                            UNITED STATES DISTRICT COURT
                            FOR THE DISTRICT OF COLUMBIA

                                              )
ANTHONY WATSON,                               )
                                              )
               Plaintiff,                     )
                                              )
       v.                                     )       Civil Action No. 10-30 (RMC)
                                              )
GOLD N DIAMONDS, INC., et al.,                )
                                              )
               Defendants.                    )
                                              )

                                  MEMORANDUM OPINION

               Anthony Watson alleges that he purchased jewelry from Gold N Diamonds using a

“Gold N Diamonds” credit card, under terms that allowed two years of no payments. Wells Fargo

Bank, N.A. (“Wells Fargo”) asserts that he purchased the jewelry using a Wells Fargo credit card

under terms that allowed only one year of no payments. The Complaint indicates that Mr. Watson

signed a credit agreement. Because the terms of the credit agreement require disputes between the

parties to be arbitrated, Wells Fargo’s motion to stay and compel arbitration will be granted.

                                            I. FACTS

               On January 19, 2008, Mr. Watson purchased jewelry totaling approximately $5,000.

He alleges that he “was under the impression that the purchase price was charged to his then existing

credit card with Defendant Gold N Diamonds.” Compl. [Dkt. # 1] ¶ 10. There is a receipt for the

transaction. See Wells Fargo’s Mot. to Compel Arbitration [Dkt. # 13] (“Mot. to Compel”), Ex. A

(“Receipt”). The Receipt states that it was issued pursuant to a “Credit Agreement with Wells Fargo

Financial National Bank.” Id. The Credit Agreement states:

               YOU ACKNOWLEDGE RECEIPT OF A COPY OF THE CREDIT
               CARD ACCOUNT AGREEMENT. YOU ACKNOWLEDGE THE
               EXISTENCE OF THE ARBITRATION AGREEMENT
               CONTAINED IN THE CREDIT CARD AGREEMENT AND
               SPECIFICALLY AGREE TO BE BOUND BY ITS TERMS.

Id., Ex. B (“Credit Agreement”) at 1. The arbitration agreement that is part of the Credit Agreement

provides that Wells Fargo and the borrower agree as follows:

               (1) RIGHT TO ELECT TO ARBITRATE: Any party covered by this
               Agreement may elect to have any claim, dispute or controversy
               (“Claim”) of any kind (whether in contract, tort or otherwise) arising
               out of or relating to your Credit Card Account Agreement, or any
               prior or future dealings between us, resolved by binding arbitration.
               If any party covered by this agreement elects arbitration, that election
               is binding on all parties to this Agreement. A claim may include, but
               shall not be limited to, the issue of whether any particular Claim must
               be submitted to arbitration, or the facts and circumstances involved
               with your signing this Agreement, or your willingness to abide by the
               term of this Agreement or the validity of this Agreement. Any such
               election may be made at any time. . . . . The filing of a lawsuit . . .
               does not mean that any party has waived the right to subsequently
               elect to submit a Claim to arbitration.

Id., Ex. C (“Credit Card Terms”) at 7.

               Mr. Watson filed this suit, alleging that Wells Fargo and Gold N Diamonds, Inc.

violated the Truth in Lending Act, 15 U.S.C. § 1601 et seq.; the Fair Credit Reporting Act, 15 U.S.C.

§ 1681 et seq.; and the District of Columbia Consumer Procedures Protection Act, D.C. Code § 28-

3901 et seq. Compl. ¶¶ 15-33. Wells Fargo moved to stay and to compel arbitration.

                                    II. LEGAL STANDARDS

               The Federal Arbitration Act (“FAA”), 9 U.S.C. § 1-16, was passed by Congress “to

establish an alternative to the complications of litigation.” Revere Copper & Brass v. Overseas

Private Inv. Corp., 628 F.2d 81, 83 (D.C. Cir. 1980). The purpose to the FAA is to ensure that

private contracts to arbitrate are enforced according to their terms. Stolt-Nielsen S.A. v. AnimalFeeds



                                                  2
Int’l Corp., No. 08-1198, 2010 WL 1655826, at *11 (Apr. 27, 2010). Federal policy favors

arbitration, and any doubt concerning the scope of arbitrable issues should be resolved in favor of

arbitration. Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983). “By

agreeing to arbitrate, a party ‘trades the procedures and opportunity for review of the court [ ] for the

simplicity, informality, and expedition of arbitration.’” Gilmer v. Interstate/Johnson Lane Corp.,

500 U.S. 20, 31 (1991) (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S.

614, 628 (1985)). An individual who agrees to arbitrate claims does not forego substantive rights

afforded by statute; he merely submits to resolution in an arbitral rather than a judicial forum. Id.

at 26. Courts routinely enforce arbitration agreements, including those in credit card agreements.

