United States District Court, E.D. North Carolina, Southern Division
SHANE MATHIS, individually and on behalf of all others similarly situated, Plaintiff,
LENDMARK FINANCIAL SERVICES, LLC, Defendant.
W. FLANAGAN United States District Judge
matter is before the court on defendant's motion wherein
it seeks an order directing arbitration together with
dismissal of this action. Should the court not be inclined to
dismiss the action, defendant seeks a stay during pendency of
arbitration. Should the court decline to refer the matter to
arbitration and, instead, reach the merits of defendant's
motion, defendant seeks dismissal based upon plaintiff's
failure to state a claim. The issues raised are ripe for
ruling. For reasons that follow, defendant's motion to
compel arbitration is granted and the case is dismissed.
a member of the United States Navy (“Navy”),
initiated this action September 1, 2016, in the Superior
Court of North Carolina, Onslow County, on behalf of himself
and others similarly situated, seeking compensatory and
punitive damages as well as ancillary relief arising from
defendant's refusal to reduce interest rate on a consumer
loan pursuant the Servicemembers Civil Relief Act
(“Servicemembers Act”), 50 U.S.C. §§
3901-4043. Defendant removed the action to this court on the
basis of federal question jurisdiction pursuant to 28 U.S.C.
§ 1441(a). On November 7, 2016, defendant filed the
instant motion. In support thereof, among other things,
defendant relies upon a note dated November 18, 2011, and the
affidavit of Loretta Byrd (“Byrd”). In
opposition, plaintiff relies upon his affidavit wherein he
testifies as to circumstances under which he entered into the
subject loan agreement.
facts viewed in the light most favorable to plaintiff may be
summarized as follows. Defendant is engaged in the business
of consumer lending and, in the course of its business, lends
to military servicemembers. Plaintiff enlisted in the Navy
September 15, 2012, and began active duty April 16, 2013.
November 18, 2011, before joining the Navy, plaintiff entered
into a note with Green Cap Financial, LLC (“Green
Cap”), secured in part by a 2004 Jeep Liberty motor
vehicle. Plaintiff borrowed $8, 636.33 at an annual interest
rate of 18.35 percent and made regular payments in accordance
with the parties' agreed-upon payment schedule. The note
was paid and satisfied in full May 30, 2015.
following acknowledgment appears on the face of the note:
I, [plaintiff], do hereby acknowledge receipt of a copy of
this Promissory Note and Security Agreement. Further
acknowledged is the receipt of the proceeds of the loan
stated above. I further acknowledge that at the time I
received a copy of this Promissory Note and Security
Agreement, that such forms were complete and filled-in and
that all blanks in such forms we [sic] filled in prior to my
executing the same.
(DE 17-2 at 2). It is undisputed that plaintiff's
witnessed signature under seal appears directly below the
foregoing text. In the bottom right corner appears the mark,
“Page 1 of 3[.]” Page three of the note bears the
mark “Page 3 of 3” and contains an arbitration
agreement. Repeated reference is made to form number
“NC0001” on these two pages of the note. Page
two, however, is omitted from the record.
arbitration agreement specifies that “[the parties]
agree than any and all disputes, claims or controversies of
any kind and nature between us arising out of or relating to
the relationship between us will be resolved through
mandatory, binding arbitration. . . . Both of us are waiving
our rights to have disputes resolved in court by a judge or
jury [except as otherwise provided in the agreement].”
(DE 17-2 at 3).
upon her experience as assistant branch manager for Green Cap
and, later, branch manager for defendant, Byrd testifies that
Green Cap and defendant regularly used form NC0001 in the
course of business. In her capacity as assistant branch
manager for Green Cap, Byrd witnessed plaintiff sign the
note. She attests that the version of NC0001 that plaintiff
signed was the only version in use at that time, all of which
plaintiff does not dispute.
around July 2013, plaintiff wrote to Green Cap requesting
that interest rate on his loan be reduced to six percent per
annum pursuant to the Servicemembers Act. Green Cap denied
the request on the ground that plaintiff was not deployed at
the time of request. Following denial, defendant acquired
Green Cap September 30, 2014, and succeeded to Green
wrote to defendant February 19, 2015, again requesting an
interest rate reduction pursuant to the Servicemembers Act.
Defendant denied the request. Finally, on March 18, 2015,
plaintiff's counsel sent a formal written demand for
relief under ...