HUERTAS v. FOULKE MANAGMENT, CORP. et al

Filing 36

OPINION. Signed by Judge Renee Marie Bumb on 12/18/2017. (tf, )

[Docket No. 5, 11, 17, 21, 25, 29]
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE

HECTOR L. HUERTAS,
Plaintiff,

Civil No. 17-1891 (RMB/AMD)
OPINION

v.
FOULKE MANAGEMENT CORP., CHERRY
HILL MITSUBISHI, ANTHONY
TRAPANI, et al.,
Defendants.

APPEARANCES:
Hector L. Huertas, pro se
P.O. Box 448
Camden, New Jersey 08101
CAPEHART & SCATCHARD, P.A.
By: Laura D. Ruccolo, Esq.
8000 Midlantic Drive, Suite 300S
P.O. Box 5016
Mount Laurel, New Jersey 08054
BUMB, UNITED STATES DISTRICT JUDGE:
Pro se Plaintiff Hector Huertas brings this suit against
various defendants in connection with his purchase of a used car on
December 22, 2016.

Huertas primarily asserts that he was duped into

purchasing a car on credit terms he ultimately could not afford, at
an inflated price.

He seeks compensatory / statutory damages of

$81,092.40, punitive damages, and costs of suit.

1

Defendants Foulke Management Corp., Cherry Hill Mitsubishi,
Cherry Hill Triplex, and Anthony Trapani (collectively “Foulke
Management”) move to compel arbitration. (Dkt No. 5)

Defendant

“Capital One, N.A.” / “Capital One Financial Corp.” (“Capital One”)
also separately moves to compel arbitration.

(Dkt No. 17) 1

In

response to Capital One’s motion, Huertas moves to amend his
complaint. (Dkt No. 21)

Oral argument on all outstanding motions

was held on December 15, 2017.

For the reasons stated herein,

Foulke Management’s motion will be granted, Huertas’ Motion to Amend
will be dismissed without prejudice with leave to renew for failure
to comply with L. Civ. R. 7.1(f), and Capital One’s motion to compel
arbitration will be administratively terminated pending further
proceedings with respect to Plaintiff’s proposed amended pleading. 2
I.

FACTS
The Complaint alleges the following facts.

Sometime in

December, 2016, Foulke Management sent Huertas a “promotional

1

The other Defendant to this suit is “David Michael Sciolla
Insurance.” The Court has no record of Sciolla Insurance having
been served with process, and no attorney has entered an appearance
on Sciolla Insurance’s behalf.
2

Also pending are three other motions filed by Huertas: (1)
Motion for Leave to File a Sur-Reply (Dkt No. 11) in further
opposition to Foulke Management’s motion; (2) Motion to Strike
Capital One’s Opposition to Huertas’ Motion to Amend (Dkt No. 25);
and (3) Motion to Strike Capital One’s Opposition to the Motion to
Strike (Dkt No. 29). As to (1), the Court has concluded that the
proposed sur-reply would not be helpful in this instance.
Accordingly, the motion for leave to file will be denied. As to (2)
and (3), those motions will be denied as moot in light of the
disposition of Huertas’ Motion to Amend.
2

mailer” which appeared to indicate that Huertas had won $25,000.00.
(Compl. ¶ 7)

Huertas called the telephone number on the mailer and

was given an appointment time of December 22, 2016 at 4 p.m. at the
Cherry Hill Mitsubishi car dealership.

(Id. at ¶ 7-8)

On December 22, 2016, Huertas arrived an hour early for his
appointment, and inquired about his prize at the front counter.
(Compl. ¶ 9)

The employee behind the counter explained that Huertas

“had not won the $25,000 grand prize but had won a $50 gift card for
restaurant.com.”

(Id. at ¶ 10)

The employee then asked Huertas

whether he would like “to be evaluated for prequalification for a
car.”

(Id. at ¶ 11)

Although initially reluctant, Huertas “then

changed his mind and agreed to be evaluated because he had already
made the trip via public transportation and did not want to waste
any more time making another trip to a dealer in the future.”

