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Elected Arbitration in answer and DV - received notice of msj - help!


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If I responded to a civil summons from a creditor, and within the answer declared that I elect arbitration as set forth in the card member agreement, and that I request a current copy of said agreement so that the amount needed to initiate arbitration could be forwarded to me by the plaintiff (creditor). Then a few months later I receive a copy of a motion for summary judgement from plaintiff lawyer, are they in violation for doing this, since I elected arbitration as intent and made the request?

Any assistance is greatly appreciated, I'm seriously losing sleep over this...

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I do not know the specifics about North Carolina rules of procedures, so my answer is general in nature to how things generally work.

I would say you are pretty much up the creek without a paddle. The lawsuit answer is not where you demand arbitration.

You would answer the lawsuit or in the alternate ask the answer to the lawsuit be stayed while you file a motion to compel arbitration. I've heard that sometimes even answering the lawsuit can't be seen as conceding jurisdiction to the court.

Assuming answering the suit won't get you in trouble for arbitration, you should have answered the lawsuit, then immediatley filed a motion to compel arbitration. That would have gotten you your arbitration.

Also you can't demand evidence in the answer to the lawsuit. That is why you received nothing. The other side just laid low and when you time ran out to file motions or discovery, they hit you with summary judgement.

In my opinion, you're the one that made the errors. You had the right idea, but did not put what you wanted in the proper procedural form. Sorry, but I would expect you to be slapped with summary judgement unless you can show a trialable issue and defeat summary judgement.

You need to see what case law you can find for filing arbitration at this stage. Also get the agreement, you don't need them to give it to you, just get it off the internet. You might get lucky and the arb clause read where at anytime either party can elect arbitration, even after a lawsuit in court has begun (there are arb agreements that actually have that language written into the agreements).

Sounds like you are in default of the arbitration clause (that is the legal way of saying you did not ask arbitration properly or you waited too long).

Edited by Coltfan1972
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Thanks for the rightful beating on me Colt, I figured I screwed up... I do plan on filing motion to compel Arb tomorrow am first thing.

I have a few samples, anything you guys can throw my way as far as sample motions would be awesome... I have a feeling I will already be up all night doing this work as is.

Thanks in advance

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If I responded to a civil summons from a creditor, and within the answer declared that I elect arbitration as set forth in the card member agreement, and that I request a current copy of said agreement so that the amount needed to initiate arbitration could be forwarded to me by the plaintiff (creditor). Then a few months later I receive a copy of a motion for summary judgement from plaintiff lawyer, are they in violation for doing this, since I elected arbitration as intent and made the request?

Any assistance is greatly appreciated, I'm seriously losing sleep over this...

First. Who is the creditor? What year is the default?

You did not do wrong by stating in your answer that you elect

private arbitration, but you should not have asked them to send you

a current copy of the agreement in order to ask for the fees to be

forwarded to you.

You do not need the current cardmember agreement as most any agreement

that was in effect as long as you had the account should work.

They may offer you nothing in the way of payment on an arb. and by asking for the agreement and stating this, you have basically told them that

you do not understand this process.

No OC and definitely no JDB wants to go to arb. It is way too costly

for them to do so unless the debt is very high.

Now, do I understand you to have also elected arbitration in your DV to them?

If you did that and they did bring a lawsuit after that yes, that is a violation.

That is why it is important to get that in a DV, even if you have no intention of following through.

Now, you received notice of a motion that will be presented for the judgment?

You have to go to that hearing, no matter what.

You also need to call your court and ask how you get a motion heard

and you will need to motion your court for a stay in the court case pending private contractual arbitration.

But this is assuming you have not already gotten a judgment against you.

If you answer these things we will see where you need to go next.

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Again, thanks so much for the informative replies.

1). Yes, I did elect arbitration during the DV

2). The creditor is discover card

3). The debt, with additional occurred interest and fees since the DV total 9,720

Hope this helps.

I will be contacting/visiting the court in the am, just a 10 minute skip up the road for me.

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Was not really trying to beat up on you. I'm usually just pretty blunt and requesting documents or asking for arbitration in the lawsuit answer is pretty much universally not the way it's done in any state. So just cut and dry in my opinion, but not trying to pile on you. I hope it works out and I agree with the other advice you have been given.

