Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_17-cv-02352/USCOURTS-casd-3_17-cv-02352-0/pdf.json

Nature of Suit Code: 480
Nature of Suit: Consumer Credit
Cause of Action: 15:1681 Fair Credit Reporting Act

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

DANIEL SALAS,

Plaintiff,

v.

UNIVERSAL CREDIT SERVICES, 

LLC; GTPD ENTERPRISES, INC.;

PRIORITY DOCUMENTS; EC 

LENDING, LLC; NEIL BILLOCK; and 

DOES 1-10,

Defendants.

Case No.: 17-CV-2352 JLS (BLM)

ORDER GRANTING MOTION TO 

COMPEL ARBITRATION

(ECF No. 15)

Presently before the Court is Defendants Universal Credit Services, LLC, GTPD 

Enterprises, Inc. (“GTPD”); Priority Documents (“Priority”); EC Lending, LLC; and Neil 

Billock’s Motion to Dismiss or Compel Arbitration. (“Mot.,” ECF No. 15.) Also before 

the Court is Plaintiff Daniel Salas’ Opposition to (“Opp’n,” ECF No. 16) and Defendants’ 

Reply in Support of (“Reply,” ECF No. 18) the Motion. After reviewing the Parties’

arguments and the law, the Court rules as follows. 

BACKGROUND

Looking to repair his credit and get help settling his debt, Plaintiff decided to enroll 

in a debt settlement and repair services program. (First Amended Complaint (“FAC”) ¶¶ 

25–27, ECF No. 12.) After receiving promotional materials in the mail, Plaintiff decided 

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to enroll in Defendant Priority’s debt settlement and repair services program, in part 

because it allegedly offered him a 100% money-back guarantee over the phone. Id. ¶¶ 25, 

32, 85. Plaintiff signed the “Priority Documents Service Agreement” on March 9, 2016. 

FAC ¶ 32; ECF No. 12-2. The only signatories to the Agreement were Priority Documents 

and Plaintiff. ECF No. 12-2.

Before he received the promotional materials and entered into the Agreement, 

Plaintiff alleges that on February 8, 2016, Defendant GTPD obtained Plaintiff’s credit 

report “without a permissible purpose” from Defendant Universal Credit Services, LLC. 

Id. ¶ 21. GTPD then allegedly passed Plaintiff’s credit report to Defendants Priority; EC 

Lending, LLC; and the owner of Priority, Neil Billock, who also “directs the operations of 

GTPD and EC Lending, LLC.” Id. ¶¶ 24–25. 

After signing the Agreement, the relationship between the parties turned south. On 

the advice of Priority, Plaintiff stopped paying his credit card accounts “to facilitate more 

advantageous settlement arrangements.” FAC ¶ 32, 33. Plaintiff made his monthly 

payments of $610.15 until, in November 2016, Plaintiff began receiving notices of suit for

collection of debt on credit accounts Plaintiff had enrolled in Priority’s program. Id. ¶¶ 33, 

39, 44. After some back and forth, Plaintiff cancelled his Priority account on December 

12, 2016. Id. ¶ 42. Thereafter, Plaintiff sought a refund of the $5,491.35 he paid to Priority; 

Priority declined to refund the money. See id. at 45–46. 

In the FAC, Plaintiff brings claims against all Defendants under the Fair Credit 

Reporting Act (“FCRA”) and the California Credit Reporting Agencies Act (“CCRAA”). 

Plaintiff also brings claims against EC Lending, Priority, and Billock under California Civil 

Code 1789.13.

1

 These claims are predicated on Defendants “impermissibly furnishing 

and/or obtaining Plaintiff’s consumer report as part of an improper venture to advertise, 

 

1 The Court notes that Plaintiff alleges violations of the Credit Repair Organizations Act (“CROA”), citing

to 15 U.S.C. 1789.13; however, the CROA is located at 15 U.S.C.A. 1679 et seq. Based on the elements 

pled in Plaintiff’s FAC, it seems that Plaintiff is actually bringing claims under California Civil Code 

section 1789.13. Under either statute, the Court’s decision remains the same. 

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promote, and operate a business of soliciting clients for debt settlement and credit repair 

services.” Id. ¶ 1. Finally, Plaintiff also brings claims for fraud and false promises against 

Priority for soliciting Plaintiff to enroll in the program and convincing him to stop paying 

his credit cards. Id. ¶¶ 1, 46. 

