Master "Refusal of arbitration" thread

[SBD]

Ovitz v. Schulman (2005) 133 Cal. App. 4th 830, 35 Cal. Rptr. 3d 117 , arose out of defendant's employment with plaintiffs' joint venture. The employment agreement contained an arbitration provision. Dispute arose regarding whether defendant resigned or was wrongfully terminated. After the parties agreed to arbitration in accordance with the American Arbitration Association (AAA)'s Rules for Resolution of Employment Disputes, the proposed neutral arbitrator submitted a worksheet, purportedly making the required disclosures. The worksheet did not in fact contain the disclosure required by Cal. Rules of Ct, Appen. Div., VI, Standard 12 (b) regarding the proposed neutral arbitrator's intention, while that arbitration was pending, to entertain offers of employment from a party or a lawyer for a party, including offers to serve as a dispute resolution neutral in another case. Arbitration began on September 8, 2003. After 23 days of hearings and twenty-one witnesses, the arbitrator ruled on May 12, 2004, that the joint venture and related parties were entitled to $1,878,739.15 in attorney fees and costs.

On May 27, 2004, after the joint venture parties had circulated a proposed draft of the award, the AAA informed all parties' attorneys that the arbitrator had accepted employment in another arbitration in which the law firm representing the joint venture parties was representing a party. The arbitrator conducted a preliminary hearing in the second arbitration as early as March 1, 2004. The precise date of the arbitrator's appointment in the second case was not clear, but declarations suggested that the arbitrator and the attorneys for the law firm representing the joint venture parties had discussions in the second case as early as January or February 2004. On June 3 and 14, 2004, defendant's counsel sent letters to the AAA requesting the arbitrator's disqualification for failure to disclose that he would entertain offers of employment from the law firm representing the joint venture parties, and further failed to disclose his employment by that firm in the second arbitration. The AAA denied that disqualification request. The trial court denied the joint venture parties' petition to confirm the award, and granted defendant's cross-petition to vacate the award. After denial of their motion for reconsideration, the joint venture parties appealed.

The court of appeal affirmed ( 133 Cal. App. 4th 830, 856) . The portions of the opinion considering the failures of disclosure are discussed at § 20.420[3][g]. After deciding that Code Civ. Proc. § 1286.2(a)(6)(A) required the award to be vacated, the court of appeal considered joint venture parties' contention that Code Civ. Proc. § 1286.2(a)(6)(A) is preempted by the Federal Arbitration Act (FAA; 9 U.S.C. § 1 et seq.). The court of appeal concluded after reviewing the relevant statutory language, that the congressional purpose of the FAA, did not result in the FAA's preemption of section 1286.2(a)(6)(A). Under the FAA, an award must be vacated if there ''was evident partiality or corruption in the arbitrators, or either of them'' [9 U.S.C. § 10(a)(2)]. The joint venture parties argued that, for two reasons, section 10(a)(2) of the FAA preempted Code Civ. Proc. § 1286.2(a)(6)(A). First, the FAA's ''evident partiality'' permits vacating an arbitration award for inadequate disclosure only if the undisclosed facts create a reasonable impression of partiality, and second, that a party who has constructive knowledge of a ground for disqualification but remains silent is deemed to have waived the right to disqualify.

The court of appeal disposed of the second contention first, saying that federal rule, based on a case, not statute, was not accepted in all federal courts ( 133 Cal. App. 4th 830, 849) . Also, the only evidence that defendant had constructive knowledge was presented in the declarations filed in support of the motion for reconsideration, and the trial court did not find them credible. Finally, the waiver rule could have no greater preemptive effect than section 10(a)(2) itself; and the court of appeal chose to rest its decision on consideration of the preemptive effect of section 10(a)(2) alone.

