Kapphahn et al v. Bridgecrest Acceptance Corporation et al

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
ANGELA KAPPHAHN, DE’AJALA LE’SHAY
HARRIS, and LASHIYA STEWART, each
individually and on behalf of a class of all
others similarly situated,
Plaintiffs,
v.
BRIDGECREST ACCEPTANCE
CORPORATION; WELLS FARGO BANK,
N.A.; R.I. LIMITED LIABILITY COMPANY
d/b/a RECOVERY INDUSTRY; and JOHN
DOES FINANCE COMPANIES 1-50,
Defendants.
Civ. No. 25-2409 (JRT/DLM)
MEMORANDUM OPINION AND ORDER
GRANTING DEFENDANTS’ MOTIONS TO
COMPEL ARBITRATION AND TO STAY
PROCEEDINGS
Carter B. Lyons and Thomas J. Lyons, Jr., CONSUMER JUSTICE CENTER, P.A.,
367 Commerce Court, Vadnais Heights, MN 55127, for Plaintiffs.
Megan L. Tilton, Michael S. Poncin, Patrick D. Newman, BASSFORD REMELE,
100 South Fifth Street, Suite 1500, Minneapolis, MN 55402, for Defendants
Bridgecrest Acceptance Corporation and R.I. Limited Liability Company
d/b/a Recovery Industry.
Jason D. Evans, Joshua D. Davey, Lauren Geiser, and Ryan E. Dornberger,
TROUTMAN PEPPER LOCKE LLP, 301 South College Street, Suite 3400,
Charlotte, NC 28202, for Defendant Wells Fargo Bank, N.A.
Plaintiffs Angela Kapphahn, De’Ajala Le’Shay Harris, and Lashiya Stewart initiated
this 	putative 	class 	action 	against 	Defendants 	Bridgecrest 	Acceptance 	Corporation
(“Bridgecrest”), Wells Fargo Bank, N.A. (“Wells Fargo”), R.I. Limited Liability Company
d/b/a Recovery Industry (“Recovery”), and unnamed finance companies (collectively,
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“Defendants”), alleging that Defendants unlawfully repossessed their automobiles by
using GPS tracking devices to locate and seize their vehicles. 	Defendant Bridgecrest
moves to compel arbitration and to stay proceedings as to Kapphahn’s claims (Docket No.
39); Defendant Recovery moves to compel arbitration and to stay proceedings as to the
claims brought by Kapphahn (Docket No. 49) and Harris (Docket No. 44). 	After careful
consideration, the Court will grant Defendants’ motions to compel arbitration. The Court
will, therefore, also stay proceedings as to Kapphahn and Harris’s claims against
Bridgecrest and Recovery.1
BACKGROUND
I. 	FACTUAL BACKGROUND
A. 	Recovery’s Use of GPS “Pucks” in Self-Help Repossessions
In general, after a debtor defaults on an automobile loan, the lender may enforce
its security interest by repossessing the vehicle that serves as collateral for the loan.
(Compl. ¶¶ 3–4, June 10, 2025, Docket No. 1.) The lender typically hires a third party—
1 The claims of the third named Plaintiff, Stewart, are not subject to Defendants’ motions
to compel arbitration. 	Plaintiffs allege that Wells Fargo and Recovery unlawfully repossessed
Plaintiff Stewart’s vehicle using a puck after she defaulted on her automobile loan. 	(Compl.
¶¶ 39–42, 47, 76–80 June 10, 2025, Docket No. 1.) On February 12, 2026, Plaintiffs stipulated
and agreed to dismiss their claims against Wells Fargo with prejudice, and the Court approved
the stipulation. (Docket Nos. 92 & 94.) Accordingly, the Court will not address Plaintiffs’ claims
against Wells Fargo or the facts relevant to Stewart’s claims.
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like Defendant Recovery, a professional recovery company—to repossess the vehicle. (Id.
¶ 5.)
Plaintiffs allege that Recovery uses “spotters,” Recovery employees who drive
vehicles outfitted with cameras, to help locate vehicles subject to active repossession
orders. (Id. ¶¶ 49–52.) Once the spotter locates a vehicle, they call a tow truck driver,
typically another Recovery employee, who then takes possession of the vehicle. (Id. ¶¶
53–54.)
On occasion, spotters will locate a vehicle eligible for repossession when a tow
truck driver is not immediately available. (Id. ¶ 55.) In those situations, Plaintiffs allege
that Recovery’s spotters attach a magnetic external GPS tracking device—also known as
a “puck”—to the vehicle without the owner’s knowledge or consent, enabling Recovery
to track the vehicle’s movements and quickly pinpoint its location once a tow truck is
available. (Id. ¶ 56.) Plaintiffs allege that Recovery’s repossession practices are unlawful.
(Id. ¶¶ 57–59.)
B. 	The Relevant Named Plaintiffs
Plaintiffs Kapphahn, Harris, and Stewart brought this putative class action against
Defendants, alleging that Recovery’s use of external GPS pucks to locate and repossess
vehicles after consumer debtors defaulted on their automobile loans violated the Fair
Debt Collection Practices Act, 15 U.S.C. § 1692 et seq., as well as Minnesota statute and
common law. (Compl. ¶¶ 1, 102–135.) Although the Complaint names three Plaintiffs,
only Kapphahn and Harris are relevant to Defendants’ motions to compel arbitration and
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stay proceedings. The Court will therefore address only the facts relevant to Kapphahn
and Harris’s claims.
