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Jacqueline Selby, On Behalf of Herself v. Deutsche Bank Trust Company Americas

March 28, 2013

JACQUELINE SELBY, ON BEHALF OF HERSELF AND ALL OTHERS SIMILARLY SITUATED,
PLAINTIFF,
v.
DEUTSCHE BANK TRUST COMPANY AMERICAS, AS TRUSTEE FOR ADVANTA BUSINESS CARD MASTER TRUST; CARDWORKS, INC., AND SAGE CAPITAL RECOVERY, LLC
DEFENDANTS.



The opinion of the court was delivered by: Hon. Anthony J. Battaglia U.S. District Judge

ORDER GRANTING MOVING DEFENDANTS' MOTION TO COMPEL ARBITRATION AND DENYING MOVING DEFENDANT'S MOTION TO STAY ACTION [Doc. No. 18]

Presently before the Court is the Motion to Compel Arbitration and Stay Action filed by Defendant Deutsche Bank Trust Company Americas ("Deutsche Bank"), as trustee for Advanta Business Card Master Trust ("ABCMT"), and Defendant CardWorks, Inc. ("CardWorks") (collectively referred to as "Moving Defendants") on September 7, 2012. Defendant Sage Capital has not joined in the instant motion, or filed any documents in support or opposition of the motion. For the reasons set forth below, the Court GRANTS the Moving Defendants' Motion to Compel Arbitration and DENIES Moving Defendants' Motion to Stay Action.

BACKGROUND

Factual Background

1. Relationship Among the Parties

Plaintiff Jacqueline Selby ("Plaintiff") held a business credit card issued by non-party Advanta Bank Corp. ("Advanta Bank"), formerly a Utah industrial loan corporation and a wholly-owned subsidiary of Advanta Corporation. (Doc. No. 3 at ¶ 4.)In November 2009, Advanta Corporation filed for bankruptcy under Chapter 11. (Id.) Thereafter, Advanta Bank, as a subsidiary of Advanta Corporation, was closed by the Utah Department of Financial Institutions on May 19, 2010. (Id.) The Federal Deposit Insurance Corporation ("FDIC") was subsequently named as Advanta Bank's receiver. (Id.)

Non-party ABCMT is the issuer of certificates secured by credit card receivables originated by Advanta Bank, including Plaintiff's credit card account. (Id.) Defendant Deutsche Bank serves as the indenture trustee for ABCMT. (Id. at ¶¶ 4, 5.) On July 26, 2010, Defendant Deutsche Bank appointed Defendant CardWorks and CardWorks Servicing, LLC to jointly act as successor servicers to ABCMT.*fn1 (Id. at ¶ 6.) Defendant Sage Capital Recovery, LLC ("Sage") collects debts asserted to be due and owing to itself and others, including debts owed to ABCMT and serviced by CardWorks. (Id. at ¶

2. Facts Leading to Plaintiff's Claims Against Defendants

Plaintiff held a business credit card issued by non-party Advanta Bank. (Doc. No. 18-1 at 3.) Plaintiff opened a credit card account ("Account") with Advanta Bank in September 2006. (Id. at 5.) The Account was issued to Selby Investments, Inc. as the "Business" on the Account, with Plaintiff being the "Signing Individual." (Id. at 5.) After opening the Account, Advanta Bank mailed the credit card together with a copy of the Card Agreement ("Agreement") to Plaintiff. (Id.) The Agreement contained an arbitration disclosure stating, "that if a dispute of any kind arises out of your application for credit or out of the existence or use of this Agreement or your Account, either you or we or any other party that may be involved can choose to have that dispute resolved by binding arbitration." (Doc. No. 18-3 at 10, ¶ 35.) Additionally, the terms of the Agreement provide, "Any claim, dispute, or controversy of any nature whatsoever (whether stated in contract, tort or otherwise, and whether involving federal and/or state statutory, regulatory, common law and/or equitable claims) now in existence or arising in the future related to the Account or this Agreement or the relationships that led up to or result from this Agreement . . . shall, at the election of you or us or any such third-party, be resolved by binding arbitration." (Id. at ¶ 36.) In full, the relevant provisions of the Agreement read as follows:

