United States District Court, S.D. Georgia, Dublin Division
CHRISTINA BAZEMORE, on behalf of herself and all others similarly situated, Plaintiff,
JEFFERSON CAPITAL SYSTEMS, LLC, Defendant.
DUDLEY H. BOWEN, District Judge.
Before the Court is Defendant Jefferson Capital Systems, LLC's ("Jefferson Capital") motion to compel arbitration. (Doc. no. 17.) Upon consideration of the parties' briefs and oral argument held on February 23, 2015, the motion is DENIED for the reasons set forth herein.
Plaintiff Christina Bazemore ("Bazemore") has filed a putative consumer class action alleging that Jefferson Capital violated the law by systematically filing proofs of claim in bankruptcy cases to recover debts which were barred by a statute of limitations defense. Bazemore alleges that this conduct violates the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq.,  and constitutes unjust enrichment. Jefferson Capital contends that Bazemore's claims are subject to mandatory arbitration.
On November 18, 2005, Bazemore applied on-line for a credit card, the Imagine MasterCard, with a credit limit of $300. (Ryan Aff. ¶¶ 5-6 & Ex. B.) The credit card was issued by First Bank of Delaware. (Id. ¶ 4.) The credit card account was immediately charged a $150 enrollment fee (id., ex. B) which, according to Bazemore, is not disclosed until the first bill is mailed to the card holder. Bazemore charged $148.03 to the card in the first three weeks. (Id.) Thus, according to the statement with a closing date of December 21, 2005, Bazemore owed $299.69. (Id.) On December 22, 2005, the account was charged a $9.95 account maintenance fee that caused Bazemore to exceed the $300 limit before her first payment became due. (Id.) Bazemore paid the minimum payment of $20.00. The next billing statement, with a closing date of January 23, 2006, reflected $125 in fees, including a $35 "overlimit fee." (Id.) Subsequently, Bazemore incurred monthly fees, typically between $35 to $80. By May 2007, Bazemore owed $1, 153.18 on the account. (Id.) At that time, she had charged only $247.01 on the card and had made payments totaling $314.
In 2013, Bazemore filed for Chapter 13 protection in the United States Bankruptcy Court. On January 11, 2014, Jefferson Capital filed a Proof of Claim in her bankruptcy case to collect $1, 153.18 owed on the credit card account. The last payment date on the credit card account was October 5, 2006; thus, the debt was time-barred effective October 5, 2012. (See Pl.'s Resp. in Opp'n, Ex. A; Am. Compl. ¶¶ 19-20.)
Jefferson Capital claims to own the debt and therefore to be a party to an arbitration provision contained in the Cardholder Agreement purportedly provided to Bazemore. Jefferson Capital explains further that Atlanticus Services Corporation ("Atlanticus"), formerly known as CompuCredit Corporation ("CompuCredit"), sent new credit card applicants a "Welcome Kit" within ten business days of the application date. (Ryan Aff., ¶ 7.) According to the executive correspondence manager, Mr. Gregory Ryan, "Atlanticus provided certain contractual services related to the marketing of the [Imagine MasterCard] credit card for and on behalf of [First Bank of Delaware]." (Id. ¶ 4.) Mr. Ryan attests that the
Welcome Kit contained a Cardholder Agreement, which contains the following arbitration provision:
Any claim, dispute or controversy (whether in contract, tort, or otherwise) at any time arising from or relating to your Account, any transferred balances or this Agreement (collectively, "Claims"), upon the election of you or us, will be resolved by binding arbitration pursuant to this Arbitration Provision and the Code of Procedure ("NAF Rules") of the National Arbitration Forum ("NAF") in effect when the Claim is filed. If for any reason the NAF cannot, will not or ceases to serve as arbitration administrator, we will substitute another nationally recognized arbitration organization utilizing a similar code of procedure.
UPON SUCH ELECTION, NEITHER YOU NOR WE WILL HAVE THE RIGHT TO LITIGATE IN COURT THE CLAIM BEING ARBITRATED, INCLUDING IN A JURY TRIAL, OR TO ENGAGE IN PRE-ARBITRATION DISCOVERY EXCEPT AS PROVIDED IN THE NAF RULES. IN ADDITION, YOU WILL NOT HAVE THE RIGHT TO PARTICIPATE AS A REPRESENTATIVE OR MEMBER OF ANY CLASS OF CLAIMANTS RELATING TO ANY CLAIM SUBJECT TO THE ARBITRATION. EXCEPT AS SET FORTH BELOW, THE ARBITRATOR'S DECISION WILL BE FINAL AND BINDING, OTHER RIGHTS AVAILABLE TO YOU IN COURT MAY NOT BE AVAILABLE IN ARBITRATION.
The term "Claims" covered by this Arbitration Provision is to be given the broadest possible meaning, and includes, by way of example and without limitation, (I) Claims arising from the application for or issuance, use, terms, change in terms or addition of terms, closing or collection of your Account or this Agreement, or from advertisements, promotions or oral or written statements related to your Account, including any Claims regarding information obtained by us from, or reported by us to, credit reporting agencies or others, or Claims related to the goods or insurance or other services purchased under your Account; (II) Claims between you and our parent corporations, wholly or majority owned subsidiaries, affiliates, predecessors, successors, assigns, agents, independent contractors, employees, officers, directors or representatives arising from your Account or this Agreement; and (III) Claims regarding the validity, enforceability or scope of this Arbitration Provision or this entire Agreement.
(Id., Ex. A.)
On March 31, 2008, pursuant to an alleged Bill of Sale, Atlanticus sold all of its right, title and interest to a pool of accounts to Defendant Jefferson Capital. (Simon Aff. ¶ 7.) Jefferson Capital claims that Bazemore's credit card account fell ...