Rivers v. Pegar Investments LLC

• Court: District Court, D. Arizona
• Decided: October 6, 2021
• Docket: 2:21-cv-00396
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Rebecca A Rivers, No. CV-21-00396-PHX-SMB

10 Plaintiff, ORDER

11 v.

12 Pegar Investments LLC,

13 Defendant. 14 15 Pending before the Court is Defendant’s Motion to Compel Arbitration and Motion 16 for Stay (Doc. 11). Plaintiff has filed a response (Doc. 12) and Defendant replied (Doc. 17 13). After consideration of the pleadings and relevant case law, the Court will deny the 18 motion. 19 I. BACKROUND 20 Plaintiff financed the purchase of her personal automobile through Defendant. 21 Addendum No. 2 to the vehicle sales contract included an arbitration agreement. (Doc. 11, 22 p. 6) Due to financial hardship stemming from the COVID-19 pandemic, Plaintiff fell 23 behind on her scheduled payments to Defendant. Plaintiff alleges that Defendant began 24 calling her cell phone relentlessly. (Doc. 1, p.3) Plaintiff also alleged that Defendant 25 threatened to call the police and report that the subject vehicle was stolen and that this 26 caused Plaintiff to suffer severe emotional distress. (Doc. 1, p. 4). 27 On December 8, 2020, Plaintiff filed a Demand for Arbitration with the AAA for 28 damages against Defendant, in compliance with the arbitration provision. Plaintiff paid her filing fee and AAA sent correspondence to Defendant advising it of the fees due. 2|| Defendant never paid the fees to AAA and on March 3, 2021, the parties received a letter 3|| from the AAA via email informing them that the AAA was declining to administer 4|| Plaintiff's claim because Defendant had failed to comply with the AAA’s policies. 5 || Plaintiff then filed a Complaint in this Court on March 8, 2021 alleging: Violation of the || Telephone Consumer Protection Act, 47 U.S.C. § 227 Et Seq; Violations of Arizona || Consumer Fraud Act, A.R.S. § 44-1522 Et Seq.; Invasion of Privacy; Trespass to Chattels; 8 || and Intentional Infliction of Emotional Distress. 9 II. LEGAL STANDARD 10 Section 2 of the Federal Arbitration Act (“FAA”) provides that “[a] written 11 |} agreement to arbitrate ‘in any maritime transaction or a contract evidencing a transaction || involving commerce . . . shall be valid, irrevocable, and enforceable, save upon such 13 || grounds as exist at law or in equity for the revocation of any contract.” Moses H. Cone Mem’! Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983) (quoting 9 U.S.C. § 2). The 15 || FAA reflects a “congressional declaration of a liberal federal policy favoring arbitration,” id., and “courts must place arbitration agreements on an equal footing with other contracts 17 || and enforce them according to their terms,” AT&T Mobility LLC v. Concepcion, 563 U.S. 18 || 333, 339 (2011) (internal and external citation omitted). Indeed, “the [FAA] ‘leaves no || place for the exercise of discretion by a district court, but instead mandates that district 20 || courts shall direct the parties to proceed to arbitration on issues as to which an arbitration || agreement has been signed.’” Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 22 || 1130 (9th Cir. 2000) (quoting Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 218 23 || (1985)); Republic of Nicar. v. Standard Fruit Co., 937 F.2d 469, 478 (9th Cir. 1991) (“Our || role is strictly limited to determining arbitrability and enforcing agreements to arbitrate, 25 || leaving the merits of the claim and any defenses to the arbitrator.”’). 26 “The court’s role under the [FAA] is therefore limited to determining (1) whether a 27 || valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses 28 || the dispute at issue.” "Chiron, 207 F.3d at 1130. “If the court finds that an arbitration

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1 clause is valid and enforceable, the court should stay or dismiss the action to allow the 2 arbitration to proceed.” Kam–Ko Bio–Pharm Trading Co. Ltd–Australasia v. Mayne 3 Pharma (USA) Inc., 560 F.3d 935, 940 (9th Cir. 2009) (citing Nagrampa v. MailCoups, 4 Inc., 469 F.3d 1257, 1276-77 (9th Cir. 2006) (en banc)). 5 Section 4 of the FAA, which governs petitions to compel arbitration, provides in 6 relevant part: 7 A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate 8 under a written agreement for arbitration may petition any United States district 9 court which, save for such agreement, would have jurisdiction . . . of the subject 10 matter of a suit arising out of the controversy between the parties, for an order 11 directing that such arbitration proceed in the manner provided for in such agreement. 12 9 U.S.C. § 4 (emphasis added). 13 “[U]pon being satisfied that the making of the agreement for arbitration or the 14 failure to comply therewith is not in issue, the court shall make an order directing the parties 15 to proceed to arbitration in accordance with the terms of the agreement.” 9 U.S.C. § 4. But 16 “[i]f the making of the arbitration agreement or the failure, neglect, or refusal to perform 17 the same be in issue, the court shall proceed summarily to the trial thereof.” Id. 18 III. DISCUSSION 19 The parties do not dispute that there was a valid arbitration agreement. However, 20 Plaintiff argues that she attempted arbitration, but AAA declined to administer her claim 21 due to no fault on her part. Because she did not fail, neglect, or refuse to arbitrate, she 22 should not be compelled to go back to arbitration. Defendant argues that Plaintiff failed to 23 comply with the terms of the arbitration agreement because she failed to provide the 24 agreement to AAA. The arbitration agreement provided that the fees would be split 25 between the parties. As a result of Plaintiff’s failure, AAA assessed all the arbitrator’s 26 compensation to Defendant instead of splitting it. 27 After review of the exhibits, it appears that both parties are right in some sense. 28 However, Defendant presented no correspondence to show that it advised AAA that the fees should be split or that it contacted Plaintiff to discuss splitting the fees. Instead, 2|| Plaintiff responded that it would be sending payment but never did. (Doc. 12-5) 3 The FAA does not require the Court to return parties to arbitration once Defendant has 4|| defaulted by failing to pay required fees. Sink v. Aden Enterprises, Inc., 352 F.3d 1197, 5 || 1200 (9th Cir. 2003) In this case, Defendant failed to pay the required fee or raise the issue || with AAA and has lost its right to compel arbitration. 7 IV. CONCLUSION 8 For the reasons stated above, 9 IT IS ORDERED denying Defendant’s Motion to Compel Arbitration and Motion for Stay (Doc. 11). 11 IT IS FURTHER ORDERED that Defendant must file an Answer no later than || October 20, 2021. 13 Dated this 6th day of October, 2021. 14 15 a . ~P 16 SO

17 Gnted States District lodge 18 19 20 21 22 23 24 25 26 27 28

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