United States District Court, M.D. Pennsylvania
KAROLINE MEHALCHICK, United States Magistrate Judge.
the Court is the motion of Defendant, Alltran Financial LP
(hereinafter “Alltran, ” formerly known as
“United Recovery Systems”), to dismiss and to
compel arbitration, or alternatively stay proceedings pending
arbitration. (Doc. 21). This matter having been
fully briefed, it is ripe for disposition. For the following
reasons, the Court will DENY Defendant's motion.
BACKGROUND AND PROCEDURAL HISTORY
point prior to 2003, Plaintiff, Francis Pacanowski
(“Pacanowski”) opened a new Home Depot credit
card account (“the Account”) (Doc. 21-1 at 1).
Citibank, (South Dakota) N.A. (“Citibank”)
eventually purchased the Account. (Doc. 21-2 at ¶ 4).
Pacanowski submits that the identity of the original
creditor, and the terms of the original subject agreement are
unknown. Pacanowski currently has a delinquent balance on his
account in excess of $6, 600.00, which is the subject of this
lawsuit. While the Account was active, Citibank mailed to
Pacanowski multiple documents, each of which purported to
replace the prior terms of the Account. (Doc. 21-2 at
¶¶6-13). The last of these documents was sent in
May 2011. (Doc. 1 at ¶11; Doc. 21-2 at ¶11). This
document contains an arbitration provision. (Doc. 23-1 at 6).
The May 2011 document advised Pacanowski that Citibank was
changing the terms of the agreement, including the applicable
arbitration provision, and provided Pacanowski with an
opportunity to opt out of the 2011 Notice. Pacanowski did not
opt out of the 2011 Notice.
lawsuit was instituted by Pacanowski on July 20, 2016 against
Alltran, in which Pacanowski alleges that Alltran, acting as
a debt collector for Citibank, sent him a form letter on or
around July 21, 2015, attempting to collect the outstanding
account balance, and claiming that the letter violates the
Fair Debt Collection Practices Act. (Doc. 1 at ¶ 12).
Pacanowski alleges that the letter violates the FDCPA by
failing to include a disclosure as to when the amount due was
calculated or if the debt would continue to grow. (Doc. 1 at
has moved the Court dismiss the case and to compel
arbitration, or in the alternative, to stay this matter
pending individual arbitration of Pacanowski's claims.
Alltran submits that the Pacanowski's FDCPA claims
against Alltran clearly relate to Pacanowski's account,
and that the allegations establish that Alltran is connected
with Citibank or was acting as Citibank's agent or
representative when it contacted Pacanowski. Alltran further
submits that Pacanowski alleges that Alltran attempted to
collect a debt on behalf of Citibank, and the letter that
Pacanowski allegedly received from Alltran identifies
Citibank as Alltran's client. As such, Alltran submits
that Pacanowski's claims fall squarely within the express
terms of the arbitration provision of Pacanowski's Card
Agreement, and that the arbitration agreement is valid and
submits that he is not bound by the arbitration provision
because (1) the cardmember agreement is a contract of
adhesion; (2) Alltran has not presented any evidence
regarding the initial terms of the contract with
Citibank's predecessor; (3) Pacanowski's claim is not
included within the provision's scope because it is not a
“Claim” as defined in the agreement; (4)
Alltran's alternative estoppel argument fails; (5)
Alltran is not a third party beneficiary because it was not
named in the cardmember agreement; and (6) that this Court
should decide the gateway issue of arbitrability.
Court addresses each of these arguments below.
THIS COURT SHOULD DECIDE THE GATEWAY ISSUE OF
initial question of arbitrability-i.e., whether or
not the parties validly agreed to arbitrate-is presumed to be
a question for the court unless the parties clearly and
unmistakably indicate otherwise. Guidotti v. Legal
Helpers Debt Resolution, L.L.C., 716 F.3d 764, 773 (3d
Cir. 2013); Briggs v. Macy's Inc., No. CV
3:16-0902, 2017 WL 590274, at *2-3 (M.D. Pa. Feb. 14, 2017).
In Guidotti, the Third Circuit Court of Appeals
clarified the appropriate standard of review to be applied to
a motion to compel arbitration filed before the completion of
discovery. This clarification was needed due to conflicting
precedent using the standard under Federal Rule of Civil
Procedure 12(b)(6) applied to motions to dismiss as compared
to precedent using the standard under Federal Rule of Civil
Procedure 56 applied to motions for summary judgment.
Guidotti, 716 F.3d at 771. The Third Circuit
determined that this conflict was premised on the competing
purposes of the Federal Arbitration Act (“FAA”),
9 U.S.C. § 1 et seq., governing arbitration
versus the values underlying contract interpretation more
generally. Guidotti, 716 F.3d at 773. While the FAA
“calls for a summary and speedy resolution of motions
or petitions to enforce arbitration clauses, ”
enforcement of the private agreement between the parties is
also an important consideration. Guidotti, 716 F.3d
at 773 (quoting Moses H. Cone Mem'l Hosp. v. Mercury
Constr. Corp., 460 U.S. 1, 29 (1983)).
“Accordingly, ‘[b]efore a party to a lawsuit can
be ordered to arbitrate and thus be deprived of a day in
court, there should be express, unequivocal agreement to that
effect.'” Guidotti, 716 F.3d at 773
(quoting Par-Knit Mills, Inc. v. Stockbridge Fabrics Co.,
Ltd., 636 F.2d 51, 54 (3d Cir. 1980)) (alteration in
Third Circuit in Guidotti held that where the
affirmative defense of arbitrability is apparent on the face
of the complaint or those documents relied upon in the
complaint, the standard under Rule 12(b)(6) should be
applied. Guidotti, 716 F.3d at 773-74. In those
cases, the FAA would favor speedy resolution without the
delay of discovery. Guidotti, 716 F.3d at 773-74.
“[A] more deliberate pace is required” when
either (1) the complaint and documents referenced therein do
not establish with “requisite clarity” that the
parties agreed to arbitrate or (2) “the opposing party
has come forth with reliable evidence that is more than a
‘naked assertion ... that it did not intend to be
bound, ' even though on the face of the pleadings it
appears that it did.” Guidotti, 716 F.3d at
774 (quoting Somerset Consulting, LLC v. United Capital
Lenders, LLC, 832 F.Supp.2d 474, 479 (E.D. Pa. 2011) and
Par-Knit Mills, 636 F.2d at 55).
the issue of arbitrability is not apparent on the fact of the
complaint, “the motion to compel arbitration
must be denied pending further development of the
factual record.” Guidotti, 716 F.3d at 774
(emphasis added). When the issue of arbitrability is apparent
on the face of the complaint but the non-moving party has
come forward with evidence to place the question in issue,
the motion should be resolved according to the standard
provided in Rule 56. Guidotti, 716 F.3d at 774.
“Under either of those scenarios, a restricted inquiry
into the factual issues will be necessary to properly
evaluate whether there was a meeting of the minds on the
agreement to arbitrate, and the non-movant must be
given the opportunity to conduct limited discovery on the
narrow issue concerning the validity of the arbitration
agreement.” Guidotti, 716 F.3d at 774
(emphasis added) (internal citations and quotations omitted).
case, the parties exchanged limited initial discovery in
anticipation of this motion, and therefore the Court has a
complete factual record before it with regard to the issue of
arbitrability, and will ...