In my opinion, you've made a pretty big mistake and put yourself in an unfavorable position, but you have not completely lost the case yet. You just have a lot of work to do.

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1.) The Cardmember Agreement (Exhibit A) contains on page 13, a binding private consumer Arbitration provision. The Agreement states: “If either you or we elect arbitration, neither you nor we shall have the right to litigate that claim in Court or to have a jury trial on that claim.” The defendant hereby elects binding private arbitration to solve this claim and prays that the Court according to Federal Arbitration Act 9 U.S.C. § 1, Section 3 moves to stay the court proceeding and order plaintiff to initiate the arbitration process according to the Agreement, as prepared and promulgated by the Plaintiff without input from the defendant, that regulates the arrangements between the parties.

2.) The plaintiff was notified of this election and chose to file suit anyway. Please see "Exhibit A".A binding private consumer Arbitration provision.

3.) Recently the Supreme Court of United States has held in AT&T Mobility v. Concepcion, Sup. Ct. U.S. (SCOTUS), June, 2011 that if there is an arbitration clause in the contract, that clause must be honored. “We have described this provision as reflecting both a

“liberal federal policy favoring arbitration,” Moses H. Cone, supra, at 24, and the “fundamental principle that arbitration is a matter of contract,” Rent-A-Center, West, Inc. v. Jackson, 561 U. S. ____ , ____ (2010) (slip op., at 3). In line with these principles, courts must place arbitration agreements on an equal footing with other contracts, Buckeye Check Cashing, Inc. v. Cardegna, 546 U. S. 440, 443 (2006), and enforce them according to their terms, Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ., 489 U. S. 468, 478 (1989).

4) Furthermore, “principal purpose” of the FAA is to “ensur[e] that private arbitration agreements are enforced according to their terms.” Volt, 489 U. S., at 478; see also Stolt-Nielsen S. A. v. AnimalFeeds Int’l Corp., 559 U. S. ___, ___ (2010) (slip op., at 17). This purpose is readily apparent from the FAA’s text. Section 2 makes arbitration agreements “valid, irrevocable, and enforceable” as written (subject, of course, to the saving clause); §3 requires courts to stay litigation of arbitral claims pending arbitration of those claims “in accordance with the terms of the agreement”; and §4 requires courts to compel arbitration “in accordance with the terms of the agreement” upon the motion of either party to the agreement…”

5) Arbitration is mandated in accordance with public policy as contained in the Federal Arbitration Act

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There is no "official" motion to compel form available for nc that I can find. Should I take the motion that the attorney on behalf of discover filed and piece this together in the same fashion?

Thanks again for all the assistance

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Guest usctrojanalum

To be honest, I'd forget about a motion to compel at this point. Focus your energy on opposing the MSJ and defeating the motion.

I think you have a shot at defeating the motion if you can show the Court that the agreement between you and discover allowed for private arbitration, and your requests for arbitration have been denied.

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http://www.nccourts.org/Citizens/CPrograms/Arbitration/Documents/cannons.pdf

WHEREAS, section 7A-37.1 of the North Carolina General Statutes

authorizes court-ordered nonbinding arbitration as an alternative to civil

procedure, and

WHEREAS, N.C.G.S. § 7A-37.1(B) provides for this Court to adopt rules

governing this procedure,

NOW, THEREFORE, pursuant to N.C.G.S. § 7A-37.l(B), the North Carolina

Canons of Ethics for Arbitrators are hereby adopted, to read as in the

following pages, for court-ordered nonbinding arbitration in the State of

North Carolina. The supervising Chief District Court Judge or Senior

Resident Superior Court Judge shall be the enforcing authority for these

Canons. These Canons shall be effective on the 1st day of October, 1999.

Adopted by the Court in conference the 19th day of August, 1999. The

Appellate Division Reporter shall publish the North Carolina Canons of

Ethics for Arbitrators in their entirety, as amended through this action,

at the earliest practicable date.

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North Carolina Supreme Court Finds Arbitration Cost-Prohibitive Where Agreement Required Losing Party to Pay for Arbitral Appeal

The North Carolina Supreme Court found that arbitration under a lender's arbitration agreement would be cost-prohibitive because the agreement provided for an arbitral appeal to a three-member panel and required the losing party to pay the cost of the appeal. Accordingly, the Court held that the arbitration agreement was unenforceable.

