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Gonzalez v. Comenity Capital Bank

United States District Court, E.D. California

October 30, 2019

LORI ANN GONZALEZ, individually and on behalf of others similarly situated, Plaintiff,
v.
COMENITY CAPITAL BANK, DOES 1-30, Defendants.

          ORDER ON DEFENDANT COMENITY CAPITAL BANK'S MOTION TO COMPEL ARBITRATION (DOC. NO. 20)

         INTRODUCTION

         This is a putative class action in which Plaintiff Lori Ann Gonzalez (“Gonzalez”) alleges that Defendant Comenity Capital Bank (“Comenity Capital”) has violated California statutes relating to identity theft in connection with credit card accounts branded for retailers Blair and Overstock.com (the “Accounts” or, individually, the “Account”). Comenity Capital contends that arbitration agreements apply to Gonzalez's claims as to both Accounts and has brought a motion for an order compelling arbitration pursuant to the terms of those agreements. For the reasons set forth below, the Court will deny Comenity Capital's motion to compel arbitration without prejudice pending a summary determination as to the existence of the arbitration agreements.

         BACKGROUND

         This action involves a credit card accounts issued by Comenity Capital and branded for retailers “Blair” and “Overstock.com.” See Doc. No. 1, Ex. A (Complaint). Gonzalez contends that she did not open the Accounts and filed an action against Comenity Capital in Fresno County Superior Court alleging various forms of misconduct on Comenity Capital's part in connection with her claims of identity theft. Id., Ex. A. For example, Gonzalez alleges that Comenity Capital “pursued [her] for a debts she did not owe” on the Accounts; “ignored her when she said the accounts were not hers”; and “ignored her requests for information about the alleged debts, violating California laws for how creditors and debt collector[s] must respond to reports of identity theft.” Id., Ex. A ¶ 1. Further, Gonzalez alleges that Comenity Capital failed to notify her that her claims of identity theft with respect to the Accounts “must be in writing, ” id., Ex. A ¶ 21; failed to provide “information and documents” Gonzalez requested with respect to the Accounts, id., Ex. A ¶ 47; improperly threatened her with legal action to collect debts on the Accounts, id. Ex. A ¶ 64; and “failed to diligently investigate [Gonzalez's] notification of identity theft” with respect to the Accounts. Id., Ex. A ¶ 99.

         Based on these and other such allegations, Gonzalez brought claims against Comenity Capital under the California Identity Theft Act (“CITA”), California's Rosenthal Fair Debt Collection Practices Act (the “Rosenthal Act”), the California Penal Code, and California's Unfair Competition Law (“UCL”). Id., Ex. A, pp. 10-15. The CITA claim is brought individually, while the claims under the Rosenthal Act, Penal Code and UCL are brought individually and on a class basis. Id. Comenity Capital removed the action to this Court based on diversity jurisdiction on March 14, 2019, see Doc. No. 1, and later filed the instant motion to compel arbitration. See Doc. No. 20. The Court denied Gonzalez's motion to remand in an Order dated October 21, 2019, Doc. No. 39, and now addresses Comenity Capital's motion to compel arbitration.

         DEFENDANT'S MOTION TO COMPEL ARBITRATION

         Comenity Capital argues that the Court is required under the Federal Arbitration Act (“FAA”) to send this action to arbitration in its entirety because the agreements governing the Accounts (the “Credit Card Agreements” or, individually, the “Credit Card Agreement”) include valid and enforceable arbitration provisions (the “Arbitration Provisions” or, individually, the “Arbitration Provision”) that encompass all of Gonzalez's claims and bars her from arbitrating any of the claims at issue on a class basis. Doc. No. 20, Part III.A. Comenity Capital also seeks a stay of this action pending arbitration of Gonzalez's claims. Id., Part III.C.

         According to Comenity Capital, the “totality of the evidence” shows that Gonzalez entered into the Credit Card Agreements - and manifested assent to the Arbitration Provisions - because she opened, used and managed the Accounts; was provided with the Credit Card Agreements online and by mail; and did not opt out of the Arbitration Provisions. Id., Part III.A.3.

