Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Dillon v. BMO Harris Bank, N.A.

United States Court of Appeals, Fourth Circuit

May 10, 2017

JAMES DILLON, Plaintiff - Appellee,
v.
BMO HARRIS BANK, N.A., Defendant-Appellant, and FOUR OAKS BANK & TRUST COMPANY; GENERATIONS FEDERAL CREDIT UNION; BAY CITIES BANK, Defendants.

          Argued: March 24, 2017

         Appeal from the United States District Court for the Middle District of North Carolina, at Greensboro. Catherine C. Eagles, District Judge. (1:13-cv-00897-CCE-LPA)

         ARGUED:

          Kevin Scott Ranlett, MAYER BROWN LLP, Washington, D.C., for Appellant.

          Hassan A. Zavareei, TYCKO & ZAVAREEI LLP, Washington, D.C., for Appellee.

         ON BRIEF:

          Lucia Nale, Debra Bogo-Ernst, MAYER BROWN LLP, Chicago, Illinois; Mary K. Mandeville, ALEXANDER RICKS PLLC, Charlotte, North Carolina, for Appellant.

          Norman E. Siegel, Steve Six, J. Austin Moore, STUEVE SIEGEL HANSON LLP, Kansas City, Missouri; Jeffrey M. Ostrow, KOPELOWITZ OSTROW P.A., Fort Lauderdale, Florida; Darren T. Kaplan, DARREN KAPLAN LAW FIRM, P.C., New York, New York; F. Hill Allen, THARRINGTON SMITH, L.L.P., Raleigh, North Carolina; Jeffrey D. Kaliel, TYCKO & ZAVAREEI LLP, Washington, D.C., for Appellee.

          Before DUNCAN, KEENAN, and THACKER, Circuit Judges.

          BARBARA MILANO KEENAN, Circuit Judge

         In this appeal, we consider the enforceability of an arbitration agreement included in the terms of a "payday loan" obtained over the internet. Plaintiff James Dillon brought this civil action against defendant BMO Harris Bank, N.A. (BMO Harris), alleging that BMO Harris violated the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961 et seq., when BMO Harris used its role within a network of financial institutions "to conduct and participate in the collection of unlawful payday loans."

         Relying on the Federal Arbitration Act (FAA), BMO Harris sought to enforce an arbitration agreement for the loan at issue, which was entered into by Dillon and the lender, Great Plains Lending, LLC (Great Plains). The district court held that the arbitration agreement was unenforceable under this Court's opinion in Hayes v. Delbert Services Corp., 811 F.3d 666 (4th Cir. 2016), and denied BMO Harris' motion to compel arbitration. BMO Harris appeals from the district court's order. Upon our review, we hold that the arbitration agreement between Dillon and Great Plains is unenforceable, and we affirm the district court's order denying BMO Harris' motion.

         I.

         James Dillon is a resident of North Carolina. In December 2012, Dillon applied for and received a "payday loan"[1] through the website of Great Plains, a lender wholly owned by the Otoe-Missouria Tribe of Indians. Although North Carolina usury law generally prohibits interest rates in excess of 16%, N.C. Gen. Stat. § 24-1.1, Great Plains has no physical presence in North Carolina and charged an interest rate of 440.18% for Dillon's loan. Dillon authorized Great Plains to deposit and withdraw funds in Dillon's bank account through the Automated Clearing House Network (ACH Network), a transaction processing system that facilitates electronic transfer of funds between financial institutions, usually on behalf of account holders.

         In order to complete the loan transaction, Dillon electronically signed a contract (the Great Plains Agreement) that contained: (1) terms governing the loan (the underlying loan agreement); and (2) an agreement to submit disputes to arbitration (the arbitration agreement). The Great Plains Agreement included choice of law provisions both in the underlying loan agreement and in the arbitration agreement. These choice of law provisions required the application of Otoe-Missouria tribal law and disclaimed the application of state or federal law. For example, the Great Plains Agreement by its terms was "subject solely to the exclusive laws and jurisdiction of the Otoe-Missouria Tribe of Indians, a federally recognized Indian Tribe, " and provided that "no other state or federal law or regulation shall apply to this Agreement, its enforcement or interpretation."

         Similarly, the arbitration agreement within the Great Plains Agreement provided that "any dispute . . . will be resolved by arbitration in accordance with the law of the Otoe-Missouria Tribe of Indians, " and instructed the arbitrator to "apply the laws of the Otoe-Missouria Tribe of Indians." For borrowers who opt out of arbitration within 60 days of receiving the loan, "any disputes . . . shall nonetheless be governed under the laws ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.