SJULawAlum

Arbitration Defense in New York - Recent Results

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Hi guys, 

I know it's been a while since I've been here. I am coming up on being an attorney for two years (crazy how time flies). I have steadily been building up my consumer debt defense practice and have about 15 active cases. I wanted to give an update on the cases where I have used a motion to compel arbitration.

  • 2019 - Midland Claim for $3,400 - I brought a cross-motion to compel arbitration in response to a summary judgment motion by Midland. Midland fought hard against the arbitration motion and made terrible legal arguments. Judge denied summary judgment and directed the parties to arbitrate. My client paid the consumer $250 fee with JAMS, and Midland sought to withdraw the arbitration. JAMS said that's great, but you still owe us $600 as a cancellation fee. Attorney's for Midland were not happy lol.
  • 2020 - I assisted another client, against a debt buyer (the name escapes me) with a motion. He wanted to bring the motion pro se and just have me give him a template. After he served the motion the creditor voluntarily dismissed the case.
  • 2021 - Midland claim for $2,900 - Client did not have copy of cardmember agreement. I demanded it in discovery, and it had one of the best arbitration provisions I ever saw. Brought the motion to compel, a week later Midland voluntarily dismissed the case.
  • 2021 - Capital One Bank for $8,000. Capital One brought summary judgment. In the summary judgment motion, they attached a cardmember agreement that said arbitration can be demanded at any time. Of course, I cross-moved to compel arbitration under JAMS. That motion is pending for a decision. The court is so far backed up, it will probably take until June or July of this year to get a decision on the motion.

I have around 12 other cases where I have answers filed and the cases are kind of in COVID pending purgatory.

What I've learned in making these motions to compel:

  • You need to have a way to authenticate the cardmember agreement is the actual one that was in effect. This can be done two ways, by the consumer keeping the agreements that are mailed (or emailed to them) OR by getting the cardmember agreement from the Plaintiff in Discovery.
    • The latter is more common. I only had 1 client who kept all the cardmember agreements throughout the years and I was able to authenticate the agreement that way.
    • If the creditor turns over a cardmember agreement that has a great arbitration clause, then its very easy to authenticate - I just have my client submit an affidavit saying "I stipulate the the cardmember agreement provided by the Plaintiff is authentic and the agreement was in effect when the account when in default."
  • If you are going to go this route, you kind of need to admit that you had a credit card with the plaintiff and that the account is yours. This can be risky, because judges are human and judges might not want you to get away with not paying a bill over a technicality. Fortunately I have not run into that problem yet because most judges in NY are very liberal, and most judges want these cases off their docket and would much prefer to have them heard in private arbitration.
  • I think I am the only attorney in New York pursuing this defense and winning with it. I know attorneys are legal aid, law school clinics, etc., and I share my motions with them but they don't seem to think it's a viable strategy. But I've already got close to 10k in consumer debt wiped out using it.

If anyone has questions about bringing these motions to compel, feel free to ask me. I check these DM's weekly. 

 

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The Cap One case is odd, IMO.  I thought they had removed the arb clauses back in 2010 or 2011.  When did the client default?  If it was back then, then the SOL should have run out?

Or maybe Cap One or their attorneys made a grave mistake in attaching that agreement.

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I just learned myself that Cap One has a severability clause in their old agreements (I asked the same question recently). If they did, then that might have helped the argument in getting into arbitration). The plaintiff also attached the agreement that they felt was in force at the time the debtor defaulted so it would be up to them to say why that clause is now not valid. That motion is still pending due to COVID so we shall see.

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I seem to remember Capital One removing forced arbitration from their agreements too. But this is an industry that is known for it's laziness and sloppiness. I would not be surprised if they attached an incorrect agreement to the summary judgment motion. I checked on the Cap 1 case today. These motions were filed November 2020, and they are not going to be submitted to a judge for decision until June 2021. 