The court considered the language of 9 U.S.C. § 10(a)(2) ( 133 Cal. App. 4th 830, 850) , and the fact that that language strongly suggests that section 10 applies only in federal court proceedings: ''the United States court in and for the district wherein the award was made.'' Similarly, section 12 of the FAA, which provides the procedure for presenting a motion to vacate, refers to a motion in district court ( 133 Cal. App. 4th 830, 851) . Further, Code Civ. Proc. § 1286.2(a)(6)(A) is not inconsistent with the purpose of the FAA. Absent an express preemption provision, federal statutory language does not resolve the question of preemption. Rather, there is no evidence that Congress intended to preempt postaward and state court litigation rules so long as the basic policy upholding the enforceability of arbitration agreements is given full effect court ( 133 Cal. App. 4th 830, 852) .

By its terms, section 1286.2(a)(6)(A) does not undermine the enforceability of arbitration agreements. It merely requires the vacating of an award if the arbitrator failed timely to disclose a ground for disqualification of which he was aware. Indeed, because it applies to vacating an arbitration award, section 1286.2(a)(6)(A) presupposes that the arbitration agreement has been enforced and the arbitration held. Further, the legislative purpose of section 1286.2(a)(6)(A) and the California disclosure requirements as a whole seek to enhance both the appearance and reality of fairness in arbitration proceedings, thereby instilling public confidence. The court did not agree with the joint venture parties that the disclosure rules undermine the arbitration process by allowing a party to seize on a technicality to vacate an arbitration award ( 133 Cal. App. 4th 830, 853) . Nor was section 1286.2(a)(6)(A) inconsistent with the parties' arbitration agreement, which specified that the intended their arbitration to be subject to all of the disclosure requirements imposed by the AAA and the California Code of Civil Procedure. From the outset of the arbitration proceeding, the parties contemplated that the California disclosure requirements applied, in addition to AAA disclosure requirements ( 133 Cal. App. 4th 830, 854) . The arbitration agreement provided that judicial review would be limited as provided by Code Civ. Proc. § 1286.2 or other applicable law. Even if ''other applicable law'' meant the FAA, section 10(a)(2) of the FAA does not preempt Code Civ. Proc. § 1286.2(a)(6)(A) ( 133 Cal. App. 4th 830, 855) .

Defendant/appellant in International Alliance of Theatrical Stage Employees, etc. v. Laughon (2004) 118 Cal. App. 4th 1380, 14 Cal. Rptr. 3d 341 sued plaintiff/respondent for sex discrimination and entered into a settlement agreement by which they agreed that any dispute about the terms of the settlement agreement would be submitted to binding arbitration before one of four named arbitrators, one of whom was John Kagel. A dispute arose that was submitted to arbitration before Kagel, who was informed of his selection as arbitrator on April 23, 2001. Kagel had previously served as the neutral arbitrator in one noncollective bargaining arbitration involving another union represented in that arbitration by the same firm that represented plaintiff in this arbitration and in numerous collective bargaining cases in which that law firm served as counsel. Kagel never disclosed this prior service. On the first day of the arbitration hearing between these parties, plaintiff/respondent introduced as an exhibit Kagel's June 13, 2001, decision in the noncollective bargaining matter. Kagel did not acknowledge that he had failed to disclose his service as an arbitrator in that matter nor did he alert defendant's counsel that his service as an arbitrator might be grounds for disqualification. The award was introduced to support of claims of plaintiff regarding breaches of confidentiality agreements or follow-up of settlement agreements. Kagel issued an award largely in favor of plaintiff, which defendant petitioned to vacate on the ground that Kagel had failed to disclose certain matters that might serve as a basis for his disqualification, including his prior employment as an arbitrator in cases involving plaintiff or its counsel. The trial court denied the petition to vacate and confirmed the award, finding that there was no obvious bias or prejudice in the manner in which Kagel conducted the hearings and that when the prior award was introduced as evidence, defendant made a knowing, voluntary and intelligent waiver of the grounds disclosed therein for disqualification. Defendant appealed.