1. 	Kapphahn
In June 2024, Kapphahn secured a loan and purchased a 2019 Ram 1500 Crew Cab
from Carvana, LLC (“Carvana”). 	(Id. ¶ 18.) 	Kapphahn and Carvana executed a “Retail
Installment Contract and Security Agreement” (“RIC”), which granted Carvana a security
interest in the vehicle. 	(Id. ¶¶ 19–20.) 	Kapphahn also executed a Retail Purchase
Agreement (“RPA”). 	(Second Decl. of Susan Carrillo-Ramirez (“Second Carillo-Ramirez
Decl.”) ¶ 6, Ex. B, Sept. 29, 2025, Docket No. 68.) Kapphahn executed the RIC and RPA on
June 1, 2024. 	(Id.; Decl. of Susan Carrillo-Ramirez (“Carrillo-Ramirez Decl.”) ¶ 7, Ex. A,
Aug. 18, 2025, Docket No. 42.)
Kapphahn’s RIC is five pages long. (See Carrillo-Ramirez Decl. ¶ 7, Ex. A at 2–6.)2
Among other terms, the RIC sets forth the vehicle’s price, the amount financed, the
interest rate, the “Additional Terms of the Sales Agreement,” and the security agreement.
(Id.) 	The RIC states that the term “Contract” only “refers to this Retail Installment
Contract and Security Agreement.” (Id. at 4.) The RIC defines “we,” “us,” and “our” as
2 Kapphahn’s agreement was also filed in support of Recovery’s motion to compel
arbitration. (See Decl. of Susan Carrillo-Ramirez ¶ 7, Ex. A, Aug. 18, 2025, Docket No. 52.) For
convenience and clarity, the Court will cite to the agreement at Docket No. 42, filed in support of
Bridgecrest’s motion to compel arbitration.
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the “Seller [Carvana] and any entity to which it may transfer this Contract” such as
Bridgecrest. (Id.)
Kapphahn also executed an Arbitration Agreement on May 29, 2024, three days
before she executed the RIC and the RPA. 	(Id. at 7–13.) 	Section 2 of the Arbitration
Agreement provides: “Except as stated below in Section 2.1, You or We can choose to
demand that a Claim shall be resolved through binding and final arbitration instead of
through court proceedings, and You and We promise to accept that demand.” (Id. at 9.)
Section 1.2 of Arbitration Agreement defines “Claims” as having the “broadest reasonable
meaning,” and includes disputes concerning “the collection of amounts owed by You, or
the repossession of the Vehicle.”3 (Id. at 8.) 	Section 1.5 of the Arbitration Agreement
defines “Us/We/Our” to mean:
3 Section 1.2 defines “Claims” as follows:
“Claims” has the broadest reasonable meaning, and means any
claims, counterclaims, crossclaims, third-party claims, disputes, or
controversies between You and Us, whether on an individual or a
class basis, whether arising in contract, tort, equity, pursuant to
statute, regulation, ordinance, or otherwise, relating to or arising
from any of the following:
(a) the Vehicle, its features, mileage, condition, or accident history;
(b) advertisements, promotions, or oral or written statements
regarding the Vehicle or the Contracts;
(c) registration of, title to, or liens on the Vehicle;
(d) delivery or pick-up of the Vehicle;
(e) Your purchase, sale, or trade-in of the Vehicle;
(f) the Contracts, and duties or relationships arising therefrom;
(g) financing terms, credit applications, or credit reporting;
(h) origination or servicing of the Contracts;
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Carvana, LLC, any purchaser, assignee, or loan servicer of the
Contracts, 	including, 	but 	not 	limited 	to, 	Bridgecrest
Acceptance Corporation, Bridgecrest Credit Company, LLC,
and 	the 	parent 	companies, 	subsidiaries, 	affiliates,
predecessors, successors, officers, directors, and employees
of any of them. 	“Us/We/Our” also means any warranty
servicer or other party providing products or services to the
Vehicle in connection with or incidental to the Contracts, and
the parent companies, subsidiaries, affiliates, predecessors,
successors, officers, directors, and employees of any of them.
(Id. at 8.)
Carvana later assigned the RIC to Bridgecrest. (Compl. ¶ 21.) Kapphahn defaulted,
and on August 4, 2024, Recovery repossessed Kapphahn’s vehicle on Bridgecrest’s behalf.
(Id. ¶¶ 26, 60.) Recovery allegedly used a puck to locate her vehicle. (Id. ¶¶ 61–64.)
2. 	Harris
In June 2021, Harris obtained a loan to purchase a 2018 Ford Escape from Cities
Auto and Finance. (Id. ¶¶ 29–30.) As part of the transaction, Harris and Cities Auto and
Finance executed a RIC and granted Cities Auto and Finance a security interest in the
(i) any goods and services incidental to the Contracts or the Vehicle,
such as warranty service, extended vehicle service, or insurance
coverage;
(j) the collection of amounts owed by You, or the repossession of
the Vehicle;
(k) the rescission or termination of the Contracts; or
(I) the collection or disclosure of Your personal information.
The definition of “Claims” in this Agreement is not intended to
determine whether a particular dispute includes a single Claim or
multiple Claims.
(Carrillo-Ramirez Decl. ¶ 7, Ex. A at 8 (emphasis added).)
