Put it this way, you would be the first person we have heard of who got a court to grant an MTC, filed for arbitration and then had an arbitration award issued against them by a JDB.
Read up on arbitration in the link in my signature below.
Did you get a judgement for the defendant (in other words, was the case tried on fact), did the plaintiff obtain a dismissal without prejudice, or was it something in between those 2 items? If you got a judgement for the defendant, that means the court considered all the facts and found in your favor and you can use that to file a challenge to the entry on your credit report. If the case was dismissed without prejudice by the plaintiff, then the entry will probably stay because the case was not tried based on the facts.
This is California specific and most people on this board already know that California is very consumer friendly compared to the rest of the nation so it is not surprising that something that would fly in California would not fly in other states.
It has been known to happen in the past, maybe not with the bigger firms such as Calvary but with many of the smaller Western New York style firms. Better to just simply send in the amount of the settlement and avoid the issues.