See, e.g., Discover Bank v. Vaden, 489 F.3d 594, 607 (4th Cir. 2007), rev’d on other grounds, 129

S. Ct. 1262 (2009).

                When a party seeks arbitration, a court must first determine whether there is a valid

agreement to arbitrate. Nelson v. Insignia/Esg, Inc., 215 F. Supp. 2d 143, 150 (D.D.C. 2002). Then,

the court must determine whether the specific dispute falls within the scope of the arbitration

agreement. Id. To determine whether there is a valid arbitration agreement, federal courts apply

ordinary state law contract principles. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944

(1995). While it is unclear whether D.C. or Maryland law governs, the Court does not have to decide

because the same contract law principles apply under the law of both jurisdictions.1


        1
          Federal courts apply the conflicts of law rules of the state in which they sit. Klaxon v.
Stentor Electric Mfg. Co., 313 U.S. 487, 491 (1941). Thus, to determine what law to apply, this
Court must apply the District of Columbia’s choice of law analysis. See YWCA v. Allstate Ins.
Co., 275 F.3d 1145, 1150 (D.C. Cir. 2002). Under D.C. choice of law rules, the law of the
jurisdiction with the most substantial interest in the matter applies. See Nelson, 215 F. Supp. 2d
at 150. Courts consider (1) the place of contracting; (2) the place where the contract was
negotiated; (3) the place of performance; (4) the location of the subject matter of the contract;

                                                   3
               The party asserting the existence of a contract has the burden of proving its existence

and that there was a meeting of the minds as to all material respects. Bailey v. Fed. Nat’l Mortgage

Ass’n, 209 F.3d 740, 746 (D.C. Cir. 2000) (construing D.C. law); see also Royal Investment Group,

LLC v. Wang, 961 A.2d 665, 681 (Md. Ct. Spec. App. 2008) (to establish a contract the minds of the

parties must be in agreement at to its terms) (construing Maryland law). The party resisting

arbitration bears the burden of proving that the claims asserted are not suited to or intended for

arbitration. Nelson, 215 F. Supp. 2d at 150 (citing Green Tree Financial Corp. v. Randolph, 531

U.S. 79, 91 (2000)).

               One who signs a contract has a duty to read it and is obligated according to its terms.

Paterson v. Reeves, 304 F.2d 950, 951 (D.C. Cir. 1962); Pers Travel, Inc. v. Canal Square Assoc.,

804 A.2d 1108, 1110 (D.C. 2002); Holzman v. Fiola Blum, Inc., 726 A.2d 818, 831 (Md. Ct. Spec.

App. 1999). A signature on a contract indicates a mutuality of assent to which a party is bound

unless he can show some special circumstance such as fraud, duress, or mutual mistake. Nelson, 215

F. Supp. 2d at 151-52; Holzman, 726 A.2d at 831.

                                         III. ANALYSIS

               In response to Wells Fargo’s motion to compel arbitration, Mr. Watson asserts that

the signature on the Receipt and the Credit Agreement is not his and thus that he is not bound by the

arbitration agreement. See Pl.’s Opp’n at 3. In his Complaint, however, Mr. Watson alleges that he

applied for a credit card with Gold N Diamonds when he purchased jewelry in 2005. Compl. ¶¶ 7,


and (5) the domicile, residence, nationality, place of incorporation and place of business of the
parties. Restatement (Second) of Conflict of Laws § 188 (1971). Mr. Watson is a D.C. resident
who purchased jewelry at Gold N Diamonds in Maryland. Either D.C. or Maryland law applies.
The Court need not decide which, as the general contract principles that apply here are the same
in both jurisdictions.

                                                  4
12. At that time, “the sales clerk directed Plaintiff to sign a blank credit application so he could

make credit inquiries . . . .” Id. ¶ 7 (emphasis added). He alleges that “the Defendants used the

blank credit card application he signed in 2005 . . . .” Id. ¶ 12 (emphasis added). Under well-settled

case law, a party is generally bound by the facts he alleges in his pleadings. See, e.g., Lucas v.

Burnley, 879 F.2d 1240, 1242 (4th Cir. 1989) (collecting cases from numerous circuits); Nat’l

Shopmen Pension Fund v. Disa, 538 F. Supp. 2d 95, 99 (D.D.C. 2008) (citing Rann v Chao, 209 F.

Supp. 2d 75, 82 (D.D.C. 2002)). In light of the facts alleged in the Complaint, namely that Mr.

Watson signed a credit agreement, Mr. Watson cannot now avoid arbitration. The arbitration clause

is broadly drafted, as it applies to “any claim” “of any kind” including disputes regarding whether

a particular claim must be submitted to arbitration. See Credit Card Terms at 7. Moreover, the

arbitration clause provides that it governs “any prior or future dealings” between the parties. Id. The

Court will compel arbitration in this case. In arbitration, Mr. Watson may argue that his claims are

not arbitrable.

                                        IV. CONCLUSION

                  As explained above, the motion to stay and compel arbitration filed by Wells Fargo

[Dkt. # 13] will be granted.2 The parties shall arbitrate the disputes set forth in the Complaint, and

this case will be stayed pending a decision of the arbitrator. A memorializing Order accompanies

this Memorandum Opinion.

Date: September 14, 2010                                        /s/
                                                   ROSEMARY M. COLLYER
                                                   United States District Judge



        2
         Wells Fargo moved to stay or dismiss, pending arbitration. Because the Court stays this
case, the request for dismissal is denied.

                                                  5
