pockets66

MIDLAND FILED MOTION TO DENY MY ARB MOTION PLEASE HELP!

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54 minutes ago, Xerxes said:

That's right.  I did mention that issue about a third of the way down in this post.

They introduce that quote in paragraph 3 with the language "any matter brought in Small Claims court".  "Any" is clearly wrong.

The definitions of "we" and "you" in the arbitration agreement are particularly important here, not only to interpret this language but also to demonstrate that the arbitration agreement is enforceable against Midland - which they deny elsewhere in the motion.

Xerxes - this is what I have so far:

MEMORANDUM IN REPLY TO PLAINTIFF’S MEMORANDUM IN OPPOSITION TO COURT’S ORDER TO COMPEL ARBITRATION

Comes now the Defendant, Pro Se, hereby respectfully objects to Plaintiff’s Opposition to Court ordered Arbitration.  In support of its objection, Defendant will show the Honorable Court as follows:

                          

I

BACKGROUND

 

1.         Defendant, Pro Se, was served by Midland Funding/Scott & Associates on or about July 27th, 2017.

 

2.         Defendant, Pro Se, sent Arbitration Election Notice with credit card agreement to Scott & Associates, a lawyer for Plaintiff on or about August 5, 2017.

 

3.         Defendant, Pro Se, filed with Honorable Court, Answer with Arbitration Election on or about August 10, 2017, and CCMR Scott & Associates with Answer and credit card agreement.

 

4.         Defendant, Pro Se, filed with Honorable Court, Motion to Compel Arbitration on or about August 15, 2017, and CCMR Scott & Associates with Motion and credit card agreement.  The motion hearing was granted by Honorable Court on August 22, 2017, for September 27, 2017.

 

5.         Plaintiff filed for a continuance on September 21, 2017, granted by the Honorable Court on September 25, 2017, and then Plaintiff filed an opposition to Defendant’s Motion to Compel Arbitration before the motion hearing set for November 29, 2017, to hear Plaintiff’s request.

 

6.         November 29, 2017, Honorable “” abated the case and Plaintiff and Defendant were ordered to arbitration.

 

7.         On or about December 15, 2017, Defendant filed with JAMS and Scott & Associates were notified of intent and given “Jams Consumer Minimum Standards” on December 22, 2017.

 

8.         January 12, 2018, Defendant and Plaintiff received, “Notice of Intent to Initiate Arbitration” via email from JAMS.  On January 29, 2018, Plaintiff paid the initial filing fee of $1200.00 and on February 7, 2018, Plaintiff and Defendant received the strike list for Arbitrators.  Plaintiff and Defendant sent in their choices for the Arbitrator and received an email from JAMS with the Appointment of Arbitrator and invoice for the Arbitrator initial retainer fee of $5,000.00 on February 13, 2018. 

 

9.         March 6, 2018, Plaintiff and Defendant received an email from JAMS stating they were missing the Arbitrator’s initial retainer fee of $5,000.00.  An amount the Defendant has not paid.

 

10.       March 13, 2018, Plaintiff filed a motion to “Reconsider Court’s Order to Compel Arbitration” and “Notice of Hearing” which the Honorable Court set for April 4, 2018.

 

 

 

 

 

 

 

II

BRIEF AND MEMORANDUM OF LAW

           
1.    Plaintiff admits that the submitted Dell/Webank card agreement (Exhibit A) contains an arbitration clause.  Defendant agrees.

2.         Defendant objects with Plaintiff’s claim, “that any matter brought in Small Claims court is not subject to arbitration”.  The Plaintiff does not dispute the validity of the arbitration clause. 

“U.S. Supreme Court Ruling, decided April 27, 2011, AT&T MOBILITY LLC v. CONCEPCION ET U, states that if there is an arbitration clause in the contract, that clause must be honored.” 

The credit card agreement clearly states “any claim relating to your account (Defendant’s) may be resolved by BINDING INDIVIUDUAL ARBITRATION and further states that any claim or dispute upon election by either party to be resolved in binding arbitration.  Plaintiff misinterprets the referenced sentence in the Cardmember Agreement. As provided in the Agreement:

"We agree not to invoke our right to arbitrate any individual Claim you bring in small claims court or an equivalent court so long as the Claim is pending only in the court."

That in no say excludes arbitration from lawsuits filed in small claims.  According to the Agreement, "we" is defined (in part) as "WebBank and Dell Financial Services, L.L.C., their parents, direct and indirect subsidiaries, affiliates, licensees, predecessors, successors, assigns and any purchaser of the Account or any receivables arising from the use the Account..."

