Sued by Velocty Investments, Judge Granted Motion to Compel Arbitration, Plaintiff didn't pay their JAMS fee, JAMS dismissed case.

[Mistymouse4590]

Hello, 

First, many thanks to everyone here on this amazing forum for all the examples, help, and guidance. I could never have done this without this wonderful resource and all your assistance. 

Last year, I was sued for a $4k debt. I responded immediately to the complaint and filed a motion to compel arbitration (and Plaintiff replied to that motion indicating that they had no issue with arbitration), which was granted.

After I opened the JAMS case, there was some back and forth with a denied motion for summary judgment by the Plaintiff, and a court-ordered mediation which was unsuccessful (but Plaintiff offered to request a continuance so we could try mediation once again in 2 months, and I stipulated that it would be fine as long as it has no impact on the pending arbitration case). 

After I opened my JAMS case, I immediately paid my $250 fee. I checked on the status of the Plaintiff's $1500 payment after the deadline had passed, and I learned that the payment was not made. A few months later, the JAMS administrator sent out a letter called "Final Request for Missing Items", outlining that the case would be closed in 30 days if the Plaintiff's filing fee wasn't received. Sure enough, 30 days later, a "Notice of Closing File" was issued, and the JAMS case was closed. 

I'm going to file a Motion to Dismiss with Prejudice for Plaintiff failing to comply with court's order, mentioning all the relevant dates & details and attaching the letters from JAMS. Wondering if I should also request sanctions for the $250 JAMS filing fee, and for that matter, my original court filing fee and maybe even the hours of my time spent on this. Would it be worth it? 

Would love any thoughts on anything else I should include in my MTD. 

Thanks again, everyone. I'll keep you updated on how this goes.  

[BV80]

17 minutes ago, Mistymouse4590 said:

Hello, 

First, many thanks to everyone here on this amazing forum for all the examples, help, and guidance. I could never have done this without this wonderful resource and all your assistance. 

Last year, I was sued for a $4k debt. I responded immediately to the complaint and filed a motion to compel arbitration (and Plaintiff replied to that motion indicating that they had no issue with arbitration), which was granted.

After I opened the JAMS case, there was some back and forth with a denied motion for summary judgment by the Plaintiff, and a court-ordered mediation which was unsuccessful (but Plaintiff offered to request a continuance so we could try mediation once again in 2 months, and I stipulated that it would be fine as long as it has no impact on the pending arbitration case). 

After I opened my JAMS case, I immediately paid my $250 fee. I checked on the status of the Plaintiff's $1500 payment after the deadline had passed, and I learned that the payment was not made. A few months later, the JAMS administrator sent out a letter called "Final Request for Missing Items", outlining that the case would be closed in 30 days if the Plaintiff's filing fee wasn't received. Sure enough, 30 days later, a "Notice of Closing File" was issued, and the JAMS case was closed. 

I'm going to file a Motion to Dismiss with Prejudice for Plaintiff failing to comply with court's order, mentioning all the relevant dates & details and attaching the letters from JAMS. Wondering if I should also request sanctions for the $250 JAMS filing fee, and for that matter, my original court filing fee and maybe even the hours of my time spent on this. Would it be worth it? 

Would love any thoughts on anything else I should include in my MTD. 

Thanks again, everyone. I'll keep you updated on how this goes.  

Unfortunately, you are not eligible for reimbursement for the time you spent on the lawsuit.  I’ll defer to @BackFromTheDebtfor the rest.

[BackFromTheDebt]

You have pretty much won. 
 

Since the case is closed, filing a MTD as a sanction makes sense.  At this point they can’t arbitrate and they can’t pursue the case in court.  
 

You can petition for the fees.  I don’t know if you will get the award or not.  It doesn’t hurt to try

[Mistymouse4590]

Thank you for the replies. What does it mean to file a MTD as a sanction? And for the fees, should I ask for them in the form of a judgment along with the request to grant the motion: i.e.: 

"For the foregoing reasons, and as a result of Plaintiff’s failure to comply with this Court’s order to Compel Private Arbitration, the Defendant’s Motion to Dismiss with Prejudice should be granted and a judgment entered against the Plaintiff in the amount of $250 to recover the arbitration filing fee."

Or should I request the fee in a separate order? 

[BackFromTheDebt]

You can request dismissal with prejudice as a sanction for failure to abide by a court order. You may also request the filing fee as a sanction.  
 