The court of appeal reversed, concluding that pursuant to Code Civ. Proc. § 1281.9(a)(4), the arbitrator was required to disclose his service as a neutral arbitrator in the noncollective bargaining matter, his failure to do so was not waived, and the nondisclosure of this required disclosure was a ground for vacation under Code Civ. Proc. § 1286.2(a)(6)(A) ( 118 Cal. App. 4th 1380, 1382) . Code Civ. Proc. § 1281.9(a)(4) specifies that an arbitrator must disclose the names of the parties to all prior or pending noncollective bargaining cases involving any party to the arbitration or lawyer for a party for which the proposed neutral arbitrator served or is serving as neutral arbitrator. The proposed neutral arbitrator must disclose all matters required to be disclosed to all parties in writing within 10 calendar days of service of notice of the proposed nomination or appointment [Code Civ. Proc. § 1281.9(b)]. Thus, 10 days after he was proposed as the neutral arbitrator in the matter, Kagel was required to disclose his service as neutral arbitrator in the prior matter. Had Kagel done so, defendant would have been entitled to disqualify him within 15 days after the disclosure statement was served [Code Civ. Proc. § 1281.91 (b)(1)] ( 118 Cal. App. 4th 1380, 1385) .

A party who does not move to disqualify an arbitrator prior to the commencement of arbitration may nevertheless seek vacation of an arbitration award on the ground that the arbitrator failed to disclose within the time required for disclosure a ground for disqualification of which the arbitrator was then aware [Code Civ. Proc. § 1286.2(a)(6)(A)]. This statute provides that if such a failure occurs, ''the court shall vacate the award'' ( 118 Cal. App. 4th 1380, 1385-1386) . The explicit language of the statute supported defendant's argument that the trial court was required to vacate the arbitration award once it was shown that Kagel had failed to make the required disclosure in a timely fashion. Thus, Code Civ. Proc. § 1286.2, as amended in 2001, mandates that a court ''shall'' vacate an arbitration award if, among other reasons, the arbitrator making the award ''failed to disclose ... a ground for disqualification of which the arbitrator was then aware.'' The grounds include those enumerated in the six subparagraphs of Code Civ. Proc. § 1281.9(a). Those subparagraphs are preceded by general description of the matters which must be disclosed (a description also added in 2001) as ''all matters that could cause a person aware of the facts to reasonably entertain a doubt that the proposed neutral arbitrator would be able to be impartial, including all of the following:'' [Code Civ. Proc. § 1281.9(a)].


This statutory language makes clear that, when it amended both Code Civ. Proc. §§ 1281.9 and 1286.2(a)(6)(A) in 2001, the Legislature intended that the failure to disclose the sort of prior relationship involved in this case necessarily satisfies the ''might cause a reasonable person to question'' standard ( 118 Cal. App. 4th 1380, 1386) . The court further found that because no effective disclosure of the disqualifying information took place, the trial court erred in finding that defendant ''knowingly'' waived any objection to Kagel's failure to disclose his prior service as a neutral arbitrator by failing to object when the opinion in the prior arbitration was offered into evidence during the arbitration. At the very least, defendant was entitled to the functional equivalent of the disclosure mandated by statute, i.e., an explicit, formal proffer of the disqualifying information [Code Civ. Proc. § 1281.9] and an opportunity to object [Code Civ. Proc. § 1281.91] ( 118 Cal. App. 4th 1380, 1390-1392) .

[SBD]

[d] Deemed Admission If Response Untimely

Evans Co. v. Millmen's Union No. 550 (1984) 159 Cal. App. 3d 815, 205 Cal. Rptr. 731 , involved arbitration of a dispute under a collective bargaining agreement. After the award was made by the arbitrator, the employer timely filed a petition to vacate the award. The union failed to file a response to the petition within the period prescribed by Code Civ. Proc. § 1290.6. The trial court held that the employer's allegations in the petition to vacate were deemed admitted. The trial court ultimately granted the petition, after applying substantive federal law, and the union appealed.

The court of appeal affirmed, holding that the union's untimely response was not ''duly filed'' as required by Code Civ. Proc. § 1290. Therefore, the trial court had properly concluded that the allegations in petitioner's petition were deemed admitted ( 159 Cal. App. 3d 815, 819) .

