The opinion of the court was delivered by: Schiller, J.
Sisc Johnson has brought claims against Branch Banking and Trust Company ("the Bank") and BB&T Financial, FSB ("BB&T Financial") under the Fair Credit Reporting Act ("FCRA"), as well as state-law claims for defamation, invasion of privacy, and negligence. Johnson alleges that after her small business, Choice Carpet and Floors, LLC ("CCF") opened an account with BB&T Financial's predecessor-in-interest, BB&T Bankcard Corporation ("BB&T Bankcard") the BB&T entities furnished inaccurate information to credit reporting agencies and failed to investigate disputed items. Defendants seek to stay these proceedings and to compel arbitration based on an agreement between CCF and BB&T Bankcard. For the reasons set forth below, the Court denies Defendants' motion.
On November 1, 2007, Plaintiff signed an application for a commercial credit card with BB&T Bankcard as one of two co-owners of CCF. (Defs.' Mot. to Compel Arb. Ex. 1 at 1 [BB&T Bankcard Commercial Card Application].) The application included a "BB&T Bankcard Corporation Commercial Card Plan Agreement" ("the Agreement"), along with a separate personal guaranty. (Id. at 2-5.) Johnson, along with the other CCF owner, executed a "Signature and Authorization" on the card application, which provides:
The entity named above (Company), by the signature of its authorized officer(s) below, requests that a BB&T Commercial Card(s) to be issued to the authorized Cardholders as set forth on the BB&T Bankcard Corporation Commercial Card Application and as otherwise directed in writing by the Company from time to time . . . . The Company also agrees to be bound by all the terms and conditions of [the Agreement] . . . . Any parties signing below as the duly authorized signatory of the Company attests that the Company is a valid business entity and that each person signing below is authorized to enter into that Agreement on behalf of such business. (Id. at 1.) At the top of the application, "Choice Carpet and Floors LLC" is listed as "Legal Name of Company." (Id.) "Cardholder" is not further defined in the Agreement, but on the application, "Choice Carpet and Floors" is listed under the sub-heading, "Name, as it will appear on card." (Id.) However, under the heading, "New Cards," Johnson's name also appears under a different sub-heading, "Name to Appear on Card." (Id.) The attached Agreement includes provisions for arbitration. Paragraph 29 states:
By applying for a card, Cardholder agrees that if a dispute of any kind arises out of or relates to this Agreement or Cardholder's application for a Card, either Cardholder or [BB&T Bankcard] can choose to have that dispute resolved by binding arbitration as set forth in the Arbitration Provision below. (Id. at 3.) The Arbitration Provision states:
As used in this Arbitration Provision, the term "Claim" or "Claims" means any claim, dispute or controversy between Cardholder and Bank arising from or including the validity and scope of this Arbitration Provision or the Agreement. "Claim" or "Claims" includes claims of over [sic] kind and nature between Cardholder and Bank, including, but not limited to . . . claims based on contract, tort, fraud . . . constitutions, statutes, regulations, common law and equity. . . . The term "Claim" or "Claims" is to be given the broadest possible meaning and includes . . . any claim, dispute, or controversy between Cardholder and Bank that arises from or relates to (a) the credit card account . . . created in the Agreement or any balances on the Account; (b) the goods or services . . . charged to the Account; advertisements, promotions or oral or written statements related to the Account . . .; (d) your application for the Account; and (e) the origination or servicing of the Account and the collection of the amounts owed by Cardholder to Bank.
Upon the election of either Cardholder or Bank, any Claim between Cardholder and Bank shall be resolved by binding arbitration pursuant to this Arbitration Provision . . . . (Id. at 4.) The Agreement contains a choice-of-law provision, stating that it "shall be governed and construed under the laws of the state of Georgia." (Id.)
On or about January 28, 2008, Johnson traveled to a BB&T Bankcard branch office in order to "remove herself from personal responsibility" for the credit card account and to return the credit card. (Am. Compl. ¶ 11.) Notwithstanding the BB&T entities' assurances she had been removed from personal liability, the Bank sent Johnson multiple collection letters alleging that she was responsible for delinquencies that had subsequently occurred on the credit card account. (Id. ¶¶ 16-23.) Johnson later learned that the debt was being reported in delinquent status to credit reporting agencies. (Id. ¶ 24.) These erroneous reports have adversely affected Johnson's credit. (Id. ¶¶ 26-32.)
The Federal Arbitration Act (FAA) provides that arbitration agreements are "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. Any "party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court . . . for an order directing that such arbitration proceed in the manner provided for in such agreement." Id. § 4. The FAA establishes the strong federal policy in favor of arbitration. Puleo v. Chase Bank USA, N.A., 605 F.3d 172, 178 (3d Cir. 2010). The presumption in favor of arbitration, however, does not apply to the issue of whether a valid agreement to arbitrate exists. Kirleis v. Dickie, McCamey & Chilcote, P.C., 560 F.3d 156, 160 (3d Cir. 2009).
A district court decides a motion to compel arbitration under a summary judgment standard and gives the party opposing the motion the benefit of all reasonable doubts and appropriate inferences. Kaneff v. Del. Title Loans, Inc., 587 F.3d 616, 620 (3d Cir. 2009). Before compelling arbitration, a court must determine that: (1) a valid agreement to arbitrate exists; and (2) the particular dispute falls within the scope of the agreement. Kirleis, 560 F.3d at 160.
A. Validity of the Agreement to ...