IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 01-60594

AMERICAN HEALTH AND LIFE INSURANCE 

COMPANY; TRITON INSURANCE COMPANY,

 Plaintiffs - Appellees,

versus

IVA JOHNSON 

Defendant - Appellant.

 

 No. 01-60595 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE 

CO 

 Plaintiffs - Appellees 

 

 v. 

 

ELLIS B LANG 

 

 Defendant - Appellant 

 No. 01-60596 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE 

COMPANY 

 

 Plaintiffs - Appellees 

 

 v. 

 

CHARLES LAWRENCE 

 

 Defendant - Appellant
2

 No. 01-60597 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE 

COMPANY 

 Plaintiffs - Appellees 

 

 v. 

 

REGINALD V LOWERY 

 Defendant - Appellant 

 No. 01-60598 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE 

COMPANY 

 Plaintiffs - Appellees 

 

 v. 

 

ETTA MELTON 

 

 Defendant - Appellant 

 No. 01-60599 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE 

COMPANY 

 Plaintiffs - Appellees 

 

 v. 

 

HELEN MORANT 

 

 Defendant - Appellant 

 No. 01-60600 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE 

COMPANY 
3

 Plaintiffs - Appellees 

 

 v. 

 

DANIEL DAVIS 

 Defendant - Appellant 

 No. 01-60601 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE 

COMPANY 

 Plaintiffs - Appellees 

 

 v. 

 

MARILYN FARMER 

 

 Defendant - Appellant 

 No. 01-60602 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE 

COMPANY 

 Plaintiffs - Appellees 

 

 v.

 

ETHYL MAE GILL 

 

 Defendant - Appellant 

 No. 01-60603 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE 

COMPANY 

 Plaintiffs - Appellees 

 

 v. 

 
4

ZETTIE GRAHAM 

 

 Defendant - Appellant 

 No. 01-60604 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE 

COMPANY 

 Plaintiffs - Appellees 

 

 v. 

 

LAURA HAIRSTON 

 

 Defendant - Appellant 

 No. 01-60605 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE 

COMPANY 

 Plaintifffs - Appellees 

 

 v. 

 

ROBERT HALBERT 

 

 Defendant - Appellant 

 

 No. 01-60606 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE 

COMPANY 

 Plaintiffs - Appellees 

 

 v. 

 

LOUISE HARRELL 

 

 Defendant - Appellant 
5

 No. 01-60607 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE 

COMPANY 

 

 Plaintiffs - Appellees 

 

 v. 

 

TINA HART 

 Defendant - Appellant 

No. 01-60608 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE 

COMPANY 

 

 Plaintiffs - Appellees 

 

 v. 

 

DAVID HILL; GLENDA ANN HILL 

 

 Defendants - Appellants 

No. 01-60609 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE 

COMPANY 

 

 Plaintiffs - Appellees 

 v. 

 

WILLIE ARTHUR HODGES, SR; LULA D HODGES 

 

 Defendants - Appellants 

No. 01-60610 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE 

COMPANY 
6

 

 Plaintiffs - Appellees 

 

 v. 

 

VIOLET R JOHNSON 

 

 Defendant - Appellant 

No. 01-60611 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE 

COMPANY 

 Plaintiffs - Appellees 

 v. 

 

ELLSWORTH NASH 

 

 Defendant - Appellant 

 

No. 01-60612 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE 

COMPANY 

 

 Plaintiffs - Appellees 

 

 v. 

 

HOWARD PRATT 

 

 Defendant - Appellant 

No. 01-60613 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE 

COMPANY 

 

 Plaintiffs - Appellees 

 
7

 v. 

 

DELORES SANDERS 

 

 Defendant - Appellant 

No. 01-60614 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE 

COMPANY 

 

 Plaintiffs - Appellees 

 

 v. 

 

JERRY SMITH 

 

 Defendant - Appellant 

No. 01-60616 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE 

COMPANY 

 

 Plaintiffs - Appellees 

 

 v. 

