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Sued by Midland Funding LLC in Arizona over Synchrony Bank debt


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1. who is the named plaintiff in the suit?

MIDLAND FUNDING LLC

2. what is the name of the firm handling the suit?

MIDLAND THEMSELVES or MCMCG

3. how much are you being sued for?

$1674.08

4. who is the original creditor?(if not the plaintiff)

AMAZON.COM - SYNCHRONY BANK 

5. How do you know you are being sued? (you were served, right?)

SERVED

6. how were you served?

IN PERSON

7.  was the service legal as required by your state law?

I BELIEVE SO

8.  what was your correspondence (if any) by the people suing you before you think you were being sued?

NO CORRESPONDENCE FROM MIDLAND, BUT I BELIEVE I WAS CALLED BY UNITED RECOVERY SYSTEMS, A DEBT COLLECTOR

9. what state and county do you live in?

MARICOPA COUNTY, ARIZONA

10. when is the last time you paid on the account? (looking to establish if you are outside the statue of limitations)

DECEMBER 2014

11. What is the statue of limitations on the debt?

5 OR 7 YEARS I BELIEVE

12. what is the status of your case? suit served? motion filed?

I HAVE NOT FILED MY ANSWER YET; I AM STILL WITH IN THE 20 DAYS TO DO SO

13. have you disputed the debt with the credit bureaus? (both the original creditor and the collection agency)

NO

14. did you request debt validation before the suit was filed?

NO

15. how long do you have to response to suit? 

20 CALENDER DAYS FROM THE DAY I WAS SERVED

16. what evidence did they send with the summons? an affidavit? statements from the oc? contract? list anything they attached as exhibits.

COPIES OF SUMMONS, AFFIDAVIT, NOTARIZED BILL OF SALE FROM SYNCHRONY BANK, CERTIFICATE OF CONFORMITY FOR NOTARY, FINAL ACCOUNT STATEMENT FROM AMAZON.COM

I am completely unfamiliar with the legal process, and I have never been sued over debt. I do not dispute that this debt is valid, and it seems there is proof confirming Midland now owns the account. I am considering attempting to negotiate a monthly payment to settle this debt. But I also need help with the overwhelming, intimidating, high-risk legal process!

Thank you in advance.

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One of the Arizona experts should be along but in the meantime pull up your final cardmember agreement before the account went into default and look for an arbitration clause. You can also get an earlier one from when the account was active if it has an arbitration survivability clause. If you don't have one, you can find agreements at http://www.consumerfinance.gov/credit-cards/agreements/

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You'll want to pick AAA as arbitrator. They aren't too happy with Midland. You'll be going for a Motion to Dismiss or in the alternative Stay Proceedings and Compel Private Contractual Arbitration.  There are templates for that you can find on the board here making sure to reference the FAA since that governs your agreement. Not sure if Arizona also requires an answer (if so, make sure to raise Arbitration as an affirmative defense) or if the Motion is enough. You want to ask Midland to pay the fees as the agreement they claim they bought says they must. The court and Plaintiff need the papers by the deadline or win by default.

Check recent threads. There are others in Arizona with Midland as Plaintiff going for arbitration.

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6 minutes ago, Goody_Ouchless said:

arbitration is not being pursued in "good faith,"

I think the thing in the defendant's favor is the cardmember agreement says after the MTC is granted, then the party asserting the claims which is the Plaintiff has to commence it.

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Thanks for the help so far. Can anyone point me in the direction of forms, example letters, etc. which might be helpful in filing a “motion to dismiss” or “motion to stay proceedings” for these reasons in Arizona? I will also look at other threads concerning Midland in Arizona.

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There is some debate here about the best way to pursue this. Some people get their MTC granted with little fuss, while other cases get caught in the weeds (either due to judges inexperience, or judges that throw up roadblocks for a defendant that is trying to game the system.)

I believe you answer the complaint, listing your desire to pursue arbitration and also file a motion to compel. The law in AZ is pretty clearly in your favor regarding arbitration, so the goal is to not let the case get distracted - for example, when people file a Motion to Dismiss, along with their Motion to Compel Arbitration, it seems to foul up the courts scheduling system, so you end up with hearings for things that are irrelevant. That is when Midland starts filing all sorts of motions to derail arbitration.

Others here are expert in the exact steps and wording - they should be along soon to help.

 

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2 hours ago, Goody_Ouchless said:

I believe you answer the complaint, listing your desire to pursue arbitration and also file a motion to compel.