The Agreement defines "you" as "you and any person authorized by you to use your Account."

Correctly interpreted, the Agreement provides that WebBank, Dell Financial Services, L.L.C. and any purchaser of the Account ("we") would not invoke the right to arbitrate any claims brought by _________ (my name) in small claims.  It does not state that small claims lawsuits brought by the original creditor or its assignors are excluded from arbitration and cannot be arbitrated.

3.         Defendant objects to Plaintiff’s claim that there is no right to arbitrate.  Defendant also objects to the claim that Midland Funding does not have to follow the credit card agreement arbitration notice, stating the account was purchased by Midland Funding and the rules of the credit card arbitration agreement do not apply to them, Midland Funding.  

 

“For the purposes of this arbitration provision, the terms “we” and “us” shall mean WebBank and Dell Financial Services L.L.C., their parents, direct and indirect subsidiaries, affiliates, licensees, predecessors, successors, assigns and any purchaser of the Account or any receivables arising from the use of the Account, and each of their respective employees, directors and representatives. 

In addition, for the purposes of this arbitration provision, “we” and “us” shall mean any third party providing any products or services to you or us in connection with your Account (including but not limited to any credit bureau, debt collector or vendor, Participating Merchant, and including their parents, direct and indirect subsidiaries, affiliates, licensees, predecessors, successors and assigns, and each of their respective employees, directors and representatives).

 

4.         Defendant objects to Midland’s claim of lack of cost efficiency to arbitrate.  9 U.S.C. § 2 of the Federal Arbitration Act states "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 a 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."

It makes no exclusion for an amount of a claim.

But "the `risk' that [a claimant] will be saddled with prohibitive costs is too speculative to justify the invalidation of an arbitration agreement."  In re Poly-America, L.P., 262 S.W.3d 337, 356 (Tex.2008).

It is not sufficient for the party to show that it is at risk of incurring excessive fees and costs.  Venture Cotton Cooperative v. Freeman, 11-11-00093-CV, 494 S.W.3d 186, 192, 2015 WL 1967251 (Tex.App. — Eastland Apr. 30, 2015, no pet. h.).

5.         Plaintiff states they were not provided a legible copy of the card agreement. Plaintiff admits to sending Defendant a copy of the Card Agreement that contains the arbitration clause, and therefore it would be reasonable to assume Plaintiff has a legible copy of that agreement. Regardless, Plaintiff has already admitted that the card agreement contains a valid arbitration clause, rendering any question of legibility moot.

 

6.         Defendant objects that the claim cannot be arbitrated.  Defendant filed for arbitration well within the timeframe allowed by the Honorable court after being served on July 27, 2017.  Credit card further states:  “You acknowledge that if a claim arises you may be required to resolve the claim through arbitration and are giving up your rights to litigate that claim in court or before a jury.”

7.         Defendant objects with Midland’s argument that, “Texas debt collection cases are not appropriate for arbitration process due to the small amount in controversy.”  However, Plaintiff failed to provide either by statute or court precedent how it’s claim is “well-established”.  “IN RE MERRILL LYNCH & CO., INC. AND MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (other) when an issue is pending in both arbitration and litigation, Texas recognizes that the Federal Arbitration Act generally requires the arbitration to first proceed.”

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”.

 

 

 

 

III

CONCLUSION AND PRAYER


            Based on the above arguments, Defendant, Pro Se, requests the Honorable Court to DENY Midland’s Opposition to Defendant’s Motion to Compel Arbitration.

 

WHEREFORE, Defendant moves this Honorable Court to DENY plaintiff’s Motion to Reconsider Court’s Order to Compel Arbitration Demand and Grant Defendant’s court order arbitration set forth on November 29, 2017.

 

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8 hours ago, pockets66 said:
On 3/14/2018 at 4:58 PM, Xerxes said:
Quote

The arbitrator shall have the sole and exclusive authority to resolve any dispute relating to the enforceability of this arbitration provision including any unconscionability challenge or any other challenge that the Agreement or the arbitration provision is void, voidable, or otherwise invalid.

If your response does not include an argument specific to the above delegation provision, they can argue that the arbitration clause as a whole is unconscionable under state law.

Can you explain to me in what this actually means?  How can this be argued if they were ordered to arbitration and what the arbitrator rules are valid?

It is a little bit complex.

When there is a motion to compel arbitration, courts have concluded that, unless the parties have agreed otherwise, "procedural arbitrability" will be decided by the arbitrator and "substantive arbitrability" will be decided by the court.

