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MTD denied, Ordered Stay Arb


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This is a follow-up on my original story: http://www.creditinfocenter.com/forums/there-lawyer-house/310118-valid-contract-does-arbitration-apply-4.html

In short, I was sued for appr. $3K by a small fin company (not a credit card debt, but over a fin report I ordered that was not performed; I got billed for some "services/reviews" that I deny entirely). The agreement had an arb. clause.

  • I filed Motion To Dismiss for to lack of subject matter jurisdiction/improper venue as our Agreement had a mandatory arb clause.
  • My ANSWER also referred to arb. clause and denied proper venue, but included some counterclaims, i.e. Breach of Contract, etc.

This week I got the ORDER. My MTD was denied, the case was ordered stay for 90 days to allow to submit this case to binding arb. Also, ordered within 15 days to provide the name of the private service provider & the scheduled day of the initial private session within 90 days.

I am assessing the situation & coming up with the strategy to respond to this. I still don't understand why my MTD was denied.

It seems that denial of my MTD was still a good outcome b/c we're forced to arbitrate.

How would you recommend I respond and proceed next?

Does it make sense to file Motion to Compel Arbitration or some type of MTD to get it out of Court?

I've researched arbitration and it seems I should elect JAMS in my Response to the Law Clerk. Also, I think I should not initiate and in my letter to Court demand that the Plaintiff initiates arbitration with JAMS. The arguments over who initiates arb and which arb forum/provider can go on for some time and will wear out the Plaintiff's atty.

ORDER:

The above action comes before the Court on the Defendant's Motion to Dismiss Plaintiff's Complaint.

The issue before the Court is whether the Plaintiff's Complaint against the Defendant is barred for having failed to comply with the arbitration provisions set forth in the agreement. "A party aggrieved by the failure of another to arbitrate may apply for an order compelling arbitration. O.C.G.A. 9-9-6(a). If the Court determines there is no substantial issue concerning the validity of the agreement to submit to arbitration or compliance therewith and the claim sought to be arbitrated is not barred by limitation of time, the court shall order the parties to arbitrate." Id. "If the application is granted, the order shall operate to stay a pending or subsequent action, or so much of it as is referable to arbitration." Id. A party is deemed to have waived her right to arbitrate if, under the totality of the circumstances, the party has acted inconsistently with the arbitration right, and in so acting, has in some way prejudiced the other party. See USA Payday Cash Advance Ctr.#1, Inc. v. Evans, 281 GA. App.847, 849 (2006).

After review and consideration of the pleadings and briefs filed in this action, the Court find that the Plaintiff offered and the Defendant accepted the clear and definite terms of the agreement that was memorialized in a letter, signed by X on behalf of Plaintiff X, PC and signed by the Defendant MY NAME on May 5, 2008. See Def.'s Mot. To Dismiss Pl.'s Compl., Ex. A. The Court further finds, after construing the full measure of the rights of each party to the agreement, that the parties agreed to submit resolution of any fee dispute to binding arbitration in accordance with the Georgia Arbitration Code, O.C.G.A. 9-9-1. See id. Furthermore, the Court finds that the Defendant's assertion of a counterclaim has not waived her right to arbitrate because the parties have not acted inconsistently with the arbitration right, discovery has not taken place during the course of this litigation and the Defendant set forth arbitration as an affirmative defense. See USA Payday Cash Advance Ctr. #1, Inc. v. Evans, 281 Ga. App. At 849; Phil Wooden Homes, Inc. v. Ladwig, 262 Ga. App. 792, 792-793 (2003).

Likewise, the Court finds that the Defendant has the right to invoke the arbitration provision of the parties' agreement because the Plaintiff will not be prejudiced. See USA Payday Cash Advance Ctr. #1, Inc., 281 Ga. App. At 849; Ed Voyles Jeep-Chrysler, Inc. v. Wahls, 294 Ga. App. 876, 877 (2003). Therefore, sufficient grounds exist to send this case to arbitration. Accordingly, it is

ORDERED that the Defendant MY NAME Motion to Dismiss Plaintiff's Complaint is hereby DENIED. The action is STAYED for ninety (90) days from the date of this Order to allow parties to submit this case to binding arbitration under the Georgia Arbitration Code. The parties shall notify the Law Clerk, in writing, within fifteen (15) days of this Order, and provide the name of the private service provider (unless they wish to keep that confidential) and the scheduled date of their initial private session, which shall be no later than ninety (90) days from the date of this Order. If the parties are unable to agree on the arbitrator, the parties shall notify the Law Clerk, in writing, within fifteen (15) days of this Order with the name of several arbitrators.

SO ORDERED this 14th day of May, 2012.

Here's a copy of my MTD that was denied:

COMES NOW the Defendant, MY NAME, proceeding pro se. Defendant prays the complaint filed by the Plaintiff, which is attached to this motion, be dismissed.

The Plaintiff has sued the Defendant in a venue that is not allowed per the written contract attached to this motion. This honorable court has no jurisdiction over this dispute.

The Plaintiff's contract has a mandatory arbitration clause to settle any dispute. (See Defendant’s enclosed Exhibit ‘A’, page 3): “In the event of a dispute over fees for our engagement, we mutually agree to try in good faith to resolve the dispute. lf we are unable to resolve the fee dispute, we mutually agree to submit to resolution by arbitration in accordance with the Georgia Arbitration Code, O.C.G.A. § 9-9-1, et; seq. Such arbitration shall be binding and final. In agreeing to arbitration, we both acknowledge that in the event of a dispute over fees, each of us is giving up the right to have the dispute decided in a court of law before a judge or jury and, instead, is accepting the use of arbitration for resolution.”

