scarab

Sued by Velocity Investments in Nevada

Recommended Posts

4 hours ago, Coffee_before_tea said:

Arb costs vary between AAA & JAMS.  JAMS is considered to cost more than AAA, and allows arbitrators to set their own fees, most are over $400 per hour.   AAA has a set fee for hearings & Arbitrator compensation.  For example:

JAMS:
- $1500 Filing Fee
- Arbitrator Fees Vary - Range between $400 - $1000 per hour

AAA:
- $1700 Filing Fee
- $500 Hearing Fee
- $1500 Arbitrator Fee Per Day

AAA would be $2200 for their filing fee.  You will likely have multiple hearings through discovery & objections, which would cost around $2000 per hearing (according to the fee schedule).  Assuming you have 3-6 hearings before your actual case is heard, then that's an additional $6k-$12K in hearing fees.  The 3-panel arbitrator appeal (I believe is de novo), and will cost $1500 per arbitrator, or $4500.

$200.00 is the Maximum AAA fee for you (the consumer)
$250.00 is the Maximum JAMS fee for you (the consumer)

JAMS is known to be more expensive, so keep that in mind.  These fees also do not include Attorneys fees, which will run the JDB around $250-$500 per hour.

Add up your estimated Arb fees, not including the 3-panel appeal, and you can see it can quickly get expensive.  Assuming AAA would be around $10K - 16K + Attorneys fees

I like the sounds of this

Link to post
Share on other sites

The arbritration terms Velocity filed in its Exhibit say either party, at its sole discretion, may take the case into arbitration (i'm paraphrasing).

So, it looks to me like I can initiate arbitration anytime while the suit is open.  Please correct me if I am wrong.

Link to post
Share on other sites

If you want to do arbitration, then there is no reason to wait.  The reason, is the court may deem that you waived your right to arbitrate.  There really isn't a strategic reason for waiting (unless you have something in mind), and you have the possibility of waiving your right

  • Like 1
Link to post
Share on other sites

Well, "any" time isn't quite accurate.  I covered the 'excessive litigation' exception earlier, but you can certainly elect arbitration after the lawsuit is filed.  The general approach is to send their attorney a letter saying that you're electing arbitration with JAMS/AAA as the first step.  They'll never just say 'oh, ok, let's do arb', so you'll then have to file a motion to compel with the court to force them to take their case to AAA/JAMS.  Whether or not you initiate is typically up to the Judge and the wording of the order resulting from the motion to compel.  Keep emphasizing JAMS and "contractual arbitration" throughout, not just 'arbitration' to prevent any court arb nonsense.

This is the master resource thread for arbitration, and has samples of everything you need.  Be aware that you may need to reformat things to adhere to your jurisdiction's rules, but the legal language is all tried and tested.

Link to post
Share on other sites

What about my response to their complaint - the one i am currently drafting?

Do I still file that with the court, or is my response now going to be (assuming I decide to do arbitration) that I would like to take this into abritration per the terms and conditions they put in their exhibit?

Link to post
Share on other sites
20 minutes ago, hades01 said:

Well, "any" time isn't quite accurate.  I covered the 'excessive litigation' exception earlier, but you can certainly elect arbitration after the lawsuit is filed.  The general approach is to send their attorney a letter saying that you're electing arbitration with JAMS/AAA as the first step.  They'll never just say 'oh, ok, let's do arb', so you'll then have to file a motion to compel with the court to force them to take their case to AAA/JAMS.  Whether or not you initiate is typically up to the Judge and the wording of the order resulting from the motion to compel.  Keep emphasizing JAMS and "contractual arbitration" throughout, not just 'arbitration' to prevent any court arb nonsense.

This is the master resource thread for arbitration, and has samples of everything you need.  Be aware that you may need to reformat things to adhere to your jurisdiction's rules, but the legal language is all tried and tested.

Reading it now, thank you for this

Link to post
Share on other sites
8 minutes ago, scarab said:

What about my response to their complaint - the one i am currently drafting?

Do I still file that with the court, or is my response now going to be (assuming I decide to do arbitration) that I would like to take this into abritration per the terms and conditions they put in their exhibit?

