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Goss v. Smiley

United States District Court, N.D. Illinois, Eastern Division

October 8, 2019

KARICE GOSS, individually and on behalf of all others similarly situated, Plaintiff,
v.
GARY A. SMILEY, Defendant.

          MEMORANDUM OPINION AND ORDER

          Gary Feinerman, Judge.

         Karice Goss brings this putative class action under the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., alleging that Gary Smiley sent her a collection letter threatening to charge unlawful late fees. Doc. 25. Smiley moves to compel arbitration under the Federal Arbitration Act, 9 U.S.C. § 1 et seq. Doc. 36. The motion is granted.

         Background

         On a motion to compel arbitration, “the evidence of the non-movant is to be believed and all justifiable inferences are to be drawn in [her] favor.” Tinder v. Pinkerton Sec., 305 F.3d 728, 735 (7th Cir. 2002) (internal quotation marks omitted).

         Goss defaulted on a debt incurred on a AAA Checkmate consumer loan account. Doc. 25 at ¶¶ 6, 11-12. Smiley, an attorney, sent Goss a collection letter on AAA Checkmate's behalf. Id. at ¶¶ 7-10, 13-17; Doc. 25-1 at 4. On this and other matters that AAA Checkmate referred to Smiley, “AAA decide[d] whether Smiley c[ould] file suit on any given claim, ” “AAA ha[d] the final word regarding whether, and for how much Smiley may settle any claims on its behalf, ” and “AAA decide[d] whether to withdraw any given claim from Smiley.” Doc. 37-1 at ¶ 11; see also Doc. 37-8 at ¶¶ 2-6, 10.

         Smiley's letter to Goss stated, in relevant part: “Because of interest, late charges, attorney fees, if any, and other charges that may vary from day to day, the amount due on the day you pay may be greater.” Doc. 25-1 at 4. In the operative complaint, Goss alleges under the FDCPA that this statement was false and misleading because late fees could not accrue given the acceleration of Goss's debt under an acceleration provision in the Consumer Loan Agreement governing her relationship with AAA Checkmate. Doc. 25 at ¶¶ 17-26, 35-37; Doc. 37-2 at 2-3.

         In moving to compel arbitration, Smiley invokes the Consumer Loan Agreement's arbitration provision, which states in relevant part:

ARBITRATION AGREEMENT PROVISION INCLUDING WAIVER OF JURY AND CLASS ACTION PARTICIPATION
Arbitration is a method of deciding disputes outside the court system. This arbitration provision governs when and how any claims or disputes you and we may have will be arbitrated instead of litigated in court. … You and we agree to arbitrate according to the following terms:
“Claim” means any dispute, claim or controversy between you and us (including those raised as an initial claim, counterclaim, cross claim, or third party claim) that arises as a result of or has anything to at all to do with: (1) your loan account, (2) this Agreement, (3) any prior loan or agreement you may have had with us or (4) your relationship with us including our attempts to collect your obligation. This term includes (a) disputes about whether this Arbitration Provision is valid or binding or about whether or when it applies, (b) disputes relating to constitutional provisions, statutes, ordinances, regulations, court decisions, compliance with this Agreement, (c) disputes relating to wrongful acts of every type (whether intentional, fraudulent, reckless or just negligent) and (d) any claim or request for injunctive or declaratory relief. The term “claim” does not mean an action brought in small claims court pursuant to Illinois Supreme Court Rules 281-288.
IF ARBITRATION IS CHOSEN BY EITHER OF U.S. WITH RESPECT TO A CLAIM, NEITHER YOU NOR WE WILL HAVE THE RIGHT TO LITIGATE THAT CLAIM IN COURT OR HAVE A JURY TRIAL ON THAT CLAIM, OR TO ENGAGE IN PRE-ARBITRATION DISCOVERY EXCEPT AS PROVIDED FOR IN THE APPLICABLE ARBITRATION RULES OR BY THIS ARBITRATION PROVISION. EXCEPT AS SET FORTH BELOW, THE ARBITRATOR'S DECISION WILL BE FINAL AND BINDING[.] …
… This Arbitration Provision is made pursuant to a transaction involving interstate commerce, and shall be governed by the Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq.

Doc. 37-2 at 3. Smiley demanded arbitration, Doc. 37-6 at 2, and Goss ...


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