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14 minutes ago, SJULawAlum said:

I seem to remember Capital One removing forced arbitration from their agreements too. But this is an industry that is known for it's laziness and sloppiness. I would not be surprised if they attached an incorrect agreement to the summary judgment motion. I checked on the Cap 1 case today. These motions were filed November 2020, and they are not going to be submitted to a judge for decision until June 2021. 

Yes, Cap 1 removed arbitration a decade ago.   Very sloppy indeed.  
Out of curiosity, did you file anything to stipulate that the agreement they sent in was correct?

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1 hour ago, SJULawAlum said:

I seem to remember Capital One removing forced arbitration from their agreements too. But this is an industry that is known for it's laziness and sloppiness. I would not be surprised if they attached an incorrect agreement to the summary judgment motion. I checked on the Cap 1 case today. These motions were filed November 2020, and they are not going to be submitted to a judge for decision until June 2021. 

Is it possible that the defendant opened the account before 2009(when the arbitration provision was removed) and the plaintiff attached the agreement that was in effect when the account was opened?  If so, arbitration could still be a possibility depending upon whether or not there is a survival clause in the provision.  

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2 hours ago, BackFromTheDebt said:

Yes, Cap 1 removed arbitration a decade ago.   Very sloppy indeed.  
Out of curiosity, did you file anything to stipulate that the agreement they sent in was correct?

It would not be for the defense to do anything regarding the agreement if the agreement the plaintiff attached is beneficial to them. That would be for the plaintiff to state that the agreement is not the correct one but to do so at this stage would make them look bad in front of the judge and cause the judge to scrutinize any other agreements the plaintiffs provide so the plaintiff might let this go to save face. Not the first time i have seen this done.

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On 2/5/2021 at 10:47 AM, SJULawAlum said:

Hi guys, 

I know it's been a while since I've been here. I am coming up on being an attorney for two years (crazy how time flies). I have steadily been building up my consumer debt defense practice and have about 15 active cases. I wanted to give an update on the cases where I have used a motion to compel arbitration.

  • 2019 - Midland Claim for $3,400 - I brought a cross-motion to compel arbitration in response to a summary judgment motion by Midland. Midland fought hard against the arbitration motion and made terrible legal arguments. Judge denied summary judgment and directed the parties to arbitrate. My client paid the consumer $250 fee with JAMS, and Midland sought to withdraw the arbitration. JAMS said that's great, but you still owe us $600 as a cancellation fee. Attorney's for Midland were not happy lol.
  • 2020 - I assisted another client, against a debt buyer (the name escapes me) with a motion. He wanted to bring the motion pro se and just have me give him a template. After he served the motion the creditor voluntarily dismissed the case.
  • 2021 - Midland claim for $2,900 - Client did not have copy of cardmember agreement. I demanded it in discovery, and it had one of the best arbitration provisions I ever saw. Brought the motion to compel, a week later Midland voluntarily dismissed the case.
  • 2021 - Capital One Bank for $8,000. Capital One brought summary judgment. In the summary judgment motion, they attached a cardmember agreement that said arbitration can be demanded at any time. Of course, I cross-moved to compel arbitration under JAMS. That motion is pending for a decision. The court is so far backed up, it will probably take until June or July of this year to get a decision on the motion.

I have around 12 other cases where I have answers filed and the cases are kind of in COVID pending purgatory.

What I've learned in making these motions to compel:

  • You need to have a way to authenticate the cardmember agreement is the actual one that was in effect. This can be done two ways, by the consumer keeping the agreements that are mailed (or emailed to them) OR by getting the cardmember agreement from the Plaintiff in Discovery.
    • The latter is more common. I only had 1 client who kept all the cardmember agreements throughout the years and I was able to authenticate the agreement that way.
    • If the creditor turns over a cardmember agreement that has a great arbitration clause, then its very easy to authenticate - I just have my client submit an affidavit saying "I stipulate the the cardmember agreement provided by the Plaintiff is authentic and the agreement was in effect when the account when in default."
  • If you are going to go this route, you kind of need to admit that you had a credit card with the plaintiff and that the account is yours. This can be risky, because judges are human and judges might not want you to get away with not paying a bill over a technicality. Fortunately I have not run into that problem yet because most judges in NY are very liberal, and most judges want these cases off their docket and would much prefer to have them heard in private arbitration.
  • I think I am the only attorney in New York pursuing this defense and winning with it. I know attorneys are legal aid, law school clinics, etc., and I share my motions with them but they don't seem to think it's a viable strategy. But I've already got close to 10k in consumer debt wiped out using it.