         In support of this argument, Comenity Capital filed, inter alia, a declaration (the “Comenity Capital Declaration”) supported by business records and executed by a company paralegal with knowledge of Comenity Capital's[1] records and record-keeping practices, Doc. No. 20-1 ¶ 3, that shows the following:[2]

• The Accounts were opened through online applications containing Gonzalez's name, home address, date of birth, social security number and phone number, Doc. No. 20-1, ¶¶ 6-8, 27-29;
• The Credit Card Agreements were displayed on-screen at the time the online applications for the Accounts were submitted, id. ¶¶ 7, 28;
• Comenity Capital mailed numerous items relating to the Accounts to Gonzalez's home address after the applications for the Accounts had been submitted online - including the Credit Card Agreements, billing statements and letters - and none of these items were returned to Comenity Capital as undeliverable, id. ¶¶ 9-10, 26, 30-31, 37, 40;
• The Accounts were used to make multiple purchases that posted in 2016 and 2017 and were shipped to Gonzalez's home address, id. ¶¶ 13, 14, 20, 34;
• Online bill pay accounts were setup for the Accounts using Gonzalez's email address, id. ¶ 15, 39;
• The online bill pay accounts for the Accounts were accessed on numerous occasions, id. ¶¶ 18, 39;
• Numerous telephone calls were placed to Comenity Capital from the phone number in the online applications for the Accounts, id. ¶¶ 22-23, 25, 38; and
• Various payments and attempts to make payment were made with respect to the Accounts. Id. ¶¶ 16, 23-24, 38.

         The Comenity Capital Declaration also states:

During a phone call with Comenity Servicing on June 28, 2017, Ms. Gonzalez stated that her kids like some of the items, but the Overstock people told her that she couldn't keep some items unless she paid for all of them.

Doc. No. 20-1 at 4:9-12.

         Finally, the Comenity Capital Declaration attaches authenticated copies of the Credit Card Agreements, as sent to Gonzalez's home address and as displayed on-screen at the time the online applications for the Accounts were submitted. The Arbitration Provisions in the Credit Card Agreements contain, inter alia, the following paragraphs:

C. Arbitration provision.
READ THIS ARBITRATION PROVISION CAREFULLY. IF YOU DO NOT REJECT THIS ARBITRATION PROVISION IN ACCORDANCE WITH PARAGRAPH C.1. BELOW, IT WILL BE PART OF THIS AGREEMENT AND WILL HAVE A SUBSTANTIAL IMPACT ON THE WAY YOU OR WE WILL RESOLVE ANY CLAIM WHICH YOU OR WE HAVE AGAINST EACH OTHER NOW OR IN THE FUTURE.
2. Parties Subject to Arbitration: Solely as used in this Arbitration Provision (and elsewhere in this Agreement), the terms ‘we,' ‘us,' and ‘our' mean (a) Comenity Capital Bank, any parent, subsidiary or affiliate of the Bank and the employees, officers and directors of such companies (the ‘Bank Parties'); and (b) any other person or company that provides any services in connection with this Agreement if you assert a Claim against such other person or company at the same time you assert a Claim against any Bank Party.
3. Covered Claims: ‘Claim' means any claim, dispute or controversy between you and us that in any way arises from or relates to this Agreement, the Account, the issuance of any Card, any rewards program, any prior agreement or account. ‘Claim' includes disputes arising from actions or omissions prior to the date any Card was issued to you, including the advertising related to, application for or approval of the Account. ‘Claim' has the broadest possible meaning, and includes initial claims, counterclaims, cross-claims and third-party claims. It includes disputes based upon contract, tort, consumer rights, fraud and other intentional torts, constitution, statute, regulation, ordinance, common law and equity (including any claim for injunctive or declaratory relief . . . .
4. Starting an Arbitration: Arbitration may be elected by any party with respect to any Claim, even if that party has already initiated a lawsuit with respect to a different Claim. Arbitration is started by giving a written demand for arbitration to the other party. . . .
7. Prohibition Against Certain Proceedings: IF YOU OR WE ELECT TO ARBITRATE A CLAIM: (1) NEITHER YOU NOR WE MAY PARTICIPATE IN A CLASS ACTION IN COURT OR IN CLASS-WIDE ARBITRATION, EITHER AS A PLAINTIFF, DEFENDANT OR CLASS MEMBER; (2) NEITHER YOUR NOR WE MAY ACT AS A PRIVATE ATTORNEY GENERAL IN COURT OR IN ARBITRATION; (3) CLAIMS BROUGHT BY OR AGAINST YOU MAY NOT BE JOINED OR CONSOLIDATED WITH CLAIMS BROUGHT BY OR AGAINST ANY OTHER PERSON; AND (4) THE ARBITRATOR SHALL HAVE NO ...

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