(Id.

¶¶ 12-13)
After providing some “financial and credit information” to
Tyler Medina, Huertas “was qualified to purchase a car with no money
down.”

(Compl. ¶¶ 16-18)

Medina then took Huertas on test drives of three different
vehicles, including a 2013 Hyundai Sonata, which Huertas decided to
purchase.

(Compl. ¶¶ 19, 22, 34 and Ex. H)

Several hours passed before Huertas joined Woodrow Wilson in
the finance office “to sign and finalize the transaction.”
¶ 41-42)

(Compl.

By this time, it was “about 9:00 p.m. closing time,” and

3

Huertas “was extremely hungry, somewhat weak, exhausted from
waiting, and paranoid.”

(Id. at ¶¶ 42, 44) 3

The Complaint further alleges:
45. Woodrow Wilson was sitting behind a desk with a stack
of documents and just told [Huertas] ‘sign here, here,
and here’ while holding on to each document and pointing
with his index finger to the signature lines on the
documents where [Huertas] had to sign to complete the
transaction.
46. [Huertas] focused only on these multiple signature
lines within the documents and did not focus on any other
aspect of the document due to his exhaustion while Woodrow
Wilson took back each document and then presented to
[Huertas] one document after another in rapid fire fashion
while maintaining physical control of the documents.
47. Woodrow Wilson stacked the documents on top of the
desk and maintained physical control, which procedure
covered up the documents underneath making it difficult
for [Huertas] to focus on any one document so that he
never saw any disclosures or even the titles of the
documents.
48.
Woodrow Wilson did not discuss any document with
[Huertas] other than instructing [Huertas] to sign on the
numerous signature lines within the documents.
49.
5 documents contained multiple signature lines or
clauses, while 6 documents contained one signature line.
(Compl. ¶¶ 45-49)

3

Huertas alleges he was told that the lengthy passage of time
between his arrival and the completion of the car sale was the
combined result of paperwork processing, and “other customers ahead
of him.” (Compl. ¶ 24, 41)
4

After the transaction was completed, “at approximately 9:15
p.m.,” another salesperson drove Huertas and the car to Huertas’
residence.

(Compl. ¶ 54) 4

Allegedly within a few days of the purchase, Huertas
unsuccessfully attempted to “cancel” the contract of sale because he
had not received title to the car on the day of purchase, and the
rear passenger-side tire leaked. (Compl. ¶ 57)
The Complaint asserts seven counts, although some appear to
overlap: (1) “violation of [N.J.S.A.] §§ 56:8-68 and 69 and N.J.
Unfair and Deceptive Acts and Practices [sic]”; (2) “violations of
the Motor Vehicle Information and Cost Savings Act, 49 U.S.C. §§
32701-32711”; (3) “violation of the [Truth In Lending Act’s]
requirement of finality”; (4) “violation of the [Equal Credit
Opportunity Act’s] notice requirements”; (5) “violations of the
Truth in Lending Act”; (6) “violation of [N.J.S.A.] §§ 56:8-68 and
69 and N.J. Unfair and Deceptive Acts and Practices [sic]”; and (7)
“all violations committed by Defendant [Foulke Management] are
alleged against Capital One pursuant to the FTC Holder Rule if such
claims are ordered to arbitration.”
Most directly relevant to the instant motion, one of the
documents Huertas admittedly signed at the dealership was an
“Arbitration Agreement.” (Compl. ¶ 50; see also Kopp Cert. Ex. B)

4

Allegedly Huertas did not drive himself home in the car he
had just purchased because he did not have a drivers license at the
time. (Compl. ¶ 1 n.1)
5

However, Huertas states, “at the time of consummation, [he] did not
review any of the documents he signed because he was extremely
hungry, somewhat weak, confused, disoriented, and significantly
paranoid because he either completed the sale and rode inside the
car back home or had to take a bus back home that late at night.”
(Compl. ¶ 1)
The one-page Arbitration Agreement bears the following warning
at both the top and bottom of the page, in capital letters and
bolded: “READ THIS ARBITRATION AGREEMENT CAREFULLY. IT LIMITS
CERTAIN OF YOUR RIGHTS, INCLUDING YOUR RIGHT TO MAINTAIN A COURT
ACTION.”

