GEORGE J. HAZEL, District Judge.
In this action, which was removed to this Court from the Circuit Court for Prince George's County, Maryland, pro se Plaintiffs Malik Bey and Dawud Best, individually and on behalf of others similarly situated, (collectively. "Plaintiffs")
According to the Complaint, Midland Funding "is one of the nation's largest buyers of unpaid debt" and it works with its "affiliate. Midland Credit.... to service accounts." ECF No. 2 at ¶ 3. Mr. Bey alleges that, in October 2012, Midland Credit "bought a debt from Citibank, N.A. in which [Mr. Bey] had an unpaid financial obligation," but the only information that Midland Credit had respecting the "alleged debt" was the name, address, last payment date, charge-off date,
Mr. Best alleges that, on September 26, 2012, Midland Funding purchased a debt from Mobile PCS Holdings LLC ("T-Mobile"). in which, according to Midland Funding. Mr. Best had an unpaid financial obligation. Id. at ¶ 27. Once again, the only information that Midland Credit obtained respecting Mr. Best's alleged debt with T-Mobile was his name, address, last payment date, charge-off date, and balance. Id. at ¶ 28. Alter Midland Funding purchased the debt, a fee of $163.71 was added to the principal balance, but it is not clear whether that fee was a seller fee added by Defendants or if it was the result of accrued interest. Id. at ¶¶ 29-30. Mr. Best alleges that he contacted T-Mobile and asserted that "he was never contractually liable on the account and that he was not legally responsible for the alleged debt." Id. at ¶ 32. A T-Mobile representative told Mr. Best that T-Mobile could not verily who was contractually responsible for the debt, but that "all documents and/or information was provided to the debt purchaser and if the debt purchaser does not have the contract [between T-Mobile and Mr. Best], then a contract does not exist." Id. at ¶ 33. On February 27, 2015. Mr. Best contacted Midland Funding to inquire about the contract and the basis of the $167.71 fee, and he was told that "Midland did not have any evidence that [Mr. Best] had a contract with T-Mobile[]" and that "Midland `had no idea' how the interest amount was assessed on the account." Id. at ¶ 35.
Plaintiffs initiated this action in state court on March 2, 2015, alleging that Defendants' standard policy and practice is to "purchase no more than an electronic file of names, addresses and amounts owed on accounts" that are in default and that Midland Credit sends alleged debtors "dunning letters" that threaten litigation if the debtors do not make prompt payment, regardless of whether Defendants may properly pursue litigation under a particular state's laws. Id. at ¶¶ 44-46. Plaintiffs also challenge Defendants' practice of adding interest to debts prior to the date on which Midland Funding claims to have purchased the debt, where the prior owner of the debt did not charge interest during that period. Id. at ¶¶ 48-54.
The present dispute centers on whether Midland, as the purported assignee of all right, title, and interest in Plaintiffs' accounts, may enforce arbitration provisions that were contained in the terms and conditions of the credit card agreement between Mr. Bey and Citibank or the terms and conditions regarding Mr. Best's cellular phone services account with T-Mobile. Both agreements required that all claims relating to each Plaintiffs account be resolved through binding arbitration, and that any such claim must be brought individually, rather than as a class.
In support of their Motion. Defendants attached certain exhibits purporting to show that the Plaintiffs' respective debts were properly transferred to Midland. In particular. Defendants attached the affidavit of Kyle Hannan, an operations manager for Midland Credit, who indicates that Midland Credit "is the servicer and authorized agent of Midland Funding . . . and manages the debt that Midland purchases." ECF No. 12-4 at ¶ 2. Mr. Hannan stated that, pursuant to an October 17, 2012 Bill of Sale and Assignment executed by Citibank, Citibank sold, assigned, and transferred all rights, title, and interest of a portfolio of charged-off accounts to Midland Funding. Id. at ¶ 5. One of those accounts was Mr. Bey's, and the transfer included documents relating to a Home Depot credit card account that he had opened. Id. at ¶ 6. The records from Citibank indicated that Mr. Bey opened the account on August 28, 2006. made purchases on the account, and made several payments on the account. Id. at ¶ 7. Those records also included the "Card Agreement"—i.e., the terms and conditions—that was associated with the account. Id. at ¶ 8. Attached as exhibits to Mr. Hannan's affidavit are the bill of sale from Citibank and an accompanying affidavit of sale by the original creditor, Citibank; "an abstract of the true and correct data from the electronic file pertaining to the Bey Account," including the last four digits of his account number, the date the account was opened, the charge-off date and charge-off amount, the sale amount, and other relevant information; copies of Mr. Bey's credit card statements, and a copy of the Citibank Card Agreement. See id. at ¶¶ 5-8; ECF Nos. 12-5, 12-6. 12-7, 12-8. Notably, the Card Agreement provided that "[t]his Agreement is binding on you unless you close your account within 30 days after receiving the card and you have not used or authorized use of the card." ECF No. 12-8 at 3.
