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Case 2:12-cv-02221-JAR-DJW Document 27 Filed 10/15/12 Page 1 of 5

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF KANSAS

Plaintiff,

vs.

Case No. 12-2221-JAR-DJW

ANN FUNDERBURKE, on behalf of herself
and all others similarly situated,

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MIDLAND FUNDING LLC,

Defendant.

MEMORANDUM AND ORDER

This is a class action originally filed in the District Court of Wyandotte County, Kansas.

Plaintiff Ann Funderburke alleges that Defendant Midland Funding, LLC (“Midland”)

improperly obtained judgments against her and others similarly situated as the assignee of a

credit card debt. Plaintiff alleges that the judgment was improper because Midland was not

licensed to collect supervised loans under Kansas law, and, therefore, the debt was

unenforceable. Plaintiff further claims that Midland violated the Kansas Consumer Protection

Act by representing to Plaintiff that the debt was enforceable. The case was removed on April

17, 2012, under the Class Action Fairness Act of 2005. On August 3, 2012, Defendant filed a

Motion to Compel Arbitration (Doc. 17), relying on a mandatory arbitration clause in the debt

contract upon which it previously obtained judgment.

Plaintiff has not yet responded to the motion to compel arbitration. Instead, Plaintiff filed

a Motion to Stay Briefing on Defendant’s Motion to Compel Arbitration and Stay Trial Court

Proceedings to Allow Discovery (Doc. 19). This motion is fully briefed and the briefing on the

motion to compel arbitration has been abated pending disposition of this motion for discovery.

Case 2:12-cv-02221-JAR-DJW Document 27 Filed 10/15/12 Page 2 of 5

In her motion for discovery, Plaintiff seeks: (1) the actual records that Defendant claims support

its argument that there is a valid arbitration agreement that was sent to Plaintiff; (2) whether

declarants Kyle Hannan or Sabrina Stewart are qualified to testify to those records or the facts

for which they claim to have knowledge; and (3) the relationship between Defendant and the

original creditor, because the resolution of the motion to compel arbitration will require the

Court to decide whether Midland, who is not a party to the agreement, is the actual assignee or

merely an independent contractor retained to collect the debt. As described more fully below,

the Court finds that Plaintiff’s discovery requests are overly broad and not necessary to enable

her to oppose the motion to compel arbitration.

Plaintiff’s first request is for the “actual records” upon which Defendant supports its

position that a valid arbitration agreement was sent to Plaintiff. Plaintiff fails to meaningfully

limit this request, but appears to seek documents supporting the authenticity of the card member

agreement attached to Defendant’s motion to compel arbitration. But Defendant has repeatedly

provided this information to Plaintiff.1 Defendant sent Plaintiff the documents attached to its

motion to compel arbitration prior to filing the motion, including the card member agreement

upon which it relies. Plaintiff challenges the authenticity of this document in her motion for

discovery, arguing that Midland cannot show that it is the same card member agreement sent to

Plaintiff by the original creditor. But this is an argument that is appropriate in response to the

motion to compel arbitration, and Plaintiff is presently equipped to advance that argument

without discovery. Moreover, Plaintiff does not explain what further documentation she seeks

from Midland, and the Court is not prepared to allow for discovery that is neither limited nor

1See Doc. 25 at 4 n.2; Doc. 19 at 2; Doc. 18, attach. 1–4.

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Case 2:12-cv-02221-JAR-DJW Document 27 Filed 10/15/12 Page 3 of 5

tailored.

Plaintiff’s next discovery request relates to Declarants Kyle Hannan and Sabrina Stewart.

Hannan is an employee of Midland’s servicer. His declaration is submitted to establish that the

card member agreement was sent to Plaintiff by the original creditor. Stewart, an employee of

Citibank, a successor bank to the original creditor, is also offered to lay foundation that the card

member agreement attached to the motion to compel arbitration is valid and binding between

these parties. Plaintiff contends that she must be allowed to discover the basis upon which these

witnesses have personal knowledge of the facts set forth in their declarations, because they did

not work for the original creditor at the time the card member agreement was sent to Plaintiff.

But Plaintiff’s motion concedes that further discovery is not necessary to make this point when

she argues, “Midland provides no competent evidence that the sample card member agreement

from Associates National Bank (Delaware) is applicable to the Account at issue here.” Again,

Plaintiff is equipped to make these evidentiary objections to the declarations in her response to

the motion to compel arbitration.

Finally, Plaintiff seeks discovery about the relationship between Defendant and the

original creditor in order to determine whether Defendant is an actual assignee or an independent

contractor that merely services the loan. Plaintiff relies on Webb v. Midland Credit

Management, Inc.,2 a case in which the Northern District of Illinois considered a motion to

compel arbitration brought by the same defendant. The card member agreement in Webb had

been assigned four times and the plaintiff defeated the motion to compel arbitration by

establishing that the defendants were unable to show an unbroken chain of assignment that

2No. 11 C 5111, 2012 WL 2022013 (N.D. Ill. May 31, 2012).

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allowed them to stand in the shoes of the original assignor.3 The plaintiff successfully argued

that the defendants failed to lay the necessary foundation that the card member agreement and

supporting documents were business records through the testimony of a qualified witness.4 The

witnesses did not have personal knowledge about the recordkeeping procedures for each of the

assignee business entities that created the exhibits in support of the motion to compel

arbitration.5 Unlike Webb, this case involves only one assignment. As the proponent of the

evidence, Defendant must establish foundation. And to the extent Defendant is unable to lay the

requisite foundation for the exhibits it submitted in support of the motion to compel arbitration,

the Court finds that Plaintiff can advance this argument without additional discovery.

The Court finds that the parties’ arguments on the motion for discovery essentially go to

the merits of the motion to compel arbitration: whether Defendant is able to establish the

requisite foundation for the card member agreement that contains the arbitration clause. The

Court declines to stay briefing on that motion and grant discovery on the scale requested by

Plaintiff. Her arguments on the motion for discovery make clear that she is able to oppose the

motion to compel arbitration without eliminating “the cost and time-saving benefits of

arbitration.”6 Therefore, the motion to stay and for discovery is denied.

IT IS THEREFORE ORDERED BY THE COURT that Plaintiff’s Motion to Stay

Briefing on Defendant’s Motion to Compel Arbitration and Stay Trial Court Proceedings to

3Id. at *5.

4Id. at *4–5.

5Id. at *5.

6Spears v. Mid-America Waffles, Inc., No. 11-2273-CM, 2012 WL 1193183, at *2 (D. Kan. Apr. 10, 2012)
(denying motion to stay for discovery on arbitration issue where broad discovery was not necessary to determine the
merits of the underlying motion to compel arbitration).

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Allow Discovery (Doc. 19) is denied. Plaintiff shall respond to the Motion to Compel

Arbitration within fourteen (14) days.

IT IS SO ORDERED.

Dated: October 15, 2012

S/ Julie A. Robinson

JULIE A. ROBINSON

UNITED STATES DISTRICT JUDGE

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