[e] Time for Filing Petition to Vacate Award

Plaintiff in Louise Gardens of Encino Homeowners' Association, Inc. v. Truck Insurance Exchange (2000) 82 Cal. App. 4th 648, 98 Cal. Rptr. 2d 378 , demanded an appraisal of the amount of loss it sustained in the 1994 Northridge earthquake. The appraisal was conducted in accordance with Ins. Code § 2071, which provides that each party select a competent and disinterested appraiser and then they select a competent and disinterested umpire. The appraisers appraise the loss; and if they cannot agree, submit their differences to the umpire. The appraiser chosen by defendant disclosed his prior associations with defendant and its affiliates, including that during the three years immediately preceding his appointment by defendant, he had served as an appraiser designated by the defendant or its affiliates on 15 occasions, 11 of which involved appraisals which were then still pending. In addition, he had served four times during the same period as a consultant to the law firm which was then representing defendant in these proceedings. Based on those disclosures, plaintiff demanded defendant's appraiser be replaced and filed a petition for his removal. The trial court denied the petition, under former Code Civ. Proc. § 1282(e), which provided grounds for disqualification of party arbitrators. Admittedly, that denial was not appealable. Later, defendant commenced a declaratory relief action against plaintiff claiming plaintiff had breached the cooperation provisions of the policy and was therefore estopped to claim any benefits under it. That action was still pending in the trial court, but had been stayed pending resolution of the issues raised in this appeal. When the appraisal was returned, plaintiff accepted $440,000, which represented the difference between the appraisal award and the amount previously paid by defendant. Plaintiff never sought to vacate the award, much less within the 100 day period specified in Code Civ. Proc. § 1288. Instead, it filed a cross complaint in defendant's declaratory relief action. Still later, over 14 months after its receipt of the appraisal award, plaintiff filed a petition to confirm the award so that plaintiff could appeal the ruling refusing to remove the appraiser. The petition was granted, and judgment entered thereon. Plaintiff appealed, and defendant filed a timely cross appeal.

The court of appeal affirmed the judgment. An agreement to conduct an appraisal contained in a policy of insurance constitutes an ''agreement'' within the meaning of Code Civ. Proc. § 1280(a), and therefore is considered an arbitration agreement subject to the statutory contractual arbitration law. While the court recognized that one of the grounds for vacating an appraisal award is the failure of an arbitrator who was subject to disqualification on the grounds set out in former Code Civ. Proc. § 1282 (e) [now Code Civ. Proc. § 1281.9(a)(1) (applicable only to neutral arbitrators)] to disqualify himself or herself as required by former Code Civ. Proc. § 1286.2(f), [now Code Civ. Proc. § 1286.2(a)(6)(B)] relief must be sought in a timely manner. A court cannot vacate an award unless a petition requesting that relief has been duly filed and served not later than 100 days after the date of service of a signed copy of the award on the petitioning party [Code Civ. Proc. § 1288] ( 82 Cal. App. 4th 648, 658) . A party to an arbitration may not circumvent the 100 day time requirement in which to seek the vacation of an award by attempting to raise his or her objections to the award in an appeal from the judgment entered following an order of confirmation. A party who fails to timely file a petition to vacate under Code Civ. Proc. § 1286 may not thereafter attack that award by other means on grounds which would have supported an order to vacate ( 82 Cal. App. 4th 648, 659) . The court concluded that plaintiff could not avoid the consequences of its failure to file a timely petition to vacate by appealing from the post-confirmation judgment ( 82 Cal. App. 4th 648, 660) . As a further ground for affirming the judgment confirming the award, the court of appeal noted that plaintiff had accepted the benefits of the judgment, which resulted in waiver of the right to appeal from it ( 82 Cal. App. 4th 648, 661) .

The parties in Knass v. Blue Cross of California (1991) 228 Cal. App. 3d 390, 279 Cal. Rptr. 124 , stipulated to binding arbitration of a pending lawsuit. An award in defendant's favor was served in July, 1989. In September, the court ordered judgment entered in defendant's favor, and notice of entry of judgment was served on plaintiff in November. In January, 1990, plaintiff appealed, contending that the arbitrator's award should be vacated.