If anyone has questions about bringing these motions to compel, feel free to ask me. I check these DM's weekly. 

 

Hi I’m in NH and I did get my motion to compel to arbitration with a copy of the contract agreement. Now the problem seems to be getting AAA to do anything. Can you help with dealing with AAA arbitration? 

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On 2/25/2021 at 9:36 AM, BackFromTheDebt said:

Yes, Cap 1 removed arbitration a decade ago.   Very sloppy indeed.  
Out of curiosity, did you file anything to stipulate that the agreement they sent in was correct?

Yes. I had my client sign an affidavit, stating in sum and substance, "the cardmember agreement attached to Cap 1's motion is the true and correct agreement that governs this dispute." So, in essence, we stipulate that the agreement they provide is the one that controls. 

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On 2/25/2021 at 10:11 AM, BV80 said:

Is it possible that the defendant opened the account before 2009(when the arbitration provision was removed) and the plaintiff attached the agreement that was in effect when the account was opened?  If so, arbitration could still be a possibility depending upon whether or not there is a survival clause in the provision.  

This is possibly what happened, but the default occurred sometime in 2017. So the new agreements that were in effect at the time, theoretically, would be the ones that govern. But there is nothing stopping from a defendant to consenting to an incorrect agreement if it helps your cause. 

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On 2/28/2021 at 2:22 PM, Lauren said:

Hi I’m in NH and I did get my motion to compel to arbitration with a copy of the contract agreement. Now the problem seems to be getting AAA to do anything. Can you help with dealing with AAA arbitration? 

I don't get involved in the arbitration process itself. My agreements with my clients, and they understand, the value of the strategy is to get the creditor to drop the case and not pursue arbitration. In the unlikely event that a creditor chooses to go into arbitration, my client would be on their own with that. 

So far out of the small about 5 cases I have done, no creditor has gone into arbitration. All debt buyers have just voluntarily dismissed the case, and the Cap1 case is pending for a decision that I hope to get sometime in 2021. 

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2 hours ago, SJULawAlum said:

Yes. I had my client sign an affidavit, stating in sum and substance, "the cardmember agreement attached to Cap 1's motion is the true and correct agreement that governs this dispute." So, in essence, we stipulate that the agreement they provide is the one that controls. 

That was something that was a big deal on this site in the very early days of the arbitration strategy, when getting an agreement was often difficult. There was no CFPB back then.  If the plaintiff includes an agreement with a favorable arbitration provision, always stipulate to their agreement. If the plaintiff includes an agreement more favorable than the one you have, stipulate to their agreement. 
 

Back when Cap 1 had an arbitration agreement, I included a Cap1 agreement with my motion to stay (before we knew about MTC).  Their attorneys, the notorious Messerli & Kramer, objected saying my agreement was wrong and theirs was correct.  I pointed out in my reply that she arbitration provision was identical.  
 

I won that case.  

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I was granted arbitration last week and the plaintiff is now asking me to accept a stipulation to dismiss the case. I asked for a agreement to dismiss with prejudice but they are insisting they want to go separate ways amicably. They are drafting up for me to review. Does anyone have a similar situation or offer advice? 

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22 minutes ago, Lauren said:

I was granted arbitration last week and the plaintiff is now asking me to accept a stipulation to dismiss the case. I asked for a agreement to dismiss with prejudice but they are insisting they want to go separate ways amicably. They are drafting up for me to review. Does anyone have a similar situation or offer advice? 

Please start a new thread with this question, and perhaps show the wording of what they want you to sign.  

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