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vehicle. (Id. ¶ 31.) Like Kapphahn’s, Harris’s RIC spans five pages. (Decl. of Carryn Walker
(“Walker Decl.”) ¶ 6, Ex. A at 2–6, Aug. 18, 2025, Docket No. 47.) In addition to disclosing
the vehicle’s price, the amount financed, and other terms, the RIC contains an
“Arbitration Clause.” (Id. at 6.) In relevant part, the clause provides:
(Id.) Page one of the RIC required an acknowledgement (that was initialed by Harris) that
the RIC contained an Arbitration Clause and that “[b]y initialing” the buyer confirms they
have “read, understand and agree to the terms and conditions of the Arbitration Clause.”
(Id. at 2.) 	Moreover, at the bottom of page one, right above another location for the
buyer’s initials, the RIC also states: “THE ADDITIONAL TERMS AND CONDITIONS,
INCLUDING THE ARBITRATION CLAUSE SET FORTH ON THE ADDITIONAL PAGES OF THIS
CONTACT 	ARE 	PART 	OF 	THIS 	CONTRACT 	AND 	ARE 	INCORPORATED 	HEREIN 	BY
REFERENCE.” (Id. (emphasis in original).)
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Cities Auto and Finance subsequently assigned the RIC to Credit Acceptance
Corporation (“CAC”). (Compl. ¶ 32; Walker Decl. ¶¶ 2, 6.) Harris defaulted, and Recovery
repossessed her vehicle on July 7, 2023, after allegedly locating her vehicle using a puck.
(Compl. ¶¶ 37, 68–72.)
II. 	PROCEDURAL HISTORY
Plaintiffs 	filed 	a 	Class 	Action 	Complaint 	on 	June 	10, 	2025, 	asserting 	that
Defendants’ self-help repossession methods violated the Fair Debt Collection Practices
Act (“FDCPA”), 15 U.S.C. § 1692 et seq., and Minnesota statutory and common law.4
(Compl. ¶¶ 1, 102–135.) 	Defendant Bridgecrest moves to compel arbitration and stay
proceedings as to Kapphahn’s claims, pursuant to the Federal Arbitration Act. 	(Def.
Bridgecrest’s Mot. to Compel Arbitration and Stay Proceedings, Aug. 18, 2025, Docket No.
39.) 	Defendant Recovery moves to compel arbitration and stay proceedings as to the
claims brought by Kapphahn and Harris, also pursuant to the Federal Arbitration Act.
4 Kapphahn alleges four causes of action: (1) violation of FDCPA, 15 U.S.C. § 1692f(6)
against Recovery (Count I); (2) wrongful repossession under Minn. Stat. § 336.9-609 against
Bridgecrest and Recovery (Count II); (3) conversion against Bridgecrest and Recovery (Count V);
and intrusion upon seclusion against Recovery (Count VIII). (Compl. ¶¶ 102–110, 119–122, 131–
135.)
Harris alleges three causes of action: (1) wrongful repossession under Minn. Stat. § 336.9-
609 against Recovery (Count III); (2) conversion against Recovery (Count VI); and intrusion upon
seclusion against Recovery (Count VIII). (Id. ¶¶ 111–114, 123–126, 131–135.)
Stewart alleges three causes of action: (1) wrongful repossession under Minn. Stat.
§ 336.9-609 against Recovery and Wells Fargo (Count IV); (2) conversion against Recovery and
Wells Fargo (Count VII); and intrusion upon seclusion against Recovery (Count VIII). (Id.¶¶ 115–
118, 127–135.)
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(Def. Recovery’s Mots. to Compel Arbitration and Stay Proceedings, Aug. 18, 2025, Docket
Nos. 44 & 49.) 	Stewart’s claims are not subject to Defendants’ motions to compel
arbitration.
DISCUSSION
I. 	STANDARD OF REVIEW
A party who believes that a dispute is subject to arbitration may move for an order
compelling arbitration and staying the proceedings. 9 U.S.C. § 3. On a motion to compel
arbitration and stay proceedings under the Federal Arbitration Act, the Court does not
determine the merits of the substantive issues, but simply whether the parties have
agreed to submit a particular grievance to arbitration. Express Scripts, Inc. v. Aegon Direct
Mktg. Servs., Inc., 516 F.3d 695, 699 (8 th Cir. 2008). When considering such a motion, the
Court is therefore limited to assessing: (1) whether a valid agreement to arbitrate exists
between the parties and (2) whether the specific dispute is within the scope of that
agreement. 	Pro Tech Indus. Inc. v. URS Corp., 377 F.3d 868, 871 (8 th Cir. 2004). 	In
conducting this inquiry, the Court applies “ordinary state law contract principles to decide
whether parties have agreed to arbitrate a particular matter.” 	Keymer v. Mgmt.
Recruiters Int'l, Inc., 169 F.3d 501, 504 (8 th Cir. 1999).
An arbitration agreement should be construed liberally, “with any doubts resolved
in favor of arbitration.” 	MedCam, Inc. v. MCNC, 414 F.3d 972, 975 (8 th Cir. 2005). The
party seeking to avoid arbitration bears the burden of proving that the claims at issue are
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not suitable for arbitration. 	Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 91–92
(2000).