Either write it up as one motion or two motions.  If two motions you could file as a Motion to Dismiss and a separate Motion for Sanctions 

It would help to include several copies of proposed orders  for the judge to sign.  One would be a proposed order to dismiss with prejudice; one would be a proposed order for the plaintiff to pay $250 as a sanction.  By breaking them up you make it more likely the judge at least signs the dismissal order.  

[Mistymouse4590]

That's super helpful. Thank you so much. 

[Mistymouse4590]

Hi Everyone, I wanted to post an update to this case, as it's getting kind of interesting and perhaps this can be useful to others dealing with the same issue. At this time, they haven't filed a response to my MTD, but they may, and I am not yet sure how things will go or how the judge will rule. Open to any feedback and advice!

Special thanks to @Bulldoger for the help in PMs and recommendation to tag @fisthardcheese

 

===

 

First, I forgot to add some pertinent info in my original post about my case: 

• Who is the named plaintiff in the suit? Velocity Investments, LLC
• What is the name of the law firm handling the suit? Gurstal Law Firm
• How much are you being sued for? $4000
• Who is the original creditor? WebBank/Prosper.com
• What state and county do you live in? Arizona, Maricopa
• When did you open the account (looking to establish what card agreement may be applicable)? 2017
• What is the status of your case? Suit served in 2021, Answered, motion to compel arbitration granted, arbitration initiated, Plaintiff's MSJ denied, Arbitration case closed by JAMS due to lack of fee payment by Plaintiff, MTD filed by me (as of the time of this posting, unanswered, not seen by judge yet)
• How long do you have to respond to the suit?  We need to know what the "charges" are. Please post what they are claiming. Did you receive an interrogatory (questionnaire) regarding the lawsuit? They are claiming that I have failed to make payments. Do not think I received an interrogatory. 
• What evidence did they send with the summons? An affidavit? Statements from the OC? Contract? List anything else they attached as exhibits. They sent a large packet of documents purportedly showing sale of accounts, statements from OC, promissory note, etc. 

Relevant events/dates: 

• Served with suit July 2021, Responded quickly.
• I filed Motion to Compel Private Arbitration in July 2021. 
• Plaintiff filed a Response to my Motion to Compel affirming no objection to arbitration.
• Judge granted my Motion to Compel and ordered the matter moved to arbitration with a 90-day stay in August 2021
  
• Demand for private arbitration with JAMS was completed and filed in October 2021
• Plaintiff filed Motion for Summary Judgment which was denied by a temporary judge who also ordered mediation at the court, and wrote:

  Quote

   

  "DENIED at this time. Ninety (90) day stay was granted on 8/18/21, which has now expired. Defendant has, recently, initiated private mediation. If private mediation is not resolved by date of court ordered mediation, 1/18/22, Plaintiff may re-urge its motion for summary judgment. At which time, the court may rule on said motion without the need of additional response/reply as those pleadings have already been filed." Dated 12/2/21. 

  
  

   

   

   

• Mediation was unsuccessful. I offered to settle for $300, and then went up to $700. They were firm at 50% off, or $2k. I told them I couldn't do that. They asked if my financial circumstances may change in the next 60 days and agreed to continue for 60 days and schedule a second mediation. I stipulated that this should not affect my ability to complete arbitration to which they agreed, at which point the mediator asked some questions (from my notes:)

Quote

 

At that time, the Plaintiff said "have you received a date or anything, as far as that goes? We have not received any correspondence as far as a date for arbitration being set."

The mediator then asked me when I filed arbitration, to which I answered, "October.". Then he said to the plaintiff, "Filing an arbitration case in October and still not hearing anything. Does that sound normal?"

The Plaintiff replied, "Uh, I am not sure, because it's a private arbitration through JAMS, so I' am not sure why they are taking so long to get an arbitration set in this matter."

 

• About a month after the first mediation, I received notice that JAMS had closed the arbitration case due to non-payment of the $1,500 filing fee from the Plaintiff. 
• I filed a Motion to Dismiss on 2/28/22 also asking for a judgment for $250 to cover my non-refundable JAMS filing fee. The meat of my MTD: 

Quote

 

1.    On or about June, 2021, Plaintiff filed its Complaint against Defendant. 
2.    Defendant filed a Motion to Compel Arbitration in this matter on July, 2021. 
3.    Plaintiff filed a response to Defendant’s Motion to Compel on July, 2021 affirming no objection to arbitration. 
4.    Judge granted Defendant’s Motion to Compel Arbitration and ordered this matter moved to arbitration on August, 2021.
5.    Defendant complied with order and filed Demand for Private Arbitration with JAMS on October, 2021.
6.    JAMS sent to all parties a “Notice of Intent to Initiate Arbitration” (Exhibit A) which included invoices for both parties’ filing fees with a due date of December 2021.
7.    Defendant submitted her Arbitration filing fee to JAMS in full on December, 2021.
8.    Plaintiff ignored all JAMS deadlines and did not submit their filing fee to JAMS, causing JAMS to close the arbitration case before arbitration could begin.
 

