United States District Court, N.D. Illinois, Eastern Division
JANE BISHOP LILLEGARD, Individually and on behalf of a class, Plaintiff,
BLATT, HASENMILLER, LEIBSKER & MOORE, LLC and UNIFUND CCR, LLC, Defendants.
MEMORANDUM OPINION AND ORDER
Z. LEE United States District Judge.
Jane Bishop Lillegard (“Plaintiff”) brought this
action against Defendants Blatt, Hasenmiller, Leibsker &
Moore, LLC (“Blatt”) and Unifund CCR, LLC
(“Unifund”) (together, “Defendants”)
alleging violations of the Fair Debt Collection Practices Act
(FDCPA), 15 U.S.C. § 1692 et seq. After
amending their affirmative defenses to include their position
that Plaintiff's claims are subject to arbitration,
Defendants have moved to compel arbitration. For the reasons
that follow, Defendants' motion  is denied without
and Procedural Background
2006, Plaintiff opened a credit card account with Citibank,
N.A. (“Citibank”). See Compl. ¶ 8,
ECF No. 1; Defs.' Mem. Supp. Mot. Compel Arb. 2, ECF No.
53. Due to her financial circumstances, she could not fulfill
her obligations under the account, and it went into default.
Compl. ¶ 9. According to Defendants, Citibank thereafter
sold Plaintiff's debt to Pilot Receivables Management,
LLC (“Pilot”), who in turn sold Plaintiff's
debt to Unifund. Defs.' Mem. at 2; see Compl.
¶ 10. Plaintiff alleges that Unifund, along with Blatt,
which Unifund retained to collect the debt, thereafter sent
her correspondence for the purpose of collecting the debt and
contacted her directly about the debt, despite knowing she
was represented by an attorney. Compl. ¶¶ 13-16,
22, 26-30. Plaintiff maintains that these actions violated
the FDCPA. Id. ¶¶ 33-52.
filed this suit on August 15, 2016. Unifund answered on
September 28, 2016, and Blatt on October 5, 2016. Neither
listed arbitration as an affirmative defense. Unifund's
Answer, ECF No. 14; Blatt's Answer, ECF No. 18. On
January 11, 2017, the Court granted the parties' agreed
motion to extend the deadline for amended pleadings, setting
February 9, 2017, as the new deadline. Order of Jan. 11,
2017, ECF No. 36. Defendants then filed motions to amend
their affirmative defenses on February 9, each stating that
Plaintiff's claims are subject to arbitration pursuant to
an agreement with Citibank. Blatt's Mot. File Am.
Affirmative Defenses, Ex. A, ECF No. 45-1; Unifund's Mot.
File Am. Affirmative Defenses, Ex. A, ECF No. 47-1.
Defendants claim that Plaintiff's credit card account
with Citibank was subject to terms and conditions issued by
Citibank, one provision of which permitted Citibank to elect
mandatory arbitration for claims related to the account.
Defs.' Mem. at 1-2. Defendants claim that “[t]he
arbitration provision survives the transfer, sale, or
assignment of the Account, ” such that they can invoke
it in this case. Id. at 3-4.
Federal Arbitration Act mandates that courts enforce valid,
written arbitration agreements. Tinder v. Pinkerton
Sec., 305 F.3d 728, 733 (7th Cir. 2002) (citing 9 U.S.C.
§ 2). This mandate reflects a federal policy that favors
arbitration and “places arbitration agreements on equal
footing with all other contracts.” Buckeye Check
Cashing, Inc. v. Cardegna, 546 U.S. 440, 443 (2006).
Courts are responsible for deciding whether an agreement to
arbitrate exists before ordering arbitration. Janiga v.
Questar Capital Corp., 615 F.3d 735, 741-42 (7th Cir.
2010). Once a court is satisfied that an agreement to
arbitrate exists, the FAA instructs the court to stay
proceedings on issues subject to arbitration and provides a
mechanism for parties to request that the court compel
arbitration pursuant to the agreement. 9 U.S.C. §§
3-4; see also Tinder, 305 F.3d at 733. A party
opposing a motion to compel arbitration bears the burden of
identifying a triable issue of fact as to the existence of
the purported arbitration agreement. Tinder, 305
F.3d at 735. The opponent's evidentiary burden is akin to
that of a party opposing summary judgment under Federal Rule
of Civil Procedure 56. Id. “[A] party cannot
avoid compelled arbitration by generally denying the facts
upon which the right to arbitration rests; the party must
identify specific evidence in the record demonstrating a
material factual dispute for trial.” Id. The
Court must believe the evidence of the party opposing
arbitration and draw all justifiable inferences in its favor.
