Court Opinion

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Opinions of the United
2006 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

1-10-2006

In Re: Mintze
Precedential or Non-Precedential: Precedential

Docket No. 03-4745

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                              PRECEDENTIAL
      UNITED STATES COURT OF APPEALS
           FOR THE THIRD CIRCUIT

                    No. 03-4745

          IN RE: ETHEL MARIE MINTZE,

                            Debtor

             ETHEL MARIE MINTZE
                      v.

AMERICAN GENERAL FINANCIAL SERVICES, INC.,
   f/k/a AMERICAN GENERAL FINANCE, INC.;
AMERICAN GENERAL CONSUMER DISCOUNT CO.,
          collectively, "American General",

                             Appellants

           EDWARD SPARKMAN, ESQ.;
            FREDERIC J. BAKER, ESQ.,
                         Trustees

     Appeal from the United States District Court
        for the Eastern District of Pennsylvania
                (D.C. No. 03-cv-02113 )
    District Judge: Honorable Mary A. McLaughlin
                  Argued January 10, 2005

  BEFORE: ROTH and CHERTOFF*, Circuit Judges, and
             RESTANI**, Chief Judge

                  (Filed: January 10, 2006)

    *This case was submitted to the panel of Judges Roth,
Chertoff and Restani. Judge Chertoff resigned after
submission, but before the filing of the opinion. The decision
is filed by a quorum of the panel. 28 U.S.C. § 46(d).
    **Honorable Jane A. Restani, Chief Judge, United States
Court of International Trade, sitting by designation.

Henry F. Reichner, Esquire (Argued)
Charles L. Becker, Esquire
Reed Smith, LLP
2500 One Liberty Place
1650 Market Street
Philadelphia, PA 19103

                    Counsel for Appellants

Irv Ackelsberg, Esquire (Argued)
Community legal Services, Inc.
3638 N. Broad Street
Philadelphia, PA 19140

Paul Bland, Esquire
Trial Lawyers for Public Justice
1717 Massachusetts Avenue. NW

                              -2-
Suite 800
Washington, D.C. 20036

                     Counsel for Appellee

                 OPINION OF THE COURT

ROTH, Circuit Judge

       In this appeal, we are asked to determine whether the

Bankruptcy Court’s decision to deny enforcement of an

otherwise applicable arbitration clause was proper.

       Ethel M. Mintze and American General Consumer

Discount Company entered into a loan agreement. Mintze

subsequently filed a voluntary Chapter 13 bankruptcy petition.

After American General filed a proof of claim, Mintze filed a

complaint in the Bankruptcy Court seeking, inter alia, to

enforce a pre-petition rescission of the loan agreement.

American General Consumer Discount Company and its

                              -3-
parent company, American General Financial Services,

(collectively “AGF”) then filed a Motion to Compel

Arbitration, which the Bankruptcy Court denied. AGF claims

that the Bankruptcy Court did not have the discretion to deny

enforcement of the arbitration agreement.

       Based on the provisions of the Federal Arbitration Act

of 1947, 9 U.S.C. § 1-14, (FAA) and Mintze’s failure to

establish that Congress intended to preclude waiver of judicial

remedies for her claims, we hold that the Bankruptcy Court

lacked the authority and discretion to deny enforcement of the

arbitration provision. We reverse the District Court Order

affirming the Bankruptcy Court’s decision, and we remand

the case to the District Court to remand it to the Bankruptcy

Court with instructions to order the parties to engage in

arbitration in accordance with the terms of the arbitration

provision.

                              -4-
                               I.

       Ethel M. Mintze is a retired and disabled homeowner.

She lives with her children in a row house in Philadelphia.

Late in the year 2000, she had to replace the heater in her

home. The cost of a new heater was $3800. Unfortunately,

Mintze could not afford it. A&M Heating, a heating

contractor, referred Mintze to AGF. On October 20, 2000,

Mintze and AGF entered a loan agreement, whereby AGF

loaned Mintze the money to purchase a new heater in

exchange for Mintze consolidating that loan and other debt,

including her mortgage, into a home equity loan with AGF.