35. ARBITRATION DISCLOSURE: By applying for credit with us or using your Account, you agree that if a dispute of any kind arises out of your application for credit or out of the existence or use of this Agreement or your Account, either you or we or any other party that may be involved can choose to have that dispute resolved by binding arbitration. If arbitration is chosen, it will be conducted pursuant to the Code of Procedure of the National Arbitration Forum (the "NAF"). If you have questions about the NAF or want to see its rules and forms you can call the NAF toll-free at 1-800-474-2371 or visit its Website at www.arbitration-forum.com. IF ANY PARTY TO ANY SUCH DISPUTE CHOOSES ARBITRATION, NEITHER YOU NOR WE OR ANY OTHER PARTY WILL HAVE THE RIGHT TO LITIGATE OR APPEAR IN COURT BEFORE A JUDGE OR JURY, OR TO ENGAGE IN DISCOVERY EXCEPT AS PROVIDED IN THE ARBITRATION RULES, OR TO PARTICIPATE AS A REPRESENTATIVE OR MEMBER OR ANY CLASS OF CLAIMANTS. THE ARBITRATOR'S DECISION WILL GENERALLY BE FINAL AND BINDING, OTHER RIGHTS THAT YOU WOULD HAVE IN COURT MAY ALSO NOT BE AVAILABLE IN ARBITRATION. IT IS IMPORTANT THAT YOU CAREFULLY READ AND UNDERSTAND THE ARBITRATION PROVISION (SECTION 36 BELOW) BEFORE APPLYING TO US FOR NEW CREDIT OR CONTINUING TO USE YOUR ACCOUNT.

36. ARBITRATION PROVISION: Any claim, dispute or controversy of any nature whatsoever (whether stated in contract, tort, or otherwise, and whether involving federal and/or state statutory, regulatory, common law and/or equitable claims) now in existence or arising in the future relating to the Account or this Agreement or the relationships that led up to or result from this agreement, including (without limitation) any claim relating to advertisements, promotions, and/or oral or written statements relating to your Account and/or any prior agreements between you and us, and/or any claim concerning the applicability or validity or enforceability of all or any portion of this Arbitration Provision), no matter by or against whom the claim is made, whether by or against either you or us or (to the full extent permitted by law) by or against any involved third party or employees, agents, representatives or assigns of either you or us or that third party (a "Claim"), shall at the election of you or us or any such third party be resolved by binding arbitration pursuant to this Arbitration Provision conducted by the National Arbitration Forum (the "NAF"), a neutral arbitrator which is headquartered in Minneapolis, Minnesota and which provides arbitration services worldwide. All Aspects of any arbitration pursuant to this Arbitration Provision, including (without limitation) the selection of the arbitrator(s), shall be conducted under the NAF Code of Procedure in effect at the time the claim is filed (the "Code"), which Code is incorporated herein by reference. (Notwithstanding anything to the contrary contained in the Code, for any claim involving an amount equal to or greater than $75,000. either you or we or any such third party may require that the Claim be heard by a panel of three arbitrators. A single arbitrator will decide any Claim involving an amount less than $75,000.)

Arbitration can be elected at any time on any Claim, regardless of whether a lawsuit has been filed in court (unless that suit has resulted in a judgment), and a party who has asserted a Claim in a lawsuit in court may elect arbitration with respect to that Claim, and/or to any Claim(s) subsequently asserted in that lawsuit by any party. The arbitration proceeding can only decide your or our Claim(s). There shall be no authority for any Claim to be arbitrated on a class action or representative basis or as a "private attorney general" matter, and any arbitration under this Arbitration Provision may not consolidate or join claims of other persons no matter how similar they may be to your and/or our Claim(s). An arbitrator may award a prevailing party its attorneys' fees and costs pursuant to applicable law. Any arbitration hearing that you attend will take place in the federal judicial district where you reside. NAF rules and forms, including a schedule of fees, may be obtained by calling toll-free at 1-800-474-2371, or by visiting the NAF's website at www.arbitration-forum.com. At your request, we will advance the first $250 of the filing and hearing fees for any Claim which you may file against us, and we will also consider an additional request that we advance additional filing or hearing fees or other costs for you because of your financial circumstances. The arbitrator will decide whether we or you will ultimately be responsible for paying those fees and other costs. If either party (you or we)fails to submit to arbitration after a proper demand to do so, that party shall bear all of the costs and expenses, including (without limitation) reasonable attorneys fees, incurred by the other party in compelling arbitration. This Arbitration Provision relates to a transaction involving interstate commerce, and shall be governed by the Federal Arbitration Act, 9 USC 1 et seq. (the "FAA"), as it may be amended from time to time. The arbitrator shall apply relevant law and provide written, reasonable findings of fact and conclusions of law as provided by the Code, and judgment on an arbitration award may be entered in any court having jurisdiction. This Arbitration Provision shall survive repayment of your extension of credit and termination of your Account.

