Granting a motion to compel arbitration of a loan dispute, a Florida federal court rejected the borrower's claim that he had not agreed to arbitrate any loan disputes because the borrower acknowledged signing an arbitration agreement.

In Madura v. Countrywide Home Loans, Inc., No. 8:06-cv-2703-T-24-TBM, 2007 WL 4336094 (M.D. Fla. Dec. 7, 2007), Madura obtained a loan from Full Spectrum. The loan documents included an arbitration agreement. After closing, Full Spectrum assigned the loan to Countrywide. Madura sued Full Spectrum and Countrywide for Truth in Lending Act violations and sought rescission and damages on various state law claims.

Full Spectrum and Countrywide moved to compel arbitration pursuant to the arbitration agreement in the loan contract. Madura opposed the motion arguing that, although he signed an arbitration agreement in the "first contract," Full Spectrum and Countrywide destroyed the contract, which meant he was not bound by the arbitration agreement in the contract. Further, Madura argued that Full Spectrum forged Madura's signature and initials in the "second contract," the one on which Full Spectrum and Countrywide based their arbitration request.

The Court rejected Madura's claim that he was not bound by the arbitration agreement in the loan contract because Full Spectrum and Countrywide allegedly "breached" the first contract by fraud and forgery. Madura admitted signing the loan contract containing an arbitration agreement and did not contest its validity or enforceability. Moreover, the arbitration agreement expressly stated that it applied to all claims related to "this credit transaction." The Court therefore ordered arbitration, as every one of Madura's claims related to the loan transaction.