II. 	KAPPHAHN’S CLAIMS
Defendants Bridgecrest and Recovery filed separate motions to compel arbitration
and stay proceedings as to Kapphahn’s claims. (Docket Nos. 39 & 49.) Plaintiffs do not
dispute that the Kapphahn signed the RIC and the Arbitration Agreement. 	Nor do
Plaintiffs dispute that Bridgecrest is covered by the plain language of the Arbitration
Agreement. Rather, Plaintiffs argue that (1) the RIC violates the Minnesota Motor Vehicle
Retail Installment Sales Act (“MMVRISA”), Minn. Stat. § 53C.01 et seq., and therefore the
Arbitration Agreement cannot be enforced by Bridgecrest or Recovery; and (2) Recovery
is not covered by the Arbitration Agreement, and Recovery cannot enforce the Arbitration
Agreement as a nonsignatory. The Court will address each argument in turn.
A. 	Minnesota Motor Vehicle Retail Installment Sales Act
MMVRISA provides that “[e]very retail installment contract shall be in writing, shall
contain all the agreements of the parties, shall be signed by the retail buyer and seller,
and a copy signed by the retail buyer shall be furnished to such retail buyer at the time
the retail buyer executes the contract.” 	Minn. Stat. § 53C.08, subd. 1(a) (emphasis
added). Under this statute, all retail installment contracts must include:
(1) the cash sale price of the motor vehicle . . . ;
(2) the total amount of the retail buyer’s down payment . . . ;
(3) the difference between clauses (1) and (2);
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(4) the amount, if any, included in the transaction but not
included in clause (1) . . . ;
(5) principal balance, which is the sum of clauses (3) and (4);
(6) the amount of the finance charge;
(7) the total of payments payable by the retail buyer to the
retail seller and the number of installment payments required
and the amount of each installment expressed in dollars or
percentages, and date of each payment necessary finally to
pay the total of payments, which is the sum of clauses (5) and
(6).
Id., subd. 2. “The plain purpose of the MMVRISA is to require disclosure to consumers of
the cost of credit extended to them, including sale price, amount of down payment,
insurance charges, and finance charges.” Scott v. Forest Lake Chrysler-Plymouth-Dodge,
611 N.W.2d 346, 351 (Minn. 2000) (quoting Sharlow v. Wally McCarthy Pontiac-GMC
Trucks-Hyundai, Inc., Civ. No. 97-20, 1998 WL 35249294, at *1 (D. Minn. Sept. 28, 1998)).
Moreover, “‘[t]he ‘agreement of the parties’ clause serves to prohibit dealers from relying
on separate agreements containing additional or contradictory financing terms.” 	Id.
(quoting Sharlow, 1998 WL 35249294, at *1).
Plaintiffs first argue that the Arbitration Agreement Kapphahn signed should not
be enforced because the Arbitration Agreement was not part of Kapphahn’s RIC and thus
violates the MMVRISA. 	In support of their argument, Plaintiff relies on Jennings v.
Carvana LLC, No. 22-2948, 2024 WL 1209746 (3d. Cir. Mar. 21, 2024).
In Jennings, the Third Circuit considered whether an arbitration agreement was
enforceable under Pennsylvania law when it was executed at same time as the RPA and
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RIC. Id. at *1. The Pennsylvania Motor Vehicle Sales Finance Act (PMVSFA) requires an
installment sale contract to “contain all of the agreements between a buyer and an
installment seller relating to the installment sale of the motor vehicle sold[.]” Id. at *2
(quoting Pa. Cons. Stat. § 6221 (a)(2)). The Jennings plaintiffs argued that the arbitration
agreement was unenforceable because it was not part of the RIC, and thus in violation of
the one-document rule created by the PMVSFA. Id. The Third Circuit agreed, holding that
“no other ‘agreement’ is enforceable as part of the sale unless it is included in the [RIC].”
Id. 	The Third Circuit determined that the arbitration agreement was unenforceable
because it was executed separately from the RIC. Id. In doing so, the Court also rejected
the defendant’s argument that the RPA, the RIC, and the arbitration agreement be
deemed a single contract because they were related to a single transaction and were
executed on the same day. Id. at *3. The Court also rejected defendant’s argument that
arbitration agreement was valid because the statute “only concerned . . . financing
terms.” Id.
Plaintiffs’ reliance on Jennings is misplaced. First, the case is not binding authority.
Second, the Minnesota Supreme Court interprets the MMVRISA to apply more narrowly
than the Third Circuit’s construction of the Pennsylvania statute. See Scott, 611 N.W.2d
at 351. In Scott, the Minnesota Supreme Court held that the defendants did not violate
MMVRISA’s “shall contain all the agreements of the parties” requirement when a retail
installment contract did not include a conditional delivery agreement. 	Id. at 352. 	The
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court, relying on its own precedent, emphasized that MMVRISA “only requires that the
buyer be informed of the credit terms[.]” Id. at 352. The court also rejected the buyer’s
argument that separate agreements were “subsumed into the retail installment contract”
and thus in violation of MMVRISA. Id.
Reading Scott 	together with other cases interpreting MMVRISA, the Court
concludes that MMVRISA is not violated when an arbitration agreement is not included
with a RIC so long as the agreement does not contain additional or contradictory credit
terms. See, e.g., Golden v. Prosser, Civ. No. 13-3553, 2014 WL 4626489, at *4 (D. Minn.