“Arbitrability” refers to whether or not arbitrators have the authority to rule on a dispute.

Courts always decide whether an arbitration agreement exists.  However, what else the court often usually decides may instead be delegated to the arbitrator through a delegation provision in the arbitration agreement. So, issues of substantive arbitrability, normally reserved for the court, may instead be delegated (by contract) to the arbitrator.

Say, for example, in your case, the court made a preliminary determination that an arbitration agreement exists between the parties.  Normally, the court could still deny the motion to compel if, upon further consideration of an argument from a party opposing the motion to compel, the court determined that the arbitration agreement was unconscionable.

An argument about the "costliness of arbitration" is an argument that the arbitration agreement is unconscionable.  A question of  unconscionability is a question of substantive arbitrability, normally reserved for the courts    For background about cost as an issue of  unconscionability, see pages 16-19 of this pdf by a Texas attorney

However, the Dell agreement at issue here delegates unconscionability challenges to the arbitrator.  What this means is that S&A' argument about the costliness of arbitration cannot be decided by the court, it must be decided by the arbitrator. As referenced in a prior post, this case is an example of a case involving Midland and the Dell agreement where the delegation provision was enforced.

An argument has to be made about the existence of the delegation provision if one is to expect the court to enforce it.

The argument about the delegation provision is a secondary argument against S&A'  "costliness of arbitration" argument.

The primary argument is that Midland stands in the place of the draftsman of the agreement.  But if an argument about the delegation provision isn't raised, it may be considered waived.

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4 minutes ago, Xerxes said:

It is a little bit complex.

When there is a motion to compel arbitration, courts have concluded that, unless the parties have agreed otherwise, "procedural arbitrability" will be decided by the arbitrator and "substantive arbitrability" will be decided by the court.

“Arbitrability” refers to whether or not arbitrators have the authority to rule on a dispute.

Courts always decide whether an arbitration agreement exists.  However, what else the court often usually decides may instead be delegated to the arbitrator through a delegation provision in the arbitration agreement. So, issues of substantive arbitrability, normally reserved for the court, may instead be delegated (by contract) to the arbitrator.

Say, for example, in your case, the court made a preliminary determination that an arbitration agreement exists between the parties.  Normally, the court could still deny the motion to compel if, upon further consideration of an argument from a party opposing the motion to compel, the court determined that the arbitration agreement was unconscionable.

An argument about the "costliness of arbitration" is an argument that the arbitration agreement is unconscionable.  A question of  unconscionability is a question of substantive arbitrability, normally reserved for the courts    For background about cost as an issue of  unconscionability, see pages 16-19 of this pdf by a Texas attorney

However, the Dell agreement at issue here delegates unconscionability challenges to the arbitrator.  What this means that is S&A' argument about the costliness of arbitration cannot be decided by the court, it must be decided by the arbitrator. As referenced in a prior post, this case is an example of a case involving Midland and the Dell agreement where the delegation provision was enforced.

An argument has to be made about the existence of the delegation provision if one is to expect the court to enforce it.

The argument about the delegation provision is a secondary argument against S&A'  "costliness of arbitration" argument.

The primary argument is that Midland stands in the place of the draftsman of the agreement.  But if an argument about the delegation provision isn't raised, it may be considered waived.

Thank you, that does make sense to me now and I do need to address it in my motion.  I will post my update to what I just sent for you to review.  I appreciate you taking the time to explain this!

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In "Background" you have this statement:

9.         March 6, 2018, Plaintiff and Defendant received an email from JAMS stating they were missing the Arbitrator’s initial retainer fee of $5,000.00.  An amount the Defendant has not paid.

Shouldn't that be that the Plaintiff (meaning Midland) has not paid?

You (the Defendant in the court case) don't have to pay this in JAMS.

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Just now, nobk4me said:

In "Background" you have this statement:

9.         March 6, 2018, Plaintiff and Defendant received an email from JAMS stating they were missing the Arbitrator’s initial retainer fee of $5,000.00.  An amount the Defendant has not paid.

Shouldn't that be that the Plaintiff (meaning Midland) has not paid?

You (the Defendant in the court case) don't have to pay this in JAMS.

Thanks for catching that - yes I need to change that!