       The principle balance of this agreement was

$44,716.34, and consisted of her mortgage ($25,602.55); the

balance of her credit card debt ($10,463.51); the cost of the

new heater (about $3800); settlement charges ($2821); and

premiums for two life insurance policies ($1629 in a credit

                              -5-
life insurance policy,1 and $400 in a term life insurance

policy). The terms of the loan agreement were payments of

$551.13 per month over fifteen years at an annual percentage

rate of 13.44%. The loan agreement also contained a demand

clause and an arbitration clause. The demand clause allowed

AGF to accelerate the loan after five years. The arbitration

clause stated that “all claims and disputes arising out of, in

connection with, or relating to [the] loan” must “be resolved

by binding arbitration.”

       Mintze began to fall behind in her payments to AGF,

and on December 4, 2001, she voluntarily filed a Chapter 13

petition for bankruptcy. AGF filed a proof of claim against

Mintze’s estate. Mintze then filed a complaint against AGF

       1
         We note that Mintze was not in fact eligible for the
credit life insurance policy because of a pre-existing health
condition.

                               -6-
in the Bankruptcy Court. In her complaint, Mintze alleged

that AGF induced her to enter an illegal and abusive home

equity loan that resulted in AGF holding a mortgage lien

against her home; she sought to enforce a pre-petition

rescission of the mortgage that she asserted under the Truth In

Lending Act, 15 U.S.C. §§ 1601-1667f (“TILA”); and she

asserted several other claims under federal and state consumer

protection laws.2

       On May 20, 2002, AGF filed a Motion to Compel

Arbitration. During the motion hearing, the Bankruptcy

Judge sought to confirm two stipulations of the parties. First,

       2
         Mintze raised claims under the Home Owners Equity
Protection Act of 1994, 15 U.S.C. §§ 1601-15 (HOEPA); the
Equal Credit Opportunity Act, 15 U.S.C. §§ 1691-1691f
(ECOA); the Pennsylvania Home Improvement Finance Act, 73
P A . C ONS. S TAT. §§ 500-101–500-602 (HIFA); and the
Pennsylvania Unfair Trade Practices and Consumer Protection
Law, 73 P A. C ONS. S TAT. § 201-1--201-9.3 (UTPCPL).

                              -7-
          THE COURT: . . . [L]et me first
          confirm that the parties have
          agreed, at least for purposes of
          this argument, that the matter
          before me is a core proceeding.

          [AGF’s Counsel]: Yes, Your
          Honor.

          [Mintze’s Counsel]: Yes, Your
          Honor.

Second,

          THE COURT: . . . [I]n
          Zimmerman, as in this case, [the
          proceeding] involved a core
          matter. And the upshot of that
          would mean that whether I choose
          to grant the relief is within my
          discretion. Both counsel agree
          that in terms of the standard that
          I’m applying?

          [Mintze’s Counsel]: Yes, Your
          Honor.

          THE COURT: Okay. Now, I’ll
          ask the same type of question on a
          different issue, and I know I might
          not get agreement on this one, but

                          -8-
              I’ll ask it anyway.

As is apparent, counsel for AGF made no response to the

question of the court concerning the court’s discretion to grant

AGF’s Motion to Compel Arbitration. Based on this

exchange, the Bankruptcy Court determined that the

proceeding before it was a core proceeding and that it had the

discretion to deny enforcement of the arbitration clause. The

Bankruptcy Court then decided that the matter was best

resolved in the bankruptcy court system because the outcome

of Mintze’s rescission claim would affect her bankruptcy plan

and the distribution of monies to her other creditors. See

Mintze v. Am. Gen. Fin., Inc. (In re Mintze), 288 B.R. 95

(Bankr. E.D. Pa. 2003) (Mintze I). On January 21, 2003, AGF

filed a timely appeal. Finding that the Bankruptcy Court

acted within its discretion, the District Court affirmed the

Bankruptcy Court Order. See In re Mintze, 2003 WL

                               -9-
22701020 (E.D. Pa. 2003) (Mintze II). On December 11,

2003, AGF filed a timely appeal.