In Tillman v. Commercial Credit Loans, Inc., No. 360A06, 2008 WL 201750 (N.C. Jan. 25, 2008), Tillman and Shirley (collectively, Borrowers) each obtained a loan from Commercial Credit Loans (CCL). Both loan agreements contained an arbitration provision that (1) barred class-wide proceedings, (2) carved out foreclosure proceedings and claims totaling less than $15,000, and (3) provided that either party could appeal an arbitration award to a three-arbitrator panel with the party losing on appeal required to pay all expenses of the appeal.

Several years later, the Borrowers filed a putative class action against CCL, alleging that CCL's marketing of credit insurance violated North Carolina law. CCL filed a motion to compel arbitration. The trial court denied the motion on various grounds, including evidence that CCL had sued thousands of North Carolina borrowers in court but never filed a claim in arbitration.

On appeal, the North Carolina Court of Appeals reversed the trial court and remanded the case with instructions to issue an order compelling arbitration. See Tillman v. Commercial Credit Loans, Inc., 629 S.E.2d 865 (N.C. Ct. App. 2006). However, since there was a dissenting opinion, the Borrowers were able to appeal to the North Carolina Supreme Court (the Court).

Before analyzing the arbitration agreement at issue, a majority of the Court adopted a "sliding scale" approach to unconscionability as the applicable standard under North Carolina law. Under the "sliding scale" approach, a party must demonstrate both forms of unconscionability – procedural and substantive – but a strong showing of one may overcome a weak showing of the other.

The Court found that the Borrowers had made the requisite showing of procedural unconscionability, largely because CCL admitted that they would have refused the loan if the Borrowers had refused the arbitration agreement.

Thus turning to the question of substantive unconscionability, the Court first examined whether arbitration under the agreement would be cost-prohibitive. On this issue, the Court agreed with the trial court that under the circumstances, arbitration would be cost-prohibitive because the Borrowers, with their limited financial means, could not risk having to pay the cost of an arbitral appeal.

The Court identified two additional sources of substantive unconscionability. First, the Court found that the arbitration agreement was unilateral in application based on CCL's routine filing of collection lawsuits. Second, the Court found that the bar on class-wide proceedings compounded the other problems by foreclosing the cost savings of a collective proceeding and further manifesting the agreement's unilateral application.

Having determined that the arbitration agreement was both substantively and procedurally unconscionable, the Court held that the agreement was unenforceable and, accordingly, reinstated the trial court order denying CCL's motion to compel arbitration.

There were two dissenting justices who reasoned that the majority's application of the unconscionability doctrine ran afoul of the Federal Arbitration Act (FAA). Specifically, they stated: "Although the majority ostensibly applies general principles of state contract law to render this arbitration agreement unconscionable, in effect the majority finds it unconscionable precisely because it is an agreement to arbitrate."

This case offers valuable guidance for parties who prefer the simplicity and tradition of one-on-one arbitration. First, the Court's discussion of procedural unconscionability highlights the importance of an opt-out provision giving the non-drafting party a right to reject the arbitration agreement. An opt-out provision guards against the argument that there is disparate bargaining power inherent in a consumer transaction by giving full and unfettered say to the non-drafting party to choose to enter into the arbitration agreement.

Second, the Court's concern over CCL's routine filing of lawsuits serves as a reminder that parties should embrace arbitration as a fair and efficient forum for the resolution of all disputes, unless there is some exception grounded in legal necessity. Otherwise, courts may view the arbitration agreement as an attempt to shield one party from litigation rather than the election of a more capable and efficient forum.

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Have you filled out JAMS or AAA paperwork and sent copies to court/attorney/Bank/ telling them you want to use arbitration?

IT IS IMPORTANT THAT YOU READ THIS ARBITRATION PROVISION CAREFULLY. IT PRO-

VIDES THAT YOU MAY BE REQUIRED TO SETTLE A CLAIM OR DISPUTE THROUGH ARBITRA-

TION, EVEN IF YOU PREFER TO LITIGATE SUCH CLAIMS IN COURT. YOU ARE WAIVING

RIGHTS YOU MAY HAVE TO LITIGATE THE CLAIMS IN A COURT OR BEFORE A JURY. YOU ARE

WAIVING YOUR RIGHT TO PARTICIPATE IN A CLASS ACTION LAWSUIT, CLASS ACTION ARBI-

TRATION OR OTHER REPRESENTATIVE ACTION WITH RESPECT TO SUCH CLAIMS.