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59 minutes ago, Xerxes said:

An argument has to be made about the existence of the delegation provision if one is to expect the court to enforce it

4.         Defendant objects to Midland’s claim of lack of cost efficiency to arbitrate. Per Dell/Webbank agreement contains a delegation provision and leaves unconscionability challenges to the arbitrator, meaning the costliness of arbitration cannot be decided by the court, it must be decided by the arbitrator.   The agreement makes no exclusion for an amount of a claim and further states:

“In any arbitration, we will pay the entire amount of the arbitration fees, including any required deposit.”  "The arbitrator shall have the sole and exclusive authority to resolve any dispute relating to the enforceability of this arbitration provision including any unconscionability challenge or any other challenge that the Agreement or the arbitration provision is void, voidable, or otherwise invalid."

But "the `risk' that [a claimant] will be saddled with prohibitive costs is too speculative to justify the invalidation of an arbitration agreement."  In re Poly-America, L.P., 262 S.W.3d 337, 356 (Tex.2008).

It is not sufficient for the party to show that it is at risk of incurring excessive fees and costs.  Venture Cotton Cooperative v. Freeman, 11-11-00093-CV, 494 S.W.3d 186, 192, 2015 WL 1967251 (Tex.App. — Eastland Apr. 30, 2015, no pet. h.).

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48 minutes ago, pockets66 said:

In any arbitration, we will pay the entire amount of the arbitration fees, including any required deposit

That part is especially important as well.  Midland stands in the place of the draftsman of the agreement.  They agreed, without limitation, to pay all of the arbitration fees.  This seems like a strong argument against the costliness issue, whether the issue is before the court or the arbitrator.

The rest seems pretty good.  I'll read it over more carefully later.

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7 minutes ago, Xerxes said:

The rest seems pretty good.  I'll read it over more carefully later.

Thank you, Xerxes - I really appreciate that!

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On 3/14/2018 at 5:58 PM, Goody_Ouchless said:

Maybe Blatt couldn't keep lights on, and that's why they closed. Many of us faced them - they had actual lawyers that worked their cases, and everything. Maybe the default dollars are so low that only guys working out of their homes and using hourly help from craigslist are surviving. S & A appear to be a large outfit - maybe they are barely paying rent, the way it is, without having more people causing trouble with stuff like arb demands.

 

That's the way it used to be - if a judge found enough doubt to deny an MSJ, they would fold. Which was the main reason to hire a consumer lawyer - they were in the business of getting MSJ's denied, at which point plaintiff  wouldn't risk getting stuck with defendant's legal bills. I wonder what compelled judge to deny MSJ in that particular case? These days the records are so complete, and compliant with business records rules, that there's not much even a top flight consumer lawyer can do. To paraphrase every lawyer I know, "it's hard to win with bad facts."

 

Do you think the case was dropped after the summary judgment motion was denied because now that they would have to go to trial the defendant might have had to have fly in a representative from the company?

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It could have been that. They also have to be thinking that they made their best case in MSJ and if judge didn't find it compelling then they will likely lose in court and be stuck with defendant's legal fees. 

The numbers you found are really interesting - defaults could be closer to +99% rather than the widely accepted 97%. When I looked at my county the cases were mostly defaults, with a large number of "unable to serve." There were a few dismissals, which I figure were a mix of legitimate error - sued wrong person, debt was already paid off - and maybe some cases were it was obvious there was never going to be anything to collect. I was most surprised by number of "unable to serve" dismissals.

On the surface it looked like dodging service has decent odds of working, but it's probably due to our demographics. I had police in tactical gear swarming my yard looking for someone that never lived there, so I can imagine the difficulty in serving a civil summons in certain parts of town.

 

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2 hours ago, Goody_Ouchless said:

It could have been that. They also have to be thinking that they made their best case in MSJ and if judge didn't find it compelling then they will likely lose in court and be stuck with defendant's legal fees. 

The numbers you found are really interesting - defaults could be closer to +99% rather than the widely accepted 97%. When I looked at my county the cases were mostly defaults, with a large number of "unable to serve." There were a few dismissals, which I figure were a mix of legitimate error - sued wrong person, debt was already paid off - and maybe some cases were it was obvious there was never going to be anything to collect. I was most surprised by number of "unable to serve" dismissals.

On the surface it looked like dodging service has decent odds of working, but it's probably due to our demographics. I had police in tactical gear swarming my yard looking for someone that never lived there, so I can imagine the difficulty in serving a civil summons in certain parts of town.