Sept. 15, 2014) (“The [MMVRISA] is not designed to serve as a statutory integration
clause, but rather to ensure that buyers are not surprised by financing costs not set forth
in the installment contract.”); Sharlow, 1998 WL 35249294, at *1 (holding that MMVRISA
was not violated because the separate financing addendum at issue did not change any
contract terms contained in the RIC); Gibbs-Bolender v. CAG Acceptance, LLC, Civ. No. 14-
01684, 2015 WL 685217, at *6 (D. Nev. Feb. 18, 2015) (acknowledging that the Minnesota
Supreme Court, unlike other jurisdictions, interprets its motor vehicle retail installment
sales statute to allow parties to enter into separate agreements—including arbitration
agreements—so long as all credit terms appear in a single document).
Because arbitration is not a financing term (and thus does not contradict the
financing terms contained in the RIC), the Arbitration Agreement does not run afoul of
MMVRISA’s “shall contain all the agreements of the parties” requirement of Minn. Stat.
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§ 53C.08, subd. 1(a). 	See Gibbs-Bolender, 2015 WL 685217, at *6 (noting arbitration
clauses do not concern the “cost of credit”). Accordingly, the MMVRISA does not render
Kapphahn’s arbitration agreement unenforceable.
The record also supports the conclusion that Kapphahn’s arbitration agreement is
enforceable. Under Minnesota law, agreements that concern the same transaction must
be construed together. See Enestvedt v. Enestvedt, No. A24-1015, 2025 WL 1429867, at
*4 (Minn. Ct. App. May 19, 2025) (“Because the purchase agreement and option
agreement refer to each other, relate to the same transaction, and were executed at or
about the same time, we conclude that they are part of the same contract and must be
construed together.”) The parties executed the Arbitration Agreement three days before
the RIC and RPA,5 and Section 1.3 of the Arbitration Agreement incorporated the RIC and
RPA by reference. 	(See Carrillo-Ramirez Decl. ¶ 7, Ex. A at 2–13.) 	The Arbitration
Agreement stated that it was “part of the Contracts, defined below.” (Id. at 7.) Section
1.3 defined “Contracts” to mean the RPA, the RIC, and other specific agreements. (Id. at
8.) In addition, the RPA contained an arbitration clause that incorporated by reference
any arbitration provision contained in the RIC. (Second Carillo-Ramirez Decl. ¶ 6, Ex. B at
7.) Because the Arbitration Agreement, RIC, and RPA reference each other and concern
5 The Court is troubled that Kapphahn signed the Arbitration Agreement three days
before executing the RIC and the RPA, a sequence that suggest possible impropriety or
questionable business practices. It seems highly unusual that an arbitration agreement is signed
before the parties know the contours of the contract.
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the sale and financing of Kapphahn’s vehicle, the agreements form a single agreement
and should be construed together.
The Court concludes that the Arbitration Agreement does not violate MMVRISA
and is not invalid. The Court further finds—and Plaintiffs do not dispute—that the plain
language of the Arbitration Agreement covers Kapphahn’s claims against Bridgecrest
because Bridgecrest is specifically referenced in Section 1.5 of the Arbitration Agreement.
(Carrillo-Ramirez Decl. ¶ 7, Ex. A at 8.) 	The Court will, therefore, grant Bridgecrest’s
motion to compel arbitration and stay the proceedings.
B. 	Applicability of Arbitration Agreement to Recovery
Having concluded that the Arbitration Agreement does not violate MMVRISA, the
Court will consider whether Recovery may compel arbitration with respect to Kapphahn’s
claims. Plaintiffs argue that Recovery’s motion to compel arbitration should be denied
because the Arbitration Agreement does not cover claims against Recovery. 	It is
undisputed that Recovery did not sign the Arbitration Agreement, RIC, or RPA. 	To
determine whether Recovery can nevertheless compel arbitration, the Court must first
determine whether Recovery is covered by the contractual language of the RIC and
Arbitration Agreement.
Section 1.2 of the Arbitration Agreement states that the Agreements applies to
“any claims, counterclaims, crossclaims, third-party claims, disputes, or controversies
between You [Kapphahn] and Us, whether on an individual or a class basis, whether
arising in contract, tort, equity, pursuant to statute, regulation, ordinance, or otherwise,
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relating to or arising from . . . the collection of amounts owed by You [Kapphahn], or the
repossession of the Vehicle[.]” (Id. at 8.) Section 1.5 of the Arbitration Agreement defines
“Us/We/Our” to mean:
Carvana, LLC, any purchaser, assignee, or loan servicer of the Contracts,
including, 	but 	not 	limited 	to, 	Bridgecrest 	Acceptance 	Corporation,
Bridgecrest Credit Company, LLC, and the parent companies, subsidiaries,
affiliates, predecessors, successors, officers, directors, and employees of
any of them. “Us/We/Our” also means any warranty servicer or other party
providing products or services to the Vehicle in connection with or
incidental 	to 	the 	Contracts, 	and 	the 	parent 	companies, 	subsidiaries,
affiliates, predecessors, successors, officers, directors, and employees of
any of them.
(Id. at 8.)
The Court concludes that Recovery is not covered by the language of the
Arbitration Agreement. As discussed above, because the Arbitration Agreement, RIC, and
RPA refer to one another and all relate to the sale and financing of Kapphahn’s vehicle,
they constitute a single integrated agreement and should be construed together. 	See
Enestvedt, 2025 WL 1429867, at *4. However, neither the Arbitration Agreement, RPA,
nor RIC make any reference to Bridgecrest’s agents, such as Recovery. Nor is Recovery
covered by the provision extending contractual rights to “any warranty servicer or other
party providing products or services to the Vehicle” (see id.) because Recovery does not
provide services to the vehicle but merely assists with repossession. Recovery is therefore
not covered by the terms of Kapphahn’s Arbitration Agreement.