The court of appeal affirmed the award for defendant, holding that Code Civ. Proc. § 1287.4 does not allow a party to challenge an arbitration award for the first time on appeal. The 100-day time limit in Code Civ. Proc. § 1288 may not be circumvented by appealing the judgment confirming the award ( 228 Cal. App. 3d 390, 395-396) .

[f] Arbitrator's Testimony May Not Be Considered

Evid. Code § 703.5 provides that no person presiding at any judicial or quasi-judicial proceeding, and no arbitrator or mediator, is competent to testify, in any subsequent civil proceeding, as to any statement, conduct, decision, or ruling, occurring at or in conjunction with the prior proceeding, except as to a statement or conduct that could do any of the following:

Give rise to civil or criminal contempt.

Constitute a crime.

Be the subject of investigation by the State Bar or Commission on Judicial Performance.

Give rise to disqualification proceedings under Code Civ. Proc. § 170.1(a)(1) or (6).

Evid. Code § 703.5 does not apply to a mediator with regard to any mediation under Fam. Code § 3160 et seq.

Trabuco Highlands Community Assn. v. Head (2002) 96 Cal. App. 4th 1183, 117 Cal. Rptr. 2d 842 involved a dispute between a condominium association and member/homeowners. They stipulated to arbitration, but the homeowners always maintained they did not agree to ''binding'' arbitration. There were letters evidencing an agreement for nonbinding arbitration, but the association claimed the homeowners orally modified the agreement during the arbitration hearing to agree to binding arbitration. The award issued (in favor of the association) was entitled ''Binding Arbitration Award and Decision''. Homeowners made it clear at association meetings that they did not agree to binding arbitration, but did nothing until, some five months after issuance of the award, the association moved to have it confirmed. Homeowners opposed the confirmation and both parties submitted declarations. The arbitrator submitted a letter indicating his notes conformed with the association's position and that the homeowners agreed to ''seek a final resolution of this dispute''. Homeowners objected that the letter was not a declaration and was hearsay, but the court referred to the letter in ruling that the arbitration was binding and confirming the award. After losing a motion for reconsideration, the homeowners appealed.

The court of appeal reversed, finding that the trial court reached its decision by impermissible means [ 96 Cal. App. 4th 1183, 118 . The court of appeal remarked that the trial court expressly noted that it was relying on the letter by the arbitrator. By doing so, the trial court abdicated its function to determine whether the arbitrator exceeded his powers in a most fundamental way: by issuing a binding award after the parties agreed to nonbinding arbitration [ 96 Cal. App. 4th 1183, 1190] . The court of appeal said the problem went beyond the fact that the arbitrator's letter was hearsay: arbitrator testimony concerning the arbitration is expressly prohibited (except in circumstances not relevant here) by Evid. Code § 703.5. Therefore, it was inappropriate to rely after the fact on the arbitrator's characterization of the arbitration as binding. Because the trial court appeared to have relied on the arbitrator's statement, reversal was required for proper consideration of whether the parties agreed to binding arbitration [ 96 Cal. App. 4th 1183, 1191] .

[SBD]

[g] Party Who Had Award Vacated Is Entitled to Post-Arbitration Costs and Attorney's Fees

Code Civ. Proc. § 1293.2 provides that the court must award costs, as provided in Code Civ. Proc. §§ 1021-1038, in any judicial proceeding under Code Civ. Proc. §§ 1280-1294.2 connected with arbitration. This includes attorney's fees pursuant to Code Civ. Proc. § 1033.3(a)(10)(A) when they are authorized by the contract.