On January 18, 2022, JAMS issued a “Final Request for Missing Items” (Exhibit B ) to both parties indicating that they have made multiple requests to Plaintiff for full payment of the required Filing Fee, which was due upon receipt, and was required to commence arbitration proceedings. JAMS’ request indicated that the file will be closed if Plaintiff’s filing fee was not received within 30 days, by February 18, 2022.

On February 18, 2022, because JAMS had not received the requested filing fee from the Plaintiff, a “Notice of Closing File” (Exhibit C) was issued to both parties indicating that the JAMS case was closed as of February 18, 2022.

By failing to make payment to JAMS for their obligatory Arbitration filing fees, and through no fault of Defendant, Plaintiff has caused the private arbitration case to be closed, ignoring this court’s order and denying Defendant the opportunity to resolve this case via court-ordered arbitration. The Plaintiff cannot benefit from its own bad acts, mainly by breaching its own contract.

Defendant complied with this court’s order to arbitrate, and complied with all JAMS’ deadlines, paying the required $250 non-refundable filing fee on schedule. As a result of Plaintiff’s bad faith and non-compliance with this court’s order to compel private arbitration, Defendant has lost the opportunity to arbitrate.

Conclusion: 

For the foregoing reasons, and as a result of Plaintiff’s failure to comply with this Court’s order to Compel Private Arbitration, the Defendant’s Motion to Dismiss with Prejudice should be granted. Furthermore, the Defendant requests reimbursement of the $250 arbitration filing fee. 

 

• Second mediation happened yesterday. Again, unsuccessful. I offered to drop my claim for the $250 filing fee in exchange for their dismissal with prejudice. He laughed and said his client would not accept that. However, he revealed a lot about their position relative to Arbitration and JAMS: 

Quote

His introduction to the mediators: "After we had filed suit, Defendant was granted permission by the court to explore private arbitration options which she did do in October of 2021. Our office received a bill from the arbitrator for a $1,500 initiation fee and our client chose not to pay that fee and allow this to go through the court for dispute as they had already paid the filing fee with the court and had elected this forum under the contract which they were permitted to do to solve this dispute. As of today the outstanding balance is $4,xxx.xx we had provided initial disclosures to the Defendant back in August of 2021 and I do have settlement authority today, and I'm open to the possibility of being able to wrap this up today if possible."

I responded by saying that I am not comfortable continuing the negotiation at this time, and prefer to await the judge's decision on my MTD. The 2 "co-mediators" (a couple of young 2Ls from the local university) warned me that the judge is not likely to grant my MTD if I don't make a good faith effort to mediate/negotiate today. So I continued discussing a negotiation and asked the Plaintiff what he had in mind. I mentioned that they failed to follow the court's order to arbitrate and he followed with this: 

Quote

"My client's position would be that you had the opportunity to arbitrate at any time and if there was any dispute with the account during the life of the account per the contract agreement you had the opportunity to initiate the arbitration at any time. Our clients chose the forum they did because it would essentially come out with the same outcome. When we filed our lawsuit, as I mentioned earlier, we would ask the court to refund us the cost of filing the lawsuit, so in this matter it would be $207. So if we were to be successful at trial, we would be awarded $4,207... in a judgement. If we go to arbitration, we would have the same opportunity to ask for whatever initiation fees are the costs of arbitration on top of the judgment, so if we were successful at the arbitration level, you'd be looking at paying, or being on the hook for over $5500 plus any additional fees that may come through the arbitration. We were not aware that they were going to split those fees in a manner that you were going to pay $250 and they wanted us to pay $1500. We were under the impression that it was going to be split in half, that's why we had orals at the beginning of all this, of you proceeding with the arbitration. Had we known that JAMS was going to require us to pay $1500 up front for a $4000 lawsuit, we would have fought at the very beginning to have the court now allow filing arbitration for the judicial economy of it's not fair to say you filed a lawsuit in a venue that if we're successful you'd be paying less than if you went to arbitration and you were not successful. does that make sense?" 

