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Brown v. City of Philadelphia

November 9, 2010

DAVID BROWN PLAINTIFF,
v.
CITY OF PHILADELPHIA, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Tucker, J.

MEMORANDUM AND ORDER

Presently before this Court is Defendant Northeastern Title Loans, LLC's ("Northeastern") Motion to Compel Arbitration (Doc. 8), Plaintiff's Response in Opposition thereto (Doc. 13), and Northeastern's Reply (Doc. 18). For the reasons set forth below, the Court grants Northeastern's Motion.

BACKGROUND

This action arises from a repossession executed in connection with a vehicle title loan entered into by Plaintiff and Northeastern. The pertinent facts giving rise to Plaintiff's Complaint are as follows.

A. The Title Loan Agreement

On April 15, 2008, Plaintiff entered into an Installment Loan and Security Agreement ("Loan Agreement") with Northeastern to borrow $1,500.00. The Loan Agreement provided Northeastern with a security interest in Plaintiff's vehicle, a 1999 Lexus ES 300. The Loan Agreement also provided for an interest rate of 365% and a finance charge of $450.00. To satisfy his obligation under the loan, Plaintiff was required to make one payment of $1,950.00 no later than May 15, 2008. The Promissory Note section of the Loan Agreement provides as follows: "I/We agree that this note will be in default for any failure to make any required payment when due . . . and that you may exercise your rights under the law to enforce payment of this note, including repossession of the collateral securing this loan." (Doc. 8 Ex. A.)

In addition to the Loan Agreement, Plaintiff and Northeastern also entered into an Arbitration Agreement. The introduction of the Arbitration Agreement provides:

READ THIS ARBITRATION AGREEMENT. IF YOU DON'T REJECT IT IN ACCORDANCE WITH PARAGRAPH (a) BELOW, TO THE EXTENT PERMITTED BY APPLICABLE LAW, IT WILL BECOME PART OF YOUR INSTALLMENT LOAN AND SECURITY AGREEMENT AND HAVE A SUBSTANTIAL IMPACT ON THE WAY IN WHICH YOU OR WE WILL RESOLVE ANY CLAIM WHICH YOU OR WE HAVE AGAINST EACH OTHER NOW OR IN THE FUTURE.

This Arbitration Agreement describes when and how a Claim (as defined below) arising under or related to this INSTALLMENT LOAN AND SECURITY AGREEMENT (the 'Loan Agreement') between you and us may be arbitrated. Id.

Paragraph (a) of the Arbitration Agreement provides: "Your Right to Reject: If you don't want this Arbitration Agreement to apply, you may reject it by mailing us a written rejection notice. . . . If you don't reject this Arbitration Agreement, it will be effective as of the date of the Loan Agreement." Id. The paragraph also states that Northeastern must receive the rejection notice within fifteen (15) days after the date of the Loan Agreement. Id.

Paragraph (b) of the Arbitration Agreement provides:

What Claims Are Covered: 'Claim' means any claim, dispute or controversy between you and us that in any way arises from or relates to the Loan Agreement. 'Claim' has the broadest possible meaning, and includes initial claims, counterclaims, cross-claims and third-party claims. It includes disputes based upon contract, tort, consumer rights, fraud . . . . Subject to paragraph (f) below, it also includes disputes about the validity, enforceability, arbitrability or scope of this Arbitration Agreement. . .

Id.

Paragraph (c) of the Arbitration Agreement provides: "How Arbitration Is Started: Either you or we may require any Claim to be arbitrated. Arbitration is started by giving written notice to the other party of the intent to start or to compel arbitration. . . . The notice may be in the form of a motion or petition to compel arbitration." Id. Paragraph (e) of the Arbitration Agreement provides that "[i]f arbitration is chosen with respect to a Claim . . . [t]here will be no right to try that Claim in court." Id. Paragraph (i) of the Arbitration Agreement establishes that the agreement is governed by the Federal Arbitration Act, 9 U.S.C. ยงยง 1 et seq. ("FAA"). Id. The final page of the Arbitration Agreement contains an acknowledgment clause which indicates that by signing the agreement, the borrower acknowledges that he ...


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