Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_06-cv-01952/USCOURTS-azd-2_06-cv-01952-10/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:1692 Fair Debt Collection Act

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Pamela Balezos and Peter Balezos, et al.,

Plaintiff,

v.

Cavalry Portfolio Service, LLC, et al.,

Defendants.

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No. CV-06-1952-PHX-SMM

ORDER

 Pending before the Court is Plaintiffs’ Motion for Clarification of the Court’s Order

(Doc. 72) compelling this case into arbitration. With the Court’s permission, the Defendants

filed a Response to this Motion, and after careful consideration, the Court issues the

following ruling.

On August 27, 2007, Plaintiffs filed the current motion wherein they requested that

the Court enter an Order clarifying its Order of August 15, 2007, to note that the Order “does

not apply to Defendants Ewing & Ewing, P.C., and Nelson Ewing, II” (hereinafter referred

to collectively as Ewing Defendants). After careful consideration, the Court finds that

clarification is not necessary and all parties are subject to arbitration.

Pursuant to the Order entered August 27, 2007, the Court determined that Plaintiffs’

Discover Cardmember Agreement included a right to compel arbitration and that Defendants

did not waive their right to compel arbitration. The Court finds it necessary at this point to

turn to the relevant language of the cardmember agreement at issue:

Our rights and obligations under this arbitration provision shall inure to the

benefit of and be binding upon our parent corporations, subsidiaries, affiliates

Case 2:06-cv-01952-SMM Document 81 Filed 09/21/07 Page 1 of 3
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 1Neither case is out of Arizona or the Ninth Circuit.

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(including, without limitation, Discover Financial Services, Inc.), predecessors,

successors, assigns.. and will also inure to the benefit of any third party named

as a co-defendant with us or with any of the foregoing in a claim which is subject

to this arbitration provision. (emphasis added).

(see Motion to Compel Arbitration, p. 3, and SMF ¶6).

Based on the explicit language of the Agreement, the Ewing Defendants are subject

to the arbitration provision. The Ewing Defendants are third-parties to the cardmember

agreement and are named as co-defendants with Cavalry, a Defendant that the Court

previously unequivocally determined is subject to the arbitration agreement. Moreover,

Cavalry hired the Ewing Defendants as its attorneys to recover the Plaintiffs’ delinquent debt

through litigation; therefore, there are no separate factual allegations or distinct legal theories

alleged against the Ewing Defendants. They are being sued solely because of their actions

taken on behalf of Cavalry, as Cavalry’s agents and attorneys. 

Finally, the Court agrees with Defense counsel that neither Karnette v. Wolpoff &

Abramson, 444 F. Supp. 2d 640, 646 (E.D. Va. 2006) nor Bontempo v. Wolpoff & Abramson,

2006 WL3040905 (W.D. Penn. 2006) have either precedential1

 or persuasive value,

considering their striking factual distinctions. As correctly noted by Defense counsel, those

decisions involved an arbitration provision that contained language that limited its

application to third-parties; arbitration applied to third-parties only if the third-parties were

named as co-defendants with the original creditor. In each of those cases, the collecting law

firm was the lone defendant. This is clearly not the case here, as the agreement sub judice

contains no such limiting language. Consequently, the Court finds that, as third-parties to

the cardmember agreement and co-defendants with Cavalry, the Ewing Defendants are

subject to the arbitration provision of the cardmember agreement.

The Court does not disagree with Plaintiffs that the threshold inquiry in deciding

whether to compel arbitration is whether the parties agreed to arbitrate in the event that a

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dispute should arise. Leicht v. Bateman Eichler, Hill Richards, Inc., 848 F.2d 130, 12 (9th

Cir. 1998). Plaintiffs voluntarily entered into an agreement whereby they agreed to arbitrate

claims associated with credit card. The fact that Cavalry was forced to retain counsel to

collect Plaintiffs’ debt, and that Plaintiffs chose to file claims against said counsel as well as

Cavalry, does not alter the fact that Plaintiffs voluntarily agreed to arbitrate such matters.

Accordingly,

IT IS HEREBY ORDERED DENYING Plaintiffs’ Motion for Clarification of the

Court’s Order Compelling this Case into Arbitration (Doc. 72).

IT IS FURTHER ORDERED that the Ewing Defendants are subject to the

arbitration provision of the cardmember agreement.

DATED this 21st day of September, 2007.

Case 2:06-cv-01952-SMM Document 81 Filed 09/21/07 Page 3 of 3