With respect to Mr. Best's account. Mr. Hannan attested that, through a September 19, 2012 Bill of Sale and Assignment. T-Mobile sold and transferred Mr. Best's account in a portfolio of other charged-off accounts. ECF No. 20-1 at ¶ 5. As with Mr. Bey's account, Defendants attached a copy of that bill of sale, as well as "an abstract of the true and correct data from the electronic file pertaining to the Best Account, which was transferred by T-Mobile to Midland [Funding]," including the last four digits of his account number, the date the account was opened, the last payment date, the sale amount, and other relevant information. See ECF Nos. 12-9, 12-12. Those records also reflected that Mr. Best opened the account with T-Mobile on October 20, 2005, and that his last payment to T-Mobile was made on July 19, 2010. ECF No. 12-9; see also ECF No. 20-1 at ¶¶ 7-8. Defendants also provided copies of the relevant terms and conditions that applied to Mr. Best's T-Mobile Account.
Additionally. Mr. Hannan declared that this information was provided as a matter of his "own personal knowledge of the matters set forth [therein] and based on [his] review of the business records of [Midland Credit] and Midland [Funding]." See ECF No. 12-4 at ¶ 3; ECF No. 20-1 at ¶ 3. He indicated that the records "were made by, or from information transmitted by, a person with knowledge of the events described therein, at or near the time of the event described'" and, in particular, that such records "are kept in the ordinary course of the regularly conducted activity of such person and [Midland Credit |" and that he is "familiar with [Midland Credit's] and [Midland Funding's] record keeping systems." ECF No. 12-4 at ¶ 3; ECF No. 20-1 at ¶ 3. He further indicated that some of the business records he relied on "were created by businesses other than [Midland Credit] or Midland [Funding]" but that those records "have been incorporated into the business records of [Midland Credit] and Midland [Funding] and are relied upon by them in conducting their business." ECF No. 12-4 at ¶ 4; ECF No. 20-1 at ¶ 4.
A court may compel arbitration under the Federal Arbitration Act (the "FAA") if the parties agreed in writing to arbitrate the dispute. Adkins v. Labor Ready, Inc., 303 F.3d 496, 500-01 (4th Cir. 2002); see also 9 U.S.C. § 2 ("[A]n agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract."). The FAA reflects the strong federal policy favoring arbitration. Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25. 103 S.Ct. 927 (1983). But "even though arbitration has a favored place, there still must be an underlying agreement between the parties to arbitrate." Adkins, 303 F.3d at 501. "Whether a party agreed to arbitrate a particular dispute is an issue for judicial determination to be decided as a matter of contract." Johnson v. Circuit City Stores, 148 F.3d 373, 377 (4th Cir. 1998) (citing AT&T Techs., Inc. v. Commc'ns Workers of Am., 475 U.S. 643, 648-49, 106 S.Ct. 1415 (1986)).
Courts in this District have recognized that "motions to compel arbitration exist in the netherworld between a motion to dismiss and a motion for summary judgment." Shaffer v. ACS Gov't Servs., Inc., 321 F.Supp.2d 682, 683 (D. Md. 2004); see also PC Const. Co. v. City of Salisbury, 871 F.Supp.2d 475, 477 (D. Md. 2012). But where the parties dispute the validity of an arbitration agreement, "[m]otions to compel arbitration ... are treated as motions for summary judgment." Rose v. New Day Fin., LLC, 816 F.Supp.2d 245, 251 (D. Md. 2011).
In response to Defendants' Motion to Compel Arbitration, Plaintiff's raise two main arguments. First, they contend that, because Defendants have supplied only "exemplar" terms and conditions for the respective accounts, rather than signed copies of such agreements. Defendants have failed to satisfy their burden of establishing that Plaintiffs agreed to arbitrate their claims. See ECF No. 19 at 2-6. Second, they argue that Defendants have failed to demonstrate that Citibank or T-Mobile did, in fact, assign Plaintiffs" respective debts to Midland. Id. at 6-9. Plaintiffs have not argued, however, that if the arbitration agreements are valid, that their claims fall outside of the scope of those agreements, nor have they argued that the class action waivers included in the arbitration agreements are invalid. See Green Tree Win, Corp. v. Bazzle, 539 U.S. 444, 452, 123 S.Ct. 2402 (2003) (noting that courts must determine "gateway matters" to arbitration, "such as whether the parties have a valid arbitration agreement at all or whether a concededly binding arbitration clause applies to a certain type of controversy."). Thus, assuming the arbitration agreements are enforceable against Plaintiffs and that Defendants may properly invoke those agreements against Plaintiffs, then all of the claims presented in this case must be submitted to arbitration.