       On September 24, 2004, while the current case was

pending before us, the Bankruptcy Court issued an Order in

response to AGF’s Motion for Summary Judgment with

respect to several of Mintze’s claims. The Court granted

AGF’s motion with respect to Mintze’s TILA and HOEPA

claims. The Court also marked Mintze’s HIFA claim as

withdrawn.

                              II.

       This appeal comes to us from the United States District

Court for the Eastern District of Pennsylvania. The case

originated in the Bankruptcy Court for that district. The

Bankruptcy Court had jurisdiction pursuant to 28 U.S.C. §§

157(a) and 1334(b). The District Court had appellate

jurisdiction under 28 U.S.C. § 158(a)(1) and 9 U.S.C. §

                             -10-
16(a)(1)(B) (providing appeal from an order denying

arbitration). We have appellate jurisdiction pursuant to 28

U.S.C. § 158(d) and 9 U.S.C. § 16(a)(1)(B).

       We give plenary review to a decision of a district court

sitting as an appellate court in a bankruptcy proceeding. See

The Resolution Trust Corp. v. Swedeland Dev. Group, Inc. (In

re Swedeland Dev. Group, Inc.), 16 F.3d 552, 559 (3d Cir.

1994). Therefore, we review “the Bankruptcy Court’s

findings of fact under the clearly erroneous standard and

conclusions of law under a de novo standard.” Halper v.

Halper, 164 F.3d 830, 835 (3d Cir. 1999). We only review

the Bankruptcy Court’s decision for abuse of discretion if we

first determine, under plenary review, that it had the discretion

to exercise. See Hays & Co. v. Merrill Lynch Pierce, Fenner

& Smith, Inc., 885 F.2d 1149, 1156 (1989) (refusing to review

case for abuse of discretion because court “committed a more

                              -11-
fundamental error in determining that it had discretion to

exercise”).

                              III.

       AGF argues that the Bankruptcy Court lacked the

discretion to deny enforcement of the arbitration clause in the

mortgage agreement. The District Court held, and Mintze

contends, that the Bankruptcy Court had such discretion and

that it was within its bounds of discretion when it ruled

against AGF. The parties’ arguments stem from the two

stipulations that the parties made at the hearing on AGF’s

Motion to Compel. At the hearing, the parties allegedly

stipulated that the proceeding in question was a “core”

proceeding and that the Bankruptcy Court had the discretion

to deny enforcement of the arbitration clause in the loan

agreement. AGF claims that, despite its concession that the

proceeding was a “core” proceeding, the proceeding was a

                              -12-
non-core proceeding and that, even if the proceeding is

deemed to be core, such a determination did not automatically

give the Bankruptcy Court the discretion to deny arbitration.

AGF claims that the Bankruptcy Court did not have discretion

to deny enforcement of the arbitration clause because the

standard set out in Shearson/Am. Exp., Inc. v. McMahon, 482
U.S. 220 (1987), was not satisfied.

       Mintze claims that AGF is bound by its stipulations.

According to Mintze, the Bankruptcy Court had the discretion

to deny arbitration and our standard of review is for abuse of

that discretion, which Mintze claims was not abused. Mintze

also claims that we should dismiss AGF’s claims under the

doctrine of judicial estoppel and our rule against considering

new issues on appeal.

       Before we can determine whether the Bankruptcy

Court abused its discretion, we must determine whether the

                             -13-
Bankruptcy Court had any discretion to exercise. See Hays,
885 F.2d at 1156 (refusing to address the abuse of discretion

issue because the court “committed a more fundamental error

in determining that it had discretion to exercise”). We are not

bound by the parties’ stipulations concerning questions of

law. See Kraft Gen. Foods, Inc. v. Iowa Dep’t of Rev. & Fin.,

505 U.S. 71, 85 (1992). Whether a bankruptcy proceeding is

a core or non-core proceeding is a question of law. See

Halper, 164 F.2d at 836-37. See also U.S. Lines, Inc. v. Am.