I responded with , "I appreciate you looking out for my best interests, but I never got the chance to arbitrate. You didn't comply with the court order."

His response: "The court order allowed you to pursue the private arbitration, it did not compel us that we had to pay a filing fee that was almost 10x more than what we already paid to the court."

My reply: "It compelled arbitration for both parties."

His response: "It compelled the ability for you to file the private arbitration. If you don't want to settle today, that's fine. I'm not going to sit here and argue all day. We can save this for the court because all you and I are going to do is go back and forth and there's nobody on the phone that can make an actual decision."

He offered to reduce the balance owed by the amount of my $250 arb filing fee lol. And then he summarized with this: 

"Just to make sure that we're all on the same page, the promissory note says that the arbitration is permissive, that either party may elect. You know, our position is that we elected to go through the court system because for judicial economy, it's better for everyone to do that. At the end of the day, let's say hypothetically my position is that we were going to win at the arbitration like we would win at trial. we would be able then to take that arbitration award and enter it into the court system and you would be out more money on that side because we would have more fees that we would be asking to be re-awarded. versus if we continue down the path of my client's elected forum, which is going through the courts... An arbitration is essentially a trial, it's the same, going through a private company instead of having a judge decide what's going to happen. it's the same rules, everything is the exact same it's just the forum is different. So what you're saying is you want to still pursue and try to get the court to force us to go to arbitration where it will potentially cost you more money than going down my client's elected forum of going through the court system."

the mediators wrapped up by indicating that they would check the box on the mediation form that states we are requesting a continuance for 60 days pending the judge's determination on this motion.

Finally, this is the relevant arbitration section from my promissory note: 

 

Quote

 

18. Arbitration. RESOLUTION OF DISPUTES: I HAVE READ THIS PROVISION CAREFULLY, AND UNDERSTAND THAT IT LIMITS MY RIGHTS IN THE EVENT OF A DISPUTE BETWEEN YOU AND ME. I UNDERSTAND THAT I HAVE THE RIGHT TO REJECT THIS PROVISION, AS PROVIDED IN PARAGRAPH (i) BELOW.

(a) In this Resolution of Disputes provision:
(i) "I", "me" and "my" mean the promisor under this Note, as well as any person claiming through such promisor;

(ii) "You" and "your" mean WebBank, any person servicing this Note for WebBank, any subsequent holders of this Note or any interest in this Note, any person servicing this Note for such subsequent holder of this note, and each of their respective parents, subsidiaries, affiliates, predecessors, successors, and assigns, as well as the officers, directors, and employees of each of them; and

(iii) "Claim" means any dispute, claim, or controversy (whether based on contract, tort, intentional tort, constitution, statute, ordinance, common law, or equity, whether pre-existing, present, or future, and whether seeking monetary, injunctive, declaratory, or any other relief) arising from or relating to this Note or the relationship between you and me (including claims arising prior to or after the date of the Note, and claims that are currently the subject of purported class action litigation in which I am not a member of a certified class), and includes claims that are brought as counterclaims, cross claims, third party claims or otherwise, as well as disputes about the validity or enforceability of this Note or the validity or enforceability of this Section.

(b) Any Claim shall be resolved, upon the election of either you or me, by binding arbitration administered by the American Arbitration Association or JAMS, under the applicable arbitration rules of the administrator in effect at the time a Claim is filed ("Rules"). Any arbitration under this arbitration agreement will take place on an individual basis; class arbitrations and class actions are not permitted. If I file a claim, I may choose the administrator; if you file a claim, you may choose the administrator, but you agree to change to the other permitted administrator at my request (assuming that the other administrator is available). I can obtain the Rules and other information about initiating arbitration by contacting the American Arbitration Association at 1633 Broadway, 10th Floor, New York, NY 10019, (800) 778-7879, www.adr.org; or by contacting JAMS at 1920 Main Street, Suite 300, Irvine, CA 92614, (949) 224-1810, www.jamsadr.com. Your address for serving any arbitration demand or claim is WebBank, c/o Prosper Marketplace, Inc., 221 Main Street, Third Floor, San Francisco, CA 94105, Attention: Legal Department.

(c) Claims will be arbitrated by a single, neutral arbitrator, who shall be a retired judge or a lawyer with at least ten years' experience. You agree not to invoke your right to elect arbitration of an individual Claim filed by me in a small claims or similar court (if any), so long as the Claim is pending on an individual basis only in such court.