You can try to do some fanciness where you file the motion in lieu of an answer, but my advice is to not do this; it's a recipe for calamity.  Florida is the only place I know of where filing an answer, by itself, waives your right to arbitration, although obviously you should triple check this with your state.  Anywhere else I would use the court's answer form and file a general denial.  You can use 'lack of jurisdiction, as Defendant has elected contractual arbitration pursuant to the binding Contract between Defendant and Plaintiff' as an affirmative defense, or something to that effect.  Just make sure you send the arbitration election letter (cmrrr) first.  Then after (or along with) your answer, file the motion to compel arbitration, including your election letter and contract as exhibits.

  • Like 1
Link to post
Share on other sites
2 hours ago, scarab said:

What about my response to their complaint - the one i am currently drafting?

Don't use that until arb begins, just go with a general denial and make sure private contractual arbitration is an affirmative defense. Alternatively, see Rule 12 of your rules of civil procedure for a pre-answer motion to compel arbitration using the template in Linda7's thread. I would use valid agreement to arbitrate (NRS 38.219) not binding contract between Plaintiff and Defendant. FAA covers your agreement but you can reference Nevada's arb code for procedure (not to be confused with their court ran arb rules) as long as it's not in conflict. Check the agreement for any specifics. If for some reason the Judge denies your MTC you can appeal right then whereas the Plaintiff does not have the same right to appeal an approved MTC Arb until after arb is complete.

NRS 38.221  Motion to compel or stay arbitration.  https://www.leg.state.nv.us/NRS/NRS-038.html#NRS038Sec221

NRS 38.223  Initiation of arbitration. https://www.leg.state.nv.us/NRS/NRS-038.html#NRS038Sec223

NRS 38.247  Appeals. https://www.leg.state.nv.us/NRS/NRS-038.html#NRS038Sec247

 

you'll have to decide if you want JAMS or AAA, but here's their forms to get this started.

https://www.jamsadr.com/files/Uploads/Documents/JAMS_Arbitration_Demand.pdf

AAA you'll see forms on their site, Consumer Demand Form, they offer e-file as well https://www.adr.org/

  • Like 1
Link to post
Share on other sites
3 hours ago, hades01 said:

You can try to do some fanciness where you file the motion in lieu of an answer, but my advice is to not do this; it's a recipe for calamity. 

A motion to dismiss, or in the alternative compel arbitration & stay proceedings is not a recipe for disaster, it's solid strategy.

The OP can argue, per the contract, that the exclusive forum is the chosen Arbitration firm, and the court lacks jurisdiction.  Forum selection clauses are enforceable, and the court can dismiss the action.  The alternative pleading, is to compel the party into contractual arbitration, and stay the proceedings until the completion of arbitration.  I personally, would be happy with a dismissal, as the JDB is stuck arbitrating the dispute or letting it go altogether.  But I'd take an order to compel arb also.

Also, a thing to note, is the party seeking relief is the party that must initiate Arbitration.  

Lane-Tahoe, Inc. v. Kindred Construction Company, 536 P. 2d 491 - Nev: Supreme Court 1975
Absent express language in the contract placing the initial burden on either party, that responsibility properly rests with the party seeking relief [...] He should not be free to litigate in the courts simply because his opponent did not demand arbitration. This is not to say that the opponent could not have initiated arbitration.We hold only that the burden to initiate arbitration is upon the party seeking relief and does not shift to the opponent absent a clear waiver of arbitration by the opponent. The parties seeking relief in these cases, that is, payment for the claimed balances due for their work, are the contractors McKenzie and Kindred.

  • Like 3
Link to post
Share on other sites
Link to post
Share on other sites
16 hours ago, Coffee_before_tea said:

A motion to dismiss, or in the alternative compel arbitration & stay proceedings is not a recipe for disaster, it's solid strategy.

I understand the logic, but has anyone ever gotten their case dismissed outright?  The Supreme Court ruling only requires that the Court stay the case and I've never seen an example where the judge went beyond that and dismissed outright.  Ergo, it just adds complexity for no benefit.  The only scenario where I can imagine a judge would dismiss outright would be if the defendant had elected arbitration prior to the lawsuit being filed, but that's a pretty rare situation since people who come here are virtually always doing so after the lawsuit process begins.

Bottom line:  File the answer (unless you're in Florida).

Link to post
Share on other sites
11 minutes ago, hades01 said:

The Supreme Court ruling only requires that the Court stay the case and I've never seen an example where the judge went beyond that and dismissed outright.

