CINTRON v. MONTEREY FINANCIAL SERVICES, INC.

Filing 20

OPINION. Signed by Judge Claire C. Cecchi on 10/10/2018. (JB, )

Case 2:17-cv-11537-CCC-CLW Document 20 Filed 10/10/18 Page 1 of 8 PageID: 117

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

LAZARAO C1NTRON,

Civil Action No.: 2:1 7-cv-1 1537
Plaintiff,

v.

OPINION

MONTEREY FINANCIAL SERVICES, INC.,

Defendant.
CECCHI, District Judge.
I.

INTRODUCTION

This matter comes before the Court on Defendant Monterey Financial Services, Inc.’s
(“Defendant”) motion to dismiss Plaintiff Lazarao Cintron’s (“Plaintiff’) complaint pursuant to
Federal Rule of Civil Procedure 12(b)(6). (ECF No. 6). In the alternative, Defendant’s motion
seeks to compel arbitration of Plaintiff. (Id.). Pursuant to Federal Rule of Civil Procedure 78(b),
no oral argument was heard. For the reasons set forth below, Defendant’s motion is granted in
part and denied in part as moot, the parties are directed to proceed with arbitration, and the Court
dismisses this matter.
II.

BACKGROUND

This dispute arises out of a Retail Installment Contract between Plaintiff and third party
Achieve Today, wherein Achieve Today provided Plaintiff with credit “for personal, family or
household purposes” (the “Contract” or the “Debt”).’ (ECF No. I

1

¶ 11).

Sometime after signing

Plaintiff does not include a copy of the Contract as an attachment to his complaint; however,
Defendant has provided a copy of the Contract as an attachment to its motion to dismiss. (ECF
No. 6-3 at 6-9). On a motion to compel arbitration, however, the Court may consider “the face of
a complaint, and documents relied upon in the complaint.” Guidotti v. Legal Helpers Debt
Resolution, L.L.C., 716 F.3d 764, 776 (3d Cir. 2013) (citations omitted). Here, despite Plaintiffs
contentions, (ECF No. 14 at 8-14), Plaintiffs complaint explicitly relies on the Contract. (ECF
No. 1 ¶ 13 (“Thereafter
the Debt was assigned or otherwise transferred to Defendant for
.

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the Contract, “Plaintiff fell behind on payments owed” and “[t]hereafler.. the Debt was assigned
.

or otherwise transferred to Defendant.” (Id.

¶J 12-13).

The Contract cbntains an Agreement for Dispute Resolution (the “Arbitration
Agreement”), which states in relevant part that:
At the election of either “you” or “us” (both defined below), any claim, dispute or
controversy (“Claim”) by either you or us against the other, arising from or relating
in any way to (1) this Agreement, (ii) your transaction involving us, or (iii) Claims
regarding the applicability of this arbitration clause or the validity of the entire
Agreement, shall be resolved exclusively and finally by binding arbitration under
the Consumer Arbitration Rules of the American Arbitration Association (“AAA”)
in effect on the date a demand for arbitration is made. A copy of these rules may
be obtained from the AAA website at www.adr.org.
ARBITRATION WITH RESPECT TO A CLAIM IS BINDING AND
NEITHER YOU NOR WE WILL HAVE THE RIGHT TO LITIGATE THAT
CLAIM THROUGH A COURT.

Claims made and remedies sought as part of a class action, private attorney general
or other representative action (hereafter all included in the term “class action”) are
subject to arbitration on an individual basis, not on a class or representative basis.
The arbitration will not determine any class claims and will not be consolidated
with any other arbitration proceedings.

For purposes of this arbitration provision, “you” includes you and anyone or any
entity who has a shared interest with you in your transaction with us, and any of
your agents, beneficiaries or assigns; and “we” or “us” includes our employees,
parents, subsidiaries, affiliates, beneficiaries, agents and assigns, and to the extent
included in a proceeding in which we are a party, our service providers.
(ECF No. 6-3 at 8). Plaintiffs electronic signature appears on both the third and fourth pages of
the Contract, one after the credit agreement portion of the Contract, and one after the Arbitration
Agreement portion of the Contract. (Id. at 8-9).

collection.”)). As such, the Court will properly consider the Contract with Defendant’s motion to
compel arbitration.
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On November 10, 2017, Plaintiffbrought a complaint against Defendant alleging violations
of the Fair Debt Collection Practices Act (the “FDCPA”) for Defendant’s alleged attempt at
collecting the Debt in violation of such statute. (ECF No. 1). In response, Defendant filed a motion
to dismiss Plaintiffs complaint or in the alternative, compel arbitration. (ECF No. 6). With respect
to Defendant’s motion to compel arbitration, Plaintiff challenges the validity of the Arbitration
Agreement on the bases that: (1) the Contract contains an electronic signature rather than a printed
signature; and (2) the two electronic signatures on the third and fourth pages of the Contract contain
the same timestamp.2 The Court will address each of Plaintiffs contentions below.
III.

LEGAL STANDARD
A.