Id. If the party opposing arbitration identifies a
genuine issue of fact as to whether an arbitration agreement
was formed, “the court shall proceed summarily to the
trial thereof.” 9 U.S.C. § 4; see Tinder,
305 F.3d at 735.
argues that this Court should deny Defendants' motion to
compel arbitration for two reasons. First, she contends that
Defendants have waived their ability to seek arbitration by
their conduct in this litigation. Second, she raises various
issues as to the existence of the arbitration agreement that
Defendants have posited. The Court will address each of these
arguments in turn.
first argues that Defendants have waived their ability to
seek arbitration by their conduct in this litigation. A
number of obstacles, however, stand in the way of this
the Supreme Court-albeit in general terms-has repeatedly
stated that waiver is a defense to arbitration to be decided
(at least presumptively) by an arbitrator, and not by a
court. BG Grp., PLC v. Republic of Argentina, 134
S.Ct. 1198, 1207 (2014) (observing that “courts presume
that the parties intend arbitrators, not courts, to decide
disputes about the meaning and application of particular
procedural preconditions for the use of arbitration, ”
and listing waiver as one such “procedural
matter”); Howsam v. Dean Witter Reynolds,
Inc., 537 U.S. 79, 85 (2002) (same); see Moses H.
Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S.
1, 24-25 (1983) (“The [Federal] Arbitration Act
establishes that, as a matter of federal law, any doubts
concerning the scope of arbitrable issues should be resolved
in favor of arbitration, whether the problem at hand is the
construction of the contract language itself or an allegation
of waiver, delay, or a like defense to
arbitrability.”). If such a presumption applies, there
is no reason to think it should be rebutted here. This is
particularly so in light of the fact that the arbitration
provision in the Citibank terms and conditions that
Defendants have produced subjects “[c]laims regarding
the application, enforceability, or interpretation of this
Agreement and this arbitration provision” to
arbitration. Defs.' Mem., Ex. 1-D, at 57, ECF No. 57-1.
some courts have construed the Supreme Court's statements
narrowly, interpreting them to permit courts to decide the
issue of whether litigation conduct waives the right to seek
arbitration. E.g., HTG Capital Partners, LLC v.
Doe, No. 15 C 02129, 2016 WL 612861, at *4-5 (N.D. Ill.
Feb. 16, 2016). And, while “no Seventh Circuit case has
explicitly decided who should decide this type of waiver
question, in several instances the Seventh Circuit has
reviewed a district-court decision deciding the waiver issue
and has not noted any problem with the district court being
the decision-maker.” Id. at *5 (collecting
Seventh Circuit cases reviewing district courts' findings
of waiver by litigation conduct).
even if this Court could decide that Defendants waived their
right to arbitration by their conduct in this litigation, it
would find they have not. The Seventh Circuit
“recognize[s] a strong federal policy favoring
arbitration and that waiver of arbitration is not lightly to
be inferred.” Midwest Window Sys., Inc. v. Amcor
Indus., Inc., 630 F.2d 535, 536 (7th Cir. 1980). To
conclude that Defendants have waived their right to
arbitration by their conduct in this litigation, the Court
“must determine that, considering the totality of the
circumstances, [Defendants] acted inconsistently with the
right to arbitrate.” Kawasaki Heavy Indus., Ltd. v.
Bombardier Recreational Prod., Inc., 660 F.3d 988, 994
(7th Cir. 2011). “While several factors are considered
in the waiver analysis, diligence or the lack thereof should
weigh heavily in the decision.” Id. (citing
Cabinetree of Wis. v. Kraftmaid Cabinetry, 50 F.3d
388, 391 (7th Cir. 1995)). Other factors to consider include
“whether the allegedly defaulting party participated in
litigation, substantially delayed its request for
arbitration, or participated in discovery.”
Id. (citing St. Mary's Med. Ctr. of