If the contract specifies a forum that is not the court, then by contract, the court doesn't have jurisdiction.  These are two different legal strategies, where the forum selection challenges the courts jurisdiction directly.  Arbitration allows (if requested) the court to compel the parties to Arbitration, whilst staying proceedings.  That's why it's an "alternative" pleading.  
 

Quote

Either party to this Agreement, or any subsequent holder, may, at its sole election, require that the sole and exclusive forum and remedy for resolution of a Claim be final and binding arbitration

The courts (SCOTUS or otherwise) are required to Stay the case ONLY if the court compels Arbitration.  If the court doesn't compel Arb, then it's not required by statute to Stay the proceedings.  Hence the court may dismiss the case for lack of jurisdiction.  

Moreover, there are some courts that will dismiss the case and not stay proceedings, even with a order compelling arbitration.
http://www.schiffhardin.com/Templates/media/files/publications/PDF/Insurance-20150814.pdf

The bottom line:  The OP is free to do what he wants.  If he wants the chance of a dismissal, with a fallback strategy of a stay & compel Arb, then he knows what he needs to do.  

Link to post
Share on other sites
23 minutes ago, Coffee_before_tea said:

If the contract specifies a forum that is not the court, then by contract, the court doesn't have jurisdiction.

The court has jurisdiction to determine if there is a valid agreement to arbitrate, if the claims are subject to arbitration, and to confirm arbitration awards.

Continental Ins. Co. v. Hull, 654 P. 2d 1024 - Nev: Supreme Court 1982

Where an issue referable to arbitration is involved in an action or proceeding pending in a court having proper jurisdiction, the court shall stay the action or proceeding and order arbitration on application of a party. NRS 38.045

Since the filing of the complaint constituted a "refusal to arbitrate" for the purpose of compelling arbitration under NRS 38.045(1), Lane-Tahoe, Inc. v. Kindred Constr. Co., 91 Nev. 385, 389, 536 P.2d 491, 494 (1975), respondents had available to them a prescribed procedure for staying the action and compelling arbitration. NRS 38.045.  Had respondents made a proper application, the district court should have stayed the action below and ordered arbitration. The district court should have denied the motion to dismiss the complaint.

 

  • Like 1
Link to post
Share on other sites
1 hour ago, Coffee_before_tea said:

 the chance of a dismissal

I really don't want to derail this fellow's thread with a bunch of theory.  Unless you can show me an example of a consumer debt case where the Defendant filed the MTD/alternative stay and the Court dismissed rather than stayed and ordered arbitration (particularly if the arbitration election was made after the lawsuit was filed), I'm going to stand by my statement that it simply doesn't happen, regardless of whether or not it theoretically, possibly, maybe, can happen.  So why complicate something needlessly?  The people coming here for help generally aren't legal eagles; simpler is generally better.

Link to post
Share on other sites
1 hour ago, BV80 said:

Since the filing of the complaint constituted a "refusal to arbitrate" for the purpose of compelling arbitration

Thanks for that.  Happy to see more case law regarding filing a complaint = refusal to arbitrate.

You should also note that the party in that case motioned to dismiss using the arbitration statute as the authority.  Not the same as motioning to dismiss as it pertains to forum selection.  The alternative pleading, I agree would be done under the Arbitration statute, FAA or NV.

@hades01  You failed to look at the document I posted:  
 

Quote

The First, Fourth, Fifth, Sixth, Eighth, and Ninth Circuits have stated that district courts may dismiss an action after compelling arbitration of the entire dispute. See Dialysis Access Ctr., LLC v. RMS Lifeline, Inc., 638 F.3d 367, 372 (1st Cir. 2011) (reaffirming Bercovitch v. Baldwin Sch., Inc., 133 F.3d 141, 156 n.21 (1st Cir. 1998)); Choice Hotels Int’l, Inc. v. BSR Tropicana Resort, Inc., 252 F.3d 707, 709-10 (4th Cir. 2001);1 Aviles v. Russell Stover Candies, Inc., 559 F. App’x 413, 415 (5th Cir. 2014) (reaffirming Alford v. Dean Witter Reynolds, Inc., 975 F.2d 1161, 1164 (5th Cir. 1992)); Ozormoor v. T-Mobile USA, Inc., 354 F. App’x 972, 975 (6th Cir. 2009) (reaffirming Arnold v. Arnold Corp., 920 F.2d 1269, 1275 (6th Cir. 1990)); Unison Co., Ltd. v. Juhl Energy Devel., Inc., 789 F.3d 816, 821 (8th Cir. 2015); Johnmohammadi v. Bloomingdale’s, Inc., 755 F.3d 1072, 1073-74 (9th Cir. 2014) (reaffirming Sparling v. Hoffman Constr. Co., 864 F.2d 635 (9th Cir. 1988)).

