Gaul et al v. Chrysler Financial Services Americas LLC et al

Filing 32

DECISION AND ORDER re 24 MOTION to Dismiss. The Court GRANTS the motion in part as to Defendants Chrysler Financial Services Americas LLC, DaimlerChrysler Financial Services Americas LLC, DCFS Trust and TD Auto Finance LLC and stays the instant pr oceedings as to these Defendants and further directs Plaintiffs to submit to arbitration as to these Defendants in accordance with the terms of the lease agreement. This matter may otherwise proceed as against any remaining defendants. Signed by Senior Judge Thomas J. McAvoy on 7/23/2013. (dpk)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
-------------------------------JEFFERY GAUL and PAULA GAUL,
Plaintiffs,
v.

1:13-CV-433

CHRYSLER FINANCIAL SERVICES
AMERICAS LLC, DAIMLERCHRYSLER
FINANCIAL SERVICES AMERICAS LLC,
DCFS TRUST, TD AUTO FINANCE LLC
successor in interest to DAIMLERCHRYSLER
et al., TD AUTO FINANCE LLC successor in
interest to CHRYSLER FINANCIAL et al.,
EXPERIAN INFORMATION SOLUTIONS, INC.,
EQUIFAX INC., DEILY, MOONEY & GLASTETTER,
LLP,
Defendants.
-------------------------------THOMAS J. McAVOY
Senior United States District Judge
DECISION and ORDER
Plaintiffs commenced the instant action alleging violations of the Fair Credit
Reporting Act, 15 U.S.C. § 1681(n), (o), (s)(2), (e), and the Fair Debt Collections Practices
Act. 15 U.S.C. § 1692(a), (b), (e)(8), (e)(10), (f). Presently before the Court is Defendants
Chrysler Financial Services Americas LLC, DaimlerChrysler Financial Services Americas
LLC, DCFS Trust, and TD Auto Finance LLC’s (collectively referred to as “Defendant”)
motion to dismiss Plaintiffs’ claims and to compel arbitration pursuant to 9 U.S.C. §§ 2, 4.

I.

FACTS
On February 23, 2006, Plaintiffs entered into an agreement with Defendant for a

lease of a vehicle. The lease agreement included an arbitration clause. Dkt. No. 1 ¶ 24; Dkt.
No. 24. The Complaint alleges that Defendant wrongly reported a debt in the amount of
$8,749 on Plaintiffs’ credit report. Dkt. No. 1 ¶ 31. Plaintiffs believe this debt to be
inaccurate and brought the instant claims pursuant to the Fair Credit Reporting Act and the
Fair Debt Collections Practices Act against Defendant. Dkt. No. 1 ¶¶ 24-8; 15 U.S.C. § 1681;
15 U.S.C. § 1692.
II.

DISCUSSION
Defendant claims that the lease’s arbitration clause is binding upon Plaintiffs and,

therefore, moves to dismiss the Complaint and to compel arbitration pursuant to 9 U.S.C. §§
2, 4. The Federal Arbitration Act (FAA), 9 U.S.C. § 1, et seq., evidences a strong federal
policy preferring arbitration agreements. See Moses H. Cone Mem’l Hosp. v. Mercury Contr.
Corp., 460 U.S. 1, 24 (1983). The FAA “requires federal courts to enforce arbitration
agreements, reflecting Congress’ recognition that arbitration is to be encouraged as a means
of reducing the costs and delays associated with litigation.” Vera v. Saks & Co., 335 F.3d
109, 116 (2d Cir. 2003). “The Act itself leaves no place for the exercise of discretion by a
district court, but instead mandates that district courts shall direct the parties to proceed to
arbitration on issues as to which an arbitration agreement has been signed.” WorldCrisa
Corp. v. Armstrong, 129 F.3d 71, 74 (2d Cir. 1997) (quoting Dean Witter Reynolds Inc. v.
Byrd, 470 U.S. 213, 218 (1985)). Where an arbitration agreement is broad, the court should
compel arbitration. See McDonnell Douglas Fin. Corp. v. Pennsylvania Power & Light Co.,