(d) You will pay all filing and administration fees charged by the administrator and arbitrator fees up to $1,000, and you will consider my request to pay any additional arbitration costs. If an arbitrator issues an award in your favor, I will not be required to reimburse you for any fees you have previously paid to the administrator or for which you are responsible. If I receive an award from the arbitrator, you will reimburse me for any fees paid by me to the administrator or arbitrator. Each party shall bear its own attorney's, expert's and witness fees, which shall not be considered costs of arbitration; however, if a statute gives me the right to recover these fees, or fees paid to the administrator or arbitrator, then these statutory rights will apply in arbitration.

(e) Any in-person arbitration hearing will be held in the city with the federal district court closest to my residence, or in such other location as you and we may mutually agree. The arbitrator shall apply applicable substantive law consistent with the Federal Arbitration Act, 9 U.S.C. § 1-16, and, if requested by either party, provide written reasoned findings of fact and conclusions of law. The arbitrator shall have the power to award any relief authorized under applicable law. Any appropriate court may enter judgment upon the arbitrator's award. The arbitrator's decision will be final and binding except that: (1) any party may exercise any appeal right under the FAA; and (2) any party may appeal any award relating to a claim for more than $100,000 to a three-arbitrator panel appointed by the administrator, which will reconsider de novo any aspect of the appealed award. The panel's decision will be final and binding, except for any appeal right under the FAA. Unless applicable law provides otherwise, the appealing party will pay the appeal's cost, regardless of its outcome. However, you will consider any reasonable written request by me for you to bear the cost.

(f) YOU AND I AGREE THAT EACH MAY BRING CLAIMS AGAINST THE OTHER ONLY IN OUR INDIVIDUAL CAPACITY, AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS OR REPRESENTATIVE PROCEEDING. Further, unless both you and I agree otherwise in writing, the arbitrator may not consolidate more than one person's claims. The arbitrator shall have no power to arbitrate any Claims on a class action basis or Claims brought in a purported representative capacity on behalf of the general public, other borrowers, or other persons similarly situated. The validity and effect of this paragraph (f) shall be determined exclusively by a court, and not by the administrator or any arbitrator.

(g) If any portion of this Section 18 is deemed invalid or unenforceable for any reason, it shall not invalidate the remaining portions of this section. However, if paragraph (f) of this Section 18 is deemed invalid or unenforceable in whole or in part, then this entire Section 18 shall be deemed invalid and unenforceable. The terms of this Section 18 will prevail if there is any conflict between the Rules and this section.

(h) YOU AND I AGREE THAT, BY ENTERING INTO THIS NOTE, THE PARTIES ARE EACH WAIVING THE RIGHT TO A TRIAL BY JURY OR TO PARTICIPATE IN A CLASS ACTION. YOU AND I ACKNOWLEDGE THAT ARBITRATION WILL LIMIT OUR LEGAL RIGHTS, INCLUDING THE RIGHT TO PARTICIPATE IN A CLASS ACTION, THE RIGHT TO A JURY TRIAL, THE RIGHT TO CONDUCT FULL DISCOVERY, AND THE RIGHT TO APPEAL (EXCEPT AS PERMITTED IN PARAGRAPH (e) OR UNDER THE FEDERAL ARBITRATION ACT).

(i) I understand that I may reject the provisions of this Section 18, in which case neither you nor I will have the right to elect arbitration. Rejection of this Section 18 will not affect the remaining parts of this Note. To reject this Section 18, I must send you written notice of my rejection within 30 days after the date that this Note was made. I must include my name, address, and account number. The notice of rejection must be mailed to WebBank, c/o Prosper Marketplace, Inc., 221 Main Street, San Francisco, CA 94105, Attention: Legal Department. This is the only way that I can reject this Section 18.

(j) You and I acknowledge and agree that the arbitration agreement set forth in this Section 18 is made pursuant to a transaction involving interstate commerce, and thus the Federal Arbitration Act shall govern the interpretation and enforcement of this Section 18. This Section 18 shall

survive the termination of this Note and the repayment of any or all amounts borrowed thereunder.

(k) This section shall not apply to covered borrowers as defined in the Military Lending Act.

 

If you've read this far, thank you. I hope this helps others too. 

[Bulldoger]

2 hours ago, Mistymouse4590 said:

His response: "The court order allowed you to pursue the private arbitration, it did not compel us that we had to pay a filing fee that was almost 10x more than what we already paid to the court."

