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Kiessling v. American Bankers Life Assurance Company of Florida

December 16, 2008

BARBARA KIESSLING AND ROBERT MENDLER, PLAINTIFFS
v.
AMERICAN BANKERS LIFE ASSURANCE COMPANY OF FLORIDA AND WELLS FARGO FINANCIAL



The opinion of the court was delivered by: Yvette Kane, Chief Judge United States District Court

(Chief Judge Kane)

MEMORANDUM

Before the Court is Defendant Wells Fargo Financial Pennsylvania, Inc.'s ("Wells Fargo") Motion to Compel Arbitration. (Doc. No. 13.) The motion has been fully briefed and is ripe for disposition. For the reasons that follow, the motion will be granted.

I. BACKGROUND

This case arises from a dispute over a financing agreement with Wells Fargo. (Doc. No. 1 ¶¶ 6-7.) On or about October 25, 2005, Robert Mendler and Sheena Mendler along with Norman Kiessling and Barbara Kiessling entered into a loan transaction with Wells Fargo ("2005 Loan"). (Doc. No. 14 at 3; Doc. No. 15 at 3.) The parties to the 2005 Loan, including current Plaintiffs Robert Mendler and Barbara Kiessling, also entered into the arbitration agreement at issue with Wells Fargo at that time. (Doc. No. 14 at 3; Doc. No. 15 at 3.)

Plaintiffs claim that Robert Mendler and Norman Kiessling entered into a subsequent loan agreement with Wells Fargo on or about August 2, 2007 ("2007 Loan") and purchased life-insurance with Defendant American Bankers Life Assurance Company of Florida ("American Bankers") in connection with that loan. (Doc. No. 15 at 3.) The Plaintiffs allege that they had difficulty paying the premiums on the loans due to Norman Kiessling's illness, and requested a modification of the loans terms for accommodation. (Doc. No. 1 ¶ 8.) Wells Fargo agreed to a modification, and the Plaintiffs signed loan modification paperwork on January 11, 2008. (Id. ¶ 12.) Wells Fargo then required a second modification agreement to be executed, which was signed by Norman Kiessling on January 18, 2008. (Id. ¶ 18.) Norman Kiessling died on January 28, 2008 and American Bankers refused to honor the life insurance claim, sending the loan into default and bringing about the present dispute. (Id. ¶¶ 20-23.)

II. Discussion

Section 2 of the Federal Arbitration Act ("FAA"), 9 U.S.C. §§ 1-16, provides, in pertinent part:

A written provision in any . . . 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.

Therefore, arbitration agreements are "enforceable to the same extent as other contracts." Alexander v. Anthony Intern., L.P., 341 F.3d 256, 263 (3d Cir. 2003) (citing Seus v. John Nuveen & Co., 146 F.3d 175, 178 (3d Cir. 1998)). The FAA evidences a strong federal policy in favor of arbitration and federal law presumptively favors the enforcement of arbitration agreements. Id.

A motion to compel arbitration calls for a two-step inquiry: "(1) whether a valid agreement to arbitrate exists and (2) whether the particular dispute falls within the scope of that agreement." Trippe Mfg. Co. v. Niles Audio Corp., 401 F.3d 529, 533 (3d Cir. 2005). A party to a valid and enforceable arbitration agreement is entitled to a stay pending arbitration:

If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement . . . .

9 U.S.C. § 3.

A. Existence of a Valid Agreement ...


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