Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Mines v. Galaxy International Purchasing, LLC

United States District Court, S.D. Indiana, Indianapolis Division

March 6, 2019

ANTHONY MINES, individually and on behalf of others similarly situated, Plaintiff,
v.
GALAXY INTERNATIONAL PURCHASING, LLC, a Nevada limited liability company, GLOBAL CREDIT & COLLECTION CORP., a Delaware corporation, Defendants.

          REPORT AND RECOMMENDATION

          DORIS L. PRYOR, UNITED STATES MAGISTRATE JUDGE

         This matter comes before the Court on Defendants' Motion to Compel Arbitration (Dkt. 26). The matter has been referred to the Undersigned for a report and recommendation.

         I. Introduction

         In December 2017, Plaintiff, Anthony Mines (“Mr. Mines”), individually and on behalf of others similarly situated, filed a Class Action Complaint against the Defendants, Global Credit & Collection Corporation (“Global”) and Galaxy International Purchasing, LLC (“Galaxy”), alleging that they failed to identify the current creditor of his debt and the putative class members' debts in violation of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq. [Dkt. 1 at 4.]

         On April 5, 2018, the Defendants filed the present motion to compel arbitration and stay this action pending arbitration. [Dkt. 26.] Plaintiff opposes Defendants' motion to compel on three grounds: 1) the Defendants have not provided sufficient evidence to show that any contract to which Mr. Mines was a party permitted the right to force binding arbitration to be assigned; 2) even if there is an arbitration provision, it does not apply to his FDCPA claim; and 3) any right to arbitration was discharged through Mr. Mines's[1] bankruptcy proceedings. [Dkt. 41 at 1-2]. The Undersigned will address each in turn.

         II. Background

         A. Credit Agreement Documents

         Mr. Mines applied online for a Milestone Gold MasterCard credit card through Mid-America Bank & Trust Company on May 12, 2015. [Dkt. 29 at 10.] Upon pre-qualification, Mr. Mines was shown Mid-America's Terms and Conditions (the “Terms and Conditions”) that contains an arbitration provision that states:

Applicability of Arbitration Disputes Provision.
The Arbitration of Disputes Provision set forth in this document and the Cardholder Agreement does not apply to Covered Borrowers.
ARBITRATION OF DISPUTES PROVISION PLEASE READ THIS ARBITRATION OF DISPUTES PROVISION CAREFULLY. UNLESS YOU SEND U.S. THE REJECTION NOTICE DESCRIBED BELOW, THIS PROVISION WILL APPLY TO YOUR ACCOUNT, AND MOST DISPUTES BETWEEN YOU AND U.S. WILL BE SUBJECT TO INDIVIDUAL ARBITRATION. THIS MEANS THAT: (1) NEITHER A COURT NOR A JURY WILL RESOLVE ANY SUCH DISPUTE; (2) YOU WILL NOT BE ABLE TO PARTICIPATE IN A CLASS ACTION OR SIMILAR PROCEEDING; (3) LESS INFORMATION WILL BE
AVAILABLE; AND (4) APPEAL RIGHTS WILL BE LIMITED.

[Dkt. 29 at 62.] The Terms and Conditions also state:

Arbitration of Disputes. The Cardholder Agreement, which we will send to you if approved, provides that you and we will resolve claims on your Account by binding arbitration as opposed to in court with a judge or jury. You may opt out of this arbitration provision within 60 days after the opening date of your Account. Your Cardholder Agreement will explain how you may do so. Your Cardholder Agreement terms will also provide that you waive the right to pursue class actions against us.

[Id. at 63.] Mr. Mines checked the box in the application portal, thereby acknowledging that he had reviewed these terms and agreed to them. [Id. at 13.]

         On May 14, 2015, Mid-America opened Mr. Mines's Account (the “Account”). [Dkt. 29 at 2.] The Account had a credit limit of $300 and an annual fee of $75. [Id. at 12, 102.] Defendants claim that Mid-America mailed Mr. Mines the Cardholder Agreement in May 2015. [Id. at 5.]

         The Cardholder Agreement provides that it is binding from “the earlier of (i) the date you sign or otherwise submit an Application that is approved by us, or (ii) the first date that we extend credit to you on your Account, as evidenced by a signed sales slip or memorandum, a Cash Advance transaction, or otherwise.” [Id. at 6.] It also includes the following arbitration provision:

