Opinion ID: 68520
Heading Depth: 2
Heading Rank: 2

Heading: Motion to Dismiss and/or Compel Arbitration

Text: Countrywide and Full Spectrum moved to dismiss the federal complaint for lack of subject matter jurisdiction under the Rooker-Feldman doctrine. Alternatively, the defendants argued that the district court should order Mr. Madura to arbitrate his claims pursuant to the arbitration agreement in the loan documents. Mr. Madura opposed arbitration, arguing that he was not bound by the arbitration agreement. Mr. Madura’s argument hinged on the theory that there were two contracts. The “first contract” consisted of the loan documents he signed prior to and during the closing, and the “second contract” consisted of the documents with the prepayment penalty allegedly forged after the closing. Although somewhat difficult to follow, it appears Mr. Madura argued that the arbitration agreement he admittedly signed related to only the “first contract” and not the “second contract.” Thus, according to Mr. Madura, he could not be forced to arbitrate his claims relating to this “second contract.” As to their Rooker-Feldman argument, the defendants submitted documents from the state court action indicating that the state court: (1) found that Mr. 6 Madura’s claims were subject to the arbitration agreement; and (2) granted summary judgment to Countrywide and Full Spectrum on Mrs. Madura’s claims. The state court found that: (1) Mrs. Madura’s TILA claims were barred by the oneyear statute of limitations in 15 U.S.C. § 1640(e); (2) Mrs. Madura was not a “borrower” under the loan agreement and, thus, did not have standing to bring a usury claim; and (3) Mrs. Madura could not show damages for her fraud claims because it was undisputed that the defendants had waived the prepayment penalty.2 In this federal action, a magistrate judge issued a report (“R&R”) recommending that the district court deny the defendants’ motion to dismiss for lack of subject matter jurisdiction, but grant the defendants’ motion to compel Mr. Madura to arbitrate his claims. The R&R concluded that Mr. Madura was bound by the arbitration agreement, which he did not dispute he had signed, and that the arbitration agreement covered all of his claims. Over Mr. Madura’s objections, the district court adopted the R&R, compelled Mr. Madura to arbitrate his claims, and dismissed his claims in favor of arbitration. In doing so, the district court rejected Mr. Madura’s two-contract theory and found that all of Mr. Madura’s claims arose out of the single loan transaction and were encompassed by the arbitration 2 The Florida Second District Court of Appeal affirmed the arbitration and summary judgment rulings. The United States Supreme Court denied Mr. Madura’s subsequent petition for a writ of certiorari. 7 agreement.