Lee, Torrance v. Credit Acceptance Corporation, 3:15-cv-00614

In March 2014 Torrance Lee bought a car in Minnesota and signed a retail installment contract that included an arbitration clause and an assignment clause naming Credit Acceptance Corporation (CAC).
Within a week the dealership cancelled the transaction; Lee returned the car and received his down payment back; dealership purportedly reassigned the contract back from CAC.
Despite the cancellation, CAC continued collection efforts and sent a notice alleging default; Lee sued in Wisconsin small claims court asserting ECOA and Wisconsin Consumer Act claims.
CAC removed the case to federal court and moved to compel arbitration based on the retail installment contract CAC produced (which bears Lee’s signature).
Lee produced a different (unsigned) copy of the contract and argued that its small-claims carve-out permits him to avoid arbitration; he also demanded a trial on "the making of the arbitration agreement."
The court concluded (1) both versions contain arbitration clauses; (2) the dispute falls within the arbitration scope; and (3) Lee refused to arbitrate—so arbitration was compelled and the case stayed pending arbitration.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a valid written agreement to arbitrate exists	Lee disputes authenticity of CAC’s contract and submitted a different version	CAC produced a signed contract bearing Lee’s signature showing agreement to arbitrate	Court found a written arbitration agreement exists (Lee’s signature on CAC’s version conceded)
Whether the dispute falls within the arbitration clause’s scope	Lee contends his version permits small-claims suits that avoid arbitration	CAC argues both versions cover these disputes and require arbitration	Court held dispute falls within arbitration scope under either version
Whether filing in small claims court preserved Lee’s right to avoid arbitration	Lee reads his contract’s language as allowing him to preempt arbitration by suing in small claims court	CAC contends the clause merely permits pursuing small-claims remedies without forfeiting the right to later arbitrate	Court held the provision does not let Lee avoid arbitration by filing in small claims court; it preserves the right to later require arbitration
Whether a trial is required on the “making” of the arbitration agreement	Lee demanded a jury trial on the issue of formation/authenticity	CAC relied on the signed contract and summary-judgment standard for motions to compel arbitration	Court found trial unnecessary because Lee conceded signature on CAC’s contract and arbitration was compelled

Tickanen v. Harris & Harris, Ltd., 461 F. Supp. 2d 863 (E.D. Wis. 2006) (motions to compel arbitration reviewed under summary judgment standard)
Tinder v. Pinkerton Sec., 305 F.3d 728 (7th Cir. 2002) (same standard and evidentiary principles for arbitration motions)
Zurich Am. Ins. Co. v. Watts Indus., Inc., 417 F.3d 682 (7th Cir. 2005) (three FAA prerequisites to compel arbitration)
Miller v. Flume, 139 F.3d 1130 (7th Cir. 1998) (ambiguities in arbitration clauses resolved in favor of arbitration)
Quade v. Secura Ins., 814 N.W.2d 703 (Minn. 2012) (contract terms construed per plain, ordinary, and popular sense)