 

Funny what does it say above right here on Order 

 

 

[Bulldoger]

2 hours ago, Mistymouse4590 said:

My client's position would be that you had the opportunity to arbitrate at any time and if there was any dispute with the account during the life of the account per the contract agreement you had the opportunity to initiate the arbitration at any time. Our clients chose the forum they did because it would essentially come out with the same outcome.

My client's position would be that you had the opportunity to arbitrate at any time and if there was any dispute with the account during the life of the account per the contract agreement you had the opportunity to initiate the arbitration at any time. ( your response there was no dispute until your client allegedly purchase this account and filed suit to collect.  Our clients chose the forum they did because it would essentially come out with the same outcome. (That's your client's option but via the promissory note (b) Any Claim shall be resolved, upon the election of either you or me, by binding arbitration administered by the American Arbitration Association or JAMS, under the applicable arbitration rules of the administrator in effect at the time a Claim is filed ("Rules"). )

Does Promissory have a "Rules" section? If so please post.  

[Mistymouse4590]

5 minutes ago, Bulldoger said:

Does Promissory have a "Rules" section? If so please post.  

It doesn't. However it says this just below: 

Quote

I can obtain the Rules and other information about initiating arbitration by contacting the American Arbitration Association at 1633 Broadway, 10th Floor, New York, NY 10019, (800) 778-7879, www.adr.org; or by contacting JAMS at 1920 Main Street, Suite 300, Irvine, CA 92614, (949) 224-1810, www.jamsadr.com. Your address for serving any arbitration demand or claim is WebBank, c/o Prosper Marketplace, Inc., 221 Main Street, Third Floor, San Francisco, CA 94105, Attention: Legal Department.

 

[Mistymouse4590]

Update: A response was filed to my MTD, but I won't be able to get a copy until tomorrow. Stay tuned...

[Bulldoger]

7 minutes ago, Mistymouse4590 said:

It doesn't. However it says this just below: 

 

O.K so they are referencing AAA/JAMS rules not some other rules.  Be interested as to what defense they are going to put up. 

When is date for hearing on the MTD just want to make sure their reply is timely. 

[Mistymouse4590]

they just filed their response today. Will update here when I have it in hand. I guess there's a chance the judge could dismiss, or schedule a hearing, correct? 

[shadow99]

Does your promissory note include this clause?

Quote

d) You will pay all filing and administration fees charged by the administrator and arbitrator fees up to $1,000, and you will consider my request to pay any additional arbitration costs. If an arbitrator issues an award in your favor, I will not be required to reimburse you for any fees you have previously paid to the administrator or for which you are responsible. If I receive an award from the arbitrator, you will reimburse me for any fees paid by me to the administrator or arbitrator. Each party shall bear its own attorney's, expert's and witness fees, which shall not be considered costs of arbitration; however, if a statute gives me the right to recover these fees, or fees paid to the administrator or arbitrator, then these statutory rights will apply in arbitration.

 

In this context, you is Prosper  - I is the debtor.  This is from my promissory note.

For JAMS, they are required to pay the $1500 filing fee per the consumer rules. Then, this agreement says they will bear their own attorney, expert & witness fees.

However, I'm a little fuzzy about this part - " if a statute gives me the right to recover these fees, or fees paid to the administrator or arbitrator, then these statutory rights will apply in arbitration. " That seems kind of contradictory.

In the JAMS case I just filed (not for Prosper or Velocity), this was stated on the intent letter they sent the plaintiff's attorney with the $1500 bill.

Quote

Under appropriate circumstances, the Arbitrator may award JAMS fees and expenses against any party. JAMS agreement to render services is not only with the parties, but extends to the attorneys or other representatives of the parties in arbitration

That was not in the paperwork for the case I filed with them a year ago.  I wonder if there will be more fee shifting or if this is a warning about frivolous suits?

The other JAMS case was a Prosper/Velocity debt. The attorney tried to argue that the expense of arbitration was egregious, etc.  The judge didn't buy it.  Technically, I think they're in contempt of court for agreeing to arbitration then not following through. 

[Mistymouse4590]

16 minutes ago, shadow99 said:

Does your promissory note include this clause?

Yes, same clause, verbatim. 

JAMS sent the same clause you referenced to the Plaintiff's attorney in my case.

[Bulldoger]

11 minutes ago, shadow99 said:

Technically, I think they're in contempt of court for agreeing to arbitration then not following through. 

Yes and they did it in writing to boot. 

34 minutes ago, Mistymouse4590 said:

they just filed their response today. Will update here when I have it in hand. I guess there's a chance the judge could dismiss, or schedule a hearing, correct? 