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But the Court’s analysis does not end there. 	Although Recovery cannot compel
arbitration by the terms of the Arbitration Agreement or the RIC, Recovery may be
entitled to compel arbitration as a nonsignatory.
State law governs whether nonsignatories may enforce arbitration clauses. PRM
Energy Sys., Inc. v. Primenergy, L.L.C., 592 F.3d 830, 834 (8 th Cir. 2010). The parties do not
dispute that Minnesota law applies here. Generally, under Minnesota law, “arbitration
clauses are contractual and cannot be enforced by persons who are not parties to the
contract.” Onvoy, Inc. v. SHAL, LLC, 669 N.W.2d 344, 356 (Minn. 2003). But the Minnesota
Supreme Court has acknowledged that “[f]ederal cases have set out at least three
principles on which a nonsignatory to a contract can compel arbitration: equitable
estoppel, agency, and third-party beneficiary.” 	Id. (citation omitted). 	“Minnesota
appears to follow federal law regarding these exceptions.” In re Wholesale Grocery Prods.
Antitrust Litig., 97 F. Supp. 3d 1101, 1104 (D. Minn. 2015).
First, equitable estoppel may permit a nonsignatory to enforce an arbitration
clause if a “signatory’s claim references or presumes the existence of the agreement
containing the arbitration clause; or the claim involves a close relationship between the
signatory and nonsignatory, raising allegations of substantially interdependent and
concerted misconduct.” Adherent Laboratories, Inc. v. DiPietro, No. A17-1961, 2018 WL
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3520843, at *6 (Minn. Ct. App. July 23, 2018) (citation and internal quotation marks
omitted).6
Second, agency principles “effectuate the intent of the signatory parties to protect
individuals acting on behalf of the principal in furtherance of the agreement.” Onvoy, 669
N.W.2d at 356 (citation omitted). Likewise, the Eighth Circuit has explained that “agency
and related principles . . . allow a nonsignatory to compel arbitration when, as a result of
the nonsignatory’s close relationship with a signatory, a failure to do so would eviscerate
the arbitration agreement.” PRM Energy Sys., 592 F.3d at 834 (citing CD Partners, LLC v.
Grizzle, 424 F.3d 795, 798 (8 th Cir. 2005)).
6 Courts formulate the test for equitable estoppel theory differently, but these differences
appear to be immaterial to the facts of this case. 	See, e.g, PRM Energy Sys., 592 F.3d at 835
(noting that estoppel theory may apply if the claims are “so intertwined with the agreement
containing the arbitration clause that it would be unfair to allow the signatory to rely on the
agreement in formulating its claims but to disavow availability of the arbitration clause of that
same agreement” or when a signatory alleges “substantially interdependent and concerted
misconduct by both the nonsignatory and one or more of the signatories to the contract”); Merrill
Lynch Inv. Managers v. Optibase, Ltd., 337 F.3d 125, 131 (2d. Cir. 2003) (“[A] willing non-signatory
seeking to arbitrate with a signatory that is unwilling may do so under what has been called an
‘alternative estoppel theory’ which takes into consideration the relationships of persons, wrongs
and issues[.]” (internal quotation marks and citation omitted)).
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Third, 	third-party 	beneficiaries 	may 	enforce 	an 	arbitration 	clause 	if 	the
“contracting parties intended the third party to directly benefit from the contract.”
Onvoy, 669 N.W.2d at 356 (citation omitted).7
The first two exceptions apply here. 	First, Plaintiffs allege that Recovery (a
nonsignatory) and Bridgecrest (a signatory) engaged in “substantially interdependent and
concerted misconduct” by using a puck to locate and ultimately repossess Kapphahn’s
vehicle. See PRM Energy Sys., 592 F.3d at 835 (citation omitted). Indeed, the Complaint
includes 	a 	heading 	titled, 	“Defendants 	Bridgecrest 	and 	[Recovery] 	Unlawfully
Repossessed Plaintiff Kapphahn’s Vehicle.” 	(Compl. at 9 (emphasis added).) 	The
Complaint also asserts a wrongful repossession claim under Minn. Stat. § 336.9-609
(Count II) alleging that Bridgecrest and Recovery breached the peace when they
repossessed Kapphahn’s vehicle using a puck. 	(Id. ¶ 108.) 	Finally, Kapphahn brings a
conversion claim (Count V) against Bridgecrest and Recovery for allegedly interfering with
her property by unlawfully repossessing her vehicle. (Id. ¶¶ 119–122.) Taken together,
7 Under Minnesota law, a third party is an intended beneficiary
if recognition of a right to performance in the beneficiary is
appropriate to effectuate the intention of the parties and either:
(1) the circumstances indicate that the promisee intends to give the
beneficiary the benefit of the promised performance (the intent-
to-benefit test) or (2) the performance of the promise will satisfy
an obligation of the promisee to pay money to the beneficiary (the
duty-owed test).
Michelin Props. LLC v. Jacobson Env’t, PLLC, No. A24-0685, 2025 WL 251713, at *3 (Minn. Ct. App.