S.S. Owners Mut. Prot. & Indemn. Ass’n, Inc. (In re U.S.

Lines, Inc.), 197 F.3d 631, 636 (2d Cir. 1999). Whether a

bankruptcy court has the discretion to deny enforcement of an

arbitration clause is also a question of law. See Hays, 885
F.2d at 1152. Therefore, the parties’ stipulations in this case

are not binding on us. We will address each stipulation and

its effect on whether the Bankruptcy Court had the discretion

                              -14-
to deny enforcement of the arbitration agreement.

                               A.

       Bankruptcy proceedings are divided into two

categories: core and non-core. See 28 U.S.C. § 157. The

distinction between the two categories is relevant because the

type of proceeding may determine the ultimate authority of

the bankruptcy court. In a core proceeding, a bankruptcy

court has “comprehensive power to hear, decide and enter

final orders and judgments.” Halper, 164 F.3d at 836 (citing

28 U.S.C. § 157(b)(1)). In addition, the bankruptcy court can

make findings of fact and conclusions of law. In contrast, the

bankruptcy court’s authority is significantly limited in non-

core proceedings. In a non-core proceeding, the bankruptcy

court is allowed only to make proposed findings of fact and

proposed conclusions of law, which it submits to the district

court. See 28 U.S.C. § 157(c)(1).

                              -15-
       The core/non-core distinction does not, however, affect

whether a bankruptcy court has the discretion to deny

enforcement of an arbitration agreement. See Ins. Co. of N.

Am. v. NGC Settlement Trust & Asbestos Claims Mgmt. Corp.

(In re Nat’l Gypsum), 118 F.3d 1056, 1068 (5th Cir. 1997)

(quoting In re Statewide Realty Co., 159 B.R. 719, 722

(Bankr. D.N.J. 1993)). It merely determines whether the

bankruptcy court has the jurisdiction to make a full

adjudication. Because this distinction does not affect whether

the Bankruptcy Court had the discretion to deny arbitration,

we will accept the parties’ stipulation that the proceeding was

a “core” proceeding for the purposes of deciding whether the

Bankruptcy Court had discretion.

                              B.

       The FAA provides that arbitration agreements “shall

be valid, irrevocable, and enforceable, save upon such

                             -16-
grounds as exist at law or in equity for the revocation of any

contract.” 9 U.S.C. § 2. A court has the power to stay a

proceeding if it determines that an issue falls under an

applicable arbitration clause. 9 U.S.C. § 3. If one of the

parties fails to comply with such an agreement, a court may

order “the parties to proceed to arbitration in accordance with

the terms of the agreement.” 9 U.S.C. § 4.

       The FAA has established a strong policy in favor of

arbitration. See Moses H. Cone Mem. Hosp. v. Mercury

Constr. Corp., 460 U.S. 1, 24 (1983). It requires rigorous

enforcement of arbitration agreements. See Dean Witter

Reynolds, Inc. v. Byrd, 470 U.S. 213, 220 (1985). By itself,

the FAA mandates enforcement of applicable arbitration

agreements even for federal statutory claims. See McMahon,
482 U.S. at 226.

       The FAA’s mandate can, however, be overridden. If a

                              -17-
party opposing arbitration can demonstrate that “Congress

intended to preclude a waiver of judicial remedies for the

statutory rights at issue,” the FAA will not compel courts to

enforce an otherwise applicable arbitration agreement.

McMahon, 482 U.S. at 227. To overcome enforcement of

arbitration, a party must establish congressional intent to

create an exception to the FAA’s mandate with respect to the

party’s statutory claims. Congressional intent can be discerned

in one of three ways: (1) the statute’s text, (2) the statute’s

legislative history, or (3) “an inherent conflict between

arbitration and the statute’s underlying purposes.” McMahon,
482 U.S. at 227 (citing Mitsubishi Motors Corp. v. Soler

Chrysler-Plymouth, Inc., 473 U.S. 614, 628, 632-37 (1985)).

