UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

DEBORAH L. LEGGETT §

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Plaintiff, §

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v. § NO. 3:05-CV-1959-L

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AMERICA’S SERVICING CO., §

et al., §

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Defendants. §

FINDINGS, CONCLUSIONS, AND RECOMMENDATION 

OF THE UNITED STATES MAGISTRATE JUDGE

Pursuant to the provisions of 28 U.S.C. § 636(b) and the order of the District Court filed

on May 30, 2007, Defendant MHI Partnership LTD’s Motion to Compel Arbitration and Stay

Proceedings has been referred to the United States Magistrate Judge. The findings, conclusions,

and recommendations of the Magistrate Judge, as evidenced by his signature thereto, are as

follows: 

Type of Case: This is a breach of contract and wrongful foreclosure action brought under the

Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2601 et seq., the Truth in

Lending Act (“TILA”), 15 U.S.C. § 1601 et seq., the Fair Debt Collection Practices Act

(“FDCPA”), 15 U.S.C. § 1692 et seq., the Texas Deceptive Trade Practices Act (“DTPA”), Tex. 

Bus. & Com. Code Ann. § 1701 et seq., and the Texas Debt Collection Act (“TDCA”), Tex. Fin. 

Code § 392.001 et seq.

Parties: Plaintiff is a citizen of Texas. Defendant MHI Partnership, Ltd. (“MHI”) is a

homebuilder that constructs homes in the greater Austin, Dallas, Houston and San Antonio

markets of Texas.
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Statement of the Case: On November 21, 2002, Plaintiff and Defendant MHI entered into a

Residential Earnest Money Contract (“Contract”) for the purchase and sale of the real property

and improvements commonly known as Lot 1, Block 1, Lowe’s Farm, Phase 1, an Addition to

the City of Mansfield, Tarrant County, Texas, more commonly known as 4122 Orchid Lane,

Mansfield, Texas 76063 (“the Property”). (Def. MHI’s Mot. to Compel Arbitration and Stay

Proceedings 2.) On November 27, 2002, Plaintiff executed a promissory note to Defendant Loan

Partners Mortgage, Ltd. (“Loan Partners”) and a deed of trust securing such note to Ron

Harpole, Trustee, which covered the aforementioned property. (First Am. Compl. 5.) Plaintiff

alleges that documents provided by Defendant Loan Partners, including Good Faith Estimates

(“GFEs”) and a Truth-in-Lending Disclosure Statement and Settlement Agreement (“HUD-1"),

failed in one or more material respects to disclose to Plaintiff the true nature and cost of the loan. 

(First Am. Compl. 5.) Plaintiff further alleges that Defendant MHI, through its agent Amico

Rizzuto, “created” the transaction between Defendant Loan Partners and Plaintiff by making

“virtually all” contacts between the parties and by handling application and documentation

paperwork on behalf of Defendant Loan Partners. (First Am. Compl. 5-6.) 

On October 4, 2005, Plaintiff filed her federal complaint which included a request for

injunctive relief in the form of a temporary restraining order (“TRO”) blocking any of the named

Defendants from directing or assisting any trustee in conducting a foreclosure sale on the

Property. The court denied Plaintiff’s ex parte request for a TRO on the same day. Plaintiff

filed a first amended complaint on March 27, 2007. On April 20, 2007, Defendant MHI filed an

answer which expressly reserved its right to arbitration and on May 29, 2007, Defendant MHI

filed the motion presently at issue. As of the filing of this report and recommendation, Plaintiff
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has not filed a response.

Findings and Conclusions: Defendant MHI argues that the judicial proceedings should be stayed

and arbitration compelled because Plaintiff knowingly and voluntarily executed the contract on

November 21, 2004, wherein she agreed to arbitrate all of the claims she now asserts against

Defendant MHI. The arbitration clause, provides as follows:

[a]ny controversy arising out of or relating directly or indirectly to this Contract or the

purchase, construction or repair of the home which is the subject of this Contract and/or

the Property, including any and all Claims against Seller and/or Seller’s agents, partners,

shareholders, officers, directors and employees, shall be settled by arbitration under the

Federal Arbitration Act... 

(Holan Aff. Ex. 1 at 5.)

The Federal Arbitration Act (“FAA”) was enacted in 1925 with the intent to “reverse the

longstanding judicial hostility to arbitration agreements that had existed at English common law

and had been adopted by American courts, and to place arbitration agreements upon the same

footing as other contracts.” E.E.O.C. v. Waffle House, Inc., 534 U.S. 279, 288-289, 122 S. Ct.

754, 761 (2002) (citation omitted). The FAA provides:

If any suit or proceeding be brought in any of the courts of the United States upon any

issue referable to arbitration under an agreement in writing for such arbitration, the court

in which such suit is pending, upon being satisfied that the issue involved in such suit or

proceeding is referable to arbitration under such an agreement, shall on application of one

of the parties stay the trial of the action until such arbitration has been had in accordance

with the terms of the agreement, providing the applicant for the stay is not in default in

proceeding with such arbitration.