(Kopp. Cert. Ex. B)

Notably, the bottom warning appears

immediately above Mr. Huertas’ signature:

(Id.)
The Arbitration Agreement states in relevant part,
In consideration of the mutual promises made in this
agreement, you and we agree that either you or we have an
absolute right to demand that any dispute be submitted to
an arbitrator in accordance with this agreement.
If
either you or we file a lawsuit, counterclaim, or other
action in a court, the other party has the absolute right
to demand arbitration following the filing of such action.

6

ARBITRATION: Arbitration is a method of resolving disputes
between parties without filing a lawsuit in court.
By
signing this agreement, you and we are both agreeing that
if there are any disputes between you and us, either you
or we may require that such dispute be submitted to an
arbitrator in accordance with this agreement. If either
party demands arbitration, the arbitrator’s decision will
be final and binding on you and us. The arbitrator will
provide any written reasons for the decision. You and we
are giving up the right to continue a lawsuit,
counterclaim, or other action in court, including the
right to a jury trial, in the event the other party
exercises the right to demand arbitration pursuant to this
agreement.
DISPUTES COVERED: This agreement applies to all claims
and disputes between you and us. This includes, without
limitation, all claims and disputes arising out of, in
connection with, or relating to:
•
•
•
•

•
•
•
•

•

•
•

Your purchase of any goods or services from us;
Any previous purchase of goods or services from
us;
All the documents relating to this or any
previous purchase of goods or services from us;
Any service contract or other after market
products purchased in connection with this or
any previous purchase;
Whether the claim or dispute must be arbitrated;
The validity of this arbitration agreement;
Any negotiations between you and us;
Any claim or dispute based on an allegation of
fraud or misrepresentation, including fraud in
the inducement of this or any other agreement;
Any claim or dispute based on a federal or state
statute including, but not limited to the N.J.
Consumer Fraud Act, N.J.S.A. 56:8-1, et seq.
and the Federal Truth in Lending Act;
Any claim or dispute based on an alleged tort;
and
Any claim or dispute based on breach of
contract.

This agreement also applies to any claim or dispute,
including all the kinds of disputes listed above, between
you and any of our employees or agents, any of our
affiliate corporations, and any of their employees or
agents and any third parties related to this transaction.

7

(Kopp Cert. Ex. B)(emphasis added).
II.

MOTION TO COMPEL ARBITRATION STANDARD
Motions to compel arbitration are reviewed under the standard

for summary judgment found in Federal Rule of Civil Procedure 56(a).
Flintkote Company v. Aviva, 769 F.3d 215, 219 (3d Cir. 2014).

Under

this standard, “the motion should be granted where ‘there is no
genuine dispute as to any material fact and the movement is entitled
to judgment as a matter of law.’”
56(a)).

Id. (quoting Fed. R. Civ. P.

In applying this standard, this Court must view the facts

and draw inferences in the light most favorable to the nonmoving
party “because the district court’s order compelling arbitration is
in effect a summary disposition of the issue of whether or not there
had been a meeting of the minds on the agreement to arbitrate.”
Century Idem. Co. v. Certain Underwriters at Lloyd’s London, 584
F.3d 513, 528 (3d Cir. 2009)(quotations and citations omitted).
III. ANALYSIS
A. Foulke Management’s Motion to Compel Arbitration
Foulke Management moves to compel arbitration based on the
Arbitration Agreement which Huertas admits he signed.

