Question on Arbitration

[Kazzanova]

Hello,

  I sent LVNV Funding and the attorney who said they were representing them a letter back on 07/20/2019 requesting debt validation and notice of arbitration.

Today 09/19/2019 I was served with papers that they are suing me in court.

According to the Credit One Back contract it says all disputed will be handled thru binding arbitration unless I opt out which I never did.

Aren't they in violation for suing me in court after I elect arbitration?

[Clydesmom]

3 hours ago, Kazzanova said:

According to the Credit One Back contract it says all disputed will be handled thru binding arbitration unless I opt out which I never did.

Ummmm I don't think so.  Credit One card agreements specifically have a carve out on small claims cases.  They are not eligible for the arbitration clause.

3 hours ago, Kazzanova said:

Aren't they in violation for suing me in court after I elect arbitration?

Nope.  To date there is no case law we know of saying that filing suit after a consumer merely states they want arbitration is a violation of any collection laws or the FDCPA.

[Robby8900]

4 hours ago, Clydesmom said:

Ummmm I don't think so.  Credit One card agreements specifically have a carve out on small claims cases.  They are not eligible for the arbitration clause.

Nope.  To date there is no case law we know of saying that filing suit after a consumer merely states they want arbitration is a violation of any collection laws or the FDCPA.

Because no case law states that, does not mean it can not be done. If i demand arbitration in writing then say LVNV sues me 5 months later not only do i have a cause of action under FDCPA for a violation for taking an action that they can't lawfully take, because demanding arb replaces both parties right to go to court via the Credit One arb clause,  i have good cause to have the case dismissed for failure other than on the merits. Ohio Civ. R. 41(B)(4)(a) for failure other than on the merits (Lack of Subject matter jurisdiction). Speaking Of Ohio. I don't believe that a plaintiff, will assert the arb clause in its complaint as a material issue. i have already demanded arb with LVNV months ago, i am just waiting for them to sue me so i can pursue this in the manner i just stated. if it fails and is denied, then i would file MTC arb, and stay of proceedings.

[Kazzanova]

I have attached the Credit One Bank arbitration clause and can someone tell me if I am reading it right or not cause the way that I am reading it, it clearly states to me that unless I rejected the arbitration clause that any controversies or disputes WILL BE resolved by Arbitration thru AAA:

"This agreement to arbitrate provides that you or we can require controversies or disputes between us to be resolved by BINDING ARBITRATION. You have the right to REJECT this agreement to arbitrate by using the procedure explained below.

If you do not reject this agreement to arbitrate, you GIVE UP YOUR RIGHT TO GO TO COURT and controversies or disputes between us will be resolved by a NEUTRAL ARBITRATOR INSTEAD OF A JUDGE OR JURY, using rules that are simpler and more limited than in a court. Arbitrator decisions are subject to VERY LIMITED REVIEW BY A COURT. Arbitration will proceed INDIVIDUALLY— CLASS ACTIONS AND SIMILAR PROCEDURES WILL NOT BE AVAILABLE TO YOU."

Abritration Agreeent.pdf

[Robby8900]

28 minutes ago, Kazzanova said:

I have attached the Credit One Bank arbitration clause and can someone tell me if I am reading it right or not cause the way that I am reading it, it clearly states to me that unless I rejected the arbitration clause that any controversies or disputes WILL BE resolved by Arbitration thru AAA:

"This agreement to arbitrate provides that you or we can require controversies or disputes between us to be resolved by BINDING ARBITRATION. You have the right to REJECT this agreement to arbitrate by using the procedure explained below.

If you do not reject this agreement to arbitrate, you GIVE UP YOUR RIGHT TO GO TO COURT and controversies or disputes between us will be resolved by a NEUTRAL ARBITRATOR INSTEAD OF A JUDGE OR JURY, using rules that are simpler and more limited than in a court. Arbitrator decisions are subject to VERY LIMITED REVIEW BY A COURT. Arbitration will proceed INDIVIDUALLY— CLASS ACTIONS AND SIMILAR PROCEDURES WILL NOT BE AVAILABLE TO YOU."

