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LaRue v. Collateral Recovery Team LLC

United States District Court, S.D. Texas, Houston Division

October 25, 2019

Stephanie LaRue, Plaintiff,
v.
Collateral Recovery Team LLC, et al., Defendants.

          MEMORANDUM OPINION & ORDER

          Gray H. Miller Senior United St H. District Judge

         Pending before the court is defendant Credit Acceptance Corporation's (“Credit Acceptance”) motion to compel arbitration (Dkt. 15), and defendants Daniel Bliss (“Bliss”) and Collateral Recovery Team LLC's (“Collateral”) alternative motions to compel arbitration or dismiss the complaint (Dkt. 25). Plaintiff Stephanie LaRue (“LaRue”) responded to each (Dkts. 19, 32), and Credit Acceptance replied (Dkt. 20). After considering the motions, responses, reply, and applicable law, the court is of the opinion that the motions to compel arbitration should be GRANTED, and the motion to dismiss should be DENIED as moot.

         I. Background

         This dispute is about a retail installment sales contract, the related used car, and an attempt to repossess it. LaRue purchased a used car (the “Vehicle”) from Auto Nations Inc. (“Auto Nations”) on August 20, 2016, and entered into a retail installment sales contract (the “Agreement”) that gave Auto Nations a security interest in the Vehicle. Dkt. 1 at 2. Auto Nations assigned the Agreement and security interest to Credit Acceptance. Id.

         The Agreement included a full page arbitration clause that permitted either LaRue or Credit Acceptance to “require any Dispute to be arbitrated . . . before or after a lawsuit has been started over the Dispute.” Dkt. 15-1 at 8. Dispute is defined as:

any controversy or claim . . . arising out of or in any way related to [the Agreement], including, but not limited to, any default under [the Agreement], the collection of amounts due under [the Agreement], the purchase, sale, delivery, set-up, quality of the Vehicle, advertising for the Vehicle or its financing, or any product or service included in [the Agreement]. ‘Dispute' shall have the broadest meaning possible, and includes contract claims, and claims based on tort, violations of laws, statutes, ordinances or regulations or any other legal or equitable theories.

Id. Excepted from this broad definition are any claims brought in small claims court as well as:

any repossession of the Vehicle upon [LaRue's] default and any exercise of the power of sale of the Vehicle under [the Agreement] or any individual action by [LaRue] to prevent [Credit Acceptance] from using any such remedy, so long as such individual action does not involve a request for monetary relief of any kind.

Id.

         Sometime between August 2016 and January 2019, Credit Acceptance notified LaRue that she was behind on her loan. Dkt. 1 at 2. On January 18, 2019, Credit Acceptance engaged Collateral to repossess the Vehicle. Id. Collateral in turn sent Bliss to LaRue's home where the Vehicle was located. Id. LaRue met Bliss outside her home as he backed his tow truck into her driveway in order to repossess the Vehicle. Id. LaRue immediately objected to the repossession, but Bliss continued his efforts. Id. An altercation ensued during which Bliss allegedly injured LaRue while forcing his way into the Vehicle. Id. at 2-3. Bliss eventually left without taking possession of the Vehicle. Id. at 3.

         LaRue filed suit in this court on March 20, 2019, alleging violations of the Fair Debt Collection Practices Act, the Texas Business & Commerce Code, the Texas Fair Debt Collection Practices Act, assault, and battery. Id. at 3-5. LaRue seeks monetary relief for each cause of action. Id.

         Credit Acceptance filed its motion to compel arbitration on May 1, 2019. Dkt. 15. Collateral and Bliss filed their own motion to compel arbitration on August 12, 2019. Dkt. 25. All defendants assert the Agreement unambiguously applies to LaRue's claims and therefore the court must send the dispute to arbitration and dismiss the lawsuit. See Dkt. 15, 25. LaRue contends that the arbitration clause excludes “any disputes about repossession, on any theory, ” from its definition of Dispute, and therefore, her claims are not subject to mandatory arbitration under the Agreement. Dkt. 19 at 7.

         II. Applicable Law

         The Federal Arbitration Act (“FAA”)[1] provides that a written agreement to arbitrate, in a contract involving interstate commerce, “shall be 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. Determining whether parties should be compelled to arbitrate involves two steps: “(1) is there a valid agreement to arbitrate the claims and (2) does the dispute in question fall within the scope of the arbitration agreement.” Klein v. Nabors Drilling USA, L.P., 710 F.3d 234, 236 (5th Cir. 2013). Whether there is a valid agreement to arbitrate “is governed by ordinary state-law contract principles.” Id. The second inquiry is governed by the “federal ...


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