Jan. 21, 2025) (citation and internal quotation marks omitted). Recovery does not contend that
this exception applies here, and therefore, the Court will not discuss it further.
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Kapphahn alleges substantially interdependent and concerted misconduct by Bridgecrest
and Recovery.
Second, Recovery acted as Bridgecrest’s agent. 	(See Compl. ¶ 5 (referring to
Recovery as a “repossession agent”).) 	Recovery consented to act as Bridgecrest’s
repossession agent, acted for Bridgecrest’s benefit, and was subject to Bridgecrest’s
control. See,e.g., A. Gay Jenson Farms Co. v. Cargill, Inc., 309 N.W.2d 285, 290–91 (Minn.
1981) (discussing the elements of an agency relationship). 	Clearly, Plaintiffs’ claims
against Bridgecrest stem from its agency relationship with Recovery, the entity that
carried out the allegedly unlawful repossessions.
In sum, even though Recovery is not a party to the RIC or the Arbitration
Agreement, Recovery may compel Kapphahn to arbitrate her claims against it. Recovery
served as Bridgecrest’s repossession agent, and Plaintiffs allege that Bridgecrest (a
signatory) and Recovery (a nonsignatory) engaged in substantially interdependent and
concerted misconduct by locating Kapphahn’s vehicle with a puck and repossessing it. For
these reasons, Recovery may enforce the arbitration agreement as a nonsignatory to the
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Arbitration Agreement.8 	The Court will, therefore, grant Recovery’s motion to compel
arbitration and stay proceedings as to Kapphahn’s claims against it.
III. 	HARRIS’S CLAIMS
Defendant Recovery also moves to compel arbitration as to the claims brought by
Plaintiff Harris. Plaintiffs argue that Recovery’s motion to compel arbitration should be
denied because the Arbitration Clause does not cover Harris’s claims against Recovery,
and because Recovery is not entitled to enforce the arbitration clause as a nonsignatory.
It is undisputed that Recovery did not sign Harris’s RIC, which includes an arbitration
clause. The Court must therefore first determine whether the RIC covers claims against
Recovery.
Unlike Kapphahn’s RIC, Harris’s RIC contained an “Arbitration Clause.” 	(Walker
Decl. ¶ 6, Ex. A at 6.) 	After Harris purchased the vehicle from Cities Auto and Finance,
8 Notably, Section 4 of Kapphahn’s arbitration agreement contains a delegation clause:
“Any dispute relating to the validity, enforceability, interpretation, or scope of this Agreement,
the arbitrability of any Claim, or other gateway issues of arbitrability, or any alleged waiver of
this Agreement shall be exclusively resolved by the arbitrator and not by a court.” 	(Carrillo-
Ramirez Decl. ¶ 7, Ex. A at 10.) A delegation clause is “an agreement to arbitrate threshold issues
concerning the arbitration agreement.” Shockley v. PrimeLending, 929 F.3d 1012, 1018 (8 th Cir.
2019) (citation omitted). 	Such provisions commit “gateway questions of arbitrability” to the
arbitrator. Id. A delegation clause is “valid and enforceable unless a specific challenge is levied
against the delegation provision.” Id. The Eighth Circuit has clarified that determining whether
an arbitration clause can be enforced between a signatory and a nonsignatory is a threshold issue
of arbitrability. Eckert/Wordell Architects, Inc. v. FJM Props. of Willmar, LLC, 756 F.3d 1098, 1100
(8 th Cir. 2014). Therefore, the question of whether Recovery may enforce the arbitration clause
as a nonsignatory under Minnesota law is likely a gateway issue of arbitrability that should be
delegated to the arbitrator.
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Cities Auto and Finance assigned it to CAC. (Compl. ¶ 32; Walker Decl. ¶ 6, Ex. A at 5.)
The Arbitration Clause defined “We” and “Us” to “mean Seller [Cities Auto and Finance]
and/or Seller’s [Cities Auto and Finance’s] assignee (including, without limitation, Credit
Acceptance Corporation [CAC]) or their employees, assignees, or any third party providing
any goods or services in connection with the origination, servicing and collection of
amounts due under the Contract if such third party is named as a party between You
and Us.” (Walker Decl. ¶ 6, Ex. A at 6 (emphasis added).)
Although Recovery provided “services in connection with the . . . 	collection of
amounts due under the Contract” (id.), Recovery was not named as a party. By contrast,
the RIC names other third-party providers, including First Automotive Service Corporation
as an extended warranty provider and Phoenix American Administrator, Inc. as a
guaranteed auto protection insurance provider. (See Walker Decl. ¶ 6, Ex. A at 3.) Yet
Recovery appears nowhere in the contract. Because Recovery was not “named as a party”
as required by the Arbitration Clause, Recovery is not covered by the Arbitration Clause’s
plain language.
But, as previously discussed, the Court’s analysis does not end there. 	A
nonsignatory can enforce an arbitration clause under three theories—equitable estoppel,
agency, and third-party beneficiary.9 Onvoy, 669 N.W.2d at 356.
9 Again, Recovery does not contend that it is a third-party beneficiary to Harris’s RIC and
thus, the Court will not address the third-party beneficiary exception.