The Presumption of Arbitrability

There is a strong federal policy in favor of arbitration rooted in the Federal Arbitration Act
(“FAA”). See, e.g., Puleo v. Chase Bank USA, N.A., 605 F.3d 172, 177-78 (3d Cir. 2010). Indeed,

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Plaintiff does not appear to dispute that his claims are within the scope of the Arbitration
Agreement. Even if Plaintiff were to raise such dispute, however, the Arbitration Agreement
explicitly states that “any claim, dispute or controversy (“Claim”) by either you or us against the
other, arising from or relating in any way to. Claims regarding the applicability ofthis arbitration
clause or the validity of the entire Agreement, shall be resolved exclusively and finally by binding
arbitration under the Consumer Arbitration Rules of the American Arbitration Association
(“AAA”) in effect on the date a demand for arbitration is made.” (ECF No. 6-3 at 8). Therefore,
such dispute would be one for the arbitrator to decide. Moreover, the Court also notes that the
Arbitration Agreement states that “any claim, dispute or controversy (“Claim”) by either you or
us against the other, arising from or relating in any way to (i) this Agreement [or] (ii) your
transaction involving us. shall be resolved exclusively and finally by binding arbitration under
the Consumer Arbitration Rules of the American Arbitration Association (“AAA”) in effect on the
date a demand for arbitration is made.” (Id.). As discussed above, Plaintiffs claims are brought
exclusively under the FDCPA for Defendant’s alleged attempt at collecting the Debt in violation
of such statute. (ECF No. 1). As the Debt is undoubtedly related to the Contract, which
encompasses the Arbitration Agreement, see supra, any argument to the contrary would be without
merit. Plaintiff also does not appear to contest that the Arbitration Agreement applies as between
Plaintiff and Defendant pursuant to Achieve Today’s assignment of the Contract to Defendant.
(ECF No. 1 ¶ 13).
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the “[FAA] reflects an ‘emphatic federal policy in favor of arbitral dispute resolution.” KPMG
LLP v. Cocchi, 565 U.S. 18, 21(2011) (citations omitted). In considering the validity of an
arbitration agreement, “as a matter of federal law, any doubts concerning the scope of arbitrable
issues should be resolved in favor of arbitration, whether the problem at hand is the construction
of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.”
Moses H. Cone Mem ‘1 Hosp. v. Mercuiy Constr. Corp., 460 U.S. 1, 24-2 5 (1983); see also Green
Tree Fin. Corp. v. Bazzle, 539 U.S. 444, 452 (2003). As such, a motion to compel arbitration
“should not be denied unless it may be said with positive assurance that the arbitration clause is
not susceptible of an interpretation that covers the asserted dispute.” United Steelworkers ofAm.
v. Warrior & GulfNavigation Co., 363 U.S. 574, 582-83 (1960).
B.

Motion to Compel Arbitration

Even in light of the strong federal presumption of arbitrability, arbitration is “strictly a
matter of contract,” and therefore state law is applied. Bel-Ray Co. v. Chemrite (Pty) Ltd., 181
F.3d 435, 441, 444 (3d Cir. 1999). “If a party has not agreed to arbitrate, the courts have no
authority to mandate that he do so.” Id. at 444. Thus, in deciding whether a party may be
compelled to arbitrate under the FAA, a court must first consider “(1) whether there is a valid
agreement to arbitrate between the parties and, if so, (2) whether the merits-based dispute in
question falls within the scope of that valid agreement.” Flintkote Co. v. A viva PLC, 769 F.3d
215, 220 (3d Cir. 2014) (citations omitted).
As to the first consideration, a district court “must initially decide whether the
determination is made under [Federal Rule of Civil Procedure] 12(b)(6) or 56.” Sanford v.
Bracewelt & Guiliani, LLP, 618 F. App’x 114, 117 (3d Cir. 2015). The Rule 12(b)(6) standard is
appropriate where “it is apparent, based on the ‘face of a complaint, and documents relied upon in
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the complaint,’ that certain of a party’s claims ‘are subject to an enforceable arbitration clause.”
Guidotti, 716 F.3d at 776 (citations omitted).
The Rule 56 standard is appropriate where: (1) “the motion to compel arbitration does not
have as its predicate a complaint with the requisite clarity’ to establish on its face that the parties
agreed to arbitrate,” or (2) “the opposing party has come forth with reliable evidence that is more
than a ‘naked assertion.

.

.

that it did not intend to be bound’ by the arbitration agreement, even

though on the face of the pleadings it appears that it did.” Id. at 774. Summary judgment under
Rule 56 is appropriate if the record demonstrates that there is no genuine issue as to any material
fact, and, construing all facts and inferences in a light most favorable to the non-moving party,
“the moving party is entitled to a judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.s.
317, 322 (1986) (quoting Fed. R. Civ. P. 56); see also Pollockv. Am. TeL & Tel. LongLines, 794
F.2d $60, 864 (3d Cir. 1986).
IV.

DISCUSSION
A.