LEGAL STANDARD

The Federal Arbitration Act (“FAA”) governs the enforceability of arbitration 

agreements in contracts. See 9 U.S.C. §§ 1, et seq.; Gilmer v. Interstate/Johnson Lane 

Corp., 500 U.S. 20, 24–26 (1991). If a suit is proceeding in federal court, the party seeking 

arbitration may move the district court to compel the resisting party to submit to arbitration 

pursuant to their private agreement to arbitrate the dispute. 9 U.S.C. § 4. The FAA reflects 

both a “liberal federal policy favoring arbitration agreements” and the “fundamental 

principle that arbitration is a matter of contract.” AT&T Mobility LLC v. Concepcion, 563 

U.S. 333, 339 (2011) (quotations and citations omitted); see also Kilgore v. Keybank, Nat’l 

Ass’n, 718 F.3d 1052, 1057 (9th Cir. 2013) (en banc) (“The FAA was intended to 

‘overcome an anachronistic judicial hostility to agreements to arbitrate, which American 

courts had borrowed from English common law.’”) (quoting Mitsubishi Motors Corp. v. 

Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 625 n.14 (1985)); Circuit City Stores, Inc. v. 

Adams, 279 F.3d 889, 892 (9th Cir. 2002) (“The [FAA] not only placed arbitration 

agreements on equal footing with other contracts, but established a federal policy in favor 

of arbitration, [citation], and a federal common law of arbitrability which preempts state 

law disfavoring arbitration.”).

In determining whether to compel a party to arbitration, the Court may not review 

the merits of the dispute; rather, the Court’s role under the FAA is limited to “determining 

(1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement 

encompasses the dispute at issue.” Cox v. Ocean View Hotel Corp., 533 F.3d 1114, 1119 

(9th Cir. 2008). If the Court finds that the answers to those questions are yes, the Court 

must compel arbitration. See Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985). 

In determining the validity of an arbitration agreement, the Court applies state law contract 

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principles. Adams, 279 F.3d at 892; see also 9 U.S.C. § 2. To be valid, an arbitration 

agreement must be in writing, but it need not be signed by the party to whom it applies as 

acceptance may be implied in fact. Pinnacle Museum Tower Ass’n v. Pinnacle Mkt. Dev.

(US), LLC, 55 Cal. 4th 233, 236 (2012).

ANALYSIS

Defendants argue that there is a valid arbitration clause in the Agreement and, 

therefore, the Court should either (1) dismiss the claim for improper venue or lack of 

subject matter jurisdiction, or (2) compel arbitration and stay the case. Mot. at 2–5. 

Defendants further argue that the Court should not only compel arbitration of Plaintiff’s 

claims against Priority––a signatory to the agreement––but also against the remaining 

Defendants (the “Nonsignatory Defendants”), who are not signatories to the Agreement. 

Mot. at 5–7. The Court will first address whether the arbitration clause is valid and whether 

it encompasses Plaintiff’s claims against Priority and, second, whether the Court may 

compel arbitration of Plaintiff’s claims against the Nonsignatory Defendants. 

I. Claims Against Priority

Plaintiff does not dispute that a valid arbitration agreement exists. Plaintiff instead 

disagrees with Defendants “about the threshold arbitrability question––that is, whether 

their arbitration agreement applies to [this] particular dispute.” Henry Schein, Inc. v. 

Archer and White Sales, Inc., 139 S. Ct. 524, 527 (2019). This “threshold arbitrability 

question” is itself a question of contract and, therefore, the FAA “allows parties to agree 

by contract that an arbitrator, rather than a court, will resolve threshold arbitrability 

questions as well as underlying merits disputes.” Id. (citing Rent-A-Center, W., Inc. v. 

Jackson, 561 U.S. 63, 68–70 (2010); First Options of Chicago, Inc. v. Kaplan, 514 U.S. 

938, 943–944 (1995)).

The arbitration clause in the Parties’ Agreement states in relevant part that:

In the event of any controversy, claim or dispute between the 

parties arising out of or relating to this agreement or the breach, 

termination, enforcement, interpretation, conscionability or 

validity thereof, including any determination of the scope or 

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applicability of this agreement to arbitrate, shall be determined 

by arbitration in California or in the county in which the 

consumer resides in accordance with the Laws of the State of 

California for agreements to be made in and to be performed in 

California. The parties agree that the arbitration shall be 

administered by the American Arbitration Association (“AAA”) 

pursuant to its rules and procedures.