 

Link to post
Share on other sites
37 minutes ago, Coffee_before_tea said:

You should also note that the party in that case motioned to dismiss using the arbitration statute as the authority.  Not the same as motioning to dismiss as it pertains to forum selection. 

 

That would work if the contract mandated arbitration as the sole means of resolving disputes or if a party initiated arbitration before a lawsuit was filed.   However, when a contract allows for either court or arbitration, then court is not an improper forum. 

The contract provided by the plaintiff in this case allows for both.

 

Link to post
Share on other sites

The court is an improper forum when a party elects to Arbitrate.  That's entire point of Arbitration, it dumps all claims out of court.  The courts can 'look through' the contract to see if there is a valid arb agreement, if the party is petitioning to compel arbitration.  They can then compel the parties to arbitrate per statute.  They can also confirm the award, if necessary.  I suppose they can also invalid parts of the agreement if they are unconscionable, but that wouldn't pertain to the OP.

However, there is an argument that can be made, which the Defendant does not have to invoke the Arbitration statutes to dismiss the case, because in the primary pleading, it's claiming the court does not have jurisdiction, and per the contract, the sole and exclusive forum is Arbitration, not the court.   

Quote

18. Choice of Law. We are located in the state of Utah and this Agreement is entered into in the state of Utah. The provisions of this Agreement will be governed by federal laws and the laws of the state of Utah to the extent not preempted, without regard to any principle of conflicts of laws that would require or permit the application of the laws of any other jurisdiction.

a. Either party to this Agreement, or any subsequent holder, may, at its sole election, require that the sole and exclusive forum and remedy for resolution of a Claim be final and binding arbitration [...]  Claims are subject to arbitration regardless of whether they arise from contract; tort (intentional or otherwise); a constitution, statute, common law, or principles of equity; or otherwise. Claims include matters arising as initial claims, counter‐claims, cross-claims, third-party claims, or otherwise. The scope of this Arbitration Provision is to be given the broadest possible interpretation that is enforceable.

BUT WILL NOT HAVE THAT RIGHT IF ANY PARTY ELECTS ARBITRATION PURSUANT TO THIS ARBITRATION PROVISION. THE PARTIES HEREBY KNOWINGLY AND VOLUNTARILY WAIVE THEIR RIGHTS TO LITIGATE SUCH CLAIMS IN A COURT BEFORE A JUDGE OR JURY UPON ELECTION OF ARBITRATION BY ANY PARTY.

 

Quote

The Bremen v. Zapata Off-Shore Co., 407 US 1 - Supreme Court 1972
Forum selection [...]such clauses are prima facie valid and should be enforced unless enforcement is shown by the resisting party to be "unreasonable" under the circumstances.

If the judge disagrees, then the alternative pleading will invoke the Arbitration statute and compel & stay the matter.  This is not a complicated argument.

  • Like 1
Link to post
Share on other sites

@Coffee_before_tea

If arbitration was not elected before the lawsuit was filed, then the court was not the improper forum to which to bring the claim(s) for relief.  

40 minutes ago, Coffee_before_tea said:

18. Choice of Law. We are located in the state of Utah and this Agreement is entered into in the state of Utah. The provisions of this Agreement will be governed by federal laws and the laws of the state of Utah to the extent not preempted, without regard to any principle of conflicts of laws that would require or permit the application of the laws of any other jurisdiction.

 

That merely says that the laws of UT, not another state, should govern.   It does not say that a lawsuit cannot be brought in the court of another state.