 

EARNEST STALLINGS; LUTISHIA STALLINGS 

 

 Defendants - Appellants 

No. 01-60617 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE 

COMPANY 

 Plaintiffs - Appellees 

 

 v. 

 

JOE STALLINGS 

 
8

 Defendant - Appellant 

Case No. 01-60619 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE 

COMPANY 

 Plaintiffs - Appellees 

 

 v. 

 

ANGEL SYKES 

 

 Defendant - Appellant 

No. 01-60620 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE 

COMPANY 

 

 Plaintiffs - Appellees 

 

 v. 

 

TWANDA BRAZZLE 

 

 Defendant - Appellant 

No. 01-60621 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE 

COMPANY 

 

 Plaintiffs - Appellees 

 

 v. 

 

CHARLIE BREWER; IZELLA BREWER 

 

 Defendants - Appellants 

No. 01-60622 

 
9

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE 

COMPANY 

 

 Plaintiffs - Appellees 

 

 v. 

MICHAEL W BROWN 

 

 Defendant - Appellant 

 No. 01-60623 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE

COMPANY 

 

 Plaintiffs - Appellees 

 

 v. 

 

ARGAIL CARTER 

 

 Defendant - Appellant 

No. 01-60624 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE

COMPANY 

 Plaintiffs - Appellees 

 

 v. 

 

VELMA CLARK 

 

 Defendant - Appellant 

No. 01-60625 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE

COMPANY 

 
10

 Plaintiffs - Appellees 

 

 v. 

 

GLORIA COTTON 

 

 Defendant - Appellant 

No. 01-60626 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE

COMPANY 

 

 Plaintiffs - Appellees 

 

 v. 

 

LINDA TAYLOR 

 

 Defendant - Appellant 

No. 01-60627 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE

COMPANY 

 

 Plaintiffs - Appellees 

 

 v. 

 

TRAVIS WILKINS; LOUISE WILKINS 

 Defendants - Appellants 

No. 01-60628 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE 

COMPANY 

 
11

 Plaintiffs - Appellees 

 

 v. 

 

REGINALD WHITE; TYREE WHITE 

 

 Defendants - Appellants 

No. 01-60629 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE 

COMPANY 

 

 Plaintiffs - Appellees 

 v. 

 

HENRY YOUNG; ANNIE YOUNG 

 

 Defendants - Appellants 

No. 01-60630 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE 

COMPANY 

 

 Plaintiffs - Appellees 

 

 v. 

 

RICHARD SMITH 

 

 Defendant - Appellant 

No. 01-60631 

 

AMERICAN HEALTH AND LIFE INSURANCE COMPANY; TRITON INSURANCE

COMPANY 

 
* Pursuant to 5th CIR. R. 47.5, the court has determined that this opinion should not be published and is not

precedent except under the limited circumstances set forth in 5th CIR. R. 47.5.4.

12

 Plaintiffs - Appellees 

 

 v. 

 

B J HARVEY; LOUISE HARVEY 

 

 Defendants - Appellants 

 

 

 

 

 

Appeals from the United States District Court

for the Northern District of Mississippi

(1:01-CV-110)

June 7, 2002

Before DAVIS, EMILIO M. GARZA, and STEWART, Circuit Judges.

PER CURIAM:*

Iva Johnson (“Johnson”) appeals the district court’s order referring the above case to

arbitration pursuant to the FederalArbitrationAct (“FAA”). For the reasons stated herein, we affirm.

FACTUAL AND PROCEDURAL HISTORY

This case involves the sale of credit-related insurance to Iva Johnson and several other

similarly situated individuals(collectively the “Defendants”). The Defendants obtained one or more

consumer loans from CitiFinancial, Inc. (“CFI”) at CFI’s Mississippi offices in Columbus,

Greenwood, Starkville, or Tupelo. As a prerequisite for receiving the loans, the Defendants were
13

required to purchase credit-related insurance. The purpose of credit-related insurance is to provide

security for the repayment of a loan, in the event that the borrower is disabled or injured, or collateral

isimpaired. CFI gave the Defendants the option of purchasing their insurance from either American

Health and Life Insurance Company (“American”) or Triton Insurance Company (“Triton”).