Arbitration of Disputes Provision
PLEASE READ THIS ARBITRATION OF DISPUTES PROVISION CAREFULLY. UNLESS YOU SEND U.S. THE REJECTION NOTICE DESCRIBED BELOW, THIS PROVISION WILL APPLY TO YOUR ACCOUNT, AND MOST DISPUTES BETWEEN YOU AND U.S. WILL BE SUBJECT TO INDIVIDUAL ARBITRATION. THIS MEANS THAT: (1) NEITHER A COURT NOR A JURY WILL RESOLVE ANY SUCH DISPUTE; (2) YOU WILL NOT BE ABLE TO PARTICIPATE IN A CLASS ACTION OR SIMILAR PROCEEDING; (3) LESS INFORMATION WILL BE AVAILABLE; AND (4) APPEAL RIGHTS WILL BE LIMITED.
This provision replaces any existing arbitration provision with us and will stay in force no matter what happens to your Account, including the closing of your Account.
Except as expressly provided below, you and we must arbitrate individually, by binding arbitration under the Federal Arbitration Act ("FAA"), any dispute or claim between you, any joint cardholder and/or Authorized User, on the one hand, and us, our affiliates and agents, on the other hand, if the dispute claim arises out of or is related to (a) this Agreement (including without limitation, any dispute over validity of this Agreement to arbitrate disputes or of this entire Agreement), or (b) your Account, or (c) any relationship resulting from this Agreement, or (d) any insurance or other service related to your Account, or (e) any other agreement related to your Account (including prior agreements) or any such service, or (f) breach of this Agreement or any such agreement, whether based on statute, contract, tort or any other legal theory (any "Claim"). However, we will not require you to arbitrate: (1) any individual Claims in small claims court or your state's equivalent court, so long as it remains an individual case in that court; or (2) any Claim by us that only involves our efforts to collect money you owe us. However, if you respond to a collection lawsuit by claiming that we engaged in wrongdoing, we may require you to arbitrate.
. . . .
Judgment on the arbitration award may be entered in any court having jurisdiction. Any dispute regarding whether a particular controversy is subject to arbitration will be decided by the arbitrator(s). If any part of the damages or relief requested is not expressly stated as a dollar amount, the controversy will be a Claim that is subject to arbitration. You and we acknowledge and agree that the transactions contemplated by this Agreement, and any controversy that may arise under or relate to this Agreement, your Account, or the services or other agreements described above, involve "commerce" as that term is defined and used in the FAA.
If you or we elect to arbitrate a claim, the electing party must notify the other party in writing. The notice can be given after the beginning of a lawsuit and can be given in papers filed in the lawsuit. Otherwise, your notice must be send to Bankcard Services, Attn: Arbitration Demand, P.O. Box 4477, Beaverton, Oregon 97076-4477, and our notice must be sent to the most recent address for you in our files. The arbitration will be administered by the American Arbitration Association (the "AAA") under its rules in effect at the time an arbitration is commenced that are applicable to the resolution of consumer disputes (the "Arbitration Rules"). We will tell you how to contact the AAA and how to get a copy of the Arbitration Rules without cost if you ask us in writing to do so. The Arbitration Rules permit you to request deferral or reduction of the administrative fees of arbitration if paying them would cause you a hardship. In addition, if you ask us in writing, we will consider your request to pay any or all or your costs of arbitration.
. . . .
If any provision of this Section regarding arbitration of disputes shall be deemed to be unenforceable, the remainder of this Section shall be given full force and effect. However, if the provision precluding class, representative or private attorney general Claims in arbitration is deemed unenforceable, this this entire Arbitration Agreement shall be void and of no force and effect.
You may reject this provision, in which case only a court may be used to resolve any dispute or claim. Rejection will not affect any other aspect of the Cardholder Agreement.
To reject this Provision, you must sent [sic] us a notice within 60 days after you open your Account or we first provide you with a right to reject this Provision. This notice must include your name, address and Account number and be mailed to Bankcard Services, Attn: Arbitration Provision, P.O. Box 4477, Beaverton, Oregon 97076-4477. This is the only way you can reject this Provision.

[Dkt. 29 at 100.]

         The Cardholder Agreement reflected the terms governing Mr. Mines's Account. On May 23, 2015, Mr. Mines maxed-out his credit card with a one-time $225 purchase at a Wal-Mart store. [Dkt. 29 at 102.] After the purchase, Mr. Mines had no remaining available credit. [Id. at 102.] Mr. Mines failed to make any payments towards the Account balance and, in December 2015, the Account was “charged off, ” i.e., closed. [Id. at 28, 102-117.]

         B. Chain of Ownership

         After Mid-America charged off Mr. Mines's Account, it sold the Account to Genesis BankCard Services, Inc. (“Genesis”). [Dkt. 29 at 3.] The sale was made pursuant to Mid-America and Genesis's December 7, 2010 Receivables Sale Agreement (the “Mid-America Sale”). [Id. at 3, 22-25.] In section 35 of the Mid-America Sale, Mid-America agreed to “transfer, assign, set-over, and otherwise convey to Genesis, for no fee, all Loan Accounts opened pursuant to the Program that have been charged-off by Bank in accordance with Bank's policies and procedures regarding charge-offs.” [Id. at 24-25.]

         On September 26, 2014, Genesis and Defendant Galaxy entered into a Receivables Sale Agreement. [Dkt. 29 at 3, 27-54.] Pursuant to this sale, Genesis agreed to “sell, assign and transfer all right, title” and otherwise convey some loan accounts to Galaxy, including Mr. Mines's Account. [Id. at 54.] Thereafter, Defendant Galaxy hired Defendant Global to collect the debt owed on Mr. Mines's credit card. [Dkt. 28 at 2.]

         On February 28, 2017, Global sent a letter to Mr. Mines attempting to collect the debt. [Dkt. 1-3.] The letter identified the original creditor as Mid-America and the current creditor as Galaxy and stated that Global was “authorized by [its] client to collect the outstanding amount owed to them.” [Dkt. 1-3.] Mr. Mines claims that this letter violated Section 1692g(a)(2) of the FDCPA by failing to effectively identify the current creditor of the debt because the letter ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.