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Chavez v. Get It Now, LLC

United States District Court, D. Minnesota

January 16, 2018

Amber Chavez, on behalf of herself and all others similarly situated, Plaintiff,
v.
Get It Now, LLC d/b/a/ Home Choice, Defendant.

          Mark L. Vavreck, Esq., Gonko & Vavreck, PLLC; and Thomas J. Lyons, Jr., Esq., Consumer Justice Center, P.A., counsel for Plaintiff.

          Cameron A. Lallier, Esq., and Thomas J. Lallier, Esq., Foley & Mansfield, PLLP, counsel for Defendant.

          MEMORANDUM OPINION AND ORDER

          DONOVAN W. FRANK UNITED STATES DISTRICT JUDGE

         INTRODUCTION

         This matter is before the Court on Defendant Get It Now, LLC's Motion to Compel Arbitration and Stay Action. (Doc. No. 5.) Plaintiff Amber Chavez opposes Defendant's motion. (Doc. No. 10.) For the reasons set forth below, Defendant's motion is denied.

         BACKGROUND

         Chavez's Complaint arises out of her purchase of a number of home furnishings from Get It Now. (See generally Doc. No. 1 (“Compl.”); Doc. No. 7, Ex. A (“Agreement”) at 14.) To finance the purchase, Chavez obtained a line of credit from Get It Now in March 2015. (Compl. ¶ 6.) On April 20, 2015, Chavez and Get It Now entered into a Retail Installment Sale Contract and Security Agreement (the “Agreement”). (Agreement at 14-21.) This Agreement also contained an Arbitration Agreement (the “Arbitration Agreement”). (Id. at 17-21.)

         Chavez was unable to make timely payments on her account, and she pursued a Chapter 7 bankruptcy. (Id. at ¶¶ 7-8.) On June 26, 2015, Chavez initiated her bankruptcy case in the District, Case No. 15-42275. (Id. ¶ 8.) On September 29, 2015, Chavez obtained a discharge. (Id. ¶ 11; see also Doc. No. 10 at 2 n.1.) Notices of the bankruptcy filing and resulting discharge were mailed to Get It Now. (Compl. ¶¶ 10-11.) Chavez did not sign a reaffirmation agreement with Get It Now in connection with her bankruptcy. (Doc. No. 11 (“Chavez Aff.”).)

         On November 16, 2015, Get It Now initiated a lawsuit against Chavez in Hennepin County Conciliation Court, Case No. 27-CO-15-7760, seeking to collect the discharged debt. (Id. ¶¶ 12, 15-16.) Get It Now persuaded Plaintiff to agree to repay the discharged debt in monthly installments of $127. (Id. ¶ 17.) Chavez thereafter made payments to Defendant totaling $1, 397. (Id. ¶ 18.) On January 25, 2016, Chavez and Get It Now entered into a new Retail Installment Sale Contract and Security Agreement containing its own Arbitration Agreement. (Agreement at 5-12.)

         On August 17, 2016, Chavez determined that her credit report contained inaccurate information regarding her account with Get It Now, namely that the account contained a balance that was being repaid on a monthly basis rather than stating that the balance had been discharged in Bankruptcy. (Compl. ¶¶ 19-20.) Chavez disputed this information to the credit reporting agencies, and Get It Now responded by asserting that Chavez continued to owe the debt. (Id. ¶¶ 20-22.) Thus, the debt remained on Chavez's credit report. (Id. ¶¶ 22-23, 25.)

         On May 5, 2017, Chavez filed the Complaint in the present action, asserting the following claims on behalf of herself and a putative class: (1) Violations of the Fair Credit Reporting Act, 15 U.S.C. § 1681 (Count I); (2) Bankruptcy Discharge Violation Under 11 U.S.C. § 524 (Count II); (3) Malicious Prosecution (Count III); (4) Abuse of Process (Count IV); and (5) Unjust Enrichment/Conversion (Count V). (See Compl. at 6-7, 9-12.) Chavez seeks damages; attorney fees and costs; injunctive relief directing Defendant to desist collection efforts; and a finding of contempt based on Get It Now's violation of the Discharge Injunction. (See Compl. at Prayer for Relief.) Get It Now seeks to compel arbitration pursuant to the terms of the Agreement and to stay this action during the pendency of the arbitration. (Doc. Nos. 5, 6.)

         DISCUSSION [1]

         I. Legal Standard

         Get It Now brings this motion pursuant to the Federal Arbitration Act (“FAA”). The FAA provides that written agreements to arbitrate “shall be valid, irrevocable, and enforceable.” 9 U.S.C. § 2. Get It Now asks the Court to stay the proceedings because the present dispute is governed by a written arbitration agreement. In determining whether to compel arbitration, the Court usually must determine: (1) whether a valid agreement to arbitrate exists between the parties; and (2) whether the specific dispute is within the scope of that agreement. Pro Tech Indus., Inc. v. URS Corp.,377 F.3d 868, 871 (8th Cir. 2004). But under the FAA, parties can agree to have an arbitrator decide whether claims fall within the scope of the agreement. See, e.g., Fallo v. High-Tech Inst., 559 F.3d 874, 877 (8th Cir. 2009) (citing First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, ...


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