Davis v. Fenton
2014 U.S. Dist. LEXIS 16533
| N.D. Ill. | 2014Background
- Plaintiff Tonya Davis, African American, sues Defendants for FHA, Civil Rights Act claims, attorney malpractice, and breach of contract in N.D. Ill.
- Defendants move to stay the action pending arbitration under FAA §3; Plaintiff moves to consolidate, which the court denies as moot regarding consolidation.
- Retainer agreement between Davis and the Law Office of Ernest B. Fenton contains an arbitration clause with AAA submission and jury waiver.
- Fenton and Law Office allegedly failed to act in Davis’s mortgage foreclosure matter, leading to a foreclosure sale and eviction.
- Court applies Illinois contract law to interpret the arbitration clause and determine who is bound and whether the clause is enforceable.
- Court determines the arbitration clause covers all claims and stays proceedings pending arbitration; consolidation is moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are all defendants bound by the arbitration clause? | Davis argues the clause binds only the Law Office, not Fenton/Legal Services. | Defendants contend Fenton and the Law Office are parties to the contract and thus bound. | Yes; Fenton and the Law Office are bound by the clause. |
| Is the arbitration clause unconscionable (procedurally or substantively)? | Clause is procedurally and substantively unconscionable due to its placement and cost ignorance. | Clause is not procedurally or substantively unconscionable; signed acknowledgment shows assent and mutuality. | No; clause is valid and enforceable. |
| Do plaintiffs' FHA and CRA claims fall within the scope of arbitration? | Claims arise from discriminatory mortgage services and are not about the retainer terms or outcome. | Clause broadly covers disputes “regarding any provision” of the agreement and the outcome of the matter. | Yes; all claimed issues fall within scope of arbitration. |
| Has Defendants’ conduct waived the right to arbitration? | Defendants litigated, filed status reports, and pursued state court actions implying waiver. | Defendants acted consistently with arbitration rights and moved to stay early; no waiver. | No; arbitration right not waived. |
Key Cases Cited
- Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (U.S. 1983) (strong federal policy favoring arbitration; doubts resolved in favor of arbitration)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (U.S. 2011) (arbitration enforceability; valid contract defenses only)
- James v. McDonald’s Corp., 417 F.3d 672 (7th Cir. 2005) (state contract law governs whether parties agreed to arbitrate)