American and Triton are wholly owned subsidiaries of CFI. In connection with the loan, the

Defendants signed a document entitled “Disclosure Statement, Note and Security Agreement”

(“Agreement”), which essentially constituted the loan contract. The Agreement contained a

mandatory arbitration provision, requiring that all claims or disputes in connection with the loan

transaction be submitted to binding arbitration. Despite this provision, the Defendants independently

filed suit in state court against American, Triton, and employees of CFI (the “Plaintiffs”) alleging

fraud, negligent misrepresentation, breach of fiduciary duty, and negligence in relationship to the

consumer loan transactions. 

Shortly thereafter, the Plaintiffs filed an action in federal district court seeking to compel

arbitration. They alleged that, in connection with the loan, the Defendants signed a contract

containing a mandatory arbitration clause, and thus, arbitration was required pursuant to the FAA.

The Defendants filed motions to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil

Procedure, asserting that Mississippi law forbids arbitration clausesin insurance policies. In support

of their contention, the Defendants submitted an affidavit from the Mississippi Insurance

Commissioner, and an opinion from the State Attorney General. By written order, the district court

denied the Defendants’ motions to dismiss, finding that the Defendants submitted evidentiary

materialsthat were outside of the pleading, and therefore could not have been considered in deciding

a 12(b)(6) motion to dismiss. Considering only the pleadings, the court found that the Defendants
14

failed to allege any set of facts that would entitle them to the relief they sought. Subsequently, the

Plaintiffs filed a motion for summary judgment. After evaluating all of the summary judgment

evidence, the district court granted their motion and ordered arbitration. The Defendants each timely

appealed to this Court. All of the Defendants’ independent actions were consolidated for purposes

of appeal.

STANDARD OF REVIEW

We review de novo a district court’s ruling on a motion to dismiss pursuant to Rule 12(b)(6)

of the Federal Rules of Civil Procedure. Shipp v. McMahon, 234 F.3d 907, 911 (5th Cir. 2000).

This motion examinesthe legalsufficiency ofthe claimsstated in the complaint and must be evaluated

solely on the pleadings. Jackson v. Procunier, 789 F.2d 307, 309 (5th Cir. 1986). A district court’s

grant ofsummary judgment is also reviewed de novo. ExxonCorp. v. BatonRouge Oil, 77 F.3d 850,

853 (5th Cir. 1996). Once a properly supported motion for summary judgment is presented, t he

burden shiftsto the non-moving party to set forth facts showing that there is a genuine issue for trial.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986); Bros. v. Klevenhagen, 28 F.3d 452, 455

(5th Cir. 1994). We review “the facts drawing all inferences most favorable to the party opposing

the motion.” Matagorda County v. Russell Law, 19 F.3d 215, 217 (5th Cir. 1994). Therefore, the

entry of summary judgment is appropriate if “there is no genuine issue as to any material fact” and

“the moving party is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(c); Rojas v. TK

Comms., Inc., 87 F.3d 745, 747 (5th Cir. 1996).

DISCUSSION

In enacting the FAA, Congress expressed a strong national policy favoring arbitration and

removed the states’ power to require judicial proceedings for the resolution of claims which the
15

parties contracted to resolve by arbitration. Southland Corp. v. Keating, 465 U.S. 1, 10 (1984).

Under the Act, a written provision, in a contract that evidences a transaction involving commerce,

to settle byarbitration a controversyarising out ofsuch contract is valid, irrevocable, and enforceable.

9 U.S.C. § 2 (1999). Whenever the scope of an arbitration clause is in question, the court should

construe the clause in favor of arbitration. Rojas , 87 F.3d at 747. If the issues in the case are within

the contemplation of the arbitration agreement, the FAA's stay-of-litigation provision is mandatory,

and there is no discretion vested in the district court to deny the stay. In re Complaint of Hornbeck

Offshore Corp., 981 F.2d 752, 754 (5th Cir. 1993). 