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858 F.2d 825, 831 (2d Cir. 1988); see also Collins & Aikman Prod. Co. v. Building Sys., Inc.,
58 F.3d 16, 20 (2d Cir. 1995).
A court will apply “a standard similar to that applicable for a motion for summary
judgment” when a motion to compel arbitration is brought, so it may make a determination of
any existing “issue of fact as to the making of the agreement for arbitration.” Bensadoun v.
Jobe-Riat, 316 F.3d 171, 175 (2d Cir. 2003). When deciding if a dispute is arbitrable, a court
answers two questions: (1)“[w]hether the parties agreed to arbitrate,” and, if so, (2)“whether
the scope of [that] agreement encompasses the claims at issue.” Campaniello Imports, Ltd v.
Saporiti Italia S .p.A., 117 F.3d 655, 666 (2d Cir. 1997). In addressing the scope “a court
should classify the particular clause as either broad or narrow.” Louis Dreyfus Negoce S.A. v.
Blystad Shipping & Trading Inc., 252 F.3d 218 (2d Cir. 2001). If the clause is broad, “there
arises a presumption of arbitrability.” Collins, 58 F.3d at 23.
In their opposition papers, Plaintiffs contend that (1) they never received a copy of
the lease agreement from Defendant; (2) the arbitration clause was not legible; (3) they had
no knowledge of the arbitration clause; (4) the arbitration clause is ambiguous; (5) they did
not sign the arbitration clause; (6) Defendant did not properly demand arbitration; (7) they
were subjected to a contract of adhesion; and (8) that Defendant has not complied with the
terms of the lease agreement. Dkt. No. 29 ¶¶ 2-3, 19. These contentions are directly
contrary to the record evidence and are insufficient to raise an issue of fact or otherwise
preclude compelling arbitration. See Scott v. Harris, 550 U.S. 372, 380 (2007) (“When
opposing parties tell two different stories, one of which is blatantly contradicted by the record,
so that no reasonable jury could believe it, a court should not adopt that version of the facts
for purposes of ruling on a motion for summary judgment.”).
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Plaintiffs’ first contention is belied by the signed lease agreement where it states
“[y]ou agree that [y]ou received a completely filled in copy of this [l]ease” directly above
Plaintiffs’ signatures. Dkt. No. 30. Ex. A p. 5. With respect to Plaintiffs’ second claim, the
arbitration clause is legible and of sufficient font. See Def.’s Reply at Ex. A pp 9-10. As to
the third, fourth, and fifth assertions, the lease agreement clearly has an arbitration clause
that provides, “[a]ny claim or dispute, whether in contract, tort, or otherwise . . . between You
and us . . . which arises out of or relates to this Lease or any resulting transaction or
relationship arising out of this Lease shall, at the election of either You or us . . . be resolved
by a neutral binding arbitration agreement.” Deily Aff. ¶ 9; see Def.’s Reply at Ex. A pp 9-10.
The clause is part of the contracted lease agreement that Plaintiffs signed. The broad
language encompasses all claims arising out of, or relating to, the Lease and the relationship
between the parties arising out of the Lease. Def.’s Reply at Ex. A pp 6-7. As to the sixth
claim, the evidence demonstrates that Defendant demanded arbitration pursuant to a
certified letter (that Plaintiff did not collect), followed by notice sent via regular mail. The
regular mailing was not returned, thereby raising a presumption of delivery. Hoffenberg v.
Comm'r, 905 F.2d 665, 666 (2d Cir. 1990). The seventh and eight assertions are matters
that can be addressed to the arbitrator. JLM Industries, Inc. v. Stolt-Nielson, SA, 387 F.3d
163, 169-70 (2d Cir. 2004). Based on the record, Plaintiffs’ contentions raise no material
issue of fact. See Scott, 550 U.S. at 378-81.
As noted, the scope of the clause here uses expansive language. See Louis, 252
F.3d at 225. Plaintiffs’ claims of willful or negligent credit reporting concern a dispute over
payments under the lease agreement and, thus, are related to the parties’ relationship that
arose from the lease. This comes within the broad terms of the arbitration agreement.
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Therefore, because Defendant has demanded arbitration, the Court finds that Plaintiffs’ claim
against this Defendant should be stayed and the matter should be submitted to arbitration.
III.

CONCLUSION
For the foregoing reasons, the Court grants the motion in part as to Defendants

Chrysler Financial Services Americas LLC, DaimlerChrysler Financial Services Americas
LLC, DCFS Trust, and TD Auto Finance LLC and stays the instant proceedings as to these
Defendants and further directs Plaintiffs to submit to arbitration as to these Defendants in
accordance with the terms of the lease agreement. 9 U.S.C. § 4. This matter may otherwise
proceed as against any remaining defendants.
IT IS SO ORDERED.
Dated: July 23, 2013

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