Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Snyder v. Cach, LLC

United States District Court, D. Hawaii

November 10, 2016

MARIA SNYDER, Plaintiff,
v.
CACH, LLC, AND MANDARICH LAW GROUP, LLP, Defendants.

          ORDER GRANTING DEFENDANTS' MOTION TO COMPEL ARBITRATION AND DISMISS CLAIMS, DISMISSING DEFENDANTS' COUNTERCLAIM, AND DENYING PLAINTIFF'S MOTION TO DISMISS FOR LACK OF JURISDICTION DEFENDANTS' COUNTERCLAIM AS MOOT

          ALAN C. KAY SR. UNITED STATES DISTRICT JUDGE.

         For the reasons set forth below, the Court GRANTS Defendants'[1] Motion to Compel Arbitration and Dismiss Claims, ECF No. 19, and DENIES Plaintiff's Motion to Dismiss for Lack of Jurisdiction Defendants' Counterclaim, ECF No. 21, as moot. The Court dismisses the Complaint as well as the Counterclaim, as both must be submitted to arbitration.

         FACTUAL BACKGROUND

         This action relates to Defendants and Counterclaimants CACH LLC's (“CACH”) and Mandarich Law Group, LLP's (“Mandarich”) (collectively, “Defendants”) efforts to collect a credit card debt from Plaintiff and Counter-defendant Maria Snyder (“Snyder” or “Plaintiff”).

         I. Plaintiff's Allegations

         Plaintiff alleges that she obtained a copy of her credit report dated June 23, 2015, which showed that Bank of America N.A. (“BANA”) had been communicating information to the credit reporting agency related to her debt owed. Compl. ¶¶ 14-15, ECF No. 1. BANA reported that Plaintiff's account had been “charged-off with a ‘Date of First Delinquency'” of April 2009. Id. ¶ 15. BANA reported that the balance of Plaintiff's account at the time of charge-off was $6, 835. Id. ¶ 16.

         On May 2, 2015, Mandarich sent Plaintiff a letter informing her that her BANA account had been sold and assigned to Mandarich's client, CACH. Id. ¶ 19. The letter stated that Plaintiff had a current balance of $8, 765.10 on a BANA account number ending in 5522. Id. ¶ 17.

         On or around June 16, 2015, Mandarich sent Plaintiff another letter attempting to collect the debt. Id. ¶ 22. The account summary page attached to the letter provided that the BANA account ending in 5522 was placed for collection with CACH on November 19, 2009 with an account balance of $6, 835.10. Id. ¶ 25. Plaintiff alleges that Defendants did not have records of the underlying account, but that they “blindly assert[ed]” that the debt was owed by Plaintiff and that Defendants “illegally add[ed] interest to the account.” Id. ¶¶ 26-27. Plaintiff further alleges that the time period to collect the debt had expired at the time the collection letter was sent. Id. ¶ 33-34.

         On or around February 24, 2016, Plaintiff called Mandarich to discuss her account. Id. ¶ 35. At this time, Mandarich informed her that she owed CACH $8, 765.10 on her BANA account number ending in 5522. Id. ¶ 37.

         Plaintiff claims that BANA charged off the alleged debt in October 2009 in the amount of $6, 835 and that this was the amount of the debt when BANA sold it on November 19, 2009. Id. ¶ 41. Charge-off “means that the credit card receivable is no longer carried on a bank's books as an asset.” Id. ¶ 40. Plaintiff maintains that BANA did not charge interest after the charge-off and that CACH was accordingly not “entitled to demand payment of any amount of interest they added to the account after [BANA] charged off the account.” Id. ¶¶ 39, 43.

         According to Plaintiff, BANA waived the right to add interest after charge-off and CACH acquired the debt subject to said waiver. Id. ¶ 51. Plaintiff also claims that Defendants “demand odd amounts from” her, noting that the balance stayed the same, at $6, 835 between October 2009 and November 19, 2009 (with 0% interest); “mysteriously increases” to $8, 765.10 between November 19, 2009 and May 2, 2015 (with an interest rate of 4.665%); and then stays the same at $8, 765.10 through February 24, 2016 (with 0% interest). Id. ¶¶ 57-58.

