United States District Court, E.D. North Carolina, Southern Division
W. FLANAGAN, United States District Judge
matter is before the court on defendant's motion, made
pursuant to the Federal Arbitration Act (“FAA”),
9 U.S.C. §§ 2-4, to compel arbitration and dismiss
the case or, alternatively, stay proceedings pending
arbitration of issues so arbitrable. (DE 18). The motion has
been fully briefed and the issues raised and are ripe for
ruling. For the reasons that follow, defendant's motion
is granted on the terms set forth herein.
initiated this action June 8, 2016, alleging that defendant,
a cellular telephone service provider, engaged in unlawful
debt collection practices in violation of the Telephone
Consumer Protection Act, 47 U.S.C. § 227(a)(2), and the
North Carolina Debt Collection Act, N.C. Gen. Stat. §
filed the instant motion October 4, 2016, arguing that the
contract that serves as the basis for the parties'
relationship mandates arbitration. Accordingly defendant
seeks an order directing the parties to arbitrate per the
agreement and dismissal or stay of pending litigation. In
support of the motion, defendant relies upon the pleadings
and the declaration of Nicole Reyes, a senior analyst
employed by defendant, to which declaration is appended
copies of agreement executed by the parties and copy of
defendant's customer agreement.
opposes the motion on grounds that defendant's actions
giving rise to complaint are outside the subject matter of
the arbitration clause and, in addition, where contractual
relationship between the parties previously was cancelled,
the arbitration agreement is no longer in effect. In
opposition to the motion, plaintiff relies also upon the
pleadings, and, in addition, a series of e-mails defendant
sent to plaintiff pertaining to plaintiff's account.
facts viewed in the light most favorable to plaintiff may be
summarized as follows:
is a citizen of Columbus County, North Carolina. (DE 1 ¶
4). Defendant, a Delaware corporation, is engaged in the
businesses of cellular telephone service and debt collection
in North Carolina. (DE 8 ¶ 7). In April or May 2015,
plaintiff and defendant entered into a contract whereby
plaintiff added two cellular telephones to her preexisting
account with defendant. (DE 8 ¶ 13). As part of this
contract, plaintiff agreed to the terms of defendant's
customer agreement, and both parties agreed to arbitrate
disputes. (DE 20-1 at 5 & 7). Regarding arbitration, the
customer agreement provides, in relevant part:
[Plaintiff] and [defendant] both agree to resolve
disputes only by arbitration or in small claims court.
[Plaintiff] understand[s] that by this agreement [plaintiff
is] giving up the right to bring a claim in court or in front
of a jury. . . . [Plaintiff and defendant] also both agree
(1) The Federal Arbitration Act Applies to this agreement . .
. . Any dispute that in any way relates to or arises out
of this agreement or from any equipment, products and
services [plaintiff] receive[s] from us . . . will be
resolved by one or more neutral arbitrators . . .
(DE 20-1 at 13) (capitalization omitted) (emphasis added).
alleges that, around the time she initially purchased the
phones, defendant's employee gave assurance that cellular
network coverage existed in the area plaintiff wanted to use
the phones. (DE 1 ¶ 14). However, when plaintiff
attempted to use the phones, she learned that service was not
available in the relevant area. (DE 1 ¶ 15). Following
this discovery, plaintiff alleges she immediately called
defendant in an attempt to return the phones or,
alternatively, to seek other resolution of the problem.
(Id. ¶¶ 16-18). Plaintiff alleges that
after defendant sent a service representative to the area
where plaintiff intended to use the phones, defendant
determined that service was unavailable, and, in May 2015,
the parties agreed to cancel the contract. (Id.
¶¶ 19-20). As part of said cancellation, defendant
advised plaintiff by e-mail June 29, 2017, that she would be
permitted to keep her phones. (DE 1-3).
August 26, 2015, plaintiff received a bill from defendant in
the amount of $1, 405.96 pertaining to an alleged outstanding
balance. (DE 1-4). Plaintiff alleges she did not owe any
money to defendant and that she called defendant several
times to dispute the charge. (Id. ¶¶ 25
& 31). Nonetheless, plaintiff alleges defendant or its
agent began to call plaintiff up to three times per day to
collect alleged debt. (Id.¶ 31).
Plaintiff further alleges that, as part of its collection
efforts, defendant used automated telephonic dialing systems
to contact plaintiff, but defendant lacked plaintiff's
permission to use such automated services. (Id.