 

yeah there are a lot of cases in my county that went nowhere after the summons was never served but I answered anyway because some cases did end up in a default judgment even though the summons was never served so I did not want to take that chance. But once the summons is served the vast vast vast majority of those cases are default judgments. I have yet to see a case in my county actually make it to trial. I'm convinced that the attorneys that represent the JDB's in my county haven't been to a courtroom in years. Maybe in 2008 or whenever it was when the records weren't as good they were showing up in court but not anymore.

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On 3/15/2018 at 1:21 AM, upcycleliving said:

What I don’t understand is why they paid the $1,200 retainer if cost was an issue

Because they are idiots who never look into the consumer arbitration rules and they thought $1200 would be the total cost to arbitrate this matter.

I have seen this several times.  You notice that it was only after they got their $5k retainer bill from JAMS that they suddenly filed a Motion to Reconsider AND contacted the OP about settling?  The granted MTC has done exactly what it was designed to do. It caught this arrogant law firm off guard who thought they could steamroll this OP in arbitration for $1200 and they suddenly found out they were wrong.

If I were OP, I would have emailed them back the second I got their letter asking to contact them.  I would be letting them know I will drop the arbitration case against them in exchange for a dismissal with prejudice.  I would want to do this well before my response to their MTR is due so that I could potentially save all the time and energy of dealing with that.

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42 minutes ago, upcycleliving said:

I wonder if the $1,200 filing fee is refundable if you don’t to pursue the arbitration.

No JAMS fees are not refundable.

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On 3/19/2018 at 6:34 AM, fisthardcheese said:

Because they are idiots who never look into the consumer arbitration rules and they thought $1200 would be the total cost to arbitrate this matter.

I have seen this several times.  You notice that it was only after they got their $5k retainer bill from JAMS that they suddenly filed a Motion to Reconsider AND contacted the OP about settling?  The granted MTC has done exactly what it was designed to do. It caught this arrogant law firm off guard who thought they could steamroll this OP in arbitration for $1200 and they suddenly found out they were wrong.

If I were OP, I would have emailed them back the second I got their letter asking to contact them.  I would be letting them know I will drop the arbitration case against them in exchange for a dismissal with prejudice.  I would want to do this well before my response to their MTR is due so that I could potentially save all the time and energy of dealing with that.

Thanks, Fist,   Is it okay to just email them?

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On 3/21/2018 at 2:49 PM, pockets66 said:

Thanks, Fist,   Is it okay to just email them?

Yes.  State in your email that you are responding to their letter requesting that you contact them.  Tell them that your preferred method of contact is by email and that they can reach you at this email address.  See what they have to say after that.

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There are several reasons why email correspondence is better:

1.  Some of these guys may be fancier talkers than you.  Email lets you even things out a bit.

2.  You get a paper trail.  OK, actually electrons and not paper, but you get the idea.  

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13 hours ago, fisthardcheese said:

Yes.  State in your email that you are responding to their letter requesting that you contact them.  Tell them that your preferred method of contact is by email and that they can reach you at this email address.  See what they have to say after that.

Thank you, doing that right now.  I will keep you updated.

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12 hours ago, pockets66 said:

Jams just emailed the 2nd notice for payment.  How long is the timeframe before they close the case?

JAMS runs on JAMS time.  Your guess is as good as any.

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On 3/23/2018 at 1:03 AM, fisthardcheese said:

Yes.  State in your email that you are responding to their letter requesting that you contact them.  Tell them that your preferred method of contact is by email and that they can reach you at this email address.  See what they have to say after that.

I responded with the advice above and the lawyer for S&A answered with this:

"Thank you for reaching out.  In order to verify that you are interested in working out a settlement arrangement; please confirm that you want to proceed with settlement via email". 

"Please advise your client I would be willing to drop my arbitration claim in exchange for a mutual dismissal with prejudice".

 

 

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Hello,

Here is the response I just received.  I will hold my breath until I see the documents....

"My client will go ahead and accept your proposed settlement below.  I will send you the settlement documents that you will need to sign and send back to me via email. 

 

Once we have received the signed settlement documents back from you – our office will notify the court of the settlement, and the court may remove the case from the docket".

 

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2 minutes ago, Goody_Ouchless said:

You won! That's like four in the past couple weeks, or so? Great job!!!!

Thank you!  I couldn't have done it without everyone's help!

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I wonder if Midland, and the rest, will figure out that it's best to fold at first mention of arbitration. The way things are going, we have a growing body of concrete evidence that this strategy works and that their opposition is a farce. I would think that dismissing without prejudice early on would at least leave some doubt as to whether arbitration was the cause. Now all they are doing is helping build our library of exactly how to execute a successful MTC in more and more States.

 

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