United States District Court, D. Maryland
CATHERINE BUTLER, et al.
MARINER FINANCE, LLC
CATHERINE C. BLAKE, UNITED STATES DISTRICT JUDGE.
plaintiffs, Catherine and James Butler, sued the defendant,
Mariner Finance, LLC, (“Mariner”) in state court
claiming Mariner violated the Truth in Lending Act and
committed four state law violations: violation of
Maryland's Credit Grantor Closed End Credit Provisions,
Md. Code Ann., Com. Law § 12-1001, et seq.;
Maryland's Debt Collection Act, Md. Code Ann., Com. Law
§ 14-202(8); Maryland Consumer Protection Act, Md. Code
Ann., Com. Law § 13-301, et seq.; and fraud.
Mariner successfully removed the case to federal court and
now moves to compel arbitration under a contract signed by
December 2006 the plaintiffs Catherine and James Butler
entered into a retail installment contract with Deer
Automotive Group, LLC for the purchase of a 2003 Mercury
Mountaineer. (Compl. ¶ 7). The original purchase price
for the truck was $23, 900 but the total financed amount over
a six-year loan was $28, 569.60. (Id.). The Butlers
first payment was due on January 23, 2007. (Id.).
installment contract was assigned to Wells Fargo Auto
Finance, Inc., to which the Butlers made payments until
around June 2012, when the defendant Mariner Finance
contacted the Butlers indicating that it had been assigned
the rights under the contract. (Id. at ¶ 8-10).
Mariner asked the Butlers to enter into a “Note,
Security Agreement & Arbitration Agreement” dated
June 7, 2012. (Id. at ¶ 11). The agreement gave
Mariner a security interest in the truck and detailed the
terms of the installment contract between the parties.
(Id. at ¶ 12-17). In addition to the original
loan amount, Mariner charged the Butlers for life insurance
on its interest, non-filing insurance, and vendor's
single interest insurance. (Id. at ¶ 15).
yearly, for the next three years, Mariner asked the Butlers
to enter new agreements. (Id. at ¶ 18-33). Despite
at least three of the four agreements between the parties
including insurance costs,  the Butlers never received the
insurance policies or certificates for which they were
purportedly paying. (Id. at ¶ 34). In fact, the
Butlers allege that they “do not recall separately
applying for these insurances and it is unclear if these
insurances were ever purchased.” (Id.). The
plaintiffs further allege that because the Fourth Agreement
included a refinance charge that was not prepaid “but .
. . made part of the principal amount of the loan” it
should have been, but was not, included within Mariner's
Truth in Lending disclosure. (Id. at ¶ 37).
They also assert that they were not refunded for the amount
they paid in credit life insurance “even though the
loans were refinanced or defaulted prior to the scheduled
maturity date of the indebtedness.” (Id. at
in October 2016, the Butlers informed Mariner that their
truck was no longer working. (Id. at ¶ 41). The
parties agreed that Mariner would transfer title of the truck
to the Butlers in exchange for $300. (Id.). The
Butlers believed that this agreement extinguished their
obligations under the Fourth Agreement. (Id.).
Mariner disagreed; it filed suit in the District Court of
Maryland for Baltimore City in February 2017 alleging that
the Butlers breached the fourth loan agreement, (id.
at ¶ 43), and seeking to collect principal and interest
totaling approximately $3, 200. (Pls.' Opp., ECF No. 9,
months later the Butlers filed this suit in the Circuit Court
for Baltimore City on May 24, 2017. (Notice of Removal, ECF
No. 1). The following month Mariner removed the suit to
federal court, (id.), and now moves to compel
arbitration. (ECF No. 7).
to compel arbitration exist in the netherworld between a
motion to dismiss and a motion for summary judgment”
and “[w]hether the motion should be treated as a motion
to dismiss or a motion for summary judgment turns on whether
the court must consider documents outside the
pleadings.” PC Const. Co. v. City of
Salisbury, 871 F.Supp.2d 475, 477-78 (D. Md. 2012);
see also Iraq Middle Mkt. Dev. Found. v. Harmoosh,
848 F.3d 235, 240-41 (4th Cir. 2017) (adopting the summary
judgment standard used by the district court). Because the
court need not consider documents outside the pleadings,
Mariner's motion to compel will be treated as a motion to
survive a motion to dismiss, the factual allegations of a
complaint “must be enough to raise a right to relief
above the speculative level on the assumption that all the
allegations in the complaint are true (even if doubtful in
fact).” Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 555 (2007) (internal citations omitted). “To
satisfy this standard, a plaintiff need not
‘forecast' evidence sufficient to prove the
elements of the claim. However, the complaint must allege
sufficient facts to establish those elements.”
Walters v. McMahen, 684 F.3d 435, 439 (4th Cir.
2012) (citation omitted). “Thus, while a plaintiff does
not need to demonstrate in a complaint that the right to
relief is ‘probable, ' the complaint must advance
the plaintiff's claim ‘across the line from
conceivable to plausible.'” Id. (quoting
Twombly, 550 U.S. at 570).
parties do not contest that their dispute is subject to
arbitration under the terms of their underlying contract but
they do disagree over whether Mariner's right to compel
arbitration was waived after it brought a state court suit to
collect on its loan agreement with the Butlers. They also
disagree about which waiver law, federal or state, the court
should apply to decide the motion.
the Federal Arbitration Act (“FAA”) controls this
case, federal waiver law applies. Applying that law, the
court will grant Mariner's motion to compel arbitration
because the ...