Brooks v. N.A.R., Inc., et al.

Filing 25

Memorandum Opinion and Order: Defendant N.A.R., Inc.'s motion to dismiss and compel arbitration is granted. re 21 Judge Jeffrey J. Helmick on 5/22/2019. (S,AL)

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OHIO
WESTERN DIVISION

Tonya Brooks,

Case No. 3:18-cv-362
Plaintiff

v.

MEMORANDUM OPINION

N.A.R., Inc., et al.,
Defendants
I.

INTRODUCTION

Before me is the motion to dismiss and compel arbitration filed by Defendant N.A.R., Inc.
(Doc. No. 21). Plaintiff Tonya Brooks filed a memorandum in opposition, (Doc. No. 22), and
Defendant replied, (Doc. No. 23).
II.

BACKGROUND

On or about August 19, 2014, Plaintiff Tonya Brooks entered a Lease Agreement with
Option to Purchase with lessor Crest Financial Services, LLC. (Doc. No. 21-1 at 8-11). The Lease
Agreement advised that Crest was permitted to assign the Lease. (Doc. No. 21-1 at 9). Such an
assignment occurred on or about February 15, 2017, when an account in Brooks’s name was
assigned by Crest to Defendant N.A.R., Inc. (Doc. No. 21-1 at 2, 4-7). Along with the account
itself, Crest also assigned N.A.R. all of its rights. (Id. at 2, 4).
Several months after the assignment, N.A.R. sent Brooks a letter informing her that a debt
owed by her to Crest under the Lease Agreement had been placed with N.A.R. for collections.
(Doc. No. 1-1). N.A.R. stated Brooks owed $1,885.00 as of the date of the letter but cautioned that
“[b]ecause of interest or other charges that may vary from day to day, the amount due on the day
you pay may be greater.” (Id.). Brooks filed suit, alleging the inclusion of this final statement

violated the Fair Debt Collection Practices Act (“FDCPA”). (Doc. No. 1). Specifically, Brooks
claims that N.A.R. knew the balance would not vary and included the misleading statement merely
to coerce immediate payment. (Id.).
N.A.R. filed the pending motion to dismiss and compel arbitration to enforce the
Arbitration Provision contained in the underlying Lease Agreement. (Doc. No. 21).
III.

STANDARD

The Federal Arbitration Act provides that “[a] written provision in … a 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. “[T]he Act 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.”
Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985) (emphasis in original) (citing 9 U.S.C. §§ 3
& 4); see also AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011) (“[C]ourts must place
arbitration agreements on an equal footing with other contracts and enforce them according to their
terms.”) (internal citations omitted).
“Before compelling an unwilling party to arbitrate, the court must engage in a limited review
to determine whether the dispute is arbitrable; meaning that a valid agreement to arbitrate exists
between the parties and that the specific dispute falls within the substantive scope of that
agreement.”1 Javitch v. First Union Sec, Inc., 315 F.3d 619, 624 (6th Cir. 2003). “[A]ny 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,

1

Because there is no dispute that Congress did not intend claims under the FDCPA to be
nonarbitrable, I need not devote discussion to this consideration. See Stout v. J.D. Byrider, 228 F.3d
709, 714 (6th Cir. 2000) (“[I]f federal statutory claims are asserted, [the court] must consider whether
Congress intended those claims to be nonarbitrable.”).
2

or a like defense to arbitrability.” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25
(1983). Further, “the party resisting arbitration bears the burden of proving that the claims at issue
are unsuitable for arbitration.” Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 91 (2000) (citations
omitted).
IV.

DISCUSSION

In this case, Brooks does not challenge the applicability of the FAA to this matter or the
validity of the Lease Agreement, including the Arbitration Provision. Instead, to avoid arbitration of
her FDCPA claims, Brooks urges me to conclude N.A.R. cannot enforce the Arbitration Provision
since it is not a signatory to the contract. Specifically, she argues the contract may not be enforced
under the theory of equitable estoppel. But, as argued by N.A.R., because N.A.R. may enforce the
Arbitration Provision pursuant to the plain language of the contract as an assign, the question of
whether it may do so under the theory of equitable estoppel need not be considered.
Here, the Lease Agreement defined the terms “we,” “our,” and “us” to include “Crest
Financial Services, LLC, and its successors and assigns.” (Doc. No. 21-1 at 8-9). The Arbitration
Provision within further expanded the definitions of “we,” “our,” and “us” to include “Related
Parties.” (Doc. No. 21-1 at 10). Under the Arbitration Provision, either Brooks herself or any one
of the many parties included within the broad definition of “we” could require arbitration of certain
claims including those which “arise[ ] from or relate[ ] in any way to…our collection of any amounts
you owe.” (Doc. No. 21-1 at 10). Therefore, as an assign to the Lease Agreement,2 N.A.R. may
compel arbitration of Brooks’s claims regarding the manner in which N.A.R. attempted to collect
the amount owed by Brooks under the Lease Agreement.

2

Brooks refers to N.A.R. as a “purported assignee.” (Doc. No. 22 at 3). But, Brooks does not
meaningfully challenge the validity of the assignment under Utah law, which governs the Lease
Agreement and Arbitration Provision, to the extent state law bears on enforceability. (Doc. No. 21-1
at 9, 11); see also Arthur Anderson LLP v. Carlisle, 556 U.S. 624, 630-32 (2009) (holding the relevant
state contract law controls whether a nonsignatory litigant may enforce an arbitration agreement).
As such, I must conclude Crest validly assigned its rights to N.A.R., and N.A.R. may exercise these
rights accordingly.
3

Because both of Brooks’s FDCPA claims in this action are subject to arbitration, this case is
dismissed. See Ozomoor v. T-Mobile USA, Inc., 354 F. App’x 972, 975 (6th Cir. 2009); Hensel v. Cargill,
Inc., 198 F.3d 245, at *4 (6th Cir. 1999) (table) (“[L]itigation in which all claims are referred to
arbitration may be dismissed.”) (citing Alford v. Dean Witter Reynolds, Inc., 975 F.2d 1161, 1164 (5th
Cir. 1992)).
V.

CONCLUSION

For the foregoing reasons, N.A.R.’s motion to dismiss and compel arbitration is granted.
So Ordered.
s/ Jeffrey J. Helmick
United States District Judge

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