Vaiano v. United Nat'l Corp.

MEMORANDUM AND ORDER

ALLISON D. BURROUGHS, U.S. DISTRICT JUDGE

Vincent Vaiano (“Plaintiff” or “Vaiano”) brings this action against Defendants United National Corporation (“United”), First Premier Bank (“FPB”), and Premier Bankcard, LLC^[1] (“PBC” and, collectively, “Defendants”), related to Defendants' alleged wrongful reporting of Plaintiff's credit card debt to credit reporting agencies. [ECF No. 1-1 (“Complaint” or “Compl.”)]. Presently before the Court is Defendants' motion to compel arbitration of Plaintiff's claims and to either dismiss or stay this action pursuant to the Federal Arbitration Act (“FAA”). [ECF No. 5]. For the reasons set forth below, the motion is GRANTED, and this case is

STAYED pending the completion of arbitration.

I. BACKGROUND

Because the instant motion “was made in connection with a motion to dismiss or stay, [the Court] draw[s] the relevant facts from the operative complaint and the documents submitted to the . . . [C]ourt in support of the motion to compel arbitration.” Cullinane v. Uber Techs., Inc., 893 F.3d 53, 55 (1st Cir. 2018) (citing Gove v. Career Sys. Dev. Corp., 689 F.3d 1, 2 (1st Cir. 2012)). The facts outlined herein are undisputed except where noted.

A. Factual Background

On or about August 10, 2020, Plaintiff submitted an online credit card application to FPB, a subsidiary of United. [ECF No. 5-1 (“Gilson Decl.”) ¶¶ 1, 6-7]. A couple of days later, on or about August 12, 2020, FPB approved Plaintiff's application and he subsequently received his credit card ending in numbers -2590 (the “Account”), along with the contract and the account opening disclosures (collectively, the “Contract”), via mail. [Id. ¶¶ 6-9; ECF Nos. 5-2, 5-3].

The Contract, “contain[ing] the terms and conditions governing the Account,” also includes an “Arbitration and Litigation” provision (the “Arbitration Agreement”). [ECF No. 5-3 at 2]. Specifically, the Arbitration Agreement states that

ALL DISPUTES ARISING OUT OF OR RELATED TO THIS CREDIT CARD CONTRACT SHALL BE RESOLVED BY BINDING ARBITRATION ARBITRATION REPLACES THE RIGHT TO GO TO COURT.... EXCEPT AS OTHERWISE PROVIDED, ENTERING INTO THIS AGREEMENT CONSTITUTES A WAIVER OF YOUR RIGHT TO LITIGATE CLAIMS IN COURT BEFORE A JUDGE OR JURY

Agreement to Arbitrate: Any Claim shall be resolved and settled exclusively and finally by binding arbitration, in accordance with this Provision.

[Id.].

The Contract also provides that, for purposes of the arbitration provision,

“we” and “us” include our employees, parent companies, subsidiaries, affiliates,

beneficiaries, agents and assigns and other persons and entities you assert a Claim against in connection with a Claim you assert against us. For purposes of this Provision, “Claim” means any claim, dispute or controversy by either you or us, arising out of or relating in any way to this Credit Card Contract [or] your Credit Account .... “Claim” shall refer to claims of every kind and nature, including, but not limited to, initial claims, counterclaims, cross-claims and third-party claims. All Claims are subject to arbitration, regardless of legal theory and remedy sought, including, but not limited to, claims based in contract, tort (including negligence, intentional tort, fraud and fraud in the inducement), agency, statutory law (federal and state), administrative regulations or any other source of law (including equity).

[ECF No. 5-3 at 2].

The Contract further specifies that it would be “effective upon the earlier of (1) the first Purchase made or Cash Advance taken on your Credit Account, and (2) the expiration of 30 days from the date we issue the Card to you if you do not provide us written notice of your desire to cancel within this 30 days.” [ECF No. 5-3 at 2]. In addition, the Arbitration Agreement contains a forty-five day opt-out window, providing that “[t]o opt out of this Arbitration Provision, you must mail a written notice to us so that it is postmarked no later than 45 days after we mail your first Card to you.” [Id.].

Plaintiff first used the Account to make a purchase on August 27, 2020. [ECF No. 5-4 at 8; Gilson Decl. ¶ 10]. Defendants assert that they never received a written rejection of the Arbitration Agreement, [ECF No. 6 at 4], and Plaintiff does not claim otherwise, see generally [ECF No. 9].

Plaintiff fully “paid all of his bills until 2022, when he contracted [COVID-19],” [Compl. ¶ 9], and subsequently “was out of work for six months,” [id.]. As a result, he fell behind his credit card payments. See [id.]. In June 2022, Plaintiff obtained a credit report and learned of the adverse tradeline for the Account.^[2] [Id. ¶ 11]. He reached out to Defendants who told him

that “the [A]ccount [tradeline] would be removed and his credit reports would be updated to reflect his situation.” [Id. ¶ 12]. Despite this assurance, one month later “the negative credit report[s] still existed,” [id. ¶ 13], and Defendants failed to fix Plaintiff's credit report, [id. ¶ 16].