Abritration Agreeent.pdf 304.83 kB · 0 downloads

You are correct, and you gave ''Notice'' that you require arbitration to settle any dispute or controversy all of which are called ''claims'' pursuant the written agreement. I don't recall you saying they sued you. However, since you demanded arbitration to settle claims, that replaces both parties right to litigate in court. So if they sue you even in small claims, you can get the case dismissed, for failure other than on the merits. That is my belief, and suggestion as i am not a attorney.

[BV80]

5 hours ago, Robby8900 said:

If i demand arbitration in writing then say LVNV sues me 5 months later not only do i have a cause of action under FDCPA for a violation for taking an action that they can't lawfully take,

Please cite the case law in support of your claim.  

The 7th Circuit Court of Appeals disagrees with you.   

”The FDCPA is not a mechanism for matters governed elsewhere by state and federal law. Bentrud v. Bowman, Heintz, Boscia & Vician, P.C., 794 F.3d 871, 875 (7th Cir. 2015).  A contrary ruling would require us to declare that adherence to an arbitration provision in a contract, even in the face of a state court order to the contrary, is essential to fair debt collection. This we will not do. Id.

That court has ruled that adherence to an arbitration provision has nothing to do with FAIR debt collection.   Simply because the other party would rather litigate in court rather than arbitrate does not make the action unfair. In addition, as stated by the court, the arbitration provision is governed by the “federal law”. The FAA anticipated a party’s refusal to arbitrate and provides a remedy for a refusal.

9 U.S.C. §4

A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court which, save for such agreement, would have jurisdiction under title 28, in a civil action or in admiralty of the subject matter of a suit arising out of the controversy between the parties, for an order directing that such arbitration proceed in the manner provided for in such agreement.

In other words, you file a MTC when the other party refuses to arbitrate. 

Then, there’s the issue of a valid agreement to arbitrate (which is also addressed in the Federal Arbitration Act).  Courts get to determine that issue.  That’s part of the reason for a MTC.  

The OP is in New Jersey.  The following is from the N.J. Supreme Court in Goffe v. Foulke Management Corp. (2019)

“To make that so, the FAA provides remedies. First, section three provides that a party may request a stay of an in-court action of ‘any issue referable to arbitration under an agreement in writing for such arbitration.’ 9 U.S.C. § 3. And, section four provides a federal remedy for a party ‘aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration,’ and directs the federal court to order arbitration once it is satisfied that an agreement for arbitration has been made and has not been honored. 9 U.S.C. § 4.

”New Jersey case law acknowledges the preeminence of the national policy established by Congress through the FAA as well as the Supreme Court's holdings interpreting and implementing that policy.”

 

 

[BV80]

13 hours ago, Kazzanova said:

Hello,

  I sent LVNV Funding and the attorney who said they were representing them a letter back on 07/20/2019 requesting debt validation and notice of arbitration.

Today 09/19/2019 I was served with papers that they are suing me in court.

According to the Credit One Back contract it says all disputed will be handled thru binding arbitration unless I opt out which I never did.

Aren't they in violation for suing me in court after I elect arbitration?

Are you being sued in small claims?

[Robby8900]

1 hour ago, BV80 said:

Please cite the case law in support of your claim.  

The 7th Circuit Court of Appeals disagrees with you.   

”The FDCPA is not a mechanism for matters governed elsewhere by state and federal law. Bentrud v. Bowman, Heintz, Boscia & Vician, P.C., 794 F.3d 871, 875 (7th Cir. 2015).  A contrary ruling would require us to declare that adherence to an arbitration provision in a contract, even in the face of a state court order to the contrary, is essential to fair debt collection. This we will not do. Id.

