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Patel v. Citibank Corp.

United States District Court, E.D. Michigan, Southern Division

August 20, 2019

DEVEN PATEL, Plaintiff,
CITIBANK CORP., Defendant.

          Elizabeth A. Stafford Mag. Judge



         Plaintiff Deven Patel (“Plaintiff”) filed this lawsuit against Defendant CITIBANK N.A.[1] (“Defendant”) for violations of the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq., the Fair Debt Collections Practices Act, 15 U.S.C. § 1692 et seq., the Michigan Consumer Collection Practices Act, Mich. Comp. Laws § 445.251 et seq., and for intentional infliction of emotional distress. (ECF No. 1-1 at PageID 7.) Pursuant to 28 U.S.C. §§ 1441(a), 1446(b), and 1331, Defendant removed this action from the Wayne County Circuit Court for the State of Michigan to the United States District Court for the Eastern District of Michigan. (ECF No. 1.)

         Presently before the Court is Defendant's Motion to Dismiss and to Compel Arbitration, filed on January 22, 2019 (the “Motion”). (ECF No. 9.) The Motion has been fully briefed[2], including a supplement to the Motion filed by Defendant. (ECF Nos. 9, 13, 14, & 15.) Finding the facts and legal arguments sufficiently presented in the parties' briefs, the Court is dispensing with oral argument pursuant to Local Rule 7.1(f)(2). For the reasons stated below, the Court grants Defendant's motion and compels arbitration.

         I. Factual and Procedural History

         Plaintiff Patel opened a personal credit card account with Defendant Citibank on or about October 1, 2014. (ECF. No. 9 at PageID 195.) Plaintiff's updated Card Agreement (the “Agreement”) contained an arbitration clause (the “Clause”). (ECF No. 9 at PageID 207.) On November 2, 2016, Plaintiff was given the opportunity to reject the arbitration clause and he did not. (ECF No. 9-1 at PageID 208-09.) The Clause stated in relevant part:

You or we may arbitrate any claim, dispute or controversy between you and us arising out of or related to your Account, a previous related account or our relationship (called “Claims”). If arbitration is chosen by any party, neither you nor we will have the right to litigate that Claim in court or have a jury trial on that Claim. . . . [A]ll Claims are subject to arbitration, no matter what legal theory they are based on or what remedy (damages, or injunctive or declaratory relief) they seek, including Claims based on contract, tort (including intentional tort), fraud, agency, your or our negligence, statutory or regulatory provisions, or any other sources of law . . . .

(ECF No. 9-1 at PageID 209.)

         Following the filing of Chapter 11 Bankruptcy by VPH Pharmacy, Inc. (“Debtor”), of which Plaintiff is the principal, Defendant settled with a bankruptcy trustee whereby the trustee had Defendant reimburse items and services purchased using Plaintiff's credit card. (ECF No. 1-1 at PageID 10; ECF No. 7 at PageID 55.) Defendant settled with the trustee for $90, 000. (ECF No. 1-1 at PageID 10.) In seeking recoupment, Defendant placed the $90, 000 amount on Plaintiff's credit card bill. (Id.) Although Plaintiff has made attempts to dispute this, Defendant has continued to seek recoupment of the debt and continued reporting the debt to the three major credit agencies. (Id. at PageID 12.)

         In accordance with the Clause, Defendant seeks the Court to compel arbitration. Plaintiff argues, however, that Defendant's conduct falls outside the scope of the Clause. (ECF No. 14 at PageID 291.)

         II. Standard of Review

         The Federal Arbitration Act (“FAA”), 9 U.S.C § 2, provides that:

[a] written provision in any . . . contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable.

         When considering a motion to compel arbitration, the court must consider whether: (1) a valid arbitration agreement exists between the parties; (2) the disputes fall within the scope of the agreement; (3) Congress intended for certain federal statutory claims to be nonarbitrable; and (4) if some of the claims fall outside the scope of the arbitration agreement, if those claims will be stayed pending arbitration. Orcutt v. Kettering Radiologists, Inc., 199 F.Supp.2d 746, 750 (S.D. Ohio 2002) (citing Compuserve, Inc. v. Vigny Int'l Finance, Ltd., 760 F.Supp. 1273, 1278 (S.D. Ohio 1990)); see also Stevens-Bratton v. ...

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