Check the date when court received it the deadline for them to submit response was the March 15th, If they filed it after that you may be able to have court not consider the response since it was filed to late.   

[shadow99]

4 minutes ago, Mistymouse4590 said:

Yes, same clause, verbatim. 

JAMS sent the same clause you referenced to the Plaintiff's attorney in my case.

Last time I read the consumer rules at JAMS, they would only award the fees/expenses back to the Plaintiff, now respondent, if it is considered a frivolous case - which should have a high bar - higher than you are exercising your right to arbitration per the contract. 

There has been two cases on here where those costs were awarded to the plaintiff, but the consensus here was that was a bad ruling.  Of course, it's very expensive to appeal in JAMS, so it's a risk.  I think one person may have appealed and had it overturned.  The other one filed bankruptcy.

Most people here never get all the way to actual arbitration, so it's hard to say how often that would happen.

By the way, in my case with Velocity/Prosper, the judge finally told them to comply with the MTC or they would dismiss with prejudice.  We settled for $0 for mutual dismissal after that.  In court, I just kept repeating the same thing.  I filed a MTC, they agreed, I filed with JAMS & paid my fee, they have not paid theirs. 

It was a mess.  Court date 1 - they agreed to arbitration.  Court date 2 - they knew nothing about the MTC.  Court date 3 - we're waiting on the defendant to pay the remaining $1500 fee.  Court date 4 - we object to the MTC due to the cost.  Court date 5 - dismissed with prejudice.

[shadow99]

15 minutes ago, Bulldoger said:

Yes and they did it in writing to boot. 

Check the date when court received it the deadline for them to submit response was the March 15th, If they filed it after that you may be able to have court not consider the response since it was filed to late.   

During my first case, I was trying to figure out exactly what the plaintiff's attorney was doing - because it defied all logic, and I'm a very logical person.

Someone here explained to me that debt collections usually doesn't attract the best and brightest lawyers, that I'm probably dealing with people who graduated in the bottom half of their class.  Remembering that helps me a lot.

And, think about it.  Who in their right mind would want to spend their time filing debt collection lawsuits if they could do anything else with their law degree?  I'm sure that's not what anyone dreams about when they start out. If it wasn't such a slimy profession, I'd actually feel sorry for them. 

[Bulldoger]

I wonder what plausible argument they  can present when Arizona Law is clear. 

Ariz. R. Civ. P. 41
As amended through December 8, 2021
Rule 41 - Dismissal of Actions
(b) Involuntary Dismissal; Effect. If the plaintiff fails to prosecute or to comply with these rules or a court order, a defendant may move to dismiss the action or any claim against it. Unless the dismissal order states otherwise, a dismissal under this Rule 41(b) and any dismissal not under this rule-except one for lack of jurisdiction, improper venue, or failure to join a party under Rule 19 -operates as an adjudication on the merits.

 

[Mistymouse4590]

Super helpful, thanks for the feedback everyone. 

@Bulldoger, great point, and thanks for adding that reference. I'll use that in my reply if necessary. 

I'll update asap when I get ahold of the response. 

[Mistymouse4590]

Well folks, here's the response:

 

 

 

 

 

[BV80]

2 hours ago, Mistymouse4590 said:

Well folks, here's the response:

 

 

 

 

 

This is not in small claims, is it?  If it’s not in small claims, it doesn’t matter that the filing fee for arbitration is 9 times the court filing fee.  It also doesn’t matter that the plaintiff elected to file in court.  The arbitration provision states:

”(b) Any Claim shall be resolved, upon the election of either you or me, by binding arbitration administered by the American Arbitration Association or JAMS, under the applicable arbitration rules of the administrator in effect at the time a Claim is filed ("Rules").”

It also states:

”You agree not to invoke your right to elect arbitration of an individual Claim filed by me in a small claims or similar court (if any), so long as the Claim is pending on an individual basis only in such court.”

That statement says that you agree not to elect arbitration if the lawsuit is in small claims court.  It proves that arbitration CAN be elected AFTER a lawsuit in has been filed in OTHER  than small claims court.

You agreed not to elect arbitration if the lawsuit is in small claims.  Well, the lawsuit is not in small claims.  

They claim to own the account, so they have to follow the terms of the agreement which includes the arbitration provision and rules of the listed arbitration forum.  No where in the provision does it state that arbitration is not required if the arbitration fees are more than the court filing fees.

[shadow99]

They're reaching for straws just like the other law firm did in my case.