       Shortly after the Supreme Court decided McMahon, we

applied its standard to a bankruptcy case that is similar to the

present case. See Hays, 885 F.2d 1149. In Hays, we held that

                               -18-
where a party seeks to enforce a debtor-derivative pre-petition

contract claim, a court does not have the discretion to deny

enforcement of an otherwise applicable arbitration clause.

See 885 F.2d at 1161. Hays involved a trustee to the debtor’s

estate,3 bringing causes of action against a brokerage firm that

managed two corporate accounts for the debtor. The

complaints alleged federal and state securities violations, as

well as some statutory claims created by the Bankruptcy

Code. The Hays Court was presented with the question

whether the Bankruptcy Code conflicts with the FAA “in such

a way as to bestow upon a district court discretion to decline

to enforce an arbitration agreement” with respect to the

trustee’s claims. Applying the McMahon standard, we said

       3
        A trustee is the representative of the debtor’s estate. 11
U.S.C. § 323(a). The trustee has the capacity to sue and be sued
on behalf of the debtor’s estate. 11 U.S.C. § 323(b).

                               -19-
that

              the district court lacked the
              authority and discretion to deny
              enforcement of the arbitration
              clause unless [the trustee] had met
              its burden of showing that the
              text, legislative history, or purpose
              of the Bankruptcy Code conflicts
              with the enforcement of an
              arbitration clause in a case of this
              kind, that is, a non-core
              proceeding brought by a trustee to
              enforce a claim of the estate in a
              district court.

Hays, 885 F.2d at 1156-57 (emphasis added). We held that

whether the McMahon standard is met determines whether the

court has the discretion to deny enforcement of an otherwise

applicable arbitration clause. See Hays, 885 F.2d at 1156-57.

See also Nat’l Gypsum, 118 F.3d at 1067 (“The ‘discretion’ . .

. should exist only where a particular bankruptcy proceeding

meets the standard for nonenforcement of an arbitration

clause set forth in McMahon . . ..”). The starting point is

                              -20-
McMahon. The Bankruptcy Court and District Court,

however, applied the McMahon standard after determining

that the Bankruptcy Court had the discretion to deny

arbitration. Those courts applied McMahon to determine

whether the Bankruptcy Court should have exercised its

discretion, rather than to determine whether it had the

discretion to exercise. This approach is not what is required

by McMahon and Hays.

       Mintze contends, and the District Court held, that our

Hays decision primarily applies to non-core proceedings. See

In re Mintze, No. 03-2113, 2003 WL 22701020, at *2 (E.D.

Pa. Nov. 12, 2003) (Mintze II) (citing U.S. Lines, 197 F.3d at

640; Pardo v. Pacificare of Tex., Inc. (In re APF Co.), 264
B.R. 344, 361-62 (Bankr. D. Del. 2001); Weinstock v. Frank

(In re Weinstock), No. 96-31147DWS, 1999 Bankr. LEXIS

616, at *23 (Bankr. E.D. Pa. 1999); Sacred Heart Sacred

                              -21-
Heart Hosp. v. Independence Blue Cross (In re Sacred Heart

Hosp.), 181 B.R. 195, 202 (Bankr. E.D. Pa. 1995); In re FRG,

115 B.R. 72, 74 (E.D. Pa. 1990)). This interpretation stems

from the emphasized clause of the above quoted passage: “a

non-core proceeding brought by a trustee to enforce a claim of

the estate in a district court.”

       We disagree with this interpretation – that the

application of Hays is limited to non-core proceedings. First,

Hays applied the Supreme Court’s McMahon standard, which

applies to all statutory claims subject to applicable arbitration

clauses, not just to those claims arising in non-core

bankruptcy proceedings. Second, the Hays decision did not

seek to distinguish between core and non-core proceedings;

rather, it sought to distinguish between causes of action

derived from the debtor and bankruptcy actions that the

Bankruptcy Code created for the benefit of the creditors of the

                                   -22-
estate. See Nat’l Gypsum, 118 F.3d at 1068 (quoting In re

Statewide, 159 B.R. at 722) (holding that the relevant

distinction in Hays is that between debtor-derivative claims

and Bankruptcy Code established claims, and not the

distinction between core and non-core proceedings). Third,

the two cases that the District Court cited from other circuits

to support its holding that the Bankruptcy Court did not abuse

its discretion, actually support the contention that Hays

applies to core proceedings. The District Court cited United

States Lines and National Gypsum. Both of these cases

expressly state that a finding that a proceeding is a core

proceeding does not automatically give a bankruptcy court the

discretion to deny arbitration. Rather, those cases indicate

that the McMahon standard must still be satisfied before a

bankruptcy court has such discretion. See U.S. Lines, 197
F.3d at 640; Nat’l Gypsum, 118 F.3d at 1067.