Agreement at 3, ECF No. 12-1.2 

Plaintiff argues that his claims are not arbitrable because “[t]he majority of claims 

against the [D]efendants occurred before the Agreement existed.” Opp’n at 9. Defendants 

counter that, although some conduct occurred before Plaintiff signed the Agreement, all of 

the relevant activity still arises out of and relates to the Agreement. Mot. at 4; Reply at 4. 

While it’s not immediately clear whether Priority and Plaintiff agreed to arbitrate the 

merits of Plaintiff’s causes of action, what is clear is that the Parties agreed to arbitrate any 

dispute relating to the arbitrability of those claims. In the Ninth Circuit, “incorporation of 

the AAA rules constitutes clear and unmistakable evidence that contracting parties agreed 

to arbitrate arbitrability.” Brennan v. Opus Bank, 796 F.3d 1125, 1130 (9th Cir. 2015). 

Here, the arbitration clause explicitly incorporates the AAA Rules. Agreement at 3. And 

further, the Agreement states that “any determination of the scope or applicability of this 

agreement to arbitrate, shall be determined by arbitration.” Id. The Court is convinced 

that this is clear evidence that the Parties agreed to arbitrate any threshold questions of 

arbitrability. 

Because the Parties agreed to arbitrate arbitrability, the Court has “no business” 

deciding whether the particular claims Plaintiff brings are in fact arbitrable, even if the 

 

2 Plaintiff argues in his Opposition that the Agreement, which Defendants’ attached to their Motion as an 

exhibit, is not properly before the Court because the content of the Agreement constitutes impermissible 

hearsay and Defendants have failed to put forward any evidence of trustworthiness to authenticate the 

Agreement as a business record. Opp’n at 16–17. Plaintiff attached the Agreement to his FAC, however, 

and the Court must “consider and treat as true [Plaintiff’s] factual allegations in the exhibits attached to 

[the] complaint.” Courthouse News Service v. Planet, 750 F.3d 776, 780 n.4 (9th Cir. 2014). The 

Agreement, therefore, is properly before the Court. 

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Court were to consider Defendants’ arguments for arbitration “wholly groundless.” Henry 

Schein, 139 S. Ct. at 529 (quoting AT&T Techs., Inc. v. Commc’ns Workers, 475 U.S. 643, 

650 (1986). Therefore, the Court GRANTS Defendants’ Motion to Compel Arbitration 

as it pertains to Plaintiff’s claims against Priority. Because the arbitrator may ultimately 

decide that Plaintiff’s claims are not in fact subject to arbitration, the Court STAYS those 

claims, rather than dismissing them. 

II. Claims Against the Nonsignatory Defendants

Defendants next argue that although Defendants Universal Credit Services, GTPD, 

EC Lending, and Billock did not sign the Agreement, they may still compel arbitration of 

the claims against them. 

“The United States Supreme Court has held that a litigant who is not a party to an 

arbitration agreement may invoke arbitration under the FAA if the relevant state contract 

law allows the litigant to enforce the agreement.” Kramer v. Toyota Motor Corp., 705 F.3d 

1122, 1128 (9th Cir. 2013) (citing Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 632 

(2009)). “Under California law, a party that is not otherwise subject to an arbitration 

agreement will be equitably estopped from avoiding arbitration only under two very 

specific conditions.” Murphy v. DirecTV, Inc., 724 F.3d 1218, 1229 (9th Cir. 2013). Those 

conditions are: 

(1) when a signatory must rely on the terms of the written 

agreement in asserting its claims against the nonsignatory or the 

claims are intimately founded in and intertwined with the 

underlying contract, and (2) when the signatory alleges 

substantially interdependent and concerted misconduct by the 

nonsignatory and another signatory and the allegations of 

interdependent misconduct are founded in or intimately 

connected with the obligations of the underlying agreement.

Kramer, 705 F.3d at 1128–29 (adopting the equitable estoppel rule set forth in Goldman v. 

KPMG LLP, 173 Cal. App. 4th 209, 221 (2009), as controlling statement of California 

law). 

///

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Defendants argue that under both Goldman prongs, the Court should find equitable 

estoppel should apply. Mot. at 5. Plaintiff argues that Defendants’ equitable estoppel 

argument fails because “the claims against the nonsignatories are not grounded in the 

Agreement.” Opp’n at 11. 

Considering first Plaintiff’s causes of action against Defendants EC Lending and 

Neil Billock brought under California Civil Code section 1789.13(a), the Court finds that 

Plaintiff must “rely on the terms of the written agreement in asserting [his] claims.” See 

Kramer, 705 F.3d at 1128. Plaintiff alleges numerous violations of section 1789.13, two 

of which are relevant to the present inquiry. First, Plaintiff alleges a statutory violation for

“charging or receiving consideration prior to full and complete performance.” FAC ¶ 81. 