Plaintiff in Marcus & Millichap Real Estate Investment Brokerage Co. v. Woodman Investment Group (2005) 129 Cal. App. 4th 508, 28 Cal. Rptr. 3d 584 , sought to recover a real estate brokerage commission. The arbitrator awarded the commission to plaintiff Marcus & Millichap (MM), which petitioned to confirm the award. Woodman, and its managing partner, who was also named in the award, petitioned to vacate the award. That petition was granted, as was Woodman's petition for post-award costs and attorney's fees incurred in the judicial proceedings. The award was vacated on the ground that the managing partner was not a signatory of the arbitration agreement and that the arbitrator exceeded her powers by entering an award against him. Plaintiff sought to have the award corrected to delete Woodman's managing partner. When that motion was denied, plaintiff filed a petition to compel the managing partner to arbitrate. That petition was granted. MM did not appeal the order vacating the arbitration award, but did appeal the order granting defendants' costs and attorney's fees. The basis for seeking to set aside the order awarding post-award costs and attorney's fees under Code Civ. Proc. § 1293.2 was that the matter had not yet been resolved, so no one was yet the prevailing party.

The court of appeal affirmed the award of post-award costs and attorney's fees, although with a dissent which claimed the majority treated the matter too technically, and should have come to a contrary result based on equitable principles ( 129 Cal. App. 4th 508, 518) . The award of costs pursuant to Code Civ. Proc. § 1293.2, including attorney's fees when authorized by the contract, is mandatory. The court's determination under Code Civ. Proc. § 1293.2 which party, if either, is the prevailing party in a post-arbitration judicial proceeding is a judicial function distinct from the arbitrator's decision to award or not to award fees in the arbitration itself ( 129 Cal. App. 4th 508, 513) [see Code Civ. Proc. § 1032(4)(a) (defining ''prevailing party'')]. As a matter of law, with respect to the postarbitration judicial proceedings Woodman and its managing partner were the prevailing parties ( 129 Cal. App. 4th 508, 514) . They were entitled to post-award costs and attorney's fees despite the order for another arbitration, because the order vacating the award without ordering rehearing was final and appealable [see Code Civ. Proc. § 1294(c)] ( 129 Cal. App. 4th 508, 514-515) . Because no rehearing was ordered and the order vacating the arbitration award was not appealed, no claim of either party remained before the court or otherwise subject to judicial determination, the trial court's rulings are final. Further, the defendants did not have to prevail on the contract claim to be entitled to postarbitration fees and costs. The listing agreement provided for attorney's fees ''in any litigation, arbitration or other legal proceedings.'' That contract language, as well as Code Civ. Proc. § 1293.2 required postarbitration judicial proceedings be considered a discrete legal proceeding for purposes of determining entitlement to attorney's fees ( 129 Cal. App. 4th 508, 516) .

MBNA America Bank, N.A. v. Gorman (2006) 147 Cal. App. 4th Supp. 1, 54 Cal. Rptr. 3d 724 , was an appeal to the Appellate Division of the Superior Court from an order of the superior court denying plaintiff's petition to confirm an arbitration award against defendant card holder for sums owed to plaintiff on the ground that under Badie v. Bank of America (1998) 67 Cal. App. 4th 779, 79 Cal. Rptr. 2d 273 (discussed at § 20.133[3][a]) a mailed insert or ''bill stuffer'' cannot serve as a waiver of the procedural right of trial by jury or as a basis for enforcement of an ADR clause by a unilaterally issued change in the original agreement ( 147 Cal. App. 4th Supp. 1, 4 ). After plaintiff's petition was denied, defendant moved for costs and attorney's fees under both the attorney's fee provision in the credit card agreement and the private attorney general doctrine codified at Code Civ. Proc. § 1021.5. The trial court awarded defendant costs and fees in the amount of $23,490.77, finding that he was the prevailing party in this proceeding. The plaintiff appealed. The only issue on appeal was the grant of attorney's fees and costs to defendant.

