UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

JAMES CROSBY,

Plaintiff,

Case No. 15-10786

v.

Hon. John Corbett O’Meara

CREDIT ACCEPTANCE CORP.,

Defendant.

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ORDER DENYING DEFENDANT’S

MOTION TO COMPEL ARBITRATION

Before the court is Defendant Credit Acceptance Corporation’s motion to

compel arbitration, which has been fully briefed. For the reasons explained below,

Defendant’s motion is denied.

BACKGROUND FACTS

Plaintiff James Crosby contends that Defendant Credit Acceptance

Corporation violated the Fair Credit Reporting Act by reporting and failing to

request the removal of certain information from his credit report. Plaintiff claims

that he is a victim of identity theft and that the debt reported – for the purchase of a

Chrysler PT Cruiser – did not belong to him. 

Credit Acceptance Corporation (“CAC”) states that Plaintiff purchased a

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used vehicle in March 2012 from Monarch Car Corporation in Detroit, Michigan. 

According to CAC, Plaintiff signed a retail installment contract, which contained

an arbitration clause. CAC contends that Plaintiff made 25 of the 42 payments

under the contract before defaulting. The default was reported on Plaintiff’s credit

report. Based upon the arbitration clause in the installment contract, CAC argues

that this matter must proceed to arbitration.

Plaintiff disputes the debt and contends that he never signed the retail

installment contract, has never done business with Monarch Car Corporation or

Credit Acceptance Corporation, has never purchased a Chrysler PT Cruiser, and

never made the payments on the vehicle. See Pl.’s Ex. A (Affidavit of James

Crosby). 

LAW AND ANALYSIS

Under the Federal Arbitration Act, a written agreement to arbitrate disputes

arising out of a transaction in interstate commerce “shall be valid, irrevocable, and

enforceable, save upon such grounds as exist at law or in equity for the revocation

of any contract.” 9 U.S.C. § 2. “Before compelling an unwilling party to arbitrate,

the court must engage in a limited review to determine whether the dispute is

arbitrable; meaning that a valid agreement to arbitrate exists between the parties

and that the specific dispute falls within the substantive scope of that agreement.” 

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Javitch v. First Union Sec., Inc., 315 F.3d 619, 624 (6th Cir. 2003). 

Here, the parties dispute whether a valid agreement to arbitrate exists. “In

order to show that the validity of the agreement is ‘in issue,’ the party opposing

arbitration must show a genuine issue of material fact as to the validity of the

agreement to arbitrate.” Great Earth Cos., Inc. v. Simons, 288 F.3d 878, 889 (6th

Cir. 2002). This showing “mirrors that required to withstand summary judgment

in a civil suit.” Id. Accordingly, the court views “all facts and inferences drawn

therefrom in the light most favorable” to the nonmoving party and determines

“whether the evidence presented is such that a reasonable finder of fact could

conclude that no valid agreement to arbitrate exists.” Id. 

Plaintiff has presented evidence, in the form of a sworn affidavit, that he was

the victim of identity theft and did not sign the retail installment contract

containing the arbitration clause. Although Defendant suggests that Plaintiff’s

statement is not credible, the court must view the evidence in the light most

favorable to Plaintiff. Plaintiff contends that he did not sign the agreement, and it

“is firmly established that an arbitration clause obtained by forgery is not valid.” 

Fazio v. Lehman Bros. Inc., 340 F.3d 386, 397 (6th Cir. 2001). Because a

reasonable finder of fact could conclude that no valid arbitration agreement exists,

the court will deny Defendant’s motion at this time. A final determination on

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Defendant’s motion requires a trial on the issue of the validity of the agreement. 

See 9 U.S.C. § 4; Great Earth, 288 F.3d at 889 (“If the validity of the agreement to

arbitrate is ‘in issue,’ the court must proceed to a trial to resolve the question.”);

Chastain v. Robinson-Humphrey Co., Inc., 957 F.2d 851, 856 (11th Cir. 1992)

(directing district court to proceed to trial pursuant to 9 U.S.C. § 4 on whether

parties are bound by agreement to arbitrate).

ORDER

IT IS HEREBY ORDERED that Defendant’s motion to compel arbitration is

DENIED.

s/John Corbett O’Meara 

United States District Judge

Date: July 10, 2015

I hereby certify that a copy of the foregoing document was served upon

counsel of record on this date, July 10, 2015, using the ECF system.

s/William Barkholz 

Case Manager

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