This right here.  Don't file a motion to dismiss or anything but an answer and a motion to compel arbitration.  Anything else creates an opportunity for Midland and/or the court to go off on tangents that waste time and put you in a more perilous position to have to appeal. The simpler you make it, the greater the chance of keeping things on track. 

I do suggest sending a letter to Midland to notify them off your intent to arbitrate but that doesn't involve the court so it won't have any initial effect on your court proceedings. 

Edit: include an affidavit with your motion to compel that avows that the agreement (which you also attach) is a true and correct copy of the agreement you were provided when you opened the account. 

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24 minutes ago, JohnnyDNGRSLY said:

Is there any example text available for me to reference what an affidavit with a motion to compel arbitration, word for word, looks like?

"I swear under penalty of perjury that the agreement attached hereto is a true and correct copy of the agreement I was provided when I opened the underlying account  (or is a copy of the most updated agreement provided during the life of the account - whichever)."

It doesn't have to be any more complicated than that. 

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45 minutes ago, Harry Seaward said:

I was provided when I opened the underlying account  

I would NOT say this. If the MTC is denied you basically just handed them a notrized admittance that the account is yours and you are responsible for it.

Reword it to say  something to the affect "to the type of account the Plaintiff refers to in the complaint as filed."

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57 minutes ago, Clydesmom said:

I would NOT say this. If the MTC is denied you basically just handed them a notrized admittance that the account is yours and you are responsible for it.

Reword it to say  something to the affect "to the type of account the Plaintiff refers to in the complaint as filed."

The statute says if an agreement to arbitrate is shown, the court must order the parties to arbitrate unless it can be proven there is no agreement to arbitrate.  By OP swearing to the agreement, Midland must come back with something equally persuasive.   Since Midland cannot possibly know more about what agreement was provided to the OP than the OP himself, the only possible thing more persuasive than OP'S testimony would be testimony from the OC (Synchrony), which isn't going to happen. If the court denies the MTC in the face of an affidavit as I typed it above, you have solid grounds for appeal. 

On the other hand, if you don't lay your personal knowledge foundation for the agreement being linked to your account, as is being suggested here, you have opened the door for Midland to argue it is not the correct agreement for YOUR account. Which they have successfully done here in AZ, BTW, so I'm not making some hypothetical 100:1 odds scenario.

It's true that one of the risks of arbitration is acknowledging you had an account with the OC. This acknowledgement is NOT an admission that you had an unpaid debt with the OC, and certainly doesn't establish that you owe a debt to the debt buyer. The reality is, unless you can swear under oath that the account isn't yours, if you go to trial you'll almost certainly lose here in AZ, so any risk you run with arbitration are far outweighed by the risk you take going to court. 

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Thank you for all the explanations. I found some examples of MTCs for Arizona here and here. How do those look, given adjustments would be made to conform to my situation and the details above?

Also, I’ve read that arbitration may be an unwanted option as the debtor/defendant since arbitration heavily favors the creditor (hence the clause in their cardholder agreement). Seemingly equally unfavorable is allowing time to expire and Midland to be granted judgement against me, after which my wages would likely be garnished by some unknown amount until the full debt is paid.

Plus, I want to be clear — I understand I owe the original debt but I want to ensure that I am paying the correct party, and the summons/bill of sale/affidavit I was presented appears complete. I know some cases have been dismissed for lack of evidence and lack of “preparation” on Midland’s or the creditor’s part, but that does not appear to be the case here. Some Midland suits I read about while searching this board served the debtor with nothing more than the summons itself; but my packet was 1/4” thick!

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Midland doesn't throw softballs with these cases any more. Even if you had only been served with a summons and complaint, as I was, it doesn't mean they cannot get everything they need at a later date, as Cavalry did with me. Midland actually did you a favor by tipping their hand so early on. You now know what they have, and if it looks like things that prove you owed a debt and Midland owns the rights to collect it, you're climbing uphill the entire time.  And by "uphill", I mean the side of a cliff. These cases are decided on a preponderance of evidence, meaning that which is the most likely of all possibilities presented.

Arbitration used to favor plaintiffs several years ago. The arbitration companies got reprimanded somewhere around 2008 and they have been much less biased toward OCs and debt buyers since. 

