LaBella v. CashCall, Inc. et al

Filing 21

ORDER Denying without prejudice 9 Motion to Dismiss. Supplemental Brief due within 20 days. Response Brief due within 7 days of Plaintiffs supplemental brief being filed. Signed by Judge Miranda M. Du on 9/3/2014. (Copies have been distributed pursuant to the NEF - SLR)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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***

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LISA LABELLA, an individual,

Case No. 2:13-cv-01427-MMD-VCF
Plaintiff,

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v.

ORDER

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CASHCALL, INC., a foreign corporation,
WS FUNDING LLC, a foreign limited
liability company, et al.,

(Def’s Motion to Dismiss – dkt. no. 9)

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Defendants.
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Before the Court is Defendants CashCall, Inc. (“CashCall”) and WS Funding,

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LLC’s (“WSF”) Motion to Dismiss or, in the alternative, Motion for Stay and to Compel

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Arbitration (“Motion). (Dkt. no. 9.)

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Plaintiff Lisa LaBella filed the Complaint on August 8, 2013. (Dkt. no. 1.) The

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Complaint asserts claims under the Fair Debt Collection Practices Act (“FDCPA”) and

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Telephone Consumer Protection Act (“TCPA”) regarding Defendants’ alleged efforts to

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collect a debt from Plaintiff. (Id. at 3.) The sole basis of Defendants’ Motion is that “when

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LaBella obtained the loan that is the subject of this litigation, she expressly agreed to

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arbitrate all disputes with WSF and CashCall[.]” (Id. at 1.) Defendants assert that Plaintiff

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signed a loan agreement with an arbitration clause. (Id. at 1–2.) In her opposition to the

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Motion, however, Plaintiff disputes this. (See dkt. no. 11.) Plaintiff’s opposition states that

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“Ms. LaBella did not execute the alleged arbitration agreement or authorize any party to

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execute the agreement on her behalf” and that “Plaintiff’s former roommate fraudulently

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obtained personal information and executed the subject loan agreement without

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Plaintiff’s knowledge or consent.” (Id. at 2.) LaBella submits a declaration in support of

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her opposition. (See dkt. no. 11-1.) In their reply, Defendants argue there is no genuine

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issue of material fact as to the existence of a valid loan agreement, and submit evidence

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to support their position that Plaintiff did in fact sign the loan agreement and received the

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loan money. (See dkt. no. 16.) Plaintiff has not yet had an opportunity to respond to the

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evidence and arguments presented by Defendants.

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When one party disputes “the making of the arbitration agreement,” the Federal

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Arbitration Act (“FAA”) requires that “the court [ ] proceed summarily to the trial thereof”

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before compelling arbitration under the agreement. 9 U.S.C. § 4. The Ninth Circuit

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interprets this provision as encompassing challenges to a specific arbitration clause and

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challenges to “the making of a contract containing an arbitration provision” as well. See

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Three Valleys Mun. Water Dist. V. E.F. Hutton & Co., Inc., 925 F.2d 1136, 1140-41 (9th

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Cir. 1991). Thus, “challenges to the existence of a contract as a whole must be

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determined by the court prior to ordering arbitration.” Sanford v. MemberWorks, Inc.,

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483, F.3d 956, 962 (9th Cir. 2007) (citing Three Valleys, 925 F.2d at 1140-41). The Court

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must first determine whether a “genuine issue of fact concerning the formation of the

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[loan] agreement” exists before it can order arbitration. See Three Valleys, 925 F.2d at

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1141 (quoting Par-Knit Mills, Inc. v. Stockbridge Fabrics Co., 636 F.2d 51, 54 (3d Cir.

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1980)). This standard is similar to that employed by district courts in resolving summary

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judgment motions pursuant to Fed. R. Civ. P. 56. See Omstead v. Dell, Inc., 533 F.

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Supp. 2d 1012, 1038 (N.D. Cal. 2008) (citing Par–Knit Mills, 636 F.2d at 54 n.8).

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The Court therefore asks for additional briefing on whether there is a genuine

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issue of material fact as to the existence of a loan agreement between Plaintiff and

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Defendants. Plaintiff will be given an opportunity to file a supplemental brief on that

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question and Defendants will have an opportunity to respond. As the Court must first

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resolve this question before it may compel arbitration, Defendants’ Motion is denied

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without prejudice to renew in the event the Court resolves this question in Defendants’

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favor.
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It is hereby ordered that Defendants’ Motion to Dismiss (dkt. no. 9) is denied

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without prejudice. Plaintiff is ordered to file a supplemental brief consistent with this

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Order’s instructions within fifteen (15) days. Defendants may file a response within seven

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(7) days of Plaintiff’s supplemental brief being filed.

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DATED THIS 3rd day of September 2014.

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MIRANDA M. DU
UNITED STATES DISTRICT JUDGE

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