FILED
NOT FOR PUBLICATION
DEC 13 2017
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
CHRISTOPHER ALARCON, No. 16-55523
Plaintiff-Appellant, D.C. No.
3:15-cv-00992-LAB-KSC
v.
VITAL RECOVERY SERVICES, INC. MEMORANDUM*
and GALAXY ASSET PURCHASING,
LLC,
Defendants-Appellees.
Appeal from the United States District Court
for the Southern District of California
Larry A. Burns, District Judge, Presiding
Argued and Submitted December 4, 2017
Pasadena, California
Before: D.W. NELSON and REINHARDT, Circuit Judges, and STEEH,** District
Judge.
The district court concluded that there was a valid agreement to arbitrate
between the parties that encompassed the dispute at issue, see Knutson v. Sirius
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable George Caram Steeh III, United States District Judge
for the Eastern District of Michigan, sitting by designation.
XM Radio Inc., 771 F.3d 559, 564-65 (9th Cir. 2014), and granted Defendants’
motion to compel arbitration. Although the FAA “embodies the national policy
favoring arbitration[,] . . . the liberal federal policy regarding the scope of
arbitrable issues is inapposite when the question is whether a particular party is
bound by the arbitration agreement.” Norcia v. Samsung Telecomms. Am., LLC,
845 F.3d 1279, 1291 (9th Cir. 2017) (citations omitted). A district court should not
decide as a matter of law that the parties entered into an agreement to arbitrate
when there is a genuine issue of fact concerning the formation of any agreement.
See Three Valleys Mun. Water Dist. v. E.F. Hutton & Co., 925 F.2d 1136, 1141
(9th Cir. 1991); see also Cordas v. Uber Techs., 228 F.Supp.3d 985, 989 (N.D.
Cal. 2017). “The district court, when considering a motion to compel arbitration
which is opposed on the ground that no agreement to arbitrate had been made
between the parties, should give to the opposing party the benefit of all reasonable
doubts and inferences that may arise.” Three Valleys, 925 F.3d at 1141 (citation
omitted); see also Cordas, 228 F.Supp.3d at 989.
The district court clearly erred in finding that the Defendants met their
burden of proving the existence of an agreement to arbitrate by a preponderance of
the evidence. See Knutson, 771 F.3d at 565. Defendants provided no facts
supporting their assertion that Galaxy had been assigned Beneficial’s contractual
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rights and thus was a party to an agreement to arbitrate with Alarcon. Defendants
offered only a Declaration by an “authorized representative” of Galaxy that she
was authorized to review Galaxy’s files. The Declaration is both insufficient and
inadmissible.
California law does not mandate a particular form to show a valid
assignment, but the evidence must be sufficient to show that the owner of a right
manifested an intent to transfer that right. See Cockerell v. Title Ins. & Trust Co.,
42 Cal.2d 284, 291 (1954) (in bank); see also Cobb v. S.F. Residential Rent
Stabilization and Arbitration Bd., 98 Cal.App.4th 345, 352-53 (2002). The
Declaration contains only the legal conclusion that “[i]n November of 2011 Galaxy
became the assignee of certain assets of Beneficial [] including [Alarcon’s]
consumer loan account.” It contains no facts to support this conclusion. It is not
even clear that the Declarant reviewed any of Galaxy’s business records to reach
this conclusion. There is no evidence at all that Beneficial assigned its rights to
Galaxy or any other intermediary assignee.
Moreover, the Declaration’s legal conclusion is inadmissible in any form.
Although the Declaration might have served to authenticate actual business records
had Defendants attached any, the Declaration itself is not an admissible business
record or summary of business records because it was prepared for litigation and
3
not regularly kept as part of the practice of any business. Fed. R. Evid. 803(6). The
Declaration is likewise not an admissible summary because Defendants have not
alleged that any records are too voluminous to be conveniently examined, nor have
they provided originals or duplicates as required. Fed. R. Evid. 1006. Finally,
because the legal conclusion is offered to prove the content of business records that
allegedly document assignment, it is inadmissible unless Defendants produce the
original records. Fed. R. Evid. 1002. They did not produce those records here.
Because there was no admissible evidence of an agreement to arbitrate
between the parties, we REVERSE and REMAND with instructions to reinstate
Alarcon’s complaint and to deny Defendants’ motion to compel arbitration.
4