitrators
not affiliated with the defendant, the selection process encouraged the use of biased
arbitrators. See id. at 1003. In the instant case, however, Plaintiff has not given the
Court any reason to believe that the selection process would lead to a biased arbitrator.
Unlike in Quixtar, there is no evidence that the tribal arbitrators were trained by or have
any other connection with CashCall. Indeed, the letter from Mr. Hawk specifically states
that he “[has] no preexisting relationship with either party in this case.” DE 57-1 at 2.
Hence, the Court finds that the arbitration selection process is not unconscionable, and
will compel arbitration in accordance with the loan agreement.
IV. CONCLUSION
For the foregoing reasons, it is hereby
ORDERED AND ADJUDGED as follows:
8

1.

Defendant CashCall, Inc’s Renewed Motion to Compel Arbitration and
Dismiss or Stay Case [DE 53] is GRANTED. The parties are ordered to
submit the claims presented in the instant action to arbitration.

2.

Pursuant to the FAA, 9 U.S.C. § 3, this case is STAYED until such
arbitration has been had in accordance with the terms of the agreement.

3.

The parties are directed to file a status report with this Court upon the
earliest of either 1) the completion of arbitration, or 2) November 18,
2013, to advise the Court regarding the status of the case.

4.

Any pending motions are DENIED as moot. The Clerk of Court is
directed to CLOSE this case for administrative purposes.

DONE AND ORDERED in Chambers at Fort Lauderdale, Broward County,
Florida, on this 17th day of May, 2013.

Copies provided to:
Counsel of record via CM/ECF
Abraham Intetianbor, pro se
4271 NW 5th Street, #247
Plantation, FL 33317

9