In October 2023, Plaintiff “sent a payment [to Defendants] with the understanding that if accepted, his credit card would be restored.” [Compl. ¶ 17]. According to Plaintiff, Defendants “accepted the payment and failed to restore [his] credit privileges.” [Id. ¶ 18]. During this time, Defendants were not “answering the phone,” and therefore Plaintiff could not “arrange to erase the [tradeline] [A]ccount from [his] credit reports.” [Id. ¶ 19]. Plaintiff asserts that the “grossly inaccurate reporting of [his] account . . . affected [his] credit record for several months,” causing his “credit record [to be] adversely affected.” [Id. ¶¶ 19, 22]. Plaintiff also avers that Defendants did not investigate his “complaint that the [tradeline] [A]ccount should have been handled differently].” [Id. ¶ 21].

B. Procedural Background

Plaintiff initiated this action by filing the Complaint in Dedham District Court on December 7, 2023, [Compl. at 6], alleging fifteen causes of action, including breach of contract (Counts I, II, VI, VII, XI, and XII); intentional infliction of emotional distress (Counts III, VIII, and XIII); negligent infliction of emotional distress (Counts IV, IX, and XIV); and violations of Massachusetts General Laws Chapter 93A (Counts V, X, and XV). [Id. at 11-23]. On January 2, 2024, Defendants removed the action to this Court pursuant to 28 U.S.C. §§ 1332, 1441, and 1446, [ECF No. 1-2 at 2], and thereafter moved to compel arbitration of Plaintiff's claims and to either dismiss the Complaint, or, alternatively, to stay the proceedings pending the outcome of

the arbitration, [ECF No. 5 (“Motion to Compel Arbitration”)]. Plaintiff opposed on February 16, 2024, [ECF No. 9 (“Opp'n”)].

II. LEGAL STANDARD

This Court's review of Defendants' motion is governed by the FAA, 9 U.S.C. §§ 1-16, which “embodies the national policy favoring arbitration and places arbitration agreements on equal footing with all other contracts,” Soto-Fonalledas v. Ritz-Carlton San Juan Hotel Spa & Casino, 640 F.3d 471, 474 (1st Cir. 2011) (quoting Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443 (2006)). The FAA provides that “[a] written provision in . . . a contract . . . to settle by arbitration a controversy thereafter arising out of such contract . . . 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. “[T]he FAA does not compel arbitration unless the Court is satisfied that there exists a valid agreement to arbitrate.” Emmanuel v. Handy Techs., Inc., 442 F.Supp.3d 385, 391 (D. Mass. 2020) (citing Volt. Information Scis., Inc. v. Bd. of Trs. of Leland Stanford Jr. Univ., 489 U.S. 468, 478 (1989)), aff'd, 992 F.3d 1 (1st Cir. 2021); see also Morgan v. Sundance, Inc., 596 U.S. 411, 418 (2022). “Consequently, arbitration clauses are subject to ‘generally applicable contract defenses' available under state law.” Handy Techs, 442 F.Supp.3d at 391 (quoting AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339-40 (2011)).

The party seeking to compel arbitration bears the burden of proving “that a valid agreement to arbitrate exists, the movant has the right to enforce it, the other party is bound by it, and that the claim asserted falls within the scope of the arbitration agreement.” Oyola v. Midland Funding, LLC, 295 F.Supp.3d 14, 16-17 (D. Mass. 2018). “[I]f the party moving to compel arbitration meets its initial burden of production, the non-moving party must offer evidence supporting its own case,” Crean v. Morgan Stanley Smith Barney, LLC, 652 F.Supp.3d 171, 175

(D. Mass. 2023) (quoting Casale v. Ecolab Inc., No. 21-cv-00126, 2022 WL 1910126, at *4 (D. Me. June 3, 2022)), but “[t]he non-moving party ‘cannot avoid compelled arbitration by generally denying the facts upon which the right to arbitration rests; the party must identify specific evidence in the record demonstrating a material factual dispute for trial,'” Air-Con, Inc. v. Daikin Applied Latin Am., LLC, 21 F.4th 168, 175 n.8 (1st Cir. 2021) (quoting Soto v. State Indus. Prods., 642 F.3d 67, 72 n.2 (1st Cir. 2011)).

In evaluating motions to compel arbitration under the FAA, “district courts . . . apply the summary judgment standard.” Air-Con, 21 F.4th at 175. Under this standard, “[i]f the nonmoving party puts forward materials that create a genuine issue of fact about a dispute's arbitrability, the district court ‘shall proceed summarily' to trial to resolve that question.” Id. (citing 9 U.S.C. § 4; Neb. Mach. Co., Inc. v. Cargotec Sols., LLC, 762 F.3d 737, 744 (8th Cir. 2014)). In conducting this review, the Court ...