The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
MARY EVANS CIVIL ACTION
VERSUS NO. 24-1808
CMH HOMES, INC., ET AL. SECTION: “G”
ORDER AND REASONS
In this litigation, Plaintiff Mary Evans (“Plaintiff”) brings claims against Defendant CMH
Homes, Inc. d/b/a Freedom Homes Gonzalez, LA (“CMH Homes”) for alleged defects in a
manufactured home Plaintiff bought from CMH Homes.1 Pending before the Court is CMH
Homes’ Motion to Stay Pending Arbitration.2 The motion was filed on October 9, 2024, and set
for submission on November 27, 2024.3 Pursuant to Local Rule 7.5, any opposition to the motion
was due eight days before the noticed submission date.4 Plaintiff has not filed an opposition to
the instant motion and therefore the motion is deemed unopposed. A federal district court may
grant an unopposed motion if the motion has merit.5 Having considered the motion, the
memoranda in support, the record, and the applicable law, the Court grants the motion.
1 Rec. Doc. 1-1.
2 Rec. Doc. 8.
3 Rec. Doc. 8-3.
4 See EDLA Local Rule 7.5.
5 See Braly v. Trail, 254 F.3d 1082 (5th Cir. 2001).
I. Background
On June 13, 2024, Plaintiff filed a Petition for Damages against Defendants CMH Homes,
American Bankers Insurance Company of Florida (“American Bankers”), Tiara Hayes-Babbin
(“Babbin”), and Erica Cargo (“Cargo”).6 Plaintiff alleges that there are defects in a manufactured
home she bought from CMH Homes.7 Plaintiff brings claims for return of funds paid, breach of
warranty, tort and breach of contract arising from alleged defects in her manufactured home.8
On July 17, 2024, CMH Homes removed the case to this Court, asserting diversity
jurisdiction pursuant to 28 U.S.C. Section 1332.9 Plaintiff is a citizen of Louisiana.10 CMH Homes
is incorporated in Tennessee with its principal place of business is in Tennessee, and American
Bankers is incorporated in Florida with its principal place of business in Florida.11 CMH Homes
asserts that Babbin and Cargo, both citizens of Louisiana, were fraudulently joined to defeat
diversity.12 American Bankers, Babbin, and Cargo also have not been served. The amount in
controversy exceeds $75,000 as Plaintiff claims she is entitled to a full refund of the purchase
price of the modular home ($89,390.65), in addition to damages.13
On October 9, 2024, CMH Homes filed the instant motion to compel arbitration.14
6 Rec. Doc. 1-1.
7 Id.
8 Id.
9 Rec. Doc. 1.
10 Id.
11 Id.
12 Id.
13 Id.
14 Rec. Doc. 8.
Plaintiff has not filed an opposition to the instant motion and therefore the motion is deemed
unopposed.
II. CMH Homes’ Arguments in Support of the Motion
CMH Homes moves this Court to compel Plaintiff to arbitrate her claims under the terms
of the “Binding Dispute Resolution Agreement” (“Dispute Resolution Agreement”) signed by
Plaintiff when she purchased the manufactured home.15 CMH Homes contends that the agreement
contains a valid arbitration provision governed by the Federal Arbitration Act (“FAA”).16
CMH Homes argues that the Dispute Resolution Agreement requires Plaintiff to arbitrate
“all pre-existing, present, or future disputes, claims, controversies, grievances, and causes of
action” against CMH Homes.17 Finally, CMH Homes argues that no federal statute or policy
renders the claims non-arbitrable.18 Therefore, CMH Homes argues that this litigation should be
stayed pending arbitration.19
III. Legal Standard
In Iberia Credit Bureau, Inc. v. Cingular Wireless LLC, the United States Court of
Appeals for the Fifth Circuit explained that the Federal Arbitration Act was “in large part
motivated by the goal of eliminating the courts’ historic hostility to arbitration agreements.”20
The Fifth Circuit further explained that “Section 2 of the FAA puts arbitration agreements on the
15 Rec. Doc. 8-1 at 2.
16 Id. at 5.
17 Id. at 7.
18 Id. at 8.
19 Id.
20 379 F.3d 159, 166 (5th Cir. 2004).
same footing as other contracts.”21 This means that, “as a matter of federal law, arbitration
agreements and clauses are to be enforced unless they are invalid under principles of state law
that govern all contracts.”22
There is a “strong federal policy in favor of enforcing arbitration agreements.”23 Section
3 of the FAA provides:
If any suit or proceeding be brought in any of the courts of the United States upon
any issue referable to arbitration . . . the court . . . 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. . . .24
“[I]f the issues in a case are within the reach of that [arbitration] agreement, the district court has
no discretion under section 3 to deny the stay.”25
IV. Analysis
A. Whether the Federal Arbitration Act Applies to this Dispute
In resolving the instant motion before the Court, it is first necessary to determine whether
the FAA governs the dispute between Plaintiff and CMH Homes. The FAA, codified at 9 U.S.C.