That court has ruled that adherence to an arbitration provision has nothing to do with FAIR debt collection.   Simply because the other party would rather litigate in court rather than arbitrate does not make the action unfair. In addition, as stated by the court, the arbitration provision is governed by the “federal law”. The FAA anticipated a party’s refusal to arbitrate and provides a remedy for a refusal.

9 U.S.C. §4

A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court which, save for such agreement, would have jurisdiction under title 28, in a civil action or in admiralty of the subject matter of a suit arising out of the controversy between the parties, for an order directing that such arbitration proceed in the manner provided for in such agreement.

In other words, you file a MTC when the other party refuses to arbitrate. 

Then, there’s the issue of a valid agreement to arbitrate (which is also addressed in the Federal Arbitration Act).  Courts get to determine that issue.  That’s part of the reason for a MTC.  

The OP is in New Jersey.  The following is from the N.J. Supreme Court in Goffe v. Foulke Management Corp. (2019)

“To make that so, the FAA provides remedies. First, section three provides that a party may request a stay of an in-court action of ‘any issue referable to arbitration under an agreement in writing for such arbitration.’ 9 U.S.C. § 3. And, section four provides a federal remedy for a party ‘aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration,’ and directs the federal court to order arbitration once it is satisfied that an agreement for arbitration has been made and has not been honored. 9 U.S.C. § 4.

”New Jersey case law acknowledges the preeminence of the national policy established by Congress through the FAA as well as the Supreme Court's holdings interpreting and implementing that policy.”

 

 

Agreed.

[Clydesmom]

6 hours ago, Kazzanova said:

I have attached the Credit One Bank arbitration clause and can someone tell me if I am reading it right or not cause the way that I am reading it, it clearly states to me that unless I rejected the arbitration clause that any controversies or disputes WILL BE resolved by Arbitration thru AAA:

You stopped quoting at the section that does apply to your case:

"Claims Not Covered: Claims (whether brought initially or by counter or cross-claim) are not subject to arbitration if they are filed by you or us in a small claims court, so long as the case remains in such court and only individual claims for relief are advanced in the case."

As I said in my first post:  if they sued you in small claims court it does not matter that you elected arbitration.  There is a clause that carves out that option in small claims cases.

 

[Clydesmom]

7 hours ago, Robby8900 said:

Because no case law states that, does not mean it can not be done.

That is your opinion and worth the weight of wet toilet paper.  The courts have not ruled specifically that suing after a consumer sends a letter stating they want to arbitrate is an FDCPA violation.

7 hours ago, Robby8900 said:

If i demand arbitration in writing then say LVNV sues me 5 months later not only do i have a cause of action under FDCPA for a violation for taking an action that they can't lawfully take, because demanding arb replaces both parties right to go to court via the Credit One arb clause,  i have good cause to have the case dismissed for failure other than on the merits. Ohio Civ. R. 41(B)(4)(a) for failure other than on the merits (Lack of Subject matter jurisdiction). Speaking Of Ohio. I don't believe that a plaintiff, will assert the arb clause in its complaint as a material issue. i have already demanded arb with LVNV months ago, i am just waiting for them to sue me so i can pursue this in the manner i just stated. if it fails and is denied, then i would file MTC arb, and stay of proceedings.

We have explained this to you multiple times but you fail to grasp the law.  NOTHING in OHIO law applies to the OP in New Jersey.  You cannot take something one state has ruled on and apply it in another state.  They are separate issues.

You also over look that the arbitration clause has a carve out for small claims so even if the consumer elects it so long as the case is in small claims and stays there they are not entitled to arbitration as an option.

