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Kissinger v. Perfect Choice Exteriors, LLC

United States District Court, C.D. Illinois, Peoria Division

June 27, 2019

BERNARD KISSINGER, Plaintiff,
v.
PERFECT CHOICE EXTERIORS, LLC and MARINER FINANCE, LLC, Defendants.

          ORDER & OPINION

          JOE BILLY MCDADE UNITED STATES SENIOR DISTRICT JUDGE.

         This matter is before the Court on Defendant's Motion to Compel Arbitration (Doc. 5). Plaintiff has responded (Doc. 7) and following an Order calling for supplemental briefing (Doc. 8) the parties have submitted supplemental briefs (Docs. 12, 15). The matter is therefore ripe for review.

         Background

         Weather events caused damage to Plaintiff Bernard Kissinger's residence in April 2017. (Doc. 1-1 at 3). Plaintiff contracted with Defendant Perfect Choice Exteriors, LLC, to repair the siding and roofing of his home by means of the Siding Contract.[1] (Doc. 1-1 at 3). Plaintiff alleges an agent of Defendant Perfect Choice represented to him that Defendant Perfect Choice would be able to convince Plaintiff's insurance company to cover siding for a side of the house and a moisture barrier for the roof not included in the amount the insurance company approved to repair the damage initially. (Doc. 1-1 at 3-4). The work was completed in July 2018. (Doc. 1-1 at 4). According to Plaintiff, the total cost was $25, 980.00, of which he paid $7, 000.00 initially, $10, 500.00 on August 20, 2018, and $2, 000 on August 29, 2018, leaving a balance of $6, 480.00 which he was unable to pay. (Doc. 1-1 at 4). His insurance did not aid in the increased payments.

         The Complaint alleges Defendant Perfect Choice contacted Plaintiff on September 10, 2018, and informed him it needed further time to deal with his insurance. (Doc. 1-1 at 4-5). Defendant Perfect Choice then allegedly presented Plaintiff with the Home Improvement Installment Contract, telling him he needed to sign the contract to give Defendant Perfect Choice sixty more days to negotiate with the insurance company; Plaintiff alleges he was not informed it was a loan document. (Doc. 1-1 at 5). The completed Home Improvement Installment Contract states Plaintiff had purchased $8, 480 of goods and services, and had paid a down payment of $2, 000 with $6, 480.00 outstanding. (Doc. 6-1 at 7). He was provided this amount on credit, but would pay it back in installments, with an additional 16.99%, for a total of $8, 973.60 in addition to the already paid $2, 000. (Doc. 6-1 at 7). It further states the work would occur between September 15, 2018 and September 18, 2019, with a delivery of goods on September 10, 2018. (Doc. 6-1 at 7). All finance charges would be waived if full payment was made within 90 days. (Doc. 6-1 at 8). The Home Improvement Installment Contract contains an arbitration clause. (Doc. 6-1 at 10).

         The amounts in the Home Improvement Installment Contract-a total of $8, 480 with $2, 000 as a down payment-bear some relation to the amounts remaining on the Siding Contract; after August 20, 2018, Plaintiff had $8, 480 remaining in payments and he paid $2, 000 on August 29, 2018, according to his allegations. But the amounts are also reflected in the Roofing Contract, which purports to have been executed on August 23, 2018, for the installation of window trim. (Doc. 6-1 at 5). The Roofing Contract purports to be for $8, 480 total with $2, 000 due as a down payment, although that number purports to be a 40% down payment, with 30% due on the date work starts and the final 30% due on the date work is completed; on both lines, $6, 480 is written. (Doc. 6-1 at 5).

         On March 6, 2019, Plaintiff filed this action in state court alleging causes of action under the Illinois Consumer Fraud Act, 815 ILCS 505/1 et seq., fraud, and the Racketeer Influenced Corrupt Organizations Act, 18 U.S.C. § 1961 et seq. (Doc. 1-1 at 1-10). Defendant Mariner Finance then removed the action to this Court. (Doc. 1).

         Legal Standard

         The Federal Arbitration Act requires arbitration agreements be placed “on an equal footing with other contracts” and enforced “according to their terms”; nonetheless, they may be invalidated by generally applicable contract defenses. Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63, 67 (2010); 9 U.S.C. § 2. A party seeking to enforce an arbitration clause may request a stay of an action pending arbitration and an order compelling arbitration. 9 U.S.C. §§ 3-4.

         “The division of labor between courts and arbitrators is a perennial question in cases involving arbitration clauses.” Janiga v. Questar Capital Corp., 615 F.3d 735, 741 (7th Cir. 2010). Courts evaluate only the limited question of whether the arbitration agreement is valid, while a challenge to the whole of the contract is for the arbitrator to decide. Id. However, “the court must decide whether a contract exists before it decides whether to stay an action and order arbitration.” Id. at 742. “If there is no contract there is to be no forced arbitration.” Gibson v. Neighborhood Health Clinics, Inc., 121 F.3d 1126, 1130 (7th Cir. 1997). State law governing the formation of contracts is binding with regard to the question of contract formation. Id.

         Discussion

         Plaintiff raises two issues with enforcing the arbitration clause. First, Plaintiff argues the contract containing an arbitration clause is not enforceable for lack of consideration. Second, he intimates there are issues with the signature and initials on the Home Improvement Installment Contract and suggests Defendant Mariner Finance must meet the burden of showing Plaintiff signed and initialed it.

         I. Lack of Consideration

         In Plaintiff's view, the alleged benefit to Plaintiff was the home improvement, which had been completed prior to the signing of the Home Improvement Installment Contract. (Doc. 7 at 3). But his argument implicates issues for ...


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