The Appellate Division affirmed ( 147 Cal. App. 4th Supp. 1, 13) , also awarding defendant his costs and attorney's fees on the appeal ( 147 Cal. App. 4th Supp. 1, 13-14) . Plaintiff contended the order denying the petition to confirm was not a final award as required before contractual attorney's fees can be awarded under Civ. Code § 1717 because there was no final determination of the contractual rights giving rise to the dispute. The Appellate Division noted that Code Civ. Proc. § 1293.2 mandates that the court award costs in any judicial proceeding under Code Civ. Proc. § 1280 et seq. as provided in Code Civ. Proc. § 1021 et seq. A petition to confirm or vacate an arbitration award is covered by Code Civ. Proc. § 1280 et seq. [see Code Civ. Proc. § 1285]. Code Civ. Proc. § 1032(a)(4) defines ''prevailing party'' to include a defendant as against whom plaintiffs who do not recover any relief. Thus, defendant was the prevailing party in the judicial proceeding on plaintiff's petition to confirm the arbitration award: the petition was denied and plaintiff did not recover any relief against defendant. Thus, under the mandate in Section 1293.2, the trial court was required to award defendant his costs, which under Code Civ. Proc. § 1033.5(a)(10) includes attorney's fees if they are authorized by contract, statute, or law. The credit card agreement contained a unilateral attorney's fees provision in favor of plaintiff; but Civ. Code § 1717(a) implies a bilateral right to attorney's fees ( 147 Cal. App. 4th Supp. 1, 7) . The Appellate Division discussed other tests for who is a prevailing party, each of which bolstered its conclusion that defendant was the prevailing party on petition to confirm the award ( 147 Cal. App. 4th Supp. 1, 7-8) . Because the trial court's order was silent on the legal basis for the award, the Appellate Division also considered whether the trial court properly granted attorney's fees under Code Civ. Proc. § 1021.5, and affirmed the award on that basis too ( 147 Cal. App. 4th Supp. 1, 8-14) . Although plaintiff contended the award under the private attorney general doctrine could not be upheld because the denial of the petition to confirm the award was not ''binding precedent,'' the Appellate Division said that although the order did not formally enjoin plaintiff from enforcing the arbitration agreement against other customers, it should effectively deter plaintiff from doing so at least with regard to customers similarly situated to defendant ( 147 Cal. App. 4th Supp. 1, 10) . By similarly situated, the Appellate Division meant those of plaintiff's customers against whom the arbitration agreement would be unenforceable for the same reasons it was found to be unenforceable against plaintiff in the trial court proceedings ( 147 Cal. App. 4th Supp. 1, 10 n. 2 ).

[admin]

Great posts, SBD!

[admin]

The process:

The whole arbitration Process:

1. A credit-card company or retailer files a claim with the National Arbitration Forum
2. The creditor notifies the consumer of the claim; 40% of all cases settle
3. Cases that don't settle are assigned to arbitrators, who are lawyers and sometimes former judges
4. Consumers can respond in person or in writing, but for various reasons, the vast majority don't
5. Arbitrators decide whether to make awards, which can include interest and creditors' legal fees


Great article from Business Week!

[admin]

New article on mandatory arbitration:

http://www.creditinfocenter.com/card...itration.shtml

[Stacy1]

Originally Posted by admin

It seems that the arbitration is an issue that comes up alot, and I'd like to come up with a complete strategy for refusing it.

Here's what I have so far:

Use the following links/letters:
http://whychat.5u.com/arbltr.html
http://www.tlpj.org/briefs/chch2.htm

File them with both the courts and the arbitrator/mediator. Other steps?

When they tried to force it on me, I wrote to the collector and told them that I had never agreed to it and to produce a contract with my signiture on it if they claim that I did. Also copied arbitrator and told them that I would sue them if they continued. That was the last that I heard from them on that approach.

[admin]

Here's a thread which merits a look-see.

http://debt-consolidation-credit-rep...d.php?t=291451

[astiman]

Haven't seen a post on this thread for a while.

I can only say this...It is VERY possible to beat them at Arb if you refuse it early on....

I've done it.

You can, too.

[ping]

Once they get a NAF award, they still have to find a court to uphold/ confirm it.

At that point, you have a better chance in court instead of the NAF since the rules of evidence in the forum are slanted towards the creditor/CA.

there have been rulings for and against it depending on the state.

you have to argue it very carefully;

sometimes the right to Arbitration is not transferred in the assignment.

http://www.secinfo.com/d113He.z1t.c.htm (a credit purchase agreement aka an assignment of accounts where the seller certifies that the accounts sold are not subject to mandatory binding arbitration


5) Representations and Warranties of Seller.