Any claim or dispute (“Claim”) by either you or us against the other arising from or relating in

any way to your account, this Agreement or any transaction conducted with the Bank or any

of its affiliates will, at the election of either you or us, be resolved by binding arbitration. This

arbitration provision governs all Claims, whether such claims are based on law, statute, con-

tract, regulation, ordinance, tort, common law, constitutional provision, or any other legal the-

ory and whether such Claim seeks as remedies money damages, penalties, injunctions or

declaratory or equitable relief. Claims subject to this arbitration provision include Claims

regarding the applicability of this provision or the validity of this or any prior Agreement. As

used in this arbitration provision, the term “Claim” is to be given the broadest possible mean-

ing, and includes Claims that arose in the past or arise in the present or future. If a party

elects to arbitrate a Claim, the arbitration will be conducted as an individual action only. This

means that even if a demand for class arbitration, class action lawsuit or other representative

action, including a private attorney general action, is filed, any Claim related to the issues of

such lawsuits will be subject to individual arbitration. Claims subject to arbitration also

include Claims that are made as counterclaims, cross-claims, third-party claims, interplead-

ers or otherwise. Notwithstanding this arbitration provision, if you have a Claim that is within

the jurisdiction of the small claims court, you may file your Claim there. Any appeal from a

decision of a small claims court shall be subject this arbitration provision.

The arbitration, including the selection of the arbitrator, shall be administered by the Ameri-

can Arbitration Association (“AAA”), according to the Commercial Arbitration Rules and the

Supplemental Procedures for Consumer-Related Disputes. To start an arbitration, you or we

must give notice of an election to arbitrate. This notice may be given after a lawsuit has been

filed and may be given in papers or motions in the lawsuit. Our notice to you may be provided to you at your last known address or at such other address as we may have in our records;

your notice to us shall be given to: Arbitration Administrator, BB&T Legal Department, P.O.

Box 1255, Winston-Salem, NC 27102.

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North Carolina General Statutes § 1-569.7 Motion to compel or stay arbitration

(a) On motion of a person showing an agreement to arbitrate and alleging another person's refusal to arbitrate pursuant to the agreement:

(1) If the refusing party does not appeal or does not oppose the motion, the court shall order the parties to arbitrate; and

(2) If the refusing party opposes the motion, the court shall proceed summarily to decide the issue and order the parties to arbitrate unless it finds that there is no enforceable agreement to arbitrate.

(B) On motion of a person alleging that an arbitration proceeding has been initiated or threatened but that there is no agreement to arbitrate, the court shall proceed summarily to decide the issue. If the court finds that there is an enforceable agreement to arbitrate, it shall order the parties to arbitrate.

© If the court finds that there is no enforceable agreement to arbitrate, it shall not, pursuant to subsection (a) or (B) of this section, order the parties to arbitrate.

(d) The court shall not refuse to order arbitration because the claim subject to arbitration lacks merit or because grounds for the claim have not been established.

(e) If a proceeding involving a claim referable to arbitration under an alleged agreement to arbitrate is pending in a court, a motion under this section shall be made in that court. Otherwise a motion under this section may be made in any court as provided in G.S. 1‑569.27.

(f) If a party makes a motion to the court to order arbitration, the court on just terms shall stay any judicial proceeding that involves a claim alleged to be subject to the arbitration until the court renders a final decision under this section.

(g) If the court orders arbitration, the court on just terms shall stay any judicial proceeding that involves a claim subject to the arbitration. If a claim subject to the arbitration is severable, the court may limit the stay to that claim. (1973, c. 676, s. 1; 2003‑345, s. 2.)

Sections: Previous 1-567.87 1-569.1 1-569.2 1-569.3 1-569.4 1-569.5 1-569.6 1-569.7 1-569.8 1-569.9 1-569.10 1-569.11 1-569.12 1-569.13 1-569.14

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