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Kiely v. Canty

United States District Court, D. Massachusetts

April 30, 2015

KEVIN J. KIELY, ESQ., Plaintiff,
JOHN CANTY, Defendant

For Kevin J. Kiely, Plaintiff, Counter Defendant: Damian R. LaPlaca, Richard L. Levine, LEAD ATTORNEYS, Nelson Kinder & Mosseau P.C., Boston, MA.

Pro Se Party John Canty, Defendant, Pro se, Webster, MA.

Pro Se Party John Canty, Counter Claimant, Pro se, Webster, MA.


Donald L. Cabell, United States Magistrate Judge.

This matter arises in the context of a larger, broader dispute involving principally the Defendant, John Canty, and American Express Bank FSB (" American Express" ). American Express sued the Defendant in the state district court to collect an alleged outstanding debt. The Plaintiff, Kevin Kiely, was American Express' attorney in the district court lawsuit, but he was not a named party to the lawsuit itself. American Express and the Defendant subsequently agreed to dismiss the lawsuit and arbitrate their dispute. In initiating the arbitration proceeding, however, the Defendant reframed the dispute to cast himself as the claimant and American Express as the respondent, and he added the Plaintiff as a respondent. The Plaintiff brought suit in the state superior court for declaratory relief and a stay under Massachusetts' arbitration statute. The Defendant in turn removed the complaint to federal court. The Plaintiff argues this Court has no jurisdiction to adjudicate his complaint and he seeks remand to the state court. Having considered the record, the memoranda and arguments of counsel, and the law, I find that the Court does have jurisdiction over this complaint. However, I decline in my discretion to hear this matter and will accordingly grant the motion to remand the case to the state superior court. The Plaintiff's request for an award of attorneys' fees and costs is denied. The reasons for these rulings are explained below.

I. Factual History

On December 21, 2012, American Express filed a complaint against the Defendant in the district court in Dudley, Massachusetts (the " district court lawsuit" ). The complaint did not articulate a specific statutory or common law cause of action, but it alleged that the " Defendant owes the Plaintiff the sum of $20,482.07 for monies owed pursuant to the use by the Defendant of a credit card issued by the Plaintiff...." The Plaintiff was not a party to the district court lawsuit. He was, however, American Express' attorney of record and thus filed the complaint on American Express' behalf.

American Express and the Defendant agreed over time to arbitrate their dispute and the district court ultimately allowed a motion to compel arbitration and to dismiss the district court lawsuit without prejudice. On January 15, 2014, to initiate the arbitration process, the Defendant served on American Express a demand to arbitrate their dispute through JAMS.[1] However, the arbitration demand significantly re-framed the nature of their dispute in three significant ways. First, the Defendant reversed the posture of the parties and he listed himself as the claimant and American Express as the respondent. Second, the Defendant broadened the nature of the dispute well beyond the simple debt collection claim by stating his intent to file a claim alleging " state and federal consumer protection violations, credit reporting violations and the violation of other federal and state statutes...." Third, the Defendant added two new entities as respondents, including an entity named American Recovery Services, Inc. (ARSI), and, notably, the Plaintiff himself.

On May 13, 2014, the Defendant formally filed his notice of claims with JAMS. As foretold by his initial demand for arbitration, the Defendant's notice of claims alleged that American Express, ARSI and the Plaintiff had each violated several state and federal laws in their dealings with the Defendant, including, in particular: (1) the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 (RICO); (2) the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681; and (3) the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692.

On August 7, 2014, the Defendant moved in the arbitration proceeding to formally add ARSI, the Plaintiff and two other individuals as respondent parties. On September 22, 2014, the arbitrator allowed the motion to join ARSI and the Plaintiff, but otherwise denied it.

On December 15, 2014, the Defendant filed an amended notice of claims which sought among other things to enlarge the scope of the underlying dispute to include two other of the Defendant's American Express accounts. At least one of these accounts had already been the subject of a state superior court lawsuit in which American Express had obtained a favorable verdict, which, at the time, was the subject of a pending appeal. The arbitrator would subsequently deny the Defendant's request to amend his claims to include these accounts.

Thus, as of the end of 2014, the Plaintiff was a party to an arbitration proceeding that contained at least three federal claims.

On January 6, 2015, the Plaintiff filed a complaint in the Essex County Superior Court in an effort to extricate himself from the arbitration. The complaint sought a declaratory judgment under M.G.L. c. 251, § 2(b), a provision of the Massachusetts Uniform Arbitration Act (MUAA), that the Plaintiff was not bound by the arbitration agreement between American Express and the Defendant. The complaint also asked the court to enjoin the arbitration pending a ruling. The superior court scheduled an expedited hearing for January 27, 2015, and subsequently rescheduled it to February 5, 2015. The arbitrator, aware of the imminent hearing, stayed the arbitration pending the outcome.

On January 26, 2015, the Defendant removed the superior court action to federal court before ...

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