§ 1, et seq., provides the basis for the Court’s inquiry. Section 2 of the FAA states that a “contract
evidencing a transaction involving commerce to settle by arbitration a controversy thereafter
arising out of such contract or transaction . . . shall be valid, irrevocable, and enforceable.”26
21 Id.
22 Id.
23 Texaco Expl. & Prod. Co. v. AmClyde Engineered Prod. Co., 243 F.3d 906, 909 (5th Cir. 2001) (quoting
Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 217 (1985)).
24 9 U.S.C. § 3.
25 Texaco Expl. & Prod. Co., 243 F.3d at 909 (quoting Hornbeck Offshore Corp. v. Coastal Carriers Corp.,
981 F.2d 752, 754 (5th Cir. 1993)).
26 9 U.S.C. § 2 (emphasis added).
“Commerce” under Section 1 of the FAA means “commerce among the several States or with
foreign nations.”27 The U.S. Supreme Court has held that the FAA “provide[s] for the
enforcement of arbitration agreements within the full reach of the Commerce Clause” in the
United States Constitution.28
The instant suit involves a dispute between Plaintiff, a Louisiana citizen, and CMH
Homes, a Tennessee corporation.29 Plaintiff bought a manufactured home from CMH Homes.30
In sum, Plaintiff and CMH Homes are citizens of different states who entered a contract. “[A]
contract may involve commerce under the FAA if the parties engaged in the performance of
contract activities are citizens of different states, where such a contract involves interstate travel
of both personnel and payments.”31 Accordingly, the Court finds that the contract entails interstate
commercial activity, and the FAA applies to the present dispute between Plaintiff and CMH
Homes. The Court will now consider whether the arbitration provision in the Dispute Resolution
Agreement is enforceable against Plaintiff.
B. Enforceability of the Arbitration Provisions
To determine if an arbitration clause is enforceable, the Fifth Circuit has established a
two-step inquiry.32 First, a court determines whether the parties agreed to arbitrate.33 This first
27 Id. § 1.
28 Perry v. Thomas, 482 U.S. 483, 490 (1987).
29 Rec. Doc. 1.
30 Rec. Doc. 1-1.
31 See Atl. Aviation, Inc. v. EBM Grp., Inc., 11 F.3d 1276, 1280 (5th Cir. 1994), overruled on other grounds
by Action Industries, Inc. v. U.S. Fidelity & Guar. Co. 358 F.3d 337, 341 n.10 (5th Cir. 2004) (internal
citations omitted).
32 Fleetwood Enters., Inc. v. Gaskamp, 280 F.3d 1069, 1073 (5th Cir. 2002).
33 Id.
step itself is subdivided into two considerations: (a) whether there was a valid agreement to
arbitrate and (b) whether the dispute in question falls within the scope of the arbitration clause.34
If both questions are answered in the affirmative, the court moves on to the second step. Under
the second step, a court determines whether “any federal statute or policy renders the claims
nonarbitrable.”35
1. Whether there was a Valid Agreement to Arbitrate
Under step 1(a) of the Fifth Circuit’s two-step test, the Court must determine whether a
valid agreement to arbitrate exists between the parties. In making this determination, courts apply
“ordinary state-law principles that govern the formation of contracts.”36
Under Louisiana law, a contract is “an agreement by two or more people whereby
obligations are created, modified, or extinguished.”37 An “obligation cannot exist without a lawful
cause.”38 “Cause is the reason why a party obligates himself.”39 Under Louisiana law, “[i]t is
well-settled that a party who signs a written instrument is presumed to know its contents and
cannot avoid its obligations by contending that he did not read it, that he did not understand it, or
that the other party failed to explain it to him.”40
Here, it is undisputed that Plaintiff consented to the Dispute Resolution Agreement, and
34 Id.
35 Jones v. Halliburton Co., 583 F.3d 228, 234 (5th Cir. 2009).
36 Fleetwood Enterprises, 280 F.3d at 1073 (quoting First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938,
944 (1995)).
37 La. Civ. Code art. 1906.
38 La. Civ. Code art. 1966.
39 La. Civ. Code art. 1967.
40 Coleman v. Jim Walter Homes, Inc. 2008–1221 (La.3/17/09); 6 So. 3d 179, 183.
Plaintiff does not argue that the agreement is not supported by a lawful cause. Therefore, Plaintiff
consented to the Dispute Resolution Agreement’s terms, and Plaintiff does not argue that any
other issues affected the formation of the agreement in this case. Accordingly, the Court finds
that the Dispute Resolution Agreement constitutes a valid agreement to arbitrate between Plaintiff
and CMH Homes.
