Thomas2

Arbitration award, costs, and appeal

Recommended Posts

Hello

Long time lurker and appreciate all the information that is provided here.   I followed recommendations here when sued in civil court by an OC.  The motion to compel was granted and arbitration with JAMS commenced.  Comprehensive Rules were used and the process took about ten months to go through.  I had a formal hearing in April.  I received  the ruling at the end of last week.  

The arbitrator awarded the amount owed but also unexpectedly granted the OC all JAMS costs to be paid by me.  They brought up the fees in the formal hearing, and I objected siting Rule #7 of the Minimum Standards.  The arbitrator stated, in the ruling, that if there is a disagreement between the card member agreement and the JAMS Minimum Standards that the card member agreement takes precedent.  The OC's arbitration clause states that if I lose, the arbitrator will decide whether I must reimburse money advanced for arbitration.  However, JAMS Minimum Standard states:  

JAMS will administer arbitrations pursuant to mandatory pre-dispute arbitration clauses between companies and consumers only if the contract arbitration clause and specified applicable rules comply with the following minimum standards of fairness.

Am I correct then that JAMS will only take an arbitration case if the clause in the OC member agreement meets those  minimum standards?  Rule #7 is a minimum standard that limits consumer costs in JAMS arbitration to only $250.00.  The OC member agreement does not meet it therefore JAMS should not have taken the arbitration case.  But since it did take the case, then the Minimum Standards should have over ruled the OC member agreement.  The OC entered willingly into arbitration, did not oppose the motion to compel, and never objected to the Rules and Procedures of the arbitration process.

I presume the first course of action is to contact the case managers, arbitrator, and attorney to file an appeal.  The card member agreement allows for an appeal if the amount in question is a certain threshold of dollars.  My formal complaint was well above that amount so I qualify according to the member agreement for a 3 arbitrator appeal.  Is an email alone sufficient?  Should I document all of what I state here?  Do I need to add other information on the contract dispute itself to the appeal or wait until the process starts?  

Is this abnormal for the arbitrator to award such outrageous costs to the OC in JAMS?  From what I have read, every post here says that the consumer is limited to $250.00, period.  If I am unable to secure an appeal, what steps would be recommended to be taken when this heads back to the justice court?   

Share this post


Link to post
Share on other sites

You got a bad arbitrator, simple as that.  Courts rarely overturn the arbitrator's decision, even if it is a bad one.  What happened is this arbitrator decided to go against the JAMS rules.  

When you appeal, the case is heard de novo.  

I have never done an appeal in JAMS.  It looks like that is pretty much your only course of action here.  You must appeal, or get stuck with a bad decision.  

Check the JAMS rules for appeals.  Read it carefully, and follow the rules to the letter.  

It would probably be in your best interests to settle the case along the way, at some point during the appeal.  But, even if you lose, you will probably just be stuck with the original debt.  

Share this post


Link to post
Share on other sites

JAMS Minimum Standards appear to apply to "pursuant to mandatory pre-dispute arbitration clauses" where "a company systematically places an arbitration clause in its agreements with individual consumers and there is minimal, if any, negotiation between the parties as to the procedures or other terms of the arbitration clause."

This since the consumer wasn't mandatorily forced into arbitration, and there were terms laid out in an arbitration clause that CC agreements allow a consumer to opt-out of, it seems JAMS Minimal Standards are moot.

Surprised this doesn't come up more, although perhaps it explains the slight uptick in plaintiffs following debtors to arbitration, lately. At least those with agreements that stick debtor with fees.

 

  • Like 1

Share this post


Link to post
Share on other sites
3 minutes ago, Goody_Ouchless said:

JAMS Minimum Standards appear to apply to "pursuant to mandatory pre-dispute arbitration clauses" where "a company systematically places an arbitration clause in its agreements with individual consumers and there is minimal, if any, negotiation between the parties as to the procedures or other terms of the arbitration clause."

This since the consumer wasn't mandatorily forced into arbitration, and there were terms laid out in an arbitration clause that CC agreements allow a consumer to opt-out of, it seems JAMS Minimal Standards are moot.