(x1) Card Member Agreements. No Account is subject to any card member agreement and disclosure statement mandating claims, disputes or other controversies arising out of or relating to an Account to be submitted to any form of arbitration or alternative dispute resolution process including, without limitation, binding or mandatory arbitration.

Asset acceptance is a publicly traded firm, maybe you can find their filings

They Also have to prove that the right to arbitration was transferred, and they have to prove they own the account in accordance with the state statutes.

Read these;

http://www.websupp.org/data/DAZ/4:06...520-56-DAZ.pdf

http://www.marsomichelsonharrigan.com/Order.pdf

http://www.debtjurisprudence.org/MBN...arbopinion.pdf

http://www.in.gov/judiciary/opinions...6120803bbs.pdf

http://vlex.com/vid/midland-funding-...hnson-41409931

[admin]

Here is a complaint filed against NAF which exposes their illegal practices. Please note that it starts as a wrongful termination suit, but goes on to name illegal practices like automatic awarding arbitration disputes in favor of certain credit card companies or collection agencies and forging proof of service to consumers.

This is only a complaint, and has not been ruled on, but the practices going on are quite interesting. Because the Plaintiff has filed the complaint, it's the same as swearing in court that the allegations are true.

http://www.longhornlawyer.com/blog/w...-complaint.pdf

[admin]

Here's another good resource:

http://www.fairarbitrationnow.org/co...nare-consumers

[admin]

Update - both of the big Arbitration firms have agreed to shut down due to lawsuits filed against them:

I wrote this up to summarize:

http://www.creditinfocenter.com/word...tration-forum/

Also, the Wall Street Journal wrote up a little article how the closing of the two big firms is throwing "credit card disputes in disarray":

http://online.wsj.com/article/SB1248...ml#mod=testMod

[Mrfreespeech111]

Have you seen this video on the NAF?

http://www.youtube.com/watch?v=uYfCr...layer_embedded

[admin]

It's a pretty long video - I will have to pop open a beer for this. But I will watch it eventually.

[Mrfreespeech111]

Originally Posted by admin

It's a pretty long video - I will have to pop open a beer for this. But I will watch it eventually.

Everyone should watch it, it's priceless!

[oldguy47]

While we watch to see how arbitration works for some members, I thought I would add some information on current case law to help fight off arbitration.

In Chase Bank USA, N.A. v. Leggio, No. 43,567-CA, 2008 WL 4925802 (La. Ct. App. Nov. 19, 2008),
Reversing a trial court order confirming an arbitration award in a consumer credit dispute, a Louisiana appellate court held that mere use of a credit card does not presume consent to arbitration when the borrower did not receive notice of the arbitration agreement
Additionally, the Court rejected Chase’s implied consent argument that Leggio consented to arbitration by using the credit card. Although a presumption exists that a consumer using a credit card understands he is responsible for paying the card, merely using a credit card does not signify consent to arbitration of disputes involving a credit card, particularly without a showing that the borrower received notice of the arbitration agreement.

Wells v. Tennessee Homesafe Inspections, LLC, No. M200800224COAR3CV, 2008 WL 5234724 (Tenn. Ct. App. Dec. 15, 2008)
Affirming a trial court’s denial of a motion to compel arbitration in a dispute between a homeowner and a home inspection company, a Tennessee appellate court held that an arbitration agreement was unenforceable because both parties did not sign or initial it as Tennessee law requires.

High v. Capital Senior Living Properties 2- Heatherwood, Inc., No. 08-13066, 2008 WL 5411189 (E.D. Mich. Dec. 17, 2008),
Denying a motion to compel arbitration in a dispute between a nursing home and the estate of a deceased resident, a Michigan federal court held that a patient did not assent to arbitration because she did not knowingly and voluntarily waive her right to a jury trial.

[outfini09]

yea.. of course its up to webmaster...
he is the webmaster after all..
But that does not stop us users from having a opinion...

[christinag]

Well I can safely say I would never claim residence anywhere other than where I reside, in my book that's asking for trouble.