2. Whether Plaintiff’s Claims fall within the Arbitration Provisions
Under step 1(b) of the Fifth Circuit’s two-step test, the question is whether Plaintiff’s
claims fall within the scope of the Dispute Resolution Agreement’s arbitration provision. Courts
apply a strong presumption in favor of arbitrability when deciding whether a party’s claims fall
within the scope of an arbitration provision.41 Any doubt about the arbitrability of a dispute should
be resolved in favor of arbitration.42 The party resisting arbitration bears the burden of proving
that a dispute is not arbitrable.43 To overcome the presumption in favor of arbitrability, clear
evidence must exist that the parties did not intend the claim at issue to be arbitrated.44
In this case, the arbitration provision states:
This Agreement applies to all pre-existing, present, or future disputes, claims,
controversies, grievances, and causes of action against Seller, including, but not
limited to, common law claims, contract and warranty claims, tort claims, statutory
claims, administrative law claims, and any other matter in question, not otherwise
excepted herein, arising out of or relating to (i) the modular or manufactured
home(s) purchased, sold, owned, occupied and/or delivered in any transaction with
Buyer or Beneficiaries (the “Home”), (ii) the documents related to the purchase
and sale of the Home (including, but not limited to, the Retailer closing
Agreement, any Purchase or Sales Agreement, buyer’s order, supplemental
invoice, and other instruments and agreements whereby Seller purports to convey
or receive any goods or services to or from Buyer or Beneficiaries (collectively,
41 AT & T Techs., Inc. v. Commc'ns Workers of Am., 475 U.S. 643, 648 (1986).
42 See Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24–25 (1983).
43 Am. Heritage Life Ins. Co. v. Lang, 321 F.3d 533, 539 (5th Cir. 2003).
44 Moses H. Cone Mem’l Hosp., 460 U.S. at 24–25.
the “Contract”)), (iii) any products, goods, services, insurance, supplemental
warranty, service contract, and real property (including improvements to the real
property) sold under or referred to in the Contract, (iv) any events leading up to
the Contract, (v) the collection and servicing of the Contract, (vi) the design and
construction of the home, and (vii) the interpretation, scope, validity and
enforceability of the Contract (collectively referred to as the “Claim” or
(Claims”).45
Plaintiff’s breach of warranty, tort, and breach of contract claims clearly fall under the terms of
this provision.
This case is not a close call but, even if it were, any doubts concerning the scope of an
arbitration clause is resolved in favor of arbitrability.46 Plaintiff has not attempted to overcome
that strong presumption in favor of arbitrability and has failed to file any opposition to the instant
motion. Therefore, the Court finds that Plaintiff’s claims fall within the scope of the arbitration
provision in the Dispute Resolution Agreement.
3. Whether any Federal Policy or Federal Statute Forecloses Arbitration of
Plaintiff’s EFTA Claims
Under Step 2 of the Fifth Circuit’s two-part test, the Court determines whether any federal
statute or policy renders a party’s claims non-arbitrable.47 Here, Plaintiff does not point to any
federal statute or policy that would render Plaintiff’s claims non-arbitrable. Because no federal
policy or statute forecloses arbitration of Plaintiff’s claims, the FAA therefore requires the Court
to enforce the arbitration provision in the Dispute Resolution Agreement.
V. Conclusion
Under Section 3 of the FAA, if a federal court determines that the parties’ transaction
entails interstate commerce and the FAA governs the litigation, a federal court has the authority
45 Rec. Doc. 8-2 at 11.
46 Harvey v. Joyce, 199 F.3d 790, 793 (5th Cir. 2000).
47 Jones v. Halliburton Co., 583 F.3d at 234.
to stay the litigation pending arbitration.** As the Fifth Circuit observed, Section 3 of the FAA is
mandatory because it provides that federal courts “shall on application of one of the parties stay
the trial of the action.”
Accordingly,
IT IS HEREBY ORDERED that CMH Homes’ Motion to Stay Pending Arbitration™ is
GRANTED. The above captioned matter is STAYED and ADMINISTRATIVELY CLOSED
pending arbitration.
NEW ORLEANS, LOUISIANA, this _13th_ day of December, 2024.
D ersette obuett 0s
NANNETTE IVETTE BROWN (our
CHIEF JUDGE
UNITED STATES DISTRICT COURT
BOUSC. § 3.
000 Memt, Inc. v. Residuos Industriales Multiquim, S.A. de C.V., 372 F.3d 339, 342-43, 346 (Sth Cir.
Rec. Doc. 8.