Surprised this doesn't come up more, although perhaps it explains the slight uptick in plaintiffs following debtors to arbitration, lately. At least those with agreements that stick debtor with fees.

 

Interesting.  So this is determined by whether the CC agreement has an opt-out for arbitration?

Share this post


Link to post
Share on other sites

Unless they used a lot of unintended and unnecessary words, it seems strikingly obvious that JAMS Minimum Standards only apply to a contract where the ONLY avenue of dispute resolution is arbitration and said decree and it's terms are either not enumerated, or are written in stone. It really is poorly written, as it applies to "mandatory" arbitration and then goes on to say court must be an option in such a clause.

This could go both ways, as JMS appears to offer plaintiff the absolute right to chose small claims court:

Quote

...no party shall be precluded from seeking remedies in small claims court for disputes or claims within the scope of its jurisdiction.

Looks like the gravy train just hit a pot hole.

Share this post


Link to post
Share on other sites
17 minutes ago, BackFromTheDebt said:

Interesting.  So this is determined by whether the CC agreement has an opt-out for arbitration?

Read the footnote beneath the "Consumer Minimum Standards".

Whether or not it applies in this case, I'd like to know what about the agreement the OP believes does not comply with the minimum standards.

Share this post


Link to post
Share on other sites

I could be all wrong, but why would the preamble and footnote add those conditions and limitations if what they meant to say was "these are the rules we are using for every consumer arbitration - period?"

Share this post


Link to post
Share on other sites
5 hours ago, thomasp said:

They brought up the fees in the formal hearing, and I objected siting Rule #7 of the Minimum Standards.  The arbitrator stated, in the ruling, that if there is a disagreement between the card member agreement and the JAMS Minimum Standards that the card member agreement takes precedent.

Is this covered anywhere in JAMS rules? 

Share this post


Link to post
Share on other sites
Quote

JAMS Minimum Standards appear to apply to "pursuant to mandatory pre-dispute arbitration clauses"

It seems to me that in the language quoted above, the adjective "mandatory" is modifying the noun "clauses", or more precisely "pre-dispute arbitration clauses".

What is being described as mandatory is the inclusion of the pre-dispute arbitration clause.  The subsequent language:

 

Quote

where a company systematically places an arbitration clause in its agreements with individual consumers and there is minimal, if any, negotiation between the parties as to the procedures or other terms of the arbitration clause.

describes what constitutes a mandatory inclusion of a pre-dispute arbitration clause.

My interpretation of the above language is that it does not speak to the mandatory nature of the terms within the arbitration clause itself (for example, whether or not arbitration itself is mandatory) but rather that the clause is a ‘take it or leave it’ condition of obtaining the product or service.  Or, in a smaller number of words, part of an adhesion contract.

The language "there is minimal, if any, negotiation between the parties as to the procedures or other terms of the arbitration clause" is essentially the definition of an adhesion contract.

Share this post


Link to post
Share on other sites

It seems like this subject used to come up on the other board. I believe the argument was that that arbiter can award fees, but Consumer Minimum Standards cap defendants liability at $250. Perhaps that is what happened here?

I don't see how else they get around Standard #7. In this case JAMS seems to be saying "for purposes of JAMS taking case, a Clause must meet these standards, but since this one doesn't, we are tossing Standards and are going with Clause that does not meet our Standards."

 

Share this post


Link to post
Share on other sites

Unless the consumer is in California, the initial "Commencement of Consumer Arbitration" notice* sent by JAMS contains the following language:

this notice is sent after the non-refundable filing fee has been fully paid, either in full by one party or jointly in full together by both parties.

Quote

This arbitration shall be conducted in accordance with JAMS Comprehensive (or Streamlined) Arbitration Rules & Procedures.  All arbitrations at JAMS are conducted in accordance with the attached Arbitration Administrative Polices regarding payment of fees, document retention, and limitations of liability.

