Murray v. Westlake Portfolio Management, LLC

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
TIMOTHY MURRAY,
Plaintiff,
v.
WESTLAKE PORTFOLIO
MANAGEMENT, LLC,
Defendant.
Case No. 2:25-CV-02443-JAR-BGS
MEMORANDUM AND ORDER
Plaintiff Timothy Murray brings this action against Defendant Westlake Portfolio
Management, LLC, alleging violations of the Fair Debt Collection Practices Act (“FDCPA”).
This matter is now before the Court on Defendant’s Motion to Compel Arbitration (Doc. 28).
The motion is fully briefed, and the Court is prepared to rule. For the reasons stated below, the
Court denies Defendant’s motion.
I. 	Background
This matter arises from a transaction between Plaintiff and Dream Nissan in which
Plaintiff purchased a 2011 Ford Ranger. As part of the transaction, Plaintiff and Dream Nissan
executed a Retail Installment Sale Contract (“RISC”) to finance the purchase. The RISC
contains an arbitration provision, which provides:
Any claim or dispute, whether in contract, tort, statute, or
otherwise (including the interpretation and scope of this
Arbitration Provision and the arbitrability of the claim or dispute),
between you and us or our employees, agents, successors or
assigns, which arises out of or relates to your credit application,
purchase or condition of this vehicle, this contract or any resulting
transaction or relationship (including any such relationship with
third parties who do not sign this contract) shall, at your or our
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election, be resolved by neutral, binding arbitration and not by a
court action.1
Sometime thereafter, Dream Nissan assigned the RISC to Mechanics Bank Auto Finance
(“Mechanics Bank”). In June 2024, Plaintiff and his wife filed a Chapter 13 bankruptcy petition
in the United States Bankruptcy Court for the District of Kansas. Plaintiff alleges that the debt
associated with the auto loan was listed in the bankruptcy petition, that Mechanics Bank received
notice of the bankruptcy filing, and that Mechanics Bank later filed a proof of claim in the
bankruptcy proceeding. Plaintiff further alleges that, despite that bankruptcy filing, Defendant,
acting as a debt collector on Mechanics Bank’s behalf, sent him a collection letter in May 2025
demanding payment on the auto loan.
Based on these allegations, Plaintiff filed this action on August 6, 2025, asserting claims
under the FDCPA. 2 Defendant was served on August 8, 2025,3 and on August 29, 2025, filed its
Answer and a motion to dismiss Count II of Plaintiff’s Complaint.4 The parties thereafter began
litigating the case in this forum. Pursuant to Fed. R. Civ. P. 16, Magistrate Judge Brooks G.
Severson conducted a scheduling conference on October 14, 2025.5 The parties then exchanged
initial disclosures,6 jointly moved for entry of a protective order,7 and Defendant responded to
Plaintiff’s written discovery, including interrogatories and requests for production.8 Consistent
1 Doc. 46 at 5.
2 Doc. 1.
3 Doc. 6.
4 Docs. 7, 9.
5 Doc. 19.
6 Docs. 15, 17.
7 Doc. 21.
8 Doc. 24.
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with the Scheduling Order,9 the parties later filed a joint mediation notice advising that they
would mediate the dispute on January 28, 2026.10
On December 17, 2025, Defendant filed the present motion to compel arbitration.11
Defendant did not withdraw its motion to dismiss before or after filing the present motion.
Instead, that motion remained pending until January 6, 2026, when the Court granted it and
dismissed Count II of the Complaint. 12
II. 	Discussion
Defendant moves to compel arbitration and stay these proceedings pursuant to the
arbitration provision in the RISC. Plaintiff opposes the motion, arguing that Defendant waived
any right to arbitrate by participating in the litigation process without timely moving to stay the
case and compel arbitration.
Under federal law, “when a contract mandates arbitration, courts generally will enforce
the arbitration clause absent a waiver.”13 Whether a party waived the right to arbitrate depends
on the specific facts of the case.14 In determining whether a party has waived its right to
arbitration, the Court considers the following factors:
(1) whether the party’s actions are inconsistent with the right to
arbitrate; (2) whether the litigation machinery has been
substantially invoked and the parties were well into preparation of
a lawsuit before the party notified the opposing party of an intent
to arbitrate; (3) whether a party either requested arbitration
enforcement close to the trial date or delayed for a long period
before seeking a stay; (4) whether a defendant seeking arbitration
filed a counterclaim without asking for a stay of the proceedings;
