A recent decision from the Northern District of Ohio highlights the importance of having a carefully drafted arbitration agreement in callers’ customer-facing contracts. See Treinish v. BorrowersFirst, Inc., No. 17-1371, 2017 U.S. Dist. LEXIS 145772 (N.D. Ohio Sept. 8, 2017).
The Plaintiff in Treinish had borrowed money from the Defendant. Id. at *1. Their contract contained two notable provisions: a provision that agreed to resolve disputes in arbitration and a provision that consented to receive automated calls from the Defendant and related entities on her cellphone. Id. at *1-2.
After the Plaintiff defaulted on her loan and began to receive debt collection calls, she called the Defendant and purported to revoke her consent to receive further automated calls on her cellphone. (Because the Court did not address the merits of the underlying claim, it did not address whether she could in fact revoke consent that had been granted as part of a bilateral contract.) After she continued to receive debt collection calls at that number, she filed suit and alleged that the additional calls violated the TCPA. Id. at *2.
The Defendant moved to compel arbitration and the Plaintiff opposed that motion by arguing that she had terminated the loan agreement and by extension its arbitration agreement. Id. Specifically, she argued that she had terminated the agreement when she: (1) called to revoke her consent to be called; (2) defaulted on her loan; and (3) filed for bankruptcy. Id.
The Defendant responded by arguing that, even if any of that conduct did have the effect of terminating the loan agreement, the Court should still compel arbitration because the arbitration agreement had its own survival clause that read as follows: “[t]his Arbitration Provision shall survive (i) suspension, termination, revocation, closure, or amendments to this Agreement and the relationship of the parties and/or the Lender Parties; [and] (ii) the bankruptcy or insolvency of any party or other person.” Id. at *5.
The Court agreed with the Defendant and compelled arbitration. It began by noting that the Federal Arbitration Act “manifests a strong federal policy favoring arbitration,” and that “any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.” Id. at *3. It then rejected the notion that the arbitration agreement would not have survived the loan agreement’s alleged termination. In doing so, it distinguished the Sixth Circuit’s decision in Stevens-Bratton v. TruGreen, Inc., 675 F. App’x 536 (6th Cir. 2017), in which a lawn services provider began making autodialed telemarketing calls to a former customer months after its contract had been terminated. That case was distinguishable, the court found, because the arbitration provision in TruGreen did not have a survival clause that “would have kept the arbitration provision in force after the contract.” Treinish, 2017 U.S. Dist. LEXIS 145772, at *5. As a result, the Sixth Circuit was analyzing a “completely expired agreement.” Id.
The court also distinguished TruGreen because the scope of the arbitration agreement in that case had been ambiguous. By contrast, the arbitration agreement in Treinish was “virtually all-encompassing in the breadth of potential disputes that it cover[ed].” Id. at *6. Because the agreement required arbitration any claims “relat[ing] to or aris[ing] out of [the] Agreement,” and because the loan agreement anticipated that the Defendant would call the Plaintiff regarding the loan, the Court found that claims arising from calling the Plaintiff—with or without her consent—fell squarely within the scope of the arbitration agreement Id. at *6.
Treinish is an important reminder not only that courts will compel arbitration of TCPA claims, but also that plaintiffs will test the applicability and enforceability of arbitration agreements whenever possible. Businesses that deploy such agreements should take care in drafting them.
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