Important Notes: If any portion of this Arbitration Provision is deemed invalid or unenforceable under the FAA or any other applicable law or the Code, that fact will not invalidate the remaining portions of this Arbitration Provision except as follows: if the portion of this Arbitration Provision deemed invalid or unenforceable includes the prohibitions on the arbitration of claims on a class or representative basis and/or the prohibitions on the consolidation or joinder of similar claims, then this Arbitration Provision shall be deemed to be invalid and unenforceable in its entirety. Any claim or dispute concerning the applicability or validity or enforceability of all or any portion of this Arbitration Provision, including (without limitation) its prohibitions on the arbitration of claims on a class or representative basis and its prohibitions on the consolidation or joinder of similar claims, shall be heard and decided only by a court of competent jurisdiction and not by any arbitrator under the Arbitration Provision. (Doc. No. 18-3 at 10, ¶¶ 35, 36 (emphasis in original).)

In her First Amended Complaint ("FAC") Plaintiff asserts that she received "harassing collection calls and letters" in violation of the Telephone Consumer Protection Act, 42 U.S.C. § 227 ("TCPA"), from "non-party and now-defunct entity Advanta Bank," the original servicer of the ABCMT. (Doc. No. 3 at ¶ 19.) Plaintiff thereafter instructed her attorney to send Advanta Bank a written notice of representation and request to cease contact. (Id.) Plaintiff's attorney sent the written notice via certified mail on August 11, 2009, and Advanta Bank received the notice on August 14, 2009. (Id. at ¶ 20.) Plaintiff alleges that the "written notice clearly and conspicuously stated that all calls and letters to Plaintiff must cease and all future communication about the debt was to be directed to her attorney at the provided address and phone number." (Id.) Thereafter, Plaintiff alleges Defendants disregarded the written notice sent by Plaintiff's attorney and continued to contact her demanding payment. (Id. at ¶¶ 22-23.) Specifically, Plaintiff asserts Defendants "acted willfully or knowingly or both in calling numbers using an autodialer without regard to the TCPA or whether the number was assigned to a cellular telephone."

Plaintiff premises her theory of liability based on the following. First, Plaintiff alleges Defendant Deutsche Bank acted as the trustee for the creditor on whose behalf autodialed calls were made and was also responsible for selecting and managing ABCMT's agents and servicers; thus, Plaintiff contends Defendant Deutsche Bank is "equally liable for each call placed on ABCMT's behalf by CardWorks and/or Sage, as well as any other servicer, debt collector, or other agent, contractor, or affiliate who placed such calls." (Id. at ¶ 24.) Second, Plaintiff alleges Defendants CardWorks and Sage are similarly liable in this action for calls they placed to cellular telephone sub scribers without their prior express consent, even when the calls were not placed on behalf of ABCMT. (Id. at ¶¶ 25, 26.)

Procedural Background

On June 25, 2012, Plaintiff filed her initial class action Complaint against CardWorks, ABCMT, and Sage,*fn2 asserting claims for relief based on both negligent and knowing violations of the TCPA. (Doc. No. 1.) Plaintiff's claims are based on the non-emergency telephone calls made by CardWorks to cellular telephones through the use of an automatic telephone dialing system or an artificial or prerecorded voice to individuals who did not provide prior express consent for such calls. (FAC, Doc. No. 3, ¶ 35.) On July 16, 2012, Plaintiff filed an Amended Complaint naming Deutsche Bank as trustee for ABCMT as an additional Defendant. (Id. at ¶ 5.) Subsequently, Moving Defendants Deutsche Bank and CardWorks filed the instant Motion to Compel Arbitration and Stay Action on September 7, 2012. (Doc. No. 18.) Plaintiff filed a response to Moving Defendants' motion to compel arbitration on November 2, 2012, and also requested judicial notice of various documents in support of their response brief. (Doc. No. 25.) On November 16, 2012, Moving Defendants filed their reply in support of the instant motion. (Doc. No. 26.) Additionally, the Court granted Moving Defendants request to file a separate set ...


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