9 Doc. 20.
10 Doc. 27.
11 Doc. 28.
12 Doc. 36.
13 Peterson v. Shearson/Am. Exp., Inc., 849 F.2d 464, 465–66 (10th Cir. 1988).
14 Renteria-Camacho v. DirecTV, Inc., 175 F. Supp. 3d 1308, 1311 (D. Kan. 2016).
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(5) whether important intervening steps [e.g., taking advantage of
judicial discovery procedures not available in arbitration] had
taken place; and (6) whether the delay affected, misled, or
prejudiced the opposing party.15
It is Plaintiff’s burden to show that Defendant has waived its right to demand arbitration.16 In
deciding whether this burden has been met, the Court must give “substantial weight to the strong
federal policy encouraging the expeditious and inexpensive resolution of disputes through
arbitration.”17
Applying these factors here, the Court finds that Defendant waived any right to arbitrate
this dispute. First, Defendant’s actions before filing its motion to compel arbitration were
inconsistent with an intent to arbitrate. Although Defendant asserted arbitration as one of several
affirmative defenses in its Answer, it did not promptly move to compel arbitration or seek a stay
of proceedings. Instead, after being served with the Complaint, Defendant filed its Answer and a
motion to dismiss, exchanged initial disclosures, responded to Plaintiff’s written discovery,
jointly moved for entry of a protective order, participated in the scheduling conference, and
agreed to mediate the case. These actions reflect a choice to litigate this dispute in federal court
rather than promptly invoke arbitration.
Second, the litigation machinery had been substantially invoked before Defendant sought
arbitration. By that point, the Court had conducted a scheduling conference and entered a
Scheduling Order. At the scheduling conference, Defendant agreed to participate in mediation,
which the Scheduling Order required the parties to complete by January 30, 2026. Defendant
also filed a motion to dismiss Count II of the Complaint and never withdrew it, either before or
15 In re Cox Enters., Inc. Set-Top Cable TV Box Antitrust Litig., 790 F.3d 1112, 1116 (10th Cir. 2015)
(citing Peterson, 849 F.2d at 467–68).
16 Hill v. Ricoh Ams. Corp., 603 F.3d 766, 775 (10th Cir. 2010).
17 Id. (citation modified).
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after filing the present motion to compel arbitration. Rather, the parties fully briefed the motion
to dismiss—Plaintiff filed a response in opposition, Defendant filed a reply, and the Court later
granted the motion.18
Third, Defendant delayed for a significant period before seeking to compel arbitration.
Plaintiff filed this case on August 6, 2025, and the Court held the scheduling conference on
October 14, 2025. Defendant did not move to compel arbitration until December 17, 2025—
more than four months after the case was filed and more than two months after the scheduling
conference. That delay carries particular weight because Defendant appears to have been aware
of the arbitration agreement from the outset, as reflected in its Answer, where it asserted
arbitration as one of several affirmative defenses.19 Yet, Defendant waited until December 15,
2025, to even ask Plaintiff to stipulate to arbitration, and filed the present motion two days later,
on December 17, 2025, after Plaintiff refused.
The fourth and fifth factors are inapplicable because Defendant did not file a
counterclaim, and the record does not show that Defendant obtained any unique advantage
through judicial procedures unavailable in arbitration.
18 Rather than expressly withdrawing its earlier motion to dismiss, Defendant cites 9 U.S.C. § 3 and states
in its motion to compel arbitration that this case is stayed pending resolution of that motion. That statement is
incorrect. The filing of a motion to compel arbitration does not itself automatically stay proceedings. Instead, under
§ 3, a stay becomes mandatory only when the court is “satisfied” that the dispute is referable to arbitration and a
party applies for a stay. See 9 U.S.C. § 3; Smith v. Spizzirri, 601 U.S. 472, 475 (2024) (holding that only “[w]hen a
district court finds that a lawsuit involves an arbitrable dispute and a party has requested a stay of the court
proceeding pending arbitration, § 3 compels the court to issue a stay, and the court lacks discretion to dismiss the
suit”).
19 “While defendants asserted the arbitration agreements as an affirmative defense in their amended
answers, this assertion was insufficient to notify the opposing party of defendants’ intent to arbitrate. . . .
Defendants set out the arbitration agreements as one of several means to preclude plaintiffs’ claims. While plaintiffs
may have been made aware of defendants’ right to arbitrate, they were not notified of defendants’ intent to arbitrate
until the current motion was filed . . . .” Robinson v. Food Serv. of Belton, Inc., 415 F. Supp. 2d 1221, 1225–26 (D.
Kan. 2005).
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The sixth factor, however, supports a finding of waiver because Plaintiff was affected and
prejudiced by Defendant’s delay in seeking arbitration. By the time Defendant moved to compel
arbitration, Plaintiff was already well into litigating this case in federal court. Plaintiff had
responded to Defendant’s motion to dismiss, participated in the scheduling process, exchanged
initial disclosures, served written discovery requests, and jointly moved for entry of a protective
order. In other words, Plaintiff had already expended time and resources prosecuting this case in
this forum before Defendant sought to change course and compel arbitration.
Accordingly, the Court concludes that Defendant acted inconsistently with any right to
arbitrate and substantially invoked the judicial process before seeking a stay. The relevant
factors support a finding of waiver, and Defendant’s motion to compel arbitration is therefore
denied.
IT IS THEREFORE ORDERED BY THE COURT that Defendant’s Motion to
Compel Arbitration (Doc. 28) is denied.
IT IS SO ORDERED.
Dated: March 19, 2026
S/ Julie A. Robinson
JULIE A. ROBINSON
UNITED STATES DISTRICT JUDGE
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