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Lowery v. N.A.R., Inc.

United States District Court, D. Utah

March 8, 2019

ERICA LOWERY, Plaintiff,
N.A.R., INC., Defendant.


          Jill N. Parrish, United States District Court Judge.

         Before the court is Defendant N.A.R., Inc.'s motion to compel arbitration and to strike Plaintiff Erica Lowery's class claims. [Docket 9]. The court GRANTS the request to compel arbitration and refers to arbitration the request to strike the class claims.


         On October 1, 2014, Erica Lowery leased furniture under a rent-to-own agreement. She financed the transaction through Crest Financial Services, LLC, which maintained a security interest in the furniture. She signed a lease agreement that defines the parties to the agreement so as to include any successors and assigns to Crest Financial's rights under the agreement. On or about February 16, 2017, Crest Financial assigned Lowery's obligation to N.A.R., Inc. (NAR) for collection. On June 13, 2017, NAR sent a notice to Lowery regarding the debt owed. On June 13, 2018, Lowery filed a class action complaint against NAR, alleging violations of the Fair Debt Collection Practices Act.

         The lease agreement contains an arbitration provision that allows either party to the agreement to demand arbitration of any claim or dispute arising under the lease. NAR now demands arbitration. NAR also asks the court to strike Lowery's class claims.

         Lowery did not file a memorandum in opposition to NAR's motion. The court therefore bases its decision on the factual allegations in Lowery's complaint and in NAR's motion, as well as in the exhibits accompanying those filings.



         Section 2 of the Federal Arbitration Act states, in relevant part,

[a] written provision in . . . a 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, . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.

9 U.S.C. § 2. This provision reflects the “fundamental principle that arbitration is a matter of contract.” AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011) (citation omitted). In light of this policy, a court must enforce an arbitration provision as it would any other contractual provision. Id.

         When determining whether a dispute is governed by an existing arbitration clause, the court classifies the clause either as narrow or broad. Sanchez v. Nitro-Lift Techs., L.L.C., 762 F.3d 1139, 1146 (10th Cir. 2014). To accomplish this, the court looks for any limiting language in the clause that restricts arbitration to specific disputes. See Id. Language in the clause applying arbitration to “disputes ‘arising under' or ‘in connection with' the agreement” is construed broadly. Id. at 1147.

         The arbitration provision of the lease agreement that Lowery signed is broad. Subparagraph 16(c)(i) of the agreement states “[i]f a lawsuit is filed, the Defending Party may elect to demand arbitration under this Arbitration Provision of the Claim(s) asserted in the lawsuit. . . . A demand to arbitrate a Claim may be given in papers or motions in a lawsuit.” Subparagraph 16(b)(ii) defines “Claim” as “any claim, dispute or controversy . . . that arises from or relates in any way to this Lease or the Property . . .; any of our marketing, advertising, solicitations and conduct relating to this Lease, the Property . . .; [or] our collection of any amounts you owe . . . .” The same subparagraph states that “‘Claim' is to be given the broadest reasonable meaning and includes claims of every kind and nature.” This arbitration provision is broad because, by its terms, it encompasses all substantive claims “aris[ing] from or relat[ing] in any way” to the lease agreement. Further, there is not any language in the provision excluding arbitration of disputes over the manner in which the creditor collects on the debt. Indeed, the arbitration provision expressly includes disputes over “collection of any amounts [owed].”

         The arbitration provision notably does not cover “disputes about the validity, enforceability, coverage or scope” of the provision itself, as stated in subparagraph 16(b)(ii). The subparagraph goes on to state that “all such disputes are for a court and not an arbitrator to decide.” But Lowery has not disputed the scope of the arbitration provision inasmuch as she has not filed a memorandum in opposition to NAR's motion. Accordingly, there is no dispute that this court has authority to decide the question of arbitrability and send the case to arbitration. See Belnap v. Iasis Healthcare, 844 ...

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