Willis et al v. Defendant Debt Care USA et al

Filing 70

ORDER: The Court finds it unnecessary to review the Magistrate Judge's Findings and Recommendation 54 , 55 , which now are moot. The Court DENIES as premature Defendants' Motions 18 , 31 to Dismiss with leave to renew. Defendants' separate Motions 22 , 31 to Compel Arbitration are DENIED in part and remain pending in part. Joint Status Report due 02/10/2012. See attached 5 page Order for full text. Signed on 01/31/2012 by Judge Anna J. Brown. (bb)

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
PORTLAND DIVISION

TINA WILLIS and GARY WILLIS,

3: ll-CV-430-BR

Plaintiffs,
ORDER
v.

NATIONWIDE DEBT SETTLEMENT
GROUP, an Arizona Limited
Liability Company; GLOBAL
CLIENT SOLUTIONS, LLC, an
Oklahoma Limited Liability
Company; and DEBT CARE USA,
Defendants.

JOSHUA L. ROSS
STEVE D. LARSON
Stoll Stoll Berne Lokting & Shlachter, PC
209 S.W. Oak Street, Fifth Floor
Portland, OR 97204
[phone]
Attorneys for Plaintiffs
GEORGE J. COOPER, III
Dunn Carney Allen Higgins & Tongue, LLP
851 S.W. Sixth Avenue, Suite 1500
Portland, OR 97204-1357
[phone]

RICHARD W. EPSTEIN
REBECCA BRATTER
Greenspoon Marder, P.A.
100 West Cypress Creek Road, Suite 700
Fort Lauderdale, FL 33309
[phone]
Attorneys for Defendant Global Client Solutions, LLC
ROBERT B. MILLER
Kilmer Voorhees & Laurick, PC
732 N.W. 19th Avenue
Portland, OR 97209
[phone]
Attorneys for Defendant Debt Care USA
BROWN, Judge.
On November 10, 2011, Magistrate Judge Janice M. Stewart
issued two Findings and Recommendation (#54, #55) addressing
Defendant Debt Care's Motion (#31) to Compel Arbitration or to
Dismiss and the Motion (#18) to Dismiss and the Motion (#22) to
Compel by Defendant Global Client Solutions.

This matter comes

before the Court on the Objections (#59) by Defendant Global to
the Findings and Recommendation (#54) and the Objections (#58) by
Plaintiffs to the Findings and Recommendation (#55).

After the

Court set these matters for oral argument and before the hearing
on the parties' Objections, the matter was reassigned (#67) to
this Article III judicial officer for all purposes.

Accordingly,

and for the reasons stated on the record at the January 30, 2012,
hearing in this matter, the Court considers anew Defendants'
pending Motions (#18, #22, #31) and all of the ,filings the
parties have made in connection with these Motions, including

Defendant Global Client Solutions's Objections (#59) and
Plaintiff' Objections (#58).

As a result, the Court finds it

unnecessary to review the Magistrate Judge's Findings and
Recommendations (#54, #55), which now are moot.
For the reasons stated on the record, the Court DENIES as

premature Defendants' Motions (#18, #31) to Dismiss with leave to
renew those Motions at an appropriate time and before an
appropriate authority once it is resolved whether there is any
binding and enforceable arbitration agreement applicable to
Plaintiffs' claims.
Defendants' separate Motions (#22, #31) to Compel
Arbitration are DENIED in part and remain pending in part as
follows:

1.

Global's Motion (#22) to Compel Aribtration.
For the reasons stated on the record, the Court concludes

there is an unresolved issue of fact as to whether Plaintiffs and
Global mutually assented to an arbitration clause as part of the
material terms of their agreement.

To this extent, the Court

DENIES in part Global's Motion (#22).
issue of fact,

§

Because of this unresolved

4 of the Federal Arbitration Act provides the

Court must "proceed summarily to the trial thereof.'"
§

4.

9 U.S.C.

In order to resolve whether such trial will be to a jury or

a bench trial, the Court directs Counsel for Plaintiff and Global

, Section 4 provides a party alleged to have not complied
with an arbitration agreement "may demand a jury trial."

to confer and to file no later than February 10, 2012, a joint
status report reflecting whether the parties have reached
agreement as to whether a jury or the Court will be the trier of
fact for this summary proceeding.

If the parties have not

reached an agreement on this issue, they shall set forth in the
joint statement a concise statement of their respective positions
after which the Court will convene a conference to resolve that
dispute.
In addition, in light of the Court's conclusion that an
issue of fact remains as to the intent of the parties to form an
agreement to arbitrate Plaintiffs' claims, the Court agrees with
Plaintiffs and Global that each needs a short period of time to
take discovery on this limited question.

The Court directs

counsel to confer and to include in their February 10, 2012,
joint status report a proposed schedule to complete discovery and
for trial on this question of formation of an agreement to
arbitrate.
Finally, the Court takes under advisement that part of
Global's Motion (#22) to Compel Arbitration which raises
Plaintiffs' contention that any arbitration provision to which
the parties may have agreed is nonetheless unenforceable due to
procedural and substantive unconscionability.

2.

Debt Care's Motion (#31) to Compel Arbitration.
For the reasons set out on the record, the Court concludes

Plaintiffs should have an opportunity to conduct limited

discovery on the question whether Debt Care is the actual or
apparent agent of Defendant Nationwide, which is the sole premise
underlying Debt Care's contention that the Court should compel
arbitration as between Plaintiffs and Debt Care.

Accordingly,

the Court grants Plaintiffs' request to conduct limited discovery
as to that issue.

The Court also directs counsel for Plaintiffs

and Debt Care to confer and to submit no later than February 10,
2012, their joint proposed case management schedule for

completing this limited period of discovery and their
recommendations for the process by which the court should revisit
Debt Care's Motion to Compel Arbitration in light of discovery.
Finally, the Court also

takes under advisement that part of

Debt Care's Motion (#31) to Compel Arbitration which raises
Plaintiffs' contention that any arbitration provision to which
the parties may have agreed is unenforceable due to procedural
and substantive unconscionability.
IT IS SO ORDERED.
DATED this 31st day of January, 2012.

United States District Judge