In opposition

to the motion, Huertas argues: (A) the arbitration agreement “is
substantively unconscionable”; (B) “the [Magnusson-Moss Warranty
Act] bars all warranty claims from binding arbitration”; (C) “the
official interpretations of TILA § 130 and 131 require that those
sections are not eligible for state exemption and are barred from
arbitration agreements”; and (D) “the arbitration agreement, and the
8

embedded delegation clause, were not validly formed, were
fraudulently induced, and contain provision(s) [sic] that are
illegal that render each contract invalid.” (Opposition Brief, Dkt.
No. 7, p. 3, 10, 13, 14) 5
The Court need only address the last argument, however, because
the Court holds that the other arguments must be decided by the
arbitrator in accordance with the parties’ Arbitration Agreement,
which expressly states that all issues concerning arbitrability and
the validity of the Arbitration Agreement must be decided by the
arbitrator and not this Court.
Foulke Management asserts, “any issue raised by Plaintiff as to
the validity of the Arbitration Agreement[] is for the Arbitrator to
decide and not the [C]ourt based on the express delegation clause in
the Arbitration Agreement.”
Court agrees.

(Moving Brief, Dkt. No. 5, p. 17)

The

The delegation clause at issue is clear and broad:

“This agreement applies to all claims and disputes between you and
us.

This includes, without limitation, all claims and disputes

arising out of, in connection with, or relating to . . . [w]hether
the claim or dispute must be arbitrated, [and] [t]he validity of
this arbitration agreement.”

(Kopp Cert. Ex. B)

5

See Rent-A-Center,

Huertas also argues “Defendant Foulke Management
Corporation’s arbitration agreement does not apply to Defendant
Sciolla Insurance.” (Opposition Brief, p. 9) The Court does not
address this argument because (1) Foulke Management, the moving
party, does not argue that its Arbitration Agreement applies to
Sciolla Insurance and (2) Sciolla Insurance has not entered an
appearance in this case.
9

W., Inc. v. Jackson, 561 U.S. 63, 68–69 (2010)(“The delegation
provision is an agreement to arbitrate threshold issues concerning
the arbitration agreement.

We have recognized that parties can

agree to arbitrate ‘gateway’ questions of ‘arbitrability,’ such as
whether the parties have agreed to arbitrate or whether their
agreement covers a particular controversy.”).
It is well-established that “‘only an arbitration provisionspecific challenge is relevant to a court’s determination whether
the arbitration agreement at issue is enforceable.’

If the

challenge encompasses the contract as a whole, the validity of that
contract, like all other disputes arising under the contract, is a
matter for the arbitrator to decide.”

S. Jersey Sanitation Co.,

Inc. v. Applied Underwriters Captive Risk Assurance Co., Inc., 840
F.3d 138, 143 (3d Cir. 2016)(quoting Rent-A-Center); see also,
Quilloin v. Tenet HealthSystem Philadelphia, Inc., 673 F.3d 221, 229
(3d Cir. 2012)(when a “plaintiff ‘challenge[s] only the validity of
the contract as a whole’ rather than the validity of the delegation
clause, . . . in accordance with the valid delegation clause,
questions of arbitrability (including the arbitrability of the
overall agreement to arbitrate) must go to an arbitrator.”) (quoting
and discussing Rent-A-Center).
Here, Huertas challenges only the validity of the contract as a
whole, not the delegation clause specifically.

His theory is that

he “entered into the yo-yo car sale transaction with defendant FMC
under duress in which he blindly obeyed defendant [Foulke
10

Management’s] finance manager Woodrow Wilson and thus signed under
duress without seeing the titles of a stack of Official Legal
Documents [sic] that included a separate Arbitration Agreement that
in turn contained a purported delegation clause.” (Opposition Brief,
Dkt. No. 7, p. 17)

If Huertas were to prevail on this argument, the

entire agreement would be invalidated and unenforceable.

