Green v. Kline Chevrolet Sales Corp.

          OPINION AND ORDER

          MARK S. DAVIS CHIEF UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on a motion to compel arbitration filed by defendant Kline Chevrolet Sales Corporation, doing business as Priority Chevrolet ("Defendant" or "Priority"). ECF No. 11. For the reasons set forth below, the motion is GRANTED.

         I. FACTUAL AND PROCEDURAL HISTORY ^[1]

         Defendant operates a Chevrolet dealership in Chesapeake, Virginia. Compl., ECF No. 1 ¶¶ 2-3. On February 24, 2018, Plaintiff Darryl R. Green ("Plaintiff" or "Green") visited Defendant's dealership to have his vehicle, a 2014 Chevrolet Silverado, serviced. Id. ¶ 6. One of Defendant's salesmen approached Plaintiff at the dealership and persuaded Plaintiff to trade in his 2014 vehicle for a new 2018 Chevrolet Silverado. Id. ¶¶ 8-14. Defendant, through the salesman, represented to Plaintiff that if he transferred ownership of the 2014 vehicle to Defendant, it would pay off the remaining balance Plaintiff owed on the 2014 vehicle. Id. ¶¶ 10-11. Further, Defendant represented to Plaintiff that Defendant would assist Plaintiff in obtaining financing for the new truck, and then informed Plaintiff that he had received credit approval from two banks including Port Alliance, Plaintiff's prior lender. Id. ¶¶ 11-12.

         In reliance on these representations, Plaintiff "signed multiple documents" as part of the purchase. Id. ¶¶ 12-13. Among the documents signed, is a "Buyer's Order." The Buyer's Order contains the following clauses ("arbitration provision"):

AGREEMENT TO ARBITRATE DISPUTES: Purchaser(s) and Dealer agree that if any Dispute (as defined below) arises, the Dispute will be resolved by binding arbitration by a single arbitrator under the applicable rules of the alternative dispute resolution agency named here, with that arbitrator rendering a written decision with separate findings of fact and conclusions of law. An award by the arbitrator shall be final and binding on all parties to the proceeding. The arbitrator shall apply the substantive law of the Commonwealth of Virginia and the arbitration shall take place in the locality in which Dealer is located. All arbitration costs and expenses shall be borne as determined by the arbitrator. Judgment on an award must be entered by either party in the highest local, state, or federal court, or before any administrative body. If any portion of this agreement is found to be unenforceable, the remainder of the agreement shall remain effective. The Arbitration Agreement will survive payment of Purchaser(s)' obligations in connection with this transaction and any termination, cancellation or performance of the transaction between Purchaser(s) and Dealer.

DISPUTE DEFINED: A Dispute is any question as to whether something must be arbitrated, as well as any allegation concerning a violation of state or federal statute that may be the subject of binding arbitration, any purely monetary claim greater than $1, 000.00 in the aggregate . . . provided, however, that your failure to provide consideration to be paid by you ... as well as our right to retake possession of the vehicle pursuant to this Buyer's Order shall not be considered a dispute and shall not be subject to arbitration.

ECF No. 13 at 3.

         Plaintiff then drove off in the new truck with the understanding that he had received financing and successfully purchased the 2018 truck. ECF No. 1 at ¶ 14. A few days later, Defendant contacted Plaintiff and asked Plaintiff to return to its dealership to execute a new financing agreement because Port Alliance had not actually approved financing; Plaintiff then returned to the dealership. Id. ¶¶ 15-16. Thereafter, Defendant represented to Plaintiff that he had been approved for financing by both Wells Fargo and GM Financial. Id. ¶ 15.