Plaintiffs first argument, namely, that Defendants have failed to prove the existence of a valid arbitration agreement because Plaintiffs have not signed any such agreement, must be disregarded. Although it is true, of course, that "arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit, ... [i]t does not follow . . . that under the [Federal Arbitration] Act an obligation to arbitrate attaches only to one who has personally signed the written arbitration provision." Int'l Paper Co. v. Schwabedissen Maschinen & Anlagen GMBH, 206 F.3d 411, 416 (4th Cir. 2000) (internal quotation marks and citations omitted).
Nevertheless, only if Defendants are indeed the assignees of Plaintiffs' debts may they enforce the arbitration agreements that Mr. Bey and Mr. Best entered with Citibank and T-Mobile, respectively. Defendants have submitted sufficient evidence to that effect. Specifically, with respect to Mr. Bey's debt. Defendants have submitted a bill of sale and an accompanying affidavit of sale by the original creditor. Citibank, and, through Mr. Hannan's affidavit, established that Mr. Bey's account was one of the accounts included in that bill of sale. See ECF No. 12-4 at ¶¶ 5-6; ECF No. 12-5; ECF No. 12-6. Defendants similarly submitted a bill of sale from T-Mobile with respect to Mr. Best's debt, and again, through Mr. Hannan, established that Mr. Best's account was one of those transferred through that bill of sale. See ECF No. 20-1 at ¶¶ 5-6; ECF No. 12-12; see also Burtlett v. Portfolio Recovery Associates, LLC, 91 A.3d 1127, 1147 (Md. 2014) (noting that redacted "bill of sale" was not sufficient evidence that assignee had purchased credit card debt, but that proof of assignment was sufficient where it was accompanied by an affidavit of a custodian based on that person's personal knowledge of account records maintained by assignee).
Plaintiffs argue, however, that Mr. Hannan could not properly attest to the reliability of the data contained in Midland's records with respect to Plaintiffs' respective debts because those records came from Midland's predecessors-in-interest—Citibank and T-Mobile—and therefore Mr. Hannan lacks personal knowledge over whether the data contained therein is true and correct. See ECF No. 19 at 7. In essence, they argue that any such evidence regarding Midland's purchase of Plaintiffs' debts is inadmissible and cannot support Defendants' Motion to Compel Arbitration. See. e.g., Orsi v. Kirkwood, 999 F.2d 86, 92 (4th Cir. 1993) ("It is well established that unsworn, unauthenticated documents cannot be considered on a motion for summary judgment"); Planmatics, Inc. v. Showers, 137 F.Supp.2d 616. 620 (D. Md. 2001) ("On a motion for summary judgment, a district court may only consider evidence that would be admissible at trial" (citations omitted)). Although in attesting to the relevant information respecting Plaintiffs' debts Mr. Hannan relied on some business records that were created by businesses other than Midland Credit or Midland Funding, he explained that such records have been incorporated into Midland's business records "and are relied upon by them in conducting their business." See ECF No. 12-4 at ¶ 4; ECF No. 20-1 at ¶ 4. Such evidence may properly be considered by the Court under the business records exception to the rule against hearsay. See Fed. R. Evid. 803(6); Brawner v. Allstate Indem. Co., 591 F.3d 984, 987 (8th Cir. 2010) ("[A] record created by a third party and integrated into another entity's records is admissible as the record of the custodian entity, so long as the custodian entity relied upon the accuracy of the record and the other requirements of Rule 803(6) are satisfied."); United Stales v. Adefehinti, 510 F.3d 319, 326 (D.C. Cir. 2007) ("[A] record of which a firm takes custody is thereby `made' by the firm within the meaning of the rule (and thus is admissible if all the other requirements [to the business record hearsay exception] are satisfied)."): see also United States v. Wein, 521 F. App'x 138, 140 (4th Cir. 2013) (noting that custodian of records need not be able to "confirm the accuracy of the records in order to be a qualified witness" to authenticate business records). Thus. Defendants submitted sufficient evidence to establish that Midland is indeed the assignee of Plaintiffs' respective debts, and, accordingly, that Defendants may enforce the arbitration agreement entered between Plaintiffs and Midland's predecessors in interest.
Finally, although the FAA requires a court, upon motion by any party, to stay judicial proceedings involving issues covered by written arbitration agreements, see 9 U.S.C. § 3, the United States Court of Appeals for the Fourth Circuit has held that "[n]otwithstanding the terms of § 3 . . . dismissal is a proper remedy when all of the issues presented in a lawsuit are arbitrable.'" Choice Hotels Int'l, Inc. v. BSR Tropicana Resort, Inc., 252 F.3d 707, 709-10 (4th Cir. 2001). Because all of Plaintiffs" claims in this case are subject to arbitration, dismissal of this action is appropriate.
For the foregoing reasons. Defendants" Motion to Compel Arbitration, ECF No. 12, is
ECF No. 12-8 at 6-7 (emphasis in original). The T-Mobile terms and conditions similarly stated:
ECF No. 22 at 2-3, 10 (emphasis in original).