Standard of Review

As a threshold matter, the Court must determine which standard of review governs
Defendant’s motion. In this case, although the existence of an agreement to arbitrate is apparent
from the documents relied upon in Plaintiffs complaint, Plaintiff comes forth with more than a
mere “naked assertion” that such an agreement did not exist. Accordingly, the Rule 56 standard
governs. Under Rule 56:
[A] “court shall grant summary judgment if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” The party asserting that there is a genuine dispute of material fact
must support that assertion by “citing to particular parts of. the record, including
depositions, documents, electronically stored information, affidavits or
declarations, stipulations
,
admissions, interrogatory answers, or other
materials.” In evaluating the motion, “the court must draw all reasonable inferences
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in favor of the nonmoving party, and it may not make credibility determinations or
weigh the evidence.”
Guidotti, 716 f.3d at 772 (citations omitted). The parties put forth the relevant documents for the
Court’s consideration, therefore, the Court will consider Defendant’s motion on the existing
record.
B.

Validity of the Arbitration Agreement

Plaintiff first challenges the validity of the Arbitration Agreement on the basis that the
Contract contains an electronic signature rather than a printed signature. Under New Jersey law,
“[a] record or signature may not be denied legal effect or enforceability solely because it is in
electronic form.” N.J. Stat. Ann.

§ 12A:12-7. Plaintiffs contention that “there are grounds to

question the veracity of th[e Arbitration A]greement” because while some documents attached to
Defendant’s motion to dismiss contain Plaintiff’s printed signature, the Contract only contains
Plaintiffs e-signamre, (ECF No. 14 at 1$), is therefore without merit. Indeed, “{t]he fact that this
was an electronic rather than a physical signature does not create a genuine dispute of fact as to
whether [Plaintiff] signed the agreement.” Gomez v. Rent-A -Ctr., Inc., No. 18-1528, 2018 WL
3377172, at *3 (D.N.J. July 10, 2018).
Plaintiff next questions whether the Arbitration Agreement is valid because the two
electronic signatures on the third and fourth pages of the Contract contain the same timestamp. In
other words, Plaintiff avers that Defendant’s motion to compel arbitration should be denied
because “there would at least be a triable question of fact as to whether the ‘e-sign’ notations were
affixed after Plaintiff read the credit agreement alone, or, afier he had read the alleged [A]rbitration
[A]greement.” (ECF No. 14 at 18).
“As a matter of both federal and state law, ‘arbitration is a matter of contract and a party
cannot be required to submit to arbitration any dispute which he has not agreed so to submit.”
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Fave v. Neiman Marcus Grp., No. A-1805-13T2, 2014 WL 1884337, at *4 (N.J. Super. Ct. App.
Div. May 13, 2014) (citations omitted). As such, “basic contract principles [are used] to interpret
an arbitration clause,” including the principle that “[f]ailing to read a contract does not excuse
performance unless fraud or misconduct by the other party prevented one from reading.” Id. at
*4..5 (citations omitted).

Applying basic contract principles, the Court finds Plaintiffs

aforementioned argument without merit. “Failing to read a contract does not excuse performance
unless fraud or misconduct by the other party prevented one from reading.” Id. (citations omitted).
Here, Plaintiff provides no accusation of fraud or misconduct, and thus the Court finds that
regardless of whether Plaintiff signed the Contract before or after he read both the credit agreement
portion and the Arbitration Agreement portion of the Contract, the Contract is valid. Accordingly,
the Court finds that the Arbitration Agreement is enforceable and Defendant’s motion will be
granted with respect to arbitration.3

Having found that the Arbitration Agreement is enforceable, the Court need not consider whether
Plaintiff fails to state a claim upon which relief may be granted under the FDCPA. That is, the
Court need not consider whether Defendant is a “debt collector” under the FDCPA, as such issue
is one which should be raised before the arbitrator. Accordingly, that aspect of Defendant’s motion
to dismiss will be denied as moot.
The Court also notes that the parties disagree as to whether Plaintiffs class allegations survive
dismissal. (ECF Nos. 6-1 at 7-8; 14 at 19; 15 at 6). The Arbitration Agreement, however, states
that: “Claims made and remedies sought as part of a class action, private attorney general or other
representative action (hereafter all included in the term “class action”) are subject to arbitration on
an individual basis, not on a class or representative basis. The arbitration will not determine any
class claims and will not be consolidated with any other arbitration proceedings.” (ECF No. 6-3
at 8). Accordingly, the Court finds that no claims remain before the Court and will dismiss this
matter. See Seus v. John Nuveen & Co., 146 F.3d 175, 179 (3d Cir. 1998) (“If a party to a binding
arbitration agreement is sued in a federal court on a claim that the plaintiff has agreed to arbitrate,
it is entitled under the FAA to a stay of the court proceeding pending arbitration, Section 3, and to
an order compelling arbitration, Section 4. If all the claims involved in an action are arbitrable, a
court may dismiss the action instead of staying it.”).
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V.

CONCLUSION
For the foregoing reasons, Defendant’s motion is granted in part and denied in part as moot,

the parties are directed to proceed with arbitration, and the Court dismisses this matter. An
appropriate Order follows this Opinion.
DATED: O
CLAIRE C. CECCHI, U.S.D.J.

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