The Supreme Court Ruling, decided April 27, 2011, AT&T MOBILITY LLC v. CONCEPCION ET U, states that courts must enforce arbitration agreements according to their terms. The Plaintiff's contract has a mandatory arbitration clause in the contract.

Pursuant to the parties’ contract, this Court cannot be a forum for any disputes between the parties.

WHEREFORE, Defendant moves this Honorable Court to dismiss Plaintiff’s complaint due to Lack of Subject Matter Jurisdiction.

Edited by flashback
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Obviously does not mean it has not happened, but I've never heard of a court actually dismissing the case, but doing just what they did here.

You can't very well expect the court to do a complete dismissal just based on the word of either party that they plan to arbitrate.

However, this is one of the few "mandatory" arbitration clauses that I've seen. So I don't know why the court would not dismiss based on the language of the arb clause.

I bet Linda will be by and can probably tell you why, or at least give more info other that "I don't know why" :)

It actually could be something in your favor. Your dispute is not over the fee and you have a counterclaim. Therefore the court might have been staying the case as to not dismiss your counterclaim which is not based over a dispute of the fee.

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Let me take a stab at this;

Courts usually do not dismiss if a party elects arbitration, it stays the case. Read section 3 of FAA, Upon either party's motion the court must stay the case until arbitration has been had.

The case is stayed until you initiate and when you do must notify court of your filing.

It seems like in your motion you only asked for dismissal and not stay, usually one asked for dismissal and in alternative a stay pending the outcome of arbitration.

I don't see anything wrong with the order, you have your counterclaims intact in case opponent tries to run out the SOL clock.

Court has ordered initiation so I would not mess with that and would initiate in JAMS ASAP.

I would then file JAMS paper work with court and copy the other side.

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Thank you guys for your feedback. I feel better already! :)

1. "Mandatory" arbitration clause is something I need to explore deeper for this case. I countered with Breach of Contract b/c of arb clause. However, based on what I've read so far, it would take actual damages to get any monetary compensation for breach of contract. So, I am not sure where I can get with Breach of Contract counterclaim and others, it's still work in process.

2. I thought about initiating with JAMS and naming multiple respondents- the firm, the firm's employees, atty handling the case, and the law firm for the atty. this would get everyone's attention. :mrgreen:

But, I would have to pay $250 filing fee. I am not so sure I have to rush.

I can send a letter to Court demanding that Plaintiff initiates with JAMS. the argument over who initiates and in which forum will add to the frustration/expenses of the Plaintiff's atty.

At some future time if we still disagree, I still hope to get it to JAMS or initiate on my own if they object.

3. Note that the my court order does not request initiation, it requests choosing the provider to arbitrate. Hence, I think all I have to do is send a letter to Plaintiff and the Court demanding that Plaintiff initiates with JAMS (my election choice).

Edited by flashback
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I'd initiate with JAMS now, if your opponent is smart they will go back to court and ask AAA be granted. Don't leave the door open.

If court ordered initiation then I would jump and do it ASAP, you can be held in contempt or opponent will go back and re open the case,

Breach of contract goes both ways, you breached by not paying for what was owed, I would not open that can of worm yet.

If contract calls for OC to pay arbitration fees, then I'd demand it via CMRR (for later proof to court) after them ignoring your request you now have breach. But this claim can be added later.

How you eat an elephant is " One bite at a time".

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From what I have heard you can file your paperwork with JAMS and not send in the fee. Then JAMS will send you notice of amount to be paid. In the mean time you have initiated with JAMS and started the ball rolling before the other side gets a chance.

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I don't know if you can get into JAMS or not. It needs to be specified in your agreement or court ordered or both parties agree.

It's been awhile since I viewed your other thread, but I don't believe JAMS was in the agreement.

However, if it is specified somewhere or you both agree to JAMS, then I would file my JAMS demands now and send in $50 to go toward your consumer's fees.

Who knows - maybe the other side won't realize the difference in JAMS or AAA when you choose.

If they accept the case, the other side will be locked out of AAA and they can't use the fact that you didn't pay your fees.

It's a race now - and you better strike first! :)++

Edited by Linda7
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Thank you. Yes, neither JAMS nor any other arbitration forum was specified in the Agreement.

so, the reason why you recommend I initiate is 1) to keep them from other arbitration forums and 2) they will start getting enormous bills from JAMS.

Edited by flashback
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oh no! looks like howucan2 is right.

JAMS Arbitration, Mediation, and ADR Services | JAMS Comprehensive Arbitration Rules & Procedures 5

(a) The Arbitration is deemed commenced when JAMS confirms in a Commencement Letter its receipt of one of the following:

(i) A post-dispute Arbitration agreement fully executed by all Parties and that specifies JAMS administration or use of any JAMS Rules; or

(ii) A pre-dispute written contractual provision requiring the Parties to arbitrate the dispute or claim and that specifies JAMS administration or use of any JAMS Rules or that the Parties agree shall be administered by JAMS; or

(iii) A written confirmation of an oral agreement of all Parties to participate in an Arbitration administered by JAMS or conducted pursuant to any JAMS Rules; or

(iv) A copy of a court order compelling Arbitration at JAMS.

this leaves me with only one option- send a demand to Plaintiff & Court that JAMS is my choice of arbitration forum. we all know it will cause a stir...

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