Case 2:18-cv-04764-AB Document 22 Filed 06/05/19 Page 1 of 2

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
THRIVEST SPECIALTY FUNDING,
LLC
Plaintiff,
v.
TOBY L. WRIGHT,
Defendant.

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ORDER

CIVIL ACTION
No. 18-4764

AND NOW, this 5th day of June, 2019, it is ORDERED that the Amended Petition to
Compel Arbitration (ECF No. 11) and the motion to compel arbitration of the Counterclaim 1
(ECF No. 13) are GRANTED. 2 Accordingly, this action is STAYED in favor of arbitration.
The parties must advise the Court of the status of this action upon completion of arbitration.

1

Thrivest titled this motion a “Motion to Dismiss Counterclaim or, In the Alternative, to Compel
Arbitration.” Thrivest argued that this Court lacked subject matter jurisdiction because the dispute is
governed by an arbitration agreement. As Thrivest conceded at oral argument, however, the Court
exercises diversity jurisdiction over the entire action pursuant to 28 U.S.C. § 1332.
2

The parties dispute the validity and enforceability of their Non-Recourse Finance Transaction, Sales and
Purchase Agreement #2 (the “Agreement”). Thrivest moves to compel arbitration of the dispute pursuant
to 9 U.S.C. § 4 of the Federal Arbitration Act because the Agreement contains an arbitration provision.
Wright contends that the Agreement is void ab initio. He further contends that under Pennsylvania law
the agreement to arbitrate is not severable from the remainder of the void contract and therefore, it cannot
be enforced. Wright’s argument is directly at odds with the following three propositions established by
the Supreme Court:
First, as a matter of substantive federal arbitration law, an arbitration provision is severable
from the remainder of the contract. Second, unless the challenge is to the arbitration clause
itself, the issue of the contract’s validity is considered by the arbitrator in the first instance.
Third, this arbitration law applies in state as well as federal courts.
Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 445-46 (2006). In Buckeye, the respondents
challenged the validity of the contract as a whole and argued that it was void ab initio. Id. at 443. They
argued that under state law the arbitration provisions were not severable and thus were unenforceable. Id.
at 446-48. The Supreme Court rejected their argument and held that “because respondents challenge the
Agreement, but not specifically its arbitration provisions, those provisions are enforceable apart from the
remainder of the contract. The challenge should therefore be considered by an arbitrator, not a court.” Id.
at 446. The Supreme Court explicitly held that any “challenge to the validity of the contract as a whole,
and not specifically to the arbitration clause, must go to the arbitrator.” Id. at 449. Because Wright
challenges the validity of the contract as a whole, the dispute must go to arbitration.

 Case 2:18-cv-04764-AB Document 22 Filed 06/05/19 Page 2 of 2

It is further ORDERED that the following motions are DENIED as moot:
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Motion for a More Definite Statement Pursuant to Rule 12(E) (ECF No. 9);

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Motion for Summary Judgment on Counterclaim (ECF No. 16);

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Motion for Preliminary Injunction Staying Arbitration (ECF No. 17); and

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Respondent’s Motion for Temporary Restraining Order Staying Arbitration (ECF No.
18).

/s/ Anita B. Brody
ANITA B. BRODY, J.

COPIES VIA ECF 6.5.19