9 U.S.C. § 3.

The Act covers the contract at issue in this case, but governs only if the court determines that: (1)

the parties agreed to arbitrate the dispute in question and (2) there exist no legal constraints

external to the parties’ agreement that foreclose arbitration of the claims at issue. Tittle v. Enron
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Corp., 463 F.3d 410, 418 (5th Cir. 2006) (citations omitted). A court may find that parties

agreed to arbitrate a dispute only where: (1) there is a valid agreement to arbitrate and (2) the

dispute falls within the scope of the agreement. Am. Heritage Life Insurance Co. v. Lang, 321

F.3d 533, 537 (5th Cir. 2003) (citation omitted). Where, as here, the contract contains an

arbitration clause, there is a “presumption of arbitrability” such that “ambiguities ... [are]

resolved in favor of arbitration. ” Tittle, 463 F.3d at 418. Furthermore, the Fifth Circuit has held

that where an arbitration clause is written in “broad” form, the parties to the contract “intended

the clause to reach all aspects of the parties’ relationship.” Neal v. Hardee's Food Systems, Inc.,

918 F.2d 34, 38 (5th Cir. 1990); see also Ford Motor Co. v. Ables, 207 Fed. Appx. 443, 446-447,

2006 WL 3431602, at *3 (5th Cir. 2006) (“An arbitration provision, such as the one here, that

purports to cover all disputes ‘related to’ the contract or any resulting transaction or relationship

is ‘not limited to claims that literally ‘arise under the contract.’ Rather, ‘[w]ith such a broad

arbitration clause, it is only necessary that the dispute ‘touch’ matters covered by the [contract]

to be arbitrable’”) (quoting Pennzoil Exploration & Prod. Co. v. Ramco Energy Ltd., 139 F.3d

1061, 1067-68 (5th Cir. 1998)).

The undersigned finds that Plaintiff and Defendant MHI agreed to arbitrate all claims

asserted by Plaintiff against Defendant MHI in this lawsuit. Defendant included a copy of the

signed contract in its appendix. Clause 22 of the contract expressly provides for arbitration of 

“[a]ny controversy arising out of or relating directly or indirectly to this Contract or the

purchase, construction or repair of the home which is the subject of this Contract and/or the

Property, including any and all claims against Seller and/or Seller’s agents, partners,

shareholders, officers, directors and employees.” Plaintiff’s allegation against Defendant
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 While an argument might be made that judicial proceedings related to Plaintiff’s claims

against some or all of the remaining defendants should also be stayed in favor of arbitration as

the arbitration clause at issue refers to “all claims against Seller and/or Seller’s agent’s, partners,

shareholders, officers, directors and employees,” see Waste Management, Inc. v. Residuos

Industriales Multiquim, S.A. de C.V., 372 F.3d 339, 342 (5th Cir. 2004), none of the remaining

defendants has moved for such a stay. Therefore the undersigned’s recommendation relates only

to Plaintiff’s claims against Defendant MHI. 

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MHI–namely that MHI, through its agent Amico Rizzuto, “created” the transaction between

Defendant Loan Partners and Plaintiff and thus was party to the transaction–relates to the

contract. Financing was expressly considered in the contract as it specifically states that it is

“subject to Buyer approval of a loan.” (Holan Aff. Ex. 1 at 3.) 

Likewise, because Plaintiff failed to file a response, she has not met her burden to

demonstrate the existence of legal constraints external to the parties’ agreement that foreclose

arbitration of the claims at issue. Therefore, Defendant MHI’s Motion to Compel Arbitration

and Stay Proceedings should be granted.1

RECOMMENDATION: 
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For the forgoing reasons, it is recommended that the District Court enter its order

GRANTING Defendant MHI’s Motion to Compel Arbitration and Stay Proceedings. A copy of

this recommendation shall be transmitted to counsel for the parties.

Signed this 1st day of August, 2007.

_________________________

 Wm. F. Sanderson Jr.

UNITED STATES MAGISTRATE JUDGE

NOTICE

In the event that you wish to object to this recommendation, you are hereby notified that

you must file your written objections within ten (10) days after being served with a copy of this

recommendation. Pursuant to Douglass v. United Servs. Auto Ass’n, 79 F.3d 1415 (5th Cir.

1996)(en banc), a party=s failure to file written objections to these proposed findings of fact and

conclusions of law within such ten (10) day period may bar a de novo determination by the

district judge of any finding of fact and conclusion of law and shall bar such party, except upon

grounds of plain error, from attacking on appeal the unobjected to proposed findings of fact and

conclusions of law accepted by the district court.