United States District Court, E.D. Wisconsin
ORDER GRANTING PLAINTIFF'S MOTION TO STAY AND
DENYING DEFENDANT'S MOTION TO DISMISS
WILLIAM E. DUFFIN, U.S. Magistrate Judge
action is one of two proceedings relating to the repossession
of Briana Lott's car. As part of her loan with Credit
Acceptance Corporation, Lott agreed to arbitrate any dispute
with Credit Acceptance. She and Credit Acceptance also agreed
that, if either elected to pursue arbitration, it gave up its
right to have that dispute resolved by a court. (ECF No. 21
initiated an arbitration action against Credit Acceptance.
However, she did not have an arbitration agreement with
Repossessors, Inc., the entity that physically repossessed
her car. Thus, Lott initiated this lawsuit against
Repossessors. But she also named Repossessors in the
arbitration and, in the words of Repossessors, asserted
“virtually the same allegations she has presented in
her amended complaint (ECF #15) here.” (ECF No. 21 at
2.) Repossessors agreed to participate in the arbitration.
argues that, as with her claims against Credit Acceptance, by
agreeing to arbitrate her claim against Repossessors, Lott
has given up any right to later assert that claim against
Repossessors in federal court. Therefore, it argues that this
case ought to be dismissed. (ECF No. 21.) Lott argues that
the court must stay this action rather than dismiss it. (ECF
Court of Appeals for the Seventh Circuit has said that
“the proper course of action when a party seeks to
invoke an arbitration clause is to stay the proceedings
rather than to dismiss outright.” Halim v. Great
Gatsby's Auction Gallery, Inc., 516 F.3d 557, 561
(7th Cir. 2008) (quoting Cont'l Cas. Co. v. Am.
Nat'l Ins. Co., 417 F.3d 727, 732 n.7 (7th Cir.
2005)); Kroll v. Doctor's Assocs., 3 F.3d 1167,
1172 (7th Cir. 1993); see also 9 U.S.C. § 3
(“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
that general approach has given way in cases where the entire
dispute clearly will be decided in arbitration and thus there
is no reason to hold on to the case.” Wallace v.
GrubHub Holdings Inc., No. 18 C 4538, 2019 U.S. Dist.
LEXIS 52629, at *14 (N.D. Ill. Mar. 28, 2019) (citing
Johnson v. Orkin, LLC, 928 F.Supp.2d 989, 1008-09
(N.D. Ill. 2013)); see also CMFG Life Ins. Co. v.
Goldman, Sachs & Co., No. 13-cv-575-wmc, 2014 U.S.
Dist. LEXIS 15456, at *3 (W.D. Wis. Feb. 7, 2014) (citing
Villalobos v. EZ Corp, Inc., No. 12-cv-852-slc, 2013
U.S. Dist. LEXIS 97998, 2013 WL 3732875, at *8 (W.D. Wis.
Jul. 15, 2013)). “Although it has not expressed
outright approval of this approach, the Seventh Circuit has
repeatedly affirmed dismissals where the entirety of the
action must be resolved in arbitration.”
Wallace, 2019 U.S. Dist. LEXIS 52629, at *15 (citing
Johnson v. Orkin, LLC, 556 Fed. App'x. 543, 544
(7th Cir. 2014) (nonprecedential disposition); Baumann v.
Finish Line, Inc., 421 Fed. App'x. 632, 636 (7th
Cir. 2011) (nonprecedential disposition); Am. Int'l
Specialty Lines Ins. Co. v. Elec. Data Sys. Corp., 347
F.3d 665, 668 (7th Cir. 2003); McCaskill v. SCI Mgmt.
Corp., 298 F.3d 677, 679 (7th Cir. 2002)); see also
CMFG Life Ins. Co., 2014 U.S. Dist. LEXIS 15456, at *3
(citing Felland v. Clifton, No. 10-cv-664-slc, 2013
U.S. Dist. LEXIS 100197, 2013 WL 3778967, at *11 (W.D. Wis.
Jul. 18, 2013) (collecting cases)); Tupper v. Bally Total
Fitness Holding Corp., 186 F.Supp.2d 981, 992-93 (E.D.
argues dismissal is appropriate to ensure it “is not
forced to participate in and incur the expense involved with
the arbitration, only then to have a stay lifted and have to
face the same dispute and additional or repetitive
proceedings again in this court.” (ECF No. 21 at 4.) If
Lott and Repossessors agreed to have a claim settled through
arbitration, that claim cannot be relitigated in court. But
dismissal is ppropriate only if the court can be confident
that the entirety of the parties' dispute ill be resolved
in the arbitration. Repossessors has failed to prove that
this will be the ase. Because the court cannot be certain
that the entirety of the dispute between Lott nd Repossessors
will be resolved in the arbitration, the court finds it
necessary to pply the default rule expressed in
Halim and stay this action rather than dismiss it.
the court grants Lott's motion to stay. (ECF No. 18.)
Within 28 days of e completion of arbitration, Lott shall
advise the court whether she wishes to proceed ith this
action or whether it should be dismissed. If the arbitration
is not resolved ithin one year of the date of this order,
Lott shall notify the court no later than May 1, 020 as to
the status of the arbitration proceedings. Failure to timely
notify the court ill result in this action being dismissed
without further notice to the parties.
Clerk shall administratively close this action.
motion to dismiss (ECF No. 20) is denied.
request for sanctions ...