The full statutory section states that the complete performance due is for “the services the 

credit services organization has agreed to perform for or on behalf of the buyer.” Cal. Civ. 

Code § 1789.13(a). To determine what performance Priority owed Plaintiff before 

receiving consideration, Plaintiff must rely on the Agreement’s terms. Second, Plaintiff 

alleges a statutory violation for “failing to perform the agreed services within six months.” 

FAC ¶ 81. The full statutory section states that the six-month period begins “following the 

date the buyer signs the contract for those services.” Cal. Civ. Code § 1789.13(b). To 

determine when performance was due, the date the parties entered into the Agreement must 

be determined. Under both these statutory provisions, Plaintiff must rely on the Agreement

between Priority and Plaintiff to meet the elements of the claim. Therefore, Plaintiff is 

equitably estopped from resisting arbitration of the claims brought under Cal. Civ. Code 

§ 1789.13. 

Turning to Plaintiff’s claims under the FCRA and CCRAA against the Nonsignatory 

Defendants, the Court finds that Plaintiff “alleges substantially interdependent and 

concerted misconduct by the nonsignator[ies] and [Priority] and the allegations of 

interdependent misconduct are founded in or intimately connected with the obligations of

the underlying agreement.” See Kramer, 705 F.3d at 1128. The Agreement states that 

Plaintiff “authorize[d] . . . [Priority] to obtain a copy of [Plaintiff’s] credit report(s). If 

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[Priority] obtains a copy of [Plaintiff’s] credit report, the inquiry will show up from either 

Priority or GTPD.” Agreement at 1. Plaintiff alleges that Defendants procured Plaintiff’s 

credit report and passed it from one Defendant to the next on February 8, 2016, which is 

interdependent conduct between the Parties. Although this conduct occurred before 

Plaintiff signed the Agreement, the Court finds that Plaintiff’s claims are intimately 

connected to the obligations agreed to by Priority. Priority and Plaintiff spoke about the 

services Priority would provide before finalization of the Agreement, including obtaining 

Plaintiff’s credit report, which the Agreement ultimately authorized. It is clear that all of 

the Defendants will rely on the Agreement as a defense for their actions, which makes 

Plaintiff’s claims intimately connected to the Agreement. 

The Court also finds that the relationship between the Nonsignatory Defendants and 

Priority is sufficient to compel arbitration. In California, “[a] nonsignatory to an agreement 

to arbitrate . . . may invoke arbitration against a party, if a preexisting confidential 

relationship, such as an agency relationship between the nonsignatory and one of the parties 

to the arbitration agreement, makes it equitable to impose the duty to arbitrate.” Westra v. 

Marcus & Millichap Real Estate Inv. Brokerage Co., 129 Cal. App. 4th 759, 765 (2005). 

Plaintiff’s FAC alleges preexisting relationships between all the Parties, including:

Plaintiff’s allegation that Neil Billock is the owner of Priority and the director of EC 

Lending, FAC ¶ 25; the Agreement explicitly names GTPD as a party that may obtain 

Plaintiff’s credit report, ECF 12-1 at 1; and that Universal Credit Services procured 

Plaintiff’s credit report on behalf of Defendants, see FAC ¶ 21. 

Based on the Court’s finding that Plaintiff’s claims are intertwined with the 

Agreement and an interconnected relationship between the Nonsignatory Defendants and 

Priority exists, the Court GRANTS Defendants’ Motion to Compel Arbitration as it 

pertains to Plaintiff’s claims against the Nonsignatory Defendants. As with the claims 

against Priority, the arbitrator may ultimately decide that Plaintiff’s claims are not in fact 

subject to arbitration. Therefore, the Court STAYS those claims, rather than dismissing 

them. 

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CONCLUSION

For the foregoing reasons, the Court GRANTS Defendants’ Motion and 

COMPELS arbitration of all of Plaintiff’s causes of action. As noted above, the arbitrator 

may determine that Plaintiff’s claims are not subject to the agreement to arbitrate. Thus, 

dismissal of Plaintiff’s claims is inappropriate. Accordingly, the case is STAYED pending 

the completion of arbitration proceedings, pursuant to 9 U.S.C. § 3. The parties are 

ORDERED to file a status update on arbitration proceedings every 120 days and within 

15 days of completion.

IT IS SO ORDERED.

Dated: March 18, 2019

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