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Dowdy v. Santander Consumer USA, Inc.

United States District Court, D. Maryland

October 24, 2019

Aleia Dowdy
v.
Santander Consumer USA, Inc.;

          Stephanie A. Gallagher United States District Judge.

         Dear Counsel:

         Plaintiff, Aleia Dowdy, filed this class action lawsuit against Defendant Santander Consumer USA, Inc. (“Santander”), for claims arising out of her financing of a purchase of a motor vehicle. Currently pending are two motions: (1) Santander's Motion to Compel Non-Class Arbitration, ECF 15, and (2) Dowdy's Motion to Strike, ECF 30. I have reviewed those motions, and the related oppositions and replies. See ECF 16, 20, 33, 36. No. hearing is necessary. See Loc. R. 105.6 (D. Md. 2018). For the reasons stated below, Dowdy's motion to strike will be denied, and Santander's motion to compel arbitration will be granted.

         The basic facts underlying the transaction are undisputed. In 2007, Dowdy purchased a used vehicle from Koons Used Auto Car Outlet (“Koons”) in Baltimore, Maryland. ECF 15-1 at 1. Dowdy executed two financing agreements to complete the purchase: a Buyer's Order and a Retail Installment Sales Contract (“RISC”). Id. at 1-2. Koons immediately assigned both agreements to Santander. Id. at 3.

         Dowdy's Second Amended Complaint contains a single count, alleging that Santander violated Maryland's Creditor Grantor Closed End Credit Provisions (“CLEC”), Md. Code, Com. Law. 12-1001 et seq., by charging and collecting “convenience fees” for payments she made by telephone or internet. ECF 4. She further alleges her claim on behalf of a putative class of customers, defined as those who entered into a credit contract governed by CLEC and were charged convenience fees by Santander for making payments due under a RISC. Id. at 5.

         Santander removed the Second Amended Complaint to this Court on May 10, 2019, under the Class Action Fairness Act of 2005 (“CAFA”). ECF 1. Santander now moves to enforce an arbitration agreement in the Buyer's Order that Dowdy signed, ECF 15.

         Legal Standard

         In this case, because both parties have relied upon documents outside the pleadings in support of their positions, I will apply the summary judgment standard to the motion to compel arbitration. See ECF 15-2; 16-2 through 16-4. “Motions 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, 241-42 (4th Cir. 2017) (adopting the district court's use of the summary judgment standard). Because both parties premise their arguments on documents outside the pleadings, including the Buyer's Order and the RISC which are integral to the Second Amended Complaint, this Court will consider documents outside the pleadings and the summary judgment standard will be used.

         Rule 56(a) of the Federal Rules of Civil Procedure states that the court “shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). Santander, as the moving party, bears the burden of showing that there is no genuine dispute of material fact. See Casey v. Geek Squad, 823 F.Supp.2d 334, 348 (D. Md. 2011). If Santander establishes that there is no evidence to support Dowdy's claim that the arbitration clause is inapplicable, the burden then shifts to Dowdy to proffer specific facts to show a genuine issue exists. Id. Dowdy must provide enough admissible evidence to “carry the burden of proof at trial.” Id. at 349 (quoting Mitchell v. Data Gen. Corp., 12 F.3d 1310, 1315-16 (4th Cir.1993)). The mere existence of a scintilla of evidence in support of Dowdy's position is insufficient; rather, there must be evidence on which a factfinder could reasonably find for Dowdy. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). Moreover, a genuine issue of material fact cannot rest on “mere speculation, or building one inference upon another.” Casey, 823 F.Supp.2d at 349. In applying the summary judgment standard, a court must view the facts and inferences “in the light most favorable to the party opposing the motion.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587-88 (1986).

         Dowdy has filed, in part, a motion seeking to conduct additional discovery relating to Santander's motion to compel arbitration. ECF 30 at 7. Because this Court is applying the summary judgment standard, it will consider Dowdy's motion as analogous to a party's declaration under Fed.R.Civ.P. 56(d), seeking to demonstrate why it cannot present facts essential to justify its opposition without additional discovery. “[T]o justify a denial of summary judgment on the grounds that additional discovery is necessary, the facts identified in a Rule 56 affidavit must be ‘essential to [the] opposition.'” Hamilton v. Mayor & City Council of Baltimore, 807 F.Supp.2d 331, 342 (D. Md. 2011) (citation omitted). The Court should deny a non-moving party's Rule 56(d) request for additional discovery “where the additional evidence sought for discovery would not have by itself created a genuine issue of material fact sufficient to defeat summary judgment.” Strag v. Bd. of Trs., Craven Cmty. Coll., 55 F.3d 943, 953 (4th Cir. 1995); see Amirmokri v. Abraham, 437 F.Supp.2d 414, 420 (D. Md. 2006) (“A Rule 56[(d)] motion for additional discovery is properly denied when the additional evidence sought to be discovered would not create a genuine issue of material fact sufficient to defeat summary judgment.”) (citing Strag, 55 F.3d at 954)).

         Applying that analogy here, Dowdy has not established that the additional discovery she seeks would create a genuine issue of material fact in support of her opposition. First, several of the items she seeks are items that should be equally within her possession. See ECF 30 at 7 (requesting the opportunity “to gather any communication from Santander to Dowdy notifying Dowdy of the original assignment to NCB Management Services, Inc.”); Id. at 8 (requesting “to uncover any documents provided to Dowdy related to NCB Management Services, Inc. [sic] collection of the account.”). Second, some of the documents she seeks clearly are already within her possession, since she attached them to her own filings in this case. Id. (“Santander filed pages 1-30 of the Forward Flow Financial Assets Sale Agreement but failed to include pages 31-38 with its filing. Dowdy previously filed what she believes to be pages 32 and 33 of this agreement.”) The third and final category of items Dowdy seeks is simply irrelevant to the dispute. Dowdy “requests leave to take discovery on Santander's internal operating procedures undertaken after it entered into the Forward Flow Financial Assets Sale Agreement with NCB Management Inc. (i.e. accounting, charge offs, data storage, book entries relating to assigned RISCs).” Id. at 7. The question of what was assigned under the Forward Flow Financial Assets Sale Agreement is a question of contractual interpretation, and Santander's internal operating procedures are therefore irrelevant. Because none of the discovery sought would create a genuine issue of material fact to support Dowdy's position, I will deny her request to conduct additional discovery relating to Santander's motion to compel arbitration.

         Analysis I. Motion to Compel Arbitration

         Santander seeks to compel non-class arbitration, under the terms of the Arbitration Agreement in the Buyer's Order. Dowdy makes four arguments in opposition: 1) the RISC is a stand-alone document, without an arbitration agreement; 2) the Buyer's Order limits the application of its Arbitration Agreement to its original signatories, Dowdy and Koons; (3) even if Santander had a right to compel arbitration, the right was released upon the execution of a settlement agreement between Dowdy and Santander's assignee, NCB Management, Inc. ("NCB"); and 4) the RISC merged into the Judgment entered by the District Court in the dispute between NCB and Dowdy.

         Dowdy concedes that the Federal Arbitration Act favors the enforcement of written arbitration agreements between parties. See ECF 16 at 6 (citing Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443 (2006)). However, Dowdy correctly notes that before a court can properly compel arbitration, the moving party must prove “a written agreement that includes an arbitration provision that purports to cover the dispute[.]” Adkins v. Labor Ready, Inc., 303 F.3d 496, 500-01 (4th Cir. 2002) (“[E]ven though arbitration has a favored place, ...


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