This Circuit has directed that district courts are to conduct a two-step inquiry when

determining whether parties’ claims should be submitted to arbitration. R.M. Perez & Assocs., Inc.

v. Welch, 960 F.2d 534, 538 (5th Cir. 1992). First, the district court must determine whether the

parties had a written agreement to arbitrate the dispute. Id. After the court concludes that the parties

agreed to arbitrate, “it must consider whether any federal statute or policy renders the claims

nonarbitrable.” Id. In the present case, the parties do not dispute that the Agreement contains the

following mandatory arbitration provision:

Any claim, except those specified below in this provision,shall be resolved by binding

arbitration in accordance with (i) the Federal Arbitration Act; (ii) the Expedited

Procedures of the Commercial Arbitration Act; and (iii) this Provision.

The Agreement defines a “claim” as 

[A]ny case, controversy, dispute, tort, disagreement, lawsuit, or claim now or

hereafter existing between You and Us. A Claim includes, without limitation,

anything that concerns . . . any past, present, or future Credit Transactions. . .

Examples of claims that are governed by this Agreement include those involving:

State insurance, usury, and lending laws, fraud or misrepresentation, including claims

for failing to disclose material facts. 
2Mississippi law requires that “All policies, certificates of insurance, notices of proposed

insurance, applicationsfor insurance, endorsements and riders delivered or issued for delivery in this

state, and the schedules of premium rates pertaining thereto, shall be filed with the commissioner for

his approval prior to use.” MISS. CODE ANN. § 83-53-15 (1999).

16

The Agreement also states that the term “US” as used in the arbitration provision includes not only

the lender, but also the lender’s present and former parent corporations, subsidiary and affiliate

corporations, as well as any employees of these entities. Id. at 4 (emphasis added). The Plaintiffs

clearly fall within one or more of these categories. Thus, they are specifically covered by the

arbitration clause. 

Applying the two-prong test set out in R.M. Perez, the district court determined that the

written arbitration clause was “unambiguous, sufficiently broad to cover the Defendant[s]’ claims,

and susceptible to only one interpretation - that the partiesintended to settle, through arbitration, the

claims the Defendant[s] [had] raised.” As for the second prong, the court found that there were no

federal statutes or policies rendering the claims raised in the complaint “nonarbitrable.” Id. Thus,

the court ordered arbitration. 

As an initial matter, we find that the district court properly found that the two-prong test for

determining whether the parties agreed to binding arbitration was met, and the Defendants do not

challenge this conclusion on appeal. Instead, they maintain that the entire loan agreement is invalid

because the Plaintiffsfailed to submit their policyformsto the MississippiCommissioner ofInsurance

for approval asrequired byMississippilaw.2 This contention must fail because it ignores the fact that

the arbitration clause was in the loan agreement and not the insurance policy itself. Therefore,

Mississippi law applicable to the business of insurance is not at issue here, and there is no law in

Mississippi requiring that loan contracts must be presented to the Commissioner of Insurance for
3The Defendants also allege that in their motion to dismiss, they argued that the application

ofthe FAAto this case is prohibited bythe McCarran-FergusonAct, which generallyprohibitsfederal

interference in the state regulation of insurance. The record reveals, however, that the Defendants

did not raise thisissue in their motion to dismiss asthey contend. Because this preemption argument

is raised for the first time on appeal, we would generally review it only for plain error. Forbush v.

J.C. Penney Co., 98 F.3d 817, 822 (5th Cir. 1996). However, because we find that the disposition

of this case does not depend on the application of state insurance law, we do not address this

argument.

17

approval. See e.g. Federal Trade Comm’n v. Dixie Fin. Co., 695 F.2d 926, 931(5th Cir. 1983)

(holding that the wrongful sale of credit insurance during a loan transaction does not involve the

business of insurance). Because we find that the loan contract was valid, and that the two-prong test

set out in R.M. Perez was met, we conclude that the district court properly ordered mandatory

arbitration pursuant to the FAA. 3 Since we are affirming the district court’s decision, the

Defendants’ motion to supplement the record is denied.

CONCLUSION

For the reasons stated above, we AFFIRM.

AFFIRMED.