The real reason arbitration is to your advantage actually has nothing to do with the arbitration process itself. It's because Midland will have to pay something like $1,200 just to get their case before an arbitrator. The gamble for you is that Midland sees that it doesn't make much sense to pay the arbitration fee to pursue a debt of similar dollar amount when they can drop this case and hammer checks on their 98% default rate.  Think of it like locking your car doors. If two cars are parked next to each other and one has locked doors and the other doesn't, a thief is going for the unlocked door unless there is something in the locked car that makes it worth his while to burn the extra calories.  Same thing here. There is no guarantee Midland won't follow you into arbitration, but IME, it's a much better gamble than battling them in court. 

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2 hours ago, JohnnyDNGRSLY said:

I found some examples of MTCs for Arizona here and here.

The problem with both of these examples is they include a motion to dismiss.  It's my belief that some courts here expect motions to dismiss from pro se defendants to have no merit so they just deny them without even reading them.  The other thing that's happened here is the court denied a combo MTD/MTC  with no explanation and the defendant didn't know if the court was denying the MTD, the MTC or both.

If you intend to get this into arbitration, file an answer and line-by-line deny everything but your name and where you live (and marital status if they allege this).  Assert a few affirmative defenses like accord and satisfaction, estoppel, laches,  statute of limitation and waiver.  Make a short statement in your answer (somewhere in affirmative defenses section is fine) that you believe the claims Midland has made are subject to "private contractual arbitration in accordance with the applicable credit card agreement".

With your answer, file a motion to compel private contractual arbitration.  The motion need not be complicated.  You ask the court, pursuant to A.R.S. 12-1502(a ) and the card agreement, to order the parties into arbitration.  Also notify the court that you will be initiating arbitration with AAA within so many days (10 or 20 is a good time frame) following the court's granting of the motion and you want the court to order Midland to pay their fee within 10 days of you initiating arbitration.  Attach the agreement to your motion and include the affidavit.  Edit: I just saw where the agreement says 'the party asserting the claims will be responsible for initiating arbitration' (paraphrased).  This means Midland is required to initiate with AAA if the MTC is granted.  I would cite this section in your MTC and ask the court to order Midland to initiate within 10 days of the court's granting of your MTC.

If the MTC is granted, ideally Midland will contact you before they have to pay their fee and ask to stipulate a dismissal.   If Midland follows you into arbitration, you'll have to present a defense there.  It would be pretty much the same as if you stayed in court.  You would attack their evidence and witness qualifications.  If the MTC is denied, you'll have to appeal to get the ruling reversed, or you can just proceed to court and roll the dice there.

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3 hours ago, Harry Seaward said:

If Midland follows you into arbitration, you'll have to present a defense there. 

@JohnnyDNGRSLY Making it harder for them to follow you into arbitration is part of the plan. AAA requires companies to register (see Consumer Clause Registry at adr.org) which Midland has not done. They cannot proceed with AAA until they do. As the cardmember agreement states, the party seeking arbitration decides the arbitration administrator, so make your preference clear. 

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OK. I think I have completed a first crack at my MTC. Can someone give this a once-over and give me any best practices or point out any overt mistakes? I’m a little iffy on section #2.

The other bit that worries me is the fact that the credit card agreement specifically states “we will not require you to arbitrate: (1) any individual case in small claims court or your state’s equivalent court, so long as it remains an individual case in that court; or (2) a case we file to collect money you owe us. However, if you respond to the collection lawsuit by claiming any wrongdoing, we may require you to arbitrate.”

Thanks again for everyone’s help.

[MY NAME]
[MY ADDRESS]
[MY PHONE NUMBER]
[MY EMAIL ADDRESS]

(centered) [THE COURT NAME]
(centered) MARICOPA COUNTY, ARIZONA

(centered) [THE COURT ADDRESS]

[THE CASE NUMBER]

MIDLAND FUNDING, LLC
    Plaintiff,

vs.

[MY NAME]
    Defendant, Pro Se

(centered) DEFENDANT’S MOTION TO COMPEL ARBITRATION
   
    The Defendant, [MY NAME], Pro Se, hereby respectfully requests the court to compel contractual individual arbitration pursuant to A.R.S. § 12-1502(a) and the CREDIT CARD ACCOUNT AGREEMENT.

1.    The Defendant and SYNCHRONY BANK entered into a written CREDIT CARD ACCOUNT AGREEMENT (the “Agreement”), attached as Exhibit (A), wherein the parties agreed for individual arbitration to resolve any disputes arising between them. The parties agreed that neither a court nor a jury will resolve any such dispute.

