KETCHEN v. DRJ GAINESVILLE K LLC

• Court: District Court, N.D. Florida
• Decided: August 28, 2024
• Docket: 1:24-cv-00037
• Status: Unknown

Opinion

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF FLORIDA GAINESVILLE DIVISION

SANDY L. KETCHEN, III,

Plaintiff,

v. Case No. 1:24-cv-37-MW/MJF

DRJ GAINESVILLE K, LLC,

Defendant. / REPORT AND RECOMMENDATION Plaintiff Sandy L. Ketchen, III, commenced this action against DRJ Gainesville for damages after Ketchen purchased a vehicle from DRJ Gainesville. Doc. 1. DRJ Gainesville has moved to dismiss and to compel arbitration. Doc. 39. Ketchen responded in opposition. Doc. 42. The undersigned recommends that the District Court grant the motion to the extent it seeks to compel arbitration, stay the case pending arbitration, and deny the motion to the extent it seeks dismissal. I. BACKGROUND On October 6, 2022, Ketchen purchased a used Ford Fusion from DRJ Gainesville pursuant to an installment contract. Doc. 1 at ¶ 13. Almost immediately, the car experienced mechanical problems. Id. ¶¶ 24–25. DRJ Gainesville declined to address Ketchen’s concerns or to

make repairs. Therefore, on December 27, 2023, Ketchen commenced this civil action against DRJ Gainesville and Ally Financial Inc. Ketchen asserts the following “claims”: (1) a violation of the federal odometer act;

(2) fraud; (3) fraudulent inducement; (4) breach of an express warranty; and (5) “revocation of acceptance.” On June 10, 2024, the District Court

granted Ketchen and Ally Financial Inc.’s joint motion to dismiss Ketchen’s claims against Ally Financial. Doc. 28. A. The Arbitration Provision

The contract Ketchen signed contained an arbitration provision: [a]ny claim or dispute, whether in contract, tort, statute or otherwise . . . between you and us or our employees, agents, successors or assigns, which arises out of or relates to your credit application, purchase or condition of this vehicle . . . shall, at your or our election, be resolved by neutral, binding arbitration and not by a court action.

Doc. 1-1 at 6; Doc. 39-1 at 6. B. DRJ Gainesville’s Motion to Dismiss In light of the arbitration provision, on August 22, 2024, DRJ Gainesville filed the instant motion to compel arbitration and to dismiss Ketchen’s claims without prejudice. Doc. 39. Ketchen previously conceded that the contract he signed contains a binding arbitration

agreement. Doc. 26. Furthermore, Ketchen acknowledges that his claims arise from the purchase and condition of the vehicle. Doc. 42 at 1. II. DISCUSSION

The Federal Arbitration Act (“FAA”) states that agreements requiring the submission of disputes to arbitration “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. A district court must stay a proceeding and compel arbitration if the court determines

that “(a) the plaintiff entered into a written arbitration agreement that is enforceable ‘under ordinary state-law’ contract principles and (b) the claims before the court fall within the scope of that agreement.” Lambert

v. Austin Ind., 544 F.3d 1192, 1195 (11th Cir. 2008) (citing 9 U.S.C. §§ 2– 4). Here, a valid agreement to arbitrate exists. Doc. 1-1 at 6. Ketchen

does not raise any defense to the enforcement of the arbitration agreement. Doc. 42; see also Doc. 26. Furthermore, Ketchen concedes that the claims against DRJ Gainesville relate to the purchase of his vehicle and the vehicle’s condition at the point of sale, which allegedly was not “honestly represented in the [parties’] contract.” Doc. 42 at 1. This falls

squarely within the terms of the arbitration agreement. Doc. 1-1 at 6. Therefore, the arbitration provision constitutes a valid arbitration contract and should be enforced. See generally Joinville v. Express Auto.,

Inc., No. 16-62696-CIV, 2017 WL 8159333, at *2 (S.D. Fla. July 11, 2017). As to DRJ Gainesville’s motion to dismiss, section 3 of the FAA

provides: If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had . . . .

9 U.S.C. § 3 (emphasis added); see Smith v. Spizzirri, 601 U.S. 472, 475– 76 (2024) (“When a federal court finds that a dispute is subject to arbitration, and a party has requested a stay of the court proceeding pending the arbitration, the court does not have discretion to dismiss the suit on the basis that all the claims are subject to arbitration.”). Accordingly, the District Court should stay this case and not dismiss it. III. CONCLUSION For the reasons set forth above, the undersigned respectfully

RECOMMENDS that the District Court: 1. GRANT IN PART and DENY IN PART DRJ Gainesville’s motion to dismiss and compel arbitration as follows:

a. GRANT the motion to the extent DRJ Gainesville seeks an order compelling arbitration and ORDER the parties to submit this

dispute to binding arbitration in accordance with the terms of their agreement. b. STAY all proceeding in this action pending arbitration

of the parties’ dispute. c. DENY without prejudice DRJ Gainesville’s motion to the extent DRJ Gainesville seeks to dismiss Ketchen’s claims.

2. DIRECT the parties to notify the District Court when they have completed arbitration. 3. DIRECT the clerk of the court to administratively close this

case and to reopen the case upon the filing of the partis’ notice that arbitration has been completed. At Pensacola, Florida this 28th day of August, 2024. /s/ Michael J. Frank Michael J. Frank United States Magistrate Judge

NOTICE TO THE PARTIES

The District Court referred this case to the undersigned to address preliminary matters and to make recommendations regarding dispositive matters. See N.D. Fla. Loc. R. 72.2; see also 28 U.S.C. § 636(b); Fed R. Civ. P. 72. Objections to these proposed findings and recommendations must be filed within fourteen (14) days of the date of the report and recommendation. Any different deadline that may appear on the electronic docket is for the court’s internal use only and does not control. An objecting party must serve a copy of its objections upon all other parties. A party who fails to object to the magistrate judge’s findings or recommendations contained in a report and recommendation waives the right to challenge on appeal the district court’s order based on unobjected- to factual and legal conclusions. See 11th Cir. Rule 3-1; 28 U.S.C. § 636.