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Similar to Kapphahn, the first two exceptions are applicable here. 	First, for the
same reasons Recovery may compel arbitration of Kapphahn’s claims, Recovery may also
compel arbitration of Harris’s claims because Plaintiffs allege that CAC (a signatory) and
Recovery (a nonsignatory) engaged in “substantially interdependent and concerted
misconduct.” PRM Energy Sys., 592 F.3d at 835 (citation omitted). Plaintiffs allege that
Recovery used a puck to locate and eventually repossess Harris’s vehicle that was subject
to a repossession order. 	(Compl. at 10 (“Defendants and [Recovery] Unlawfully
Repossessed Plaintiff Harris’ Vehicle”).)
Second, even though CAC is not a named Defendant in this lawsuit, Recovery acted
as CAC’s agent.10 	(See Compl. ¶ 5 (referring to Recovery as a “repossession agent”).)
Recovery consented to act as CAC’s repossession agent, acted for CAC’s benefit, and was
subject to CAC’s control. 	See Cargill, 309 N.W.2d at 290–91. 	Harris’s claims against
Defendants arise from Recovery’s actions as Defendants’ agent. 	(See Compl. at 10
(“Defendants 	and 	[Recovery] 	Unlawfully 	Repossessed 	Plaintiff 	Harris’ 	Vehicle”).)
Therefore, the Court concludes that the agency exception applies. 	See Lindsley v.
Bramacint, LLC, Civ. No. 08-1466, 2009 WL 1209464, at *3 (D. Minn. Apr. 30, 2009)
(granting a nonsignatories’ motion to compel arbitration where the plaintiff sued Chrysler
10 Plaintiffs cannot skirt the equitable estoppel exception by not suing CAC, a signatory.
See Hays v. HCA Holdings, Inc., 838 F.3d 605, 611 (5 th Cir. 2016) (“[I]ntertwined claims estoppel
works to prevent signatories to an arbitration agreement from avoiding arbitration simply by
suing ‘nonsignatory principals or agents for pulling the strings.’” (quoting In re Merrill Lynch Trust
Co. FSB, 235 S.W.2d 185, 194 (Tex. 2007)).
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Financial’s agents, alleging they unlawfully repossessed the plaintiff’s vehicle after
defaulting on the loan); Loyola v. Am. Credit Acceptance LLC, Civ. No. 2:19-00002, 2019
WL 1601362, at *8 (E.D. Wash. April. 15, 2019) (holding that nonsignatory repossessors
could enforce the arbitration clause because the plaintiff’s FDCPA claims were “based on
the same facts” and were “inherently inseparable” from the claims against the lender).
The Court will, therefore, grant Recovery’s motion to compel arbitration and stay
proceedings as to Harris’s claims against it.
CONCLUSION
Defendant Bridgecrest moved to compel arbitration as to Kapphahn’s claims, and
Defendant Recovery moved to compel arbitration as to the claims brought by Kapphahn
and Harris.11
Regarding 	Plaintiff 	Kapphahn, 	the 	Court 	will 	grant 	both 	Bridgecrest’s 	and
Recovery’s motions to compel arbitration and stay proceedings. 	The Court concludes
Kapphahn’s RIC does not violate the MMVRISA. The Court further concludes Bridgecrest
is entitled to compel arbitration as to Kapphahn’s claims because Bridgecrest is named in
the Arbitration Agreement. 	Recovery may also enforce the arbitration agreement as a
nonsignatory because Plaintiffs allege that Recovery served as Bridgecrest’s agent and
Bridgecrest and Recovery engaged in substantially interdependent and concerted
misconduct by locating Kapphahn’s vehicle with a puck and repossessing it.
11 Stewart’s claims are not subject to Defendants’ motions to compel arbitration.
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As to Plaintiff Harris, the Court will grant Recovery’s motion to compel arbitration
and stay proceedings because Recovery has demonstrated that it may enforce the
arbitration provision as a nonsignatory.
The Federal Arbitration Act requires courts to stay—rather than dismiss—actions
involving arbitrable disputes. Smith v. Spizzirri, 601 U.S. 472, 478 (2024). Thus, consistent
with Defendants Bridgecrest’s and Recovery’s motions, the Court will stay proceedings as
to Kapphahn and Harris’s claims against Bridgecrest and Recovery.
ORDER
Based on the foregoing, and all the files, records, and proceedings herein, IT IS
HEREBY ORDERED that:
1. 	Defendant Bridgecrest Acceptance Corporation’s Motion to Compel Arbitration
and Stay Proceedings (Docket No [39]) is GRANTED. 	This action is hereby
STAYED with respect to Kapphahn’s claims against Bridgecrest until further
order of the Court. 	If Kapphahn wishes to proceed with her claims against
Bridgecrest, she shall do so in arbitration.
2. 	Defendant R.I. Limited Liability Company d/b/a Recovery Industry’s Motion to
Compel Arbitration and Stay Proceedings (Docket No. [49]) is GRANTED. This
action is hereby STAYED with respect to Kapphahn’s claims against Recovery
until further order of the Court. If Kapphahn wishes to proceed with her claims
against Recovery, she shall do so in arbitration.
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3. 	Defendant R.I. Limited Liability Company d/b/a Recovery Industry’s Motion to
Compel Arbitration and Stay Proceedings (Docket No. [44]) is GRANTED. This
action is hereby STAYED with respect to Harris’s claims against Recovery until
further order of the Court. If Harris wishes to proceed with her claims against
Recovery, she shall do so in arbitration.
DATED: March 31, 2026 	_____/s/ John R. Tunheim_____
at Minneapolis, Minnesota. 	JOHN R. TUNHEIM
United States District Judge
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