~

No. 01 C 9450 . Page3

those claims. It seeks to arbitrate a different and clearly arbitrable claim with different rights
and remedies, in which BOW alleges that it can prosecute RVR’s right to enforce the servicing
agreement against the other signatory and collect damages. And CAC sought arbitration and
the stay shortly after BOW first made the claim. CAC has not waived its right to have the

claim arbitrated. The motion is granted.

A ineo®. Meo

JAMES B. MORAN
jior Judge, U. S. District Court

Fak, 13, 2003.



ox_Minute Ojuleg Form (06/97) ( a)

United States District Court, Northern District of Hinois

Ns f Assigned Jud; Sitth iO
nye Magistrate Judge James B. Moran than Assigned Fudge
CASE NUMBER 01 C 9450 DATE 2/13/2003
CASE Automotive Finance Corp. Vs. RVR Used Cars, Inc. et al.
TITLE
[In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
MOTION: of the motion being presented.]
Memorandum Opinion and Order
DOCKET ENTRY:

(1) o Filed motion of [ use listing in “Motion” box above.]

(2) Oo Brief in support of motion due

(3) a Answer brief to motion due___. Reply to answer briefdue___

(4) Oo Ruling/Hearingon___ssetfor___—_at

(5) Oo Status hearing[held/continued to] [set for/re-set for]on__—setfor__—_at

(6) Oo Pretrial conference[held/continued to] [set for/re-set for]on__—ssetfor__——sat_—
(7) oO Trial[set for/re-set for] on__at

(8) a [Bench/Jury trial] [Hearing] held/continuedto__at

(9) oO This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

OFRCP4(m) OLocal Rule 41.1 OFRCP41(a)(1) OO FRCP41{a)(2).

(0) «=x [Other docket entry] Enter Memorandum Opinion and Order. Credit Acceptance Corporation’s
motion to compel arbitration and stay proceedings is granted.

(il) {For further detail see order attached to the original minute order.]

‘No notices required, advised in open court.
No notices required. -_
Notices mailed by judge’s staff
Notified counsel by telephone. FEB 1.8 2003
wv | Docketing to mail notices. DO i
Mail AO 450 form. dockel initials
Copy to judge/magistrate judge. u
date mailed notice
courtroom
WAH deputy’s '
initials pete r
U Dateltiine reséived in ;
central Clerk's Office mailing deputy initials



IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

AUTOMOTIVE FINANCE CORPORATION,

Plaintiff,

)
)
)
)
vs. ) No. 01€ 9450
)
RVR USED CARS, INC,, et al, )

)

)

Defendants.

CREDIT ACCEPTANCE CORPORATION, D »,
Counterclaim and OG rr F15))
Cross-Claim Plaintiff, y

FEB 1g 2003

vs.

RVR USED CARS, INC.,, et al.,
Counterclaim and
Cross-Claim Defendants.

were rere wre

BANK OF WAUKEGAN,
Counterclaim and
Cross-Claim Plaintiff,

YS.

wwe ewe Sw

CREDIT ACCEPTANCE CORPORATION,
et al,
Counterclaim and
Cross-Claim Defendants. )

~

MEMORANDUM OPINION AND ORDER
An automobile dealership fell on evil times, and various creditors seek to be first in line.
Bank of Waukegan (BOW) is one of the creditors. Another of the creditors, Credit Acceptance
Corporation (CAC), had a servicing agreement with the dealership, RVR Used Cars, Inc. That

agreement has a broad arbitration clause providing for the arbitration of any dispute relating

cx


~~

~

No. 61 C 9450 Page 2

to the agreement or the relationship between CAC and RVR. In the welter of claims,
counterclaims and cross-claims, BOW, on April 2, 2002, sought from CAC and a third creditor
a declaratory judgment that its security interest had first priority, including a claim in count
III that CAC knew RVR had assigned its rights under the servicing agreement to BOW and
did not advise BOW that it was going to apply collections under the servicing agreement to pay
RVR’s floor plan obligations to CAC. BOW claims that estoppel and waiver preclude CAC

from applying those collections to the floor plan obligations.

On November 26, 2002, BOW added a claim, this one alleging that CAC was in breach
of the servicing agreement by various failures to collect amounts due on installment contracts
and that it stood in the shoes of CAC in seeking damages for those breaches. CAC then
advised BOW that it would seek arbitration of that claim and it shortly thereafter filed a
motion to that effect and also to stay proceedings on the other BOW claims, pending
arbitration. BOW does not contend that the breach claims are, on their face, not arbitrable,
nor does it contest that if any of the claims go to arbitration then proceedings on the others
must be stayed. Rather, it contends that CAC waived any right to seek arbitration by waiting
too long after it first advanced claims in February.

A party can waive a right to arbitration because of excessive delay. Perhaps CAC had,
originally, a right to arbitrate count III, although it appears that BOW is resting not so much
on any rights accorded it under the servicing agreement but, rather, on a failure to advise
BOW that it could not expect to receive funds, thus causing it to advance additional funds.
Perhaps there was a right to arbitrate count IV, although the thrust there is that CAC did not

have rights under the servicing agreements it now claims. But CAC does not seek to arbitrate