Later in the Commencement Notice, there is the following language:

Quote

The arbitrator, once appointed, shall bill in accordance with their attached Fee Schedule.  JAMS will administer the arbitration consistent with the enclosed JAMS Policy on Consumer Arbitrations, Minimum Standards of Procedural Fairness.  According to this policy, the non-consumer party is responsible for 100% of the cost of the arbitration and will be billed accordingly  JAMS will also administer the case consistent with JAMS Cancellation/Continuance policy.  Pursuant to this policy, any party who cancels or continues a hearing after the deadline to do so will be responsible for 100% of the professional fees unless we call fill the reserved but unused time with another matter.

Under appropriate circumstances, the arbitrator may award JAMS fees and expenses against any party.  In California, the arbitration provision shall not require the consumer to pay the fees and costs incurred by the opposing party if the consumer does not prevail, and we will not enforce such a provision in the parties' agreement.

JAMS agreement to render services is not only with the parties, but extends to the attorney or other representative of the parties in arbitration.

So, it seems, even given the full enforcement of  "JAMS Policy on Consumer Arbitrations", there may be some "appropriate circumstances" where the arbitrator may award fees against the consumer - and the act of doing so may still be consistent with the consumer policy.

As a practical matter, it just doesn't happen very often.  I have no idea what might constitute "appropriate circumstances" that would warrant awarding fees against the consumer while still adhering to the entirety of the consumer policy.

Share this post


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

I have no idea what might constitute "appropriate circumstances" that would warrant awarding fees against the consumer while still adhering to the entirety of the consumer policy.

I suspect it could be labelled "Colt Fan Syndrome." If a defendant conducts himself in arbitration the way it was advocated on the other board, I could see an arbiter ruling that the party in question made a mockery of the proceedings. I've always been surprised that plaintiffs don't make a bigger deal out of the idea that the defendant is acting in "bad faith" when it's clear that the election of arbitration was made solely to run up costs per advice on a chat board.

It may behoove folks that are followed into arbitration to maintain some semblance of respect for the process - whether by appearing to honestly believe in their counter claims, or to express some sincere-sounding belief that arbitration provided a more favorable forum than court.

  • Like 2

Share this post


Link to post
Share on other sites

I have read the back and forth and I am still not quite clear on what happened.  I agree with Xeres and that is how I interpret that statement in the JAMS Consumer Minimum Standards as well as the letters that were sent.  JAMS must adhere to their own rules or not take on the arbitration case at all.   Since they took the case, then the standards and rules apply and over rule the CMA. 

Goody, I showed nothing but respect for the process and never acted in bad faith.  I had valid FDCPA violation claims and enough errors in billing statements to call into question the amount with their calculated interest owed.  The arbitrator dismissed the law firm from the arbitration and the FDCPA violations and at the formal hearing, I questioned the OC representative on the errors.  The rep was unable to prove they were not in error even though I provided corroborating evidence that they were.  There was only one pre-conference call and no other calls were scheduled as we worked out the rest through emails.  I made no attempt to run up costs in an inappropriate fashion.  There was some balking on Discovery requests on the part of the OC but otherwise, it went smoothly and quickly for us both.  

I am hard pressed to think of what 'appropriate circumstance' arose that warranted putting the OC CMA over the JAMS Consumer Minimum Standards with regards to cost.  

So the upshot I am reading is that I need to immediately file an appeal.  I have started writing it up this morning during a break at work.  The JAMS appeals process is called the Optional Appeal and both parties have to agree.  However, the OC CMA allows for an appeal without question if a certain amount was in dispute.  My formal complaint included statutory and real damages above that amount.  So based on the contract, which this arbitrator put above their own rules and standards, I am entitled to an appeal.  

My question on this is how in depth to I get in my request?  Do I state all areas I seek to appeal (like the dismissal of the FDCPA claims)?  Or do I limit it only do the OC's JAMS costs?  Or do I simply state I am seeking an appeal per my contractual right and leave it at that?  

Share this post


Link to post
Share on other sites

@thomasp

The reason the arbitrator dismissed the law firm is because the law firm is not a party to the arbitration agreement.

FDCPA claims do not apply to original creditors. 

  • Like 1

Share this post


Link to post
Share on other sites
19 minutes ago, thomasp said:

Or do I simply state I am seeking an appeal per my contractual right and leave it at that?  