Compare

Rent-A-Center, 561 U.S. at 71 (“where the alleged fraud that induced
the whole contract equally induced the agreement to arbitrate which
was part of that contract-- we nonetheless require the basis of
challenge be directed specifically to the agreement to arbitrate
before the court will intervene.”) 6; contrast Minnieland Private Day
Sch., Inc. v. Applied Underwriters Captive Risk Assurance Co., Inc.,
867 F.3d 449, 456-57 (4th Cir. 2017)(finding that the plaintiff had
“challenged the validity of th[e] delegation [clause] with
sufficient force and specificity” by arguing that Virginia law
“renders void delegation provisions in putative insurance
contracts.”).

Thus, in accordance with the delegation clause and

Rent-A-Center, the Court holds that Huertas’ substantive claims, as
well as his challenges concerning arbitrability, all must be decided
by the arbitrator.

6

See also, S. Jersey Sanitation Co., 840 F.3d at 144 (“It is
plain from these paragraphs that South Jersey alleges no arbitration
provision-specific fraud, but rather challenges the arbitration
provision only as part of its general challenge of the contract.
Indeed, South Jersey states in its brief that ‘[f]raud is a defense
that is generally applicable to all contracts and can invalidate a
whole contract or certain portions thereof, including arbitrations
[sic] agreements.’”).
11

Accordingly, the Court will compel arbitration.

However, the

claims against Foulke Management will not be dismissed, but rather
stayed pending the arbitrator’s decision regarding arbitrability.
B. Capital One’s Motion to Compel Arbitration and Huertas’ Motion
to Amend
Capital One, relying on the above-quoted arbitration agreement
signed by Huertas and Foulke Management, asserts that all claims
against it must also be sent to arbitration.

In the Court’s view,

Capital One’s argument puts the cart before the horse insofar as (a)
Huertas’ theory of liability against Capital One, as currently set
forth in the instant complaint, is somewhat unclear; and (b) Huertas
has indicated his desire to amend his complaint, however Huertas has
not filed his proposed amended complaint, as L. Civ. R. 7.1(f)
requires.

See L. Civ. R. 7.1(f) (“Upon filing a motion for leave to

file an amended complaint . . . the moving party shall attach to the
motion a copy of the proposed pleading[.]”).

Without first

determining what the claims-- or proposed claims-- are, the Court
cannot determine whether the arbitration agreement is implicated at
all.
Therefore, the Court will dismiss without prejudice Huertas’
Motion to Amend and grant Huertas leave to file, within three weeks,
a renewed Motion to Amend which complies with Local Civil Rule
7.1(f).

Capital One’s Motion to Compel Arbitration will be

administratively terminated pending the Court’s decision on Huertas’
renewed Motion to Amend.

Should Capital One oppose Huertas’ renewed

12

Motion to Amend, it is free to include in its opposition brief any
arguments asserted in its current Motion to Compel Arbitration, if
appropriate.
IV.

CONCLUSION
For the foregoing reasons, Foulke Management Corp.’s Motion to

Compel Arbitration (Dkt No. 5) will be granted, Capital One’s Motion
to Compel Arbitration (Dkt No. 17) will be administratively
terminated, Huertas’ Motion to Amend the Complaint (Dkt No. 21) will
be dismissed without prejudice with leave to renew, Huertas’ Motion
for Leave to File a Sur-reply (Dkt No. 11) will be denied, and
Huertas’ Motions to Strike (Dkt No. 25, 29) will be denied as moot. 7
An appropriate Order shall issue on this date.

Dated: December 18, 2017

s/ Renée Marie Bumb
__________________________
RENÉE MARIE BUMB
UNITED STATES DISTRICT JUDGE

7

The basis for Huertas’ first Motion to Strike [Dkt No. 25] is
the undisputed fact that the brief at issue was filed one day late.
If that Motion to Strike were not mooted by the Court’s disposition
of Huertas’ Motion to Amend, the Motion to Strike would be denied.
Huertas does not assert that he suffered any prejudice as a result
of the late filing, rather, at oral argument he merely asserted that
“rules are rules.” In that regard however, the Court observes that
Huertas himself failed to abide by the very rule he seeks to enforce
against his adversary, L. Civ. R. 7.1, when he failed to file his
proposed amended pleading along with his Motion to Amend.
13