[Robby8900]

@Clydesmom; Are you an attorney? I said i agreed about the FDCPA. But, if you elect arbitration and it replaces both parties rights to go to court before a judge, why can't you get the case dismissed under rule 41(B)(4)(a) lack of jurisdiction, failure otherwise than on the merits? i know he is in NJ wasn't using Ohio law for NJ. If i am wrong, explain, why i can't compel arbitration and dismiss the case under said rule, and not stay the proceedings, because staying the case will serve no purpose. Post arbitration is not renewed adjudication on the merits but, only a conformation of the award in the common pleas court not the muni court. As far as the carve out for small claims court, if he already demanded arbitration that replaces the plaintiff rights to go before a judge in a court that even includes small claims court. Maybe, there needs be a first case to test this to find out. That's why i said i have already demanded arb, just waiting on a suit to come my way and i will test the 41 rule. in Ohio.

[Pericles]

On 9/20/2019 at 7:23 AM, BV80 said:

The 7th Circuit Court of Appeals disagrees with you.   

”The FDCPA is not a mechanism for matters governed elsewhere by state and federal law. Bentrud v. Bowman, Heintz, Boscia & Vician, P.C., 794 F.3d 871, 875 (7th Cir. 2015).

For those that have been following cases citing Bentrud during the past four years, there is now a case before the 7th circuit court of appeals that was decided (in district court), in part, with reliance on Bentrud.

Nichole L. Richards v. Par, Inc., et al

Attached below are the district court decisions.

Oral argument was had before the 7th circuit court of appeals last week.  Audio is available here.

Whatever the court of appeals decides, it might be interesting how they distinguish this case from Bentrud.

In Richards, the district court ... indicated that it would be inappropriate to look at Indiana Code § 26-1-9.1-609 in determining whether Lawrence Towing violated section 1692f(6)(A) because Indiana has “prescribed a remedy” for violations of § 26-1-9.1-609. App. 19.

From the denial of Richards' motion to reconsider:

Quote

The Court of Appeals said as much in Bentrud v. Bowman, Heintz, Boscia & Vician, P.C., 794 F.3d 871 (7th Cir. 2015). Relying on Beler, Bentrud declared “The FDCPA is not an enforcement mechanism for matters governed elsewhere by state and federal law.” Bentrud at 875. In Bentrud, the plaintiff argued that it was “unfair” or “unconscionable” under the FDCPA for defendants to move for summary judgment against him in a state court debt collection action because the contract at issue — his credit card agreement — allowed him to pursue arbitration. The Seventh Circuit reminded Bentrud that if the defendants violated his contract by pursuing litigation after he had elected to proceed in arbitration, “his remedy sounds in breach of contract, not the FDCPA.” Id.

That is the case for Richards as well. If  Defendants disregarded their contractual obligations by breaching the peace, Richards has a state claim for breach of contract, not a federal claim under the FDCPA. For that reason, the Court denies her Motion to Reconsider on this second ground. 

The problem now for the 7th circuit court of appeals is that, distinct from Bentrud, Richards' appellant brief includes a wealth of precedent which demonstrates that the availability of a state law or federal law remedy does not foreclose a claim under the FDCPA.

During oral argument before the 7th circuit court of appeals, Richards' counsel made this argument (at 6:30 in the audio link above);

Quote

It's not unusual for provisons of the FDCPA to depend on the answers to predicate state law questions.  So, for example, this court has held that it violates the FDCPA for a debt collector to file an action to collect on a time barred debt.

And there may be state law ramifications [remedies]  ... there will be state law consequences for filing outside the statute of limitations, but that doesn't turn the FDCPA claim into an improper attempt to enforce state law.  FDCPA provisions often depend on answers to predicate state law questions to determine elements of the federal violation.

I've made the same argument here on the forum several times before.

It is difficult to see how the 7th circuit court of appeals can find in favor of Richards and not somehow weaken or destroy Bentrud, and also remain consistent with all of their precedent in regard to FDCPA claims for time barred debt (which also has a remedy in state law).

richards-deny-reconsider.pdf richards-dismiss.pdf

[fisthardcheese]

Did they ever respond to your debt validation request?  Was your DV sent within 30 days after your first correspondence from LVNV?