         II. Defendants' Allegations

         Defendants claim that on or around October 24, 2003, Plaintiff opened an account with BANA to obtain an extension of credit. Counterclaim ¶ 1, ECF No. 11. On October 31, 2009, because of a lack of payment, BANA charged off the account with a balance owed of $6, 835.10. Id. ¶ 3. On November 17, 2009, the account and underlying agreement were sold and transferred to CACH “with fully [sic] authority to do and perform all acts necessary for the collection, settlement, adjustment, compromise or satisfaction of the Account.” Id. ¶ 4. According to Defendants, the account records provided to them demonstrate an applicable interest rate at the time of charge off of 10.24%. Id. ¶ 7. Defendants allege that CACH is entitled to at least $8, 765.10 pursuant to the account agreement. Id. ¶¶ 19-20.

         III. Background Relevant to Motion to Compel Arbitration

         In support of their Motion to Compel Arbitration, Defendants submitted a Declaration by Yekaterina Livits, custodian of records for CACH. Livits Decl., ECF No. 19-4.[2] Livits states that on or around October 24, 2003, Plaintiff opened a credit card account with BANA/FIA Card Services.[3] Id. ¶ 7. According to Livits, at the time Plaintiff opened the account, she also received a Bank of America Credit Card Account Agreement. Id.

         The “Cardholder Agreement, ” (the “Agreement”) which according to Livits was sent to Plaintiff, id. ¶ 12, provides in relevant part as follows:

7.18: Governing Law. THIS AGREEMENT IS GOVERNED BY APPLICABLE ARIZONA AND FEDERAL LAW.
7.19: Arbitration. Any dispute, claim, or controversy (“Claim”) by or between you and us (including each other's employees, agents or assigns) arising out of or relating to this Agreement, your Account, or the validity or scope of any provision of this Agreement including this arbitration clause shall, upon election by either you or us, be resolved by binding arbitration.
This arbitration section of the Agreement shall be governed by the Federal Arbitration Act, 9 U.S.C. §1-16. Judgment upon arbitration may be entered in any court having jurisdiction. Arbitration shall be conducted in the federal judicial district in which your billing address is located at the time the claim is filed.
YOU UNDERSTAND AND AGREE THAT IF EITHER YOU OR WE ELECT TO ARBITRATE A CLAIM, THIS ARBITRATION SECTION PRECLUDES YOU AND U.S. FROM HAVING A RIGHT OR OPPORTUNITY TO LITIGATE CLAIMS THROUGH COURT, OR TO PARTICIPATE OR BE REPRESENTED IN LITIGATION FILED IN COURT BY OTHERS. EXCEPT AS OTHERWISE PROVIDED ABOVE, ALL CLAIMS MUST BE RESOLVED THROUGH ARBITRATION IF YOU OR WE ELECT TO ARBITRATE.

Id., Ex. 2 §§ 7.18-7.19.

         On or around November 12, 2009, BANA/FIA assigned Plaintiff's debt to CACH to collect the outstanding debt of $6, 835.10. Id. ¶ 8. CACH entered into a written Loan Sale Agreement wherein it purchased “all rights, title and interest” in several credit card accounts, including Plaintiff's credit card account number ending in “5522.” Id. ¶ 9. CACH also received information and records pertaining to Plaintiff's account that were “incorporated into the business records of CACH” and that were “relied upon by CACH in the ordinary course of business.” Id. ¶ 10.

         PROCEDURAL BACKGROUND

         On March 7, 2016, Plaintiff filed the instant lawsuit seeking declaratory and injunctive relief, as well as actual and statutory damages for Defendants' alleged violations of the Fair Debt Collection Practices Act (“FDCPA”), Hawaii Revised Statutes (“HRS”) Sections 443B-18, 19, and 20 (regulating collection agencies) and Hawaii's Unfair or Deceptive Acts or Practices law, HRS Chapter 480. Compl. ¶¶ 62-133. Plaintiff alleges that Defendants made false, misleading, and deceptive representations in connection to the interest rate used and the amount owed; and that Defendants employed unfair practices in attempting to collect the debt. Id.

         On April 22, 2016, Defendants filed a Counterclaim seeking to collect the underlying debt from Plaintiff. Counterclaim ¶¶ 1-4, 19-20.

         On May 5, 2016, Defendants filed a Motion to Consolidate the instant action with Snyder v. CACH, LLC et al., Civ. No. 16-00174 HG-KSC. ECF No. 18. On June 29, 2016, Magistrate Judge Kenneth Mansfield denied the Motion to Consolidate. ECF No. 29.