                              -23-
       We find that the standard we articulated in Hays

applies equally to core and non-core proceedings. See Nat’l

Gypsum, 118 F.3d at 1067 (“[W]e believe that

nonenforcement of an otherwise applicable arbitration

provision turns on the underlying nature of the proceedings,

i.e., whether the proceeding derives exclusively from the

provisions of the Bankruptcy Code and, if so, whether the

arbitration proceeding would conflict with the purposes of the

Code.”). See also Pardo v. Pacificare of Tex., Inc. (In re

APF), 264 B.R. 344, 362 (Bankr. D. Del. 2001) (citing Nat’l

Gypsum, 118 F.3d at 1067; Selcke v. New England Ins. Co.,

995 F.2d 688, 691 (7th Cir. 1993)) (holding that in a core

proceeding, the McMahon standard must be satisfied before

the bankruptcy court has the discretion to deny arbitration).

Where an otherwise applicable arbitration clause exists, a

bankruptcy court lacks the authority and discretion to deny its

                              -24-
enforcement, unless the party opposing arbitration can

establish congressional intent, under the McMahon standard,

to preclude waiver of judicial remedies for the statutory rights

at issue.

       Our task then is to determine whether Mintze has

established congressional intent to preclude waiver of judicial

remedies for the statutory rights at issue. We find no

evidence of such intent in either the statutory text or the

legislative history of the Bankruptcy Code. We are, therefore,

left to determine whether there is an inherent conflict between

arbitration and the Bankruptcy Code.

       The Bankruptcy Court concluded that the ultimate

decision on Mintze’s rescission claim will have an effect on

the rights of the other creditors to Mintze’s estate.

Determining that the potential effect on the order of priority

and the amount of distribution to Mintze’s other creditors was

                               -25-
sufficient to create an inherent conflict between the

Bankruptcy Code’s underlying purposes and arbitration, the

Bankruptcy Court concluded that the proceeding was best left

in the Bankruptcy Court. The District Court affirmed the

Bankruptcy Court, stating that its decision was “within the

appropriate bounds of discretion . . ..”

       We cannot agree with this conclusion. First, to

override the FAA’s mandate for enforcement of arbitration,

the McMahon standard requires congressional intent “to

preclude a waiver of judicial remedies for the statutory rights

at issue.” McMahon, 482 U.S. at 227 (emphasis added). The

statutory claims that Mintze has raised are based on TILA and

several federal and state consumer protection laws.4 Mintze

has failed to raise any statutory claims that were created by

       4
           See supra n.2.

                              -26-
the Bankruptcy Code. With no bankruptcy issue to be

decided by the Bankruptcy Court, we cannot find an inherent

conflict between arbitration of Mintze’s federal and state

consumer protection issues and the underlying purposes of the

Bankruptcy Code.

       Second, we find this case very similar to Hays. In

Hays, the trustee sought to enforce a claim it inherited from

the debtor in an adversarial proceeding in a district court. In

that case, “we perceiv[ed] no adverse effect on the underlying

purposes of the [Bankruptcy] Code from enforcing

arbitration–certainly no adverse effect of sufficient magnitude

to relieve a district court of its mandatory duty under the

Arbitration Act . . ..” Hays, 885 F.2d at 1161. Here, the

debtor herself seeks to enforce a claim in an adversary

proceeding in a bankruptcy court. If arbitration is enforced in

this case, we likewise cannot perceive of a sufficiently

                              -27-
adverse effect on the underlying purposes of the Bankruptcy

Code. We conclude that the Bankruptcy Court erred when it

determined it had the discretion to deny enforcement of the

arbitration provision in the contract between Mintze and

AGF.