They even listed the defense for you - improper venue.

This is so much like what happened with mine.  This is now their contract.  They bought it. But, because the rules are now inconvenient, they don't want to play by them.  Hopefully, you have a good judge and he doesn't let them get away with it.

In my thread, the people helping me gave me a lot of good advice.  In the end, I didn't have to use it because the judge just kept telling them they had to arbitrate, but it certainly made me feel better.  If you want to read it and can't find it, I'll dig out the link for you.

[Bulldoger]

Either they are reaching for straws or have no clue what they are doing. 

The plaintiff attorney has cited rule 116(a) as basis of defense
 Justice Court Rules of Civil Procedure
Part V:  Responding to a Lawsuit
Rule 116. Filing a Response to a Complaint  (The MTD is not a Response to complaint) not correct rule

The correct rule is  178 (d) which references rule 41
17B A.R.S. Justice Court Civ.Proc.Rules, Rule 144
Rule 144. Dismissal of Lawsuits
a. Application of this rule. This rule applies to a complaint, a counterclaim, a cross-claim, and a third-party complaint. [ARCP 41(a), (c)]
b. Voluntary dismissal before a response has been filed. A complaint or a third-party complaint may be dismissed by a notice that is filed by the plaintiff or by the third-party plaintiff at any time before a response has been filed under Rule 116. A counterclaim or a cross-claim may be dismissed before a response has been filed under Rule 117(e) by a notice filed by the claimant. [ARCP 41(a)]
c. Voluntary dismissal by agreement of the parties. A lawsuit may be dismissed upon the filing of a written agreement to dismiss that has been signed by all of the parties who have appeared in the lawsuit. A particular claim or claims in a lawsuit may be dismissed upon the filing of a written agreement to dismiss that has been signed by the parties to that claim or claims. [ARCP 41(a)]
d. Dismissal in other circumstances. Except as provided in sections (b), (c), and (e), a lawsuit or claim shall be dismissed only upon motion and by court order, and only on terms and conditions that the court determines are fair and proper. Dismissal of a complaint will not result in dismissal of a counterclaim unless agreed to by the parties. [ARCP 41(a)-(b)]
Rule 41 - Dismissal of Actions
(2)By Other Court Order; Effect. Except as provided in Rule 41(a)(1), an action may be dismissed at the plaintiff's request only by court order, on terms that the court considers proper. If a defendant has pleaded a counterclaim before being served with the plaintiff's motion to dismiss, the action may be dismissed over the defendant's objection only if the counterclaim can remain pending for independent adjudication. Unless the order states otherwise, a dismissal under this Rule 41(a)(2) is without prejudice.
(b) Involuntary Dismissal; Effect. If the plaintiff fails to prosecute or to comply with these rules or a court order, a defendant may move to dismiss the action or any claim against it. Unless the dismissal order states otherwise, a dismissal under this Rule 41(b) and any dismissal not under this rule-except one for lack of jurisdiction, improper venue, or failure to join a party under Rule 19 -operates as an adjudication on the merits.
 

as noted above 

Well, the lawsuit is not in small claims.  

They claim to own the account, so they have to follow the terms of the agreement which includes the arbitration provision and rules of the listed arbitration forum.  No where in the provision does it state that arbitration is not required if the arbitration fees are more than the court filing fees.

Moreover the arbitration references the JAMS rules which included the fees. 

Finally the response is dated March 16, 2022 they had 15 days from your mailing to respond that's March 15th so who is untimely. 

 

[BV80]

1 hour ago, Bulldoger said:

Either they are reaching for straws or have no clue what they are doing. 

The plaintiff attorney has cited rule 116(a) as basis of defense
 Justice Court Rules of Civil Procedure
Part V:  Responding to a Lawsuit
Rule 116. Filing a Response to a Complaint  (The MTD is not a Response to complaint) not correct rule

The correct rule is  178 (d) which references rule 41
17B A.R.S. Justice Court Civ.Proc.Rules, Rule 144
Rule 144. Dismissal of Lawsuits
a. Application of this rule. This rule applies to a complaint, a counterclaim, a cross-claim, and a third-party complaint. [ARCP 41(a), (c)]
b. Voluntary dismissal before a response has been filed. A complaint or a third-party complaint may be dismissed by a notice that is filed by the plaintiff or by the third-party plaintiff at any time before a response has been filed under Rule 116. A counterclaim or a cross-claim may be dismissed before a response has been filed under Rule 117(e) by a notice filed by the claimant. [ARCP 41(