         On May 6, 2016, Defendants filed a Motion to Compel Arbitration and Dismiss Claims (“Motion to Compel Arbitration”). On May 13, 2016, Plaintiff filed a Motion to Dismiss for Lack of Jurisdiction Defendant's Counterclaim (“Motion to Dismiss the Counterclaim”).[4] Defendants filed their Opposition to Plaintiff's Motion to Dismiss the Counterclaim on September 9, 2016. ECF No. 38. Plaintiff filed her Opposition to Defendants' Motion to Compel Arbitration on September 12, 2016. ECF No. 39. Plaintiff filed her Reply on September 16, 2016 and Defendants filed their Reply on September 19, 2016. ECF Nos. 40, 41.

         The Court held a hearing on Defendants' Motion to Compel Arbitration and Plaintiff's Motion to Dismiss the Counterclaim on October 25, 2016 at 11:00 a.m.[5]

         STANDARD

         I. Motion to Compel Arbitration

         As provided in the Federal Arbitration Act (“FAA”), written arbitration agreements “evidencing a transaction involving commerce . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or equity for the revocation of any contract.” 9 U.S.C. § 2. “The FAA embodies a clear federal policy in favor of arbitration” and “[a]ny doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.” Simula, Inc. v. Autoliv, Inc., 175 F.3d 716, 719 (9th Cir. 1999) (citation omitted). As noted by the Ninth Circuit, “[t]he standard for demonstrating arbitrability is not high” and arbitration agreements “are to be rigorously enforced.” Id.

         In deciding whether to compel arbitration, the court may not review the merits of the dispute. Rather, “the court must determine ‘(1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue.'” Lowden v. T-Mobile USA, Inc., 512 F.3d 1213, 1217 (9th Cir. 2008) (quoting Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000)). The Court should also consider whether there exists “a defense that would be available to a party seeking to avoid the enforcement of any contract.” Brown v. Dillard's, Inc., 430 F.3d 1004, 1010 (9th Cir. 2005); see also Williams v. 24 Hour Fitness, USA, Inc., No. CIV. 14-00560 DKW, 2015 WL 4139227, at *3 (D. Haw. July 8, 2015) (same).

         On a motion to compel arbitration, the court “may properly consider documents outside of the pleadings.” Xinhua Holdings Ltd. v. Elec. Recyclers Int'l, Inc., No. 1:13-CV-1409 AWI SKO, 2013 WL 6844270, at *5 (E.D. Cal. Dec. 26, 2013), aff'd sub nom. Clean Tech Partners, LLC v. Elec. Recyclers Int'l, Inc., 627 F. App'x 621 (9th Cir. 2015).

         II. Motion to Dismiss for Lack of Subject Matter Jurisdiction

         Pursuant to Federal Rule of Civil Procedure (“Rule”) 12(b)(1), a party may move to dismiss based on a lack of subject matter jurisdiction. “[T]he party asserting subject matter jurisdiction has the burden of proving its existence.” Robinson v. United States, 586 F.3d 683, 685 (9th Cir. 2009) (citation omitted). Pursuant to Rule 12(h)(3), “[i]f the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.”

         DISCUSSION

         I. Defendants' Motion to Compel Arbitration and Dismiss Claims[6]

         The Court notes at the outset that Defendants' Motion to Compel Arbitration applies to two different credit card accounts, while only one account is relevant to the instant case. As acknowledged by Defendants in their Reply, the Motion to Compel Arbitration was drafted to encompass the claims under both the instant case and Civ. No. 16-00174 HG-KSC. Defendants' Reply, at 2, ECF No. 41. However, as the two cases were not consolidated, the account described as “Account 1” in Defendants' Motion, i.e., Plaintiff's account number ending in 5522, is the only account relevant to this case and the motions at issue. Id. at 2, 9; see also Livits Decl. ¶ 9 (referring to account number ending in 5522); Compl. ¶¶ 17, 23, 25, 37 (same).

         As set forth below, the Court finds that a valid arbitration agreement exists and that the agreement encompasses the dispute at issue. See Lowden, 512 F.3d at 1217. The Court additionally concludes that Plaintiff has failed to raise a meritorious defense to arbitration. Accordingly, the Court directs the parties to proceed to arbitration.[7]

         A. The Livits ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.