                               C.

       Mintze also argues that AGF’s claims are barred by the

doctrine of judicial estoppel and this Court’s rule against

raising new issues on appeal. The doctrine of judicial

estoppel prevents a party from asserting inconsistent claims in

different legal proceedings. See New Hampshire v. Maine,

532 U.S. 742, 749 (2001) (quoting 18 J AMES W M. M OORE ET

AL., M OORE’ S F EDERAL P RACTICE §   134.30, p. 134-62 (3d ed.

2000)). Judicial estoppel is an equitable doctrine, within the

court’s discretion. See New Hampshire, 532 U.S. at 750. See

also Fleck v. KDI Sylvan Pools, Inc., 981 F.2d 107, 121 (3d

                              -28-
Cir. 1992) (judicial estoppel is designed to protect the courts

and not the litigants). The doctrine was designed to prevent

parties from “playing fast and loose with the courts.” Scarno

v. Cent. R.R. Co. of N.J., 203 F.2d 510, 513 (3d Cir. 1953).

       Mintze claims that AGF should not be allowed to

assert at the Bankruptcy Court hearing that the Bankruptcy

Court had discretion and now to assert that the Bankruptcy

Court did not have discretion. We choose, however, not to

apply the doctrine of judicial estoppel here. As we have

already stated, the stipulations of the parties were stipulations

regarding questions of law. Because we are not bound by

these stipulations, there is no need for us to consider judicial

estoppel.

       We also reject Mintze’s argument that AGF’s claim

that the Bankruptcy Court lacks the discretion to deny

arbitration should be dismissed because AGF is raising the

                               -29-
issue for the first time on appeal. As a general rule, we do not

address issues that are raised for the first time on appeal. See

Cont’l Cas. Co. v. Dominick D’Andrea, Inc., 150 F.3d 245,

251 (3d Cir. 1998). When the resolution of an issue is of

public importance, however, we may exercise our discretion

and address issues raised for the first time on appeal. See The

Council of Alternative Political Parties v. Hooks, 179 F.3d
64, 69 (3d Cir. 1999); Loretangeli v. Critelli, 853 F.2d 186,

189 n.5 (3d Cir. 1988) (citing Dean Witter Reynolds, Inc. v.

Fernandez, 741 F.2d 355, 360-61 (11th Cir. 1984)). Because

of the strong federal policy in favor of arbitration and the

importance of clarifying how it operates in the bankruptcy

court system, we have determined that this case is an

appropriate situation for us to exercise our discretion and to

address the issue of a bankruptcy court’s discretion to deny

arbitration.

                              -30-
                               IV.

       We conclude that the Bankruptcy Court lacked the

authority and the discretion to deny enforcement of the

arbitration provision in the contract between Mintze and

AGF. The FAA mandates enforcement of arbitration when

applicable unless Congressional intent to the contrary is

established. Mintze has failed to demonstrate through

statutory text, legislative history, or the underlying purposes

of the Bankruptcy Code that Congress intended to preclude

waiver of judicial remedies for her claims. Therefore, we will

reverse the judgment of the District Court, affirming the

Bankruptcy Court’s denial of AGF’s Motion to Compel

Arbitration, and we will remand this case to the District Court

for remand to the Bankruptcy Court with instructions to

compel the parties to engage in arbitration in accordance with

the terms of the arbitration agreement. Further, we note that

                              -31-
at oral argument AGF conceded that if we were to find in its

favor, all of Mintze’s claims, including her TILA, HOEPA

and HIFA claims, were subject to arbitration. Therefore, we

instruct the Bankruptcy Court on remand to vacate its

September 24, 2004, Order insofar as it granted summary

judgment to AGF on Mintze’s TILA and HOPA claims and to

confer with the parties concerning the status of the HIFA

claim and whether it should be reinstated since it was

withdrawn after the motion to arbitrate was filed.

                             -32-