2.    The Court should stay these proceedings and compel contractual individual arbitration pursuant to the Federal Arbitration Act (the “FAA”) (Pub.L. 68–401, 43 Stat. 883, enacted February 12, 1925, codified at 9 U.S.C. § 1 et seq.). The parties’ Agreement states that the FAA governs their disputes. Where a party refuses to arbitrate pursuant to the terms of the Agreement, the FAA provides that the Court should compel arbitration and stay Court proceedings.

3.    The Agreement states: “if a party files a lawsuit in court asserting claim(s) that are subject to arbitration and the other party files a motion with the court to compel arbitration, which is granted, it will be the responsibility of the party asserting the claim(s) to commence the arbitration proceeding.” (Exhibit (A), page 4, “How to start an arbitration, and the arbitration process”, paragraph 2) Pursuant to this directive in the Agreement the Defendant respectfully requests that this Court order the Plaintiff, MIDLAND FUNDING, LLC, to commence the arbitration proceeding within 10 days of the Court granting this Motion.

    WHEREFORE, the Defendant respectfully requests, as follows:
    A.    That this Court stay further proceedings regarding this Case.
    B.    That this Court compels contractual individual arbitration pursuant to A.R.S. § 12-1502(a) and the Agreement.
    C.    That this court order the Plaintiff, MIDLAND FUNDING, LLC, to commence the arbitration proceeding within 10 days of the Court granting this Motion.

Dated this _____ day of __________, 2016.

 

                                _________________________________
                                [MY NAME]
                                Defendant, Pro Se

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5 hours ago, JohnnyDNGRSLY said:

The other bit that worries me is the fact that the credit card agreement specifically states “we will not require you to arbitrate: (1) any individual case in small claims court or your state’s equivalent court, so long as it remains an individual case in that court; or (2) a case we file to collect money you owe us. However, if you respond to the collection lawsuit by claiming any wrongdoing, we may require you to arbitrate.”

What worries you about this? 

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You need controlling case law.  I would incorporate these bullet points into your motion:

Quote

5. The Federal Arbitration Act (FAA) 9 USC, Section 1-2 provides:

“A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction or the refusal to perform the whole or any part thereof or an agreement in writing to submit to arbitration an existing controversy arising out of such contract, transaction, or refusal, shall be valid, irrevocable and enforceable save upon such grounds as exist at law or in equity for the revocation of any contract”.

6. 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. 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) ."
Furthermore, "The “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 . . . "

I would also add specificity to your prayer.

5 hours ago, JohnnyDNGRSLY said:

WHEREFORE, the Defendant respectfully requests, as follows:
    A.    That this Court stay further proceedings regarding this Case. place an immediate Stay on this action, until the arbitration proceedings have been completed, and a final award is set
    B.    That this Court compels contractual individual arbitration pursuant to A.R.S. § 12-1502(a) and the Agreement.
    C.    That this court order the Plaintiff, MIDLAND FUNDING, LLC, to commence the arbitration proceeding within 10 30 days of the Court granting this Motion.

Then I would write up a "Proposed Order", where it specifically states what you have requested in your prayer above.  Similar to the following:

Quote

 

PROPOSED ORDER GRANTING DEFENDANT’S MOTION TO COMPEL PRIVATE / CONTRACTUAL ARBITRATION

WHEREFORE, in consideration of Defendant’s Motion to Compel Arbitration, it is hereby ORDERED and ADJUDGED that Defendant’s motion shall be GRANTED.

It is further ordered:

________To Stay proceedings pending the completion Private/Contractual arbitration.

________Compels contractual individual arbitration pursuant to A.R.S. § 12-1502(a) and the Agreement.

________Orders the Plaintiff, MIDLAND FUNDING, LLC, to commence the arbitration proceeding within 30 days of the Court granting this Motion.



SO ORDERED this _______ day of _______________, 2016

______________________________________________
JUDGE

 

I believe one of the issues the people in AZ are having, is they are not typing up the orders they have prayed for, and the Judges do whatever they want (like scheduling pre-trial conferences after a MTC Arb has been granted, and a stay is in place.)

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The AZ statute regarding arbitration is clear enough.  Your affidavit and agreement are sufficient to grant your motion with no further authority so caselaw is not necessary.  Midland will have an opportunity to respond to your motion and then you will have an opportunity to reply to their response.  That is when you would bring in the caselaw appropriate to whatever objection they bring.  Because you filed the motion, you get to have the last word.

I do agree with including the proposed motion since the rules tell us to do that.  Having said that, though, my justice court ignored every proposed motion I included and just used their own form with a 'granted' or 'denied' box checked so proposed motions in JC seem to be academic.

