Rowe v. Affordable Motors, Inc.

          RULING AND ORDER ON MOTION TO COMPEL ARBITRATION AND STAY ALL PROCEEDINGS

          VICTOR A. BOLDEN UNITED STATES DISTRICT JUDGE.

         On April 23, 2018, Defendant Credit Acceptance Corporation (“Credit Acceptance” or “CA”) filed a motion to compel arbitration and stay all proceedings in this action. Motion to Compel Arbitration, dated Apr. 23, 2018 (“CA Mot.”), ECF No. 20. Ruth Rowe and Horace Rowe (“Plaintiffs”) have failed to file any opposition to the motion for over seven months, and have not responded to an Order to Show Cause directing any such response to be filed by November 6, 2018.

         As explained below, because Mr. and Ms. Rowe's failure to respond may be deemed sufficient cause to grant the motion, and because the motion and pleadings do not provide any basis for the Court to otherwise deny the motion, Credit Acceptance's motion to compel arbitration and stay all proceeding is GRANTED.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         A. Factual Allegations

         The original transaction that gave rise to this litigation is not in dispute. On September 24, 2016, Ruth Rowe and her son Horace Rowe (“Plaintiffs”), both residents of Bridgeport, Connecticut, entered into a Retail Installment Contract to purchase a used 2007 BMW 3-series automobile from Affordable Motors, Inc. (“Affordable Motors”), a Connecticut corporation that operates an automobile dealership in Bridgeport, Connecticut. See Complaint, dated Sept. 23, 2017 (“Compl.”), ECF No. 1, ¶¶ 2, 3, 9, 14-19; Memorandum of Law in Support of CA Mot., dated Apr. 23, 2018 (“CA Mem.”), annexed to CA Mot., ECF No. 20-1, at 2-3. Credit Acceptance, a Michigan corporation, “was the assignee of the contract and, under its terms, subject to all claims and defenses that Plaintiffs could assert against Affordable Motors up to the amounts paid.” Compl. ¶¶ 4, 25.

         The Rowes, however, allege, inter alia, that Affordable Motors charged them a higher price than was advertised, attempted to deliver a different BMW 3-series than the one they had purchased, and-when the Rowes would not accept the different vehicle-refused to refund the Rowes' deposit and down payment. Id. ¶¶ 20-24, 26-35. They further allege that after this, they contacted Credit Acceptance, which stated it would investigate the matter. Id. ¶ 36. The Rowes allege, however, that Credit Acceptance subsequently claimed the Rowes had violated the contract, “repossessed” and sold the undelivered car, and began pursuing a $2, 271.62 deficiency payment, plus fees, costs, and interest, against the Rowes. Id. ¶¶ 37-43. The Rowes allege that Credit Acceptance's actions have negatively affected their credit rating, which they allege caused Mr. Rowe to be denied student loans necessary to afford his college education. Id. ¶¶ 44-45.

         B. Procedural History

         On September 23, 2017, the Rowes sued Affordable Motors and Credit Acceptance (“Defendants”), alleging that Defendants' actions violated, inter alia, express warranties to the Rowes, the Truth in Lending Act, 15 U.S.C. § 2301 et seq., the Connecticut Unfair Trade Practices Act (“CUTPA”), Conn. Gen. Stat. § 42-110a et seq., and the Connecticut Creditors Protection Act, Conn. Gen. Stat. § 36a-645 et seq. Id. ¶¶ 46-89. The Rowes seek “actual damages, statutory damages, common law punitive damages, statutory punitive damages, an order rescinding the sale, attorney's fees and costs.” Id. at 11.

         After a significant period of delay, Affordable Motors and Credit Acceptance were served on February 26, 2018 and March 8, 2018, respectively. See Summons Returned Executed, filed Mar. 2, 2018, ECF No. 10; Summons Returned Executed, filed Mar. 8, 2018, ECF No. 11. Defendants subsequently moved for and were granted three extensions of time to answer, move, or otherwise respond to the Complaint. See Orders, dated Mar. 21, 2018, Mar. 27, 2018, and Apr. 22, 2018.

         On April 23, 2018, Credit Acceptance filed a motion to compel arbitration and stay all proceedings in this action under Sections 2 through 4 of the Federal Arbitration Act (“FAA”). CA Mot. Credit Acceptance asserts that Affordable Motors assigned all “right, title and interest, including its security interest, in and to the Contract and the Vehicle, ” to Credit Acceptance. CA Mem. at 2.

         Credit Acceptance alleges that Plaintiffs agreed to be bound by an arbitration clause contained in the Retail Installment Contract. That provision states that either party (including Credit Acceptance) “may require any Dispute to be arbitrated and may do so before or after a lawsuit has been started over the Dispute or with respect to other Disputes or counterclaims brought later in the lawsuit.” See Retail Installment Contract, dated Sept. 24, 2016 (“Contract”), annexed as Ex. A to Mem., ECF No. 20-2, at 4-5.

         Credit Acceptance therefore contends that “since the parties have unequivocally agreed that, after invocation by one of the parties, whether before or after a lawsuit has been started . . . any and all Disputes arising out of or in any way related to the Contract should be resolved by binding arbitration pursuant to the rules and procedures of either [the American Arbitration Association] or JAMS, this Court should compel arbitration and stay this action pending arbitration.” CA Mem. at 5.

         More than six months have passed since Credit Acceptance moved to compel arbitration, and no opposition has been filed. Based on the lack of activity on the docket, Plaintiffs have ...