 

40 minutes ago, Coffee_before_tea said:

a. Either party to this Agreement, or any subsequent holder, may, at its sole election, require that the sole and exclusive forum and remedy for resolution of a Claim be final and binding arbitration [...]  Claims are subject to arbitration regardless of whether they arise from contract; tort (intentional or otherwise); a constitution, statute, common law, or principles of equity; or otherwise. Claims include matters arising as initial claims, counter‐claims, cross-claims, third-party claims, or otherwise. The scope of this Arbitration Provision is to be given the broadest possible interpretation that is enforceable.

 

That is not a mandatory arbitration clause.  It does not say that arbitration is the sole method of dispute resolution.   "[M]ay, at its sole election, require" shows that one must elect arbitration. 

 

40 minutes ago, Coffee_before_tea said:

BUT WILL NOT HAVE THAT RIGHT IF ANY PARTY ELECTS ARBITRATION PURSUANT TO THIS ARBITRATION PROVISION. THE PARTIES HEREBY KNOWINGLY AND VOLUNTARILY WAIVE THEIR RIGHTS TO LITIGATE SUCH CLAIMS IN A COURT BEFORE A JUDGE OR JURY UPON ELECTION OF ARBITRATION BY ANY PARTY.

Note "upon election of arbitration". 

If per the contract, arbitration were mandatory and the sole and exclusive forum is Arbitration, "may, at it's sole election, require" and "upon election of arbitration" would not have been included because "election" would not be necessary.

The agreement also includes the following:

"We agree not to invoke our right to arbitrate an individual Claim you may bring in Small Claims Court or an equivalent court, if any, so long as the Claim is pending only in that court."

If arbitration was the sole and exclusive forum, the above would not have been included because the consumer would not be allowed to bring claims in Small Claims Court.

In any case, the OP now has enough information that he can make a decision on his own.

  • Like 1
Link to post
Share on other sites
42 minutes ago, BV80 said:

In any case, the OP now has enough information that he can make a decision on his own.

Yes and the MTC template we've been using here for sometime gives the judge the option to go with dismiss or in the alternative stay. If you're really set on one, you'd best change the title caption on the motion.

Link to post
Share on other sites
2 hours ago, BV80 said:

That is not a mandatory arbitration clause.

Read what was written BV.   Once a party elects arbitration, then it becomes mandatory,  then Arbitration becomes the sole and exclusive forum.  (And no, this isn't small claims court, so that section of the contract is not applicable....omg, contracts have provisions, who knew)

I never said that Velocity couldn't file in court, where did you come up with that nugget?  It doesn't mean that the case can't be dismissed, because OP elects to have the claims heard in the forum the contract specifies.  Sole and Exclusive forum, repeat after me, sole and exclusive forum.

--Edit--  Here's another SCOTUS case regarding forum selection:
 

Quote

Scherk v. Alberto-Culver Co., 417 US 506 - Supreme Court 1974
An agreement to arbitrate before a specified tribunal is, in effect, a specialized kind of forum-selection clause that posits not only the situs of suit but also the procedure to be used in resolving the dispute. The invalidation of such an agreement in the case before us would not only allow the respondent to repudiate its solemn promise but would, as well, reflect a "parochial concept that all disputes must be resolved under our laws and in our courts

 

Link to post
Share on other sites

Guys, I appreciate the discussion on legal theory and such, but if its OK with you all, I would like to focus on what I need to do next.  I've decided to force them into JAMS. 

While keeping arbitration in mind, I have reviewed the NV rules of Civil Procedure,  THe court rules (2nd judical district court) and did not find anything specific to arbitration.  So, I then reviewed NRS chapter 38 on mediation and arbitration.

Very clearly it states that I must file a motion per the court rules.  What I am confused about at this point, is this a different motion than the Motion to Compel Arbitration?  If its different, what is this motion called?  Motion to request arbitration per the terms of the agreeement?

Link to post
Share on other sites

If I remember correctly, you have not filed an answer?

If you haven't filed an answer, then you can file a Motion to Dismiss, or in the Alternative Compel Private Contractual Arbitration (Same motion/document).

Also note that the contract is governed by the FAA (Federal Arbitration Act), and the laws of UT.  While it's good to cite NV law that is applicable, you'll also want to cite the FAA & any UT statutes in your argument.  It's not entirely complicated, there is a template floating around here, and you just have to Add/Subtract items that pertain to your situation.  I'll see if I can dig it up.

 

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.