I believe that is what Fist has said before.  Hopefully he will interject. You'll need input from those that have already been through the appeal process.  I believe that you may have to pay another $250 for the appeal case.  But wait for some confirmation on all of this before you proceed.

Share this post


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

@thomasp

The reason the arbitrator dismissed the law firm is because the law firm is not a party to the arbitration agreement.

FDCPA claims do not apply to original creditors. 

I learned that through this process.   I am looking into filing an FDCPA suit in Federal court here as the violations are within SOL. 

Share this post


Link to post
Share on other sites
18 minutes ago, thomasp said:

I learned that through this process.   I am looking into filing an FDCPA suit in Federal court here as the violations are within SOL. 

What are the violations?

Share this post


Link to post
Share on other sites
Just now, BV80 said:

What are the violations?

I don't want to provide all the specifics, however, what was proven with evidence was no Dunning letter, harassing phone calls to my employer and and my ex-wife (whom I have not had contact with in almost 10 years and was never involved with this debt), several threatening letters, and other such acts.  I can prove all of them in a court of law. 

Share this post


Link to post
Share on other sites
26 minutes ago, thomasp said:

I don't want to provide all the specifics, however, what was proven with evidence was no Dunning letter, harassing phone calls to my employer and and my ex-wife (whom I have not had contact with in almost 10 years and was never involved with this debt), several threatening letters, and other such acts.  I can prove all of them in a court of law. 

They're not required to send a dunning letter.  

Did you tell them not to call you at work?

You need to read some court rulings to determine what is considered "threatening".  What you consider to be threatening may or may not be threatening in the eyes of the court. 

In fact, you should show everything to an attorney.  If he thinks you have valid, provable claims, fine.  But, if thinks you don't have a case, you don't want to waste the money it costs to file in federal court.

Share this post


Link to post
Share on other sites
40 minutes ago, BV80 said:

They're not required to send a dunning letter.  

Did you tell them not to call you at work?

You need to read some court rulings to determine what is considered "threatening".  What you consider to be threatening may or may not be threatening in the eyes of the court. 

In fact, you should show everything to an attorney.  If he thinks you have valid, provable claims, fine.  But, if thinks you don't have a case, you don't want to waste the money it costs to file in federal court.

FDCPA does require a contact on the debt prior to filing a suit.  I will have to confirm the exact statue but I did look into that.  Yes, I did tell them explicitly not to do so.  I did look at case filings, and I have been in recent contact with a local consumer attorney.  He thinks I have a strong enough FDCPA case to file.  It is now a matter of costs and time given the other defaulted debt I am dealing with.  I was laid off and unemployed for almost two years and defaulted on debt before I was able to secure new work.  So this is not the only case I have had to deal with and my resources are better but not back to where I was prior to being laid off.  

Share this post


Link to post
Share on other sites
4 minutes ago, thomasp said:

FDCPA does require a contact on the debt prior to filing a suit. 

 No, it does not. Read 1692g(d).   That says that a summons and complaint is not considered an initial communication for the purpose of requesting validation. That means the  FDCPA recognizes that the first time one hears  from a debt collector maybe through a summons and complaint. 

Share this post


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

I believe that is what Fist has said before.  Hopefully he will interject. You'll need input from those that have already been through the appeal process.  I believe that you may have to pay another $250 for the appeal case.  But wait for some confirmation on all of this before you proceed.

I have read many of Fist's posts so yes, I hope he does weigh in shortly.  I am prepared for the $250.00 filing fee.  Do you or others know if when I demand an appeal, do I need to cc the attorney or just contact the JAMS case managers?  I presume I need to cc them but just want to confirm.

Share this post


Link to post
Share on other sites
18 minutes ago, BV80 said:

 No, it does not. Read 1692g(d).   That says that a summons and complaint is not considered an initial communication for the purpose of requesting validation. That means the  FDCPA recognizes that the first time one hears  from a debt collector maybe through a summons and complaint. 

Yes, that is the one.  I accept this, and there are still others.  Right now my focus is on the appeals process.  Once I have a handle on how to proceed with this then I will be in further contact with the lawyer about any FDCPA court filing.  

Share this post


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.