You started your motion by explaining that you and Synchrony entered into an agreement, but there is nothing explaining how Midland is a party to that agreement.  One of Midland's recent arguments is that they aren't a party to the agreement, so you need to close that loop.

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"One of Midland's recent arguments is that they aren't a party to the agreement, so you need to close that loop "

I wonder how they can argue that.   It's basic contract law recognized by AZ courts that the assignee steps into the shoes of the assignor.

Morgan Bank responds as assignee of Lasma that the assignee steps into the shoes of the assignor acquiring the benefits as well as the burden of the contract assigned. Wylie v. Douglas Lumber Co., 39 Ariz. 511, 8 P.2d 256 (1932); Whayne Supply Co. v. Morgan Const. Co., 440 S.W.2d 779 (Ky. 1969)

https://scholar.google.com/scholar_case?case=10615217207684733555&q=assignee+steps+into+shoes+assignor&hl=en&as_sdt=4,3

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In this nice reversal, "Funderburke v. Midland Funding,"  plaintiff filed a class action FDCPA suit against Midland in Kansas federal district court.   Midland filed a MTC arbitration per the credit card agreement of  the original creditor.   Funderburke objected on several grounds,  among which was his claim that the arbitration provision only applied to the OC and not to Midland.  The court granted Midland's MTC arbitration because Midland  proved it had acquired all rights, title and interest from the OC.

https://scholar.google.com/scholar_case?case=3667189616530641164&q=midland+funding+all+rights+title+interest+arbitration&hl=en&as_sdt=2003&as_ylo=2012

Plaintiff next argues that there is no valid agreement to arbitrate because Midland is not a party to the sample cardmember agreement. Plaintiff claims that Midland is not an "affiliated company" as contemplated by the agreement, and that the bill of sale is insufficient evidence that it was assigned Plaintiff's debt. The Court has already determined that the evidence submitted by Midland is admissible. In addition to the bill of sale evidencing the assignment, Hannan also submits an abstract from a voluminous Excel file of the data pertaining to Plaintiff's Associates Account.[19] Hannan states that the Excel file was included in the electronic records on charged off accounts that Citibank transferred to Midland as part of the sale. The Court further finds that this evidence shows that Plaintiff's debt was included in the assignment to Midland.

The cardmember agreement includes an assignment clause, providing that Associates, later merged with Citibank, "may assign this Agreement or any of our rights under it without prior notice or your consent."[20] While Plaintiff is correct that the arbitrationprovision states that it applies to any claim, dispute, or controversy between "you and us," or any of Associates' "employees," "affiliate companies, or their employees," sinceMidland is an assignee, it steps into the shoes of Citibank and, thus, may enforce therights set forth in the agreement, including the right to submit a dispute to arbitration.[2

 

 

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On 3/22/2016 at 0:01 AM, Clydesmom said:

I would NOT say this. If the MTC is denied you basically just handed them a notrized admittance that the account is yours and you are responsible for it.

Reword it to say  something to the affect "to the type of account the Plaintiff refers to in the complaint as filed."

@Clydesmom, thanks for the segue. That exposes the nasty underbelly of arbitration. In order to argue that you're entitled to have the claim heard in arbitration, you must not only admit that you are subject to the agreement containing the arbitration provision, but in making such an argument, you must also concede that the Plaintiff is subject to the agreement as well, which, in plain English, translates to, "yes, they have standing to sue me." You see, you can't argue that both parties are subject to a contract, then try to win your lawsuit based upon the argument that the Plaintiff can't prove assignment of the account, or that the account isn't yours. See, estoppel. In sum, by moving to compel arbitration, you're reducing your argument to, "That's my account, and they have a right to collect, but the amount they're asking for is wrong." Not much left to prove after that. So, guess what- if a plaintiff follows you into arbitration, you are almost certainly going to lose.

I get it that many plaintiffs won't follow a defendant into arbitration, but the fact is, just as many will not litigate a claim when a defendant appears to contest the claim. Truth is, it's simply all about the money; and if it's worth the money, a plaintiff will litigate in court or arbitrate wherever. It doesn't matter. The absolute only benefit to arbitration is that you roll the dice that plaintiff won't follow you. That's it; there is nothing else afterward. By keeping a claim in court, you have way more ability to defend yourself, both factually and procedurally. Look, you don't have to take arbitration completely off the table- there may be those circumstances where it makes sense. Just consider all your options before you give your rights away.

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