MIGLIACCIO v. ALLY BANK
1:24-cv-00307
| D. Me. | Feb 27, 2025Background
- Plaintiff Paul Migliaccio purchased a used car from Lee Credit Express, financing the purchase through a loan assigned to Ally Bank.
- The purchase involved two key documents: a Retail Purchase Agreement (RPA) containing an arbitration clause, and a Retail Installment Sale Contract (RISC) assigned to Ally Bank.
- Plaintiff alleges the document fees charged violated the Maine Unfair Trade Practices Act.
- Defendant Ally Bank moved to compel arbitration and to strike class claims based on the RPA's arbitration and class action waiver clauses.
- Plaintiff argued the arbitration agreement only applied as between himself and the dealer, and not to Ally Bank as assignee of the RISC.
- The Magistrate Judge recommends granting Ally Bank’s motion to compel arbitration and to strike class claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Consideration of RPA | RPA not properly before Court (authentication issue) | Both parties submitted the RPA; authenticity not disputed | RPA is properly before the Court |
| Defendant's Right to Enforce Arbitration | Arbitration clause applies only to Plaintiff and Lee | Assignment includes right to enforce arbitration; clause extends to assigns | Ally Bank can enforce the arbitration agreement |
| Scope of Arbitration Agreement | Arbitration clause doesn’t cover claims vs. assignee | Arbitration covers claims related to financing and assigns | Arbitration agreement applies to Ally Bank |
| Class Action Waiver | Waiver should not be enforced | Supreme Court precedent enforces class waivers | Class action waiver enforceable; class claims struck |
Key Cases Cited
- Soto-Fonalledas v. Ritz–Carlton San Juan Hotel Spa & Casino, 640 F.3d 471 (1st Cir. 2011) (articulates national policy favoring arbitration under the FAA and related requirements)
- Grand Wireless, Inc. v. Verizon Wireless, Inc., 748 F.3d 1 (1st Cir. 2014) (sets forth what defendants must show to compel arbitration)
- Escobar-Noble v. Luxury Hotels Int’l of Puerto Rico, Inc., 680 F.3d 118 (1st Cir. 2012) (court may order arbitration only if parties agreed to arbitrate the specific dispute)
- Barbosa v. Midland Credit Mgmt., Inc., 981 F.3d 82 (1st Cir. 2020) (an assignee has the same rights as assignor, including enforcing arbitration)