         On April 27, 2018, Defendant again contacted Plaintiff and advised him that it had failed to obtain financing for Plaintiff, despite its prior representations. Id. ¶ 17. Defendant advised Plaintiff that he would have to return the 2018 truck, which Plaintiff did. Id. ¶¶ 17-18. Plaintiff then asked for his 2014 vehicle back; however, Defendant notified Plaintiff that it had already sold the vehicle. Id. ¶ 18. Defendant provided Plaintiff with a used "loaner" vehicle to use while it "worked on solving" the sale of Plaintiff's 2014 vehicle. Id. ¶ 23. On October 22, 2018, Plaintiff was involved in a minor car accident while driving the loaner vehicle. Id. ¶ 28. Virginia State Police responded to the accident, ran the license plate of the loaner vehicle and advised Plaintiff that Defendant had reported the loaner vehicle as stolen. Id. ¶ 29. Police then handcuffed Plaintiff and placed him in the back of a police vehicle while police investigated whether the loaner vehicle was in fact stolen. Id. First, Defendant's finance manager, Brandon Jackson, acknowledged what had happened and advised police that Defendant did not wish to press charges. Id. ¶ 30. Subsequently, Defendant's Director of Finance, John Mason, told police that Plaintiff was working with a former employee of Defendant in a scheme to illegally obtain the loaner car. Id. Ultimately, Plaintiff was released without charges. Id. ¶ 31.

         Plaintiff later returned the loaner vehicle to Defendant although he has not received his 2014 vehicle back or the 2018 truck he sought to purchase. Id. Plaintiff also contacted Port Alliance regarding the matter and was informed that, despite Defendant's representations, Port Alliance had no records of any credit application or other communication from Defendant to it regarding Plaintiff's financing application. Id. ¶ 25.

         On March 18, 2019, Plaintiff filed the Complaint in this Court. ECF No. 1. The Complaint alleges two counts: (1) Defendant violated the Truth in Lending Act by failing to comply with the disclosure requirements of 15 U.S.C. §§ 226.17 and 226.18, and (2) Defendant violated the Fair Credit Reporting Act by taking an adverse action against Plaintiff without notice as required by 15 U.S.C. § 1681(m). On May 15, 2019, Defendant filed the instant motion to compel arbitration. ECF No. 11. The motion and accompanying memorandum argue that Plaintiff is bound by the arbitration provision and may not bring the instant lawsuit. ECF No. 12. On May 29, 2019, the Plaintiff filed a response. ECF No. 15. On June 4, 2019, Defendant filed a reply, ECF No. 16, and on June 10, 2019, the parties filed a joint request for a hearing, ECF No. 17. Having been fully briefed, the pending motion is ripe for review. The Court has reviewed the parties' submissions and concludes that a hearing is not necessary. Local Civil Rule 7(J); Fed.R.Civ.P. 78.

         II. LEGAL STANDARD

         The Fourth Circuit's recent opinion in Novic v. Credit One Bank, Nat'l Ass'n, 757 Fed.Appx. 263, 265-66 (4th Cir. 2019) and this Court's opinion in Lovelady v. Five Star Quality Care-VA, LLC, No. 4:18CV18, 2018 WL 3580768, at *7 (E.D. Va. July 25, 2018) set forth the standard for a motion to compel arbitration.

         The parties' agreement, which includes the arbitration provision, is a contract. The Federal Arbitration Act, 9 U.S.C. § 1 et seg. ("FAA") reflects Congress' intent that courts treat arbitration agreements the same as any other contract and requires federal courts to "rigorously enforce arbitration agreements according to their terms." Am. Exp. Co. v. Italian Colors Rest., 570 U.S. 228, 233 (2013). Federal policy favors arbitration of disputes, and thus "[a]greements to arbitrate are construed according to the ordinary rules of contract interpretation, as augmented by a federal policy requiring that all ambiguities be resolved in favor of arbitration." Choice Hotels Int'l, Inc. v. BSR Tropicana Resort, Inc., 252 F.3d 707, 710 (4th Cir. 2001) (citation omitted).

         Courts must compel arbitration if the moving party proves "(1) the existence of a dispute between the parties, (2) a written agreement that includes an arbitration provision which purports to cover the dispute, (3) the relationship of the transaction, which is evidenced by the agreement, to interstate or foreign commerce, and (4) the failure ... to arbitrate the dispute." Adkins v. Labor Ready, Inc., 303 F.3d 496, 500-01 (4th Cir. 2002). "The party seeking to compel arbitration bears the burden of establishing the existence of an arbitration provision that purports to cover the dispute." Scales v. SSC Winston-Salem Operating, Co., LLC, No. 1:17CV539, 2017 WL 4467278, at *2 (M.D. N.C. Oct. 5, 2017) (internal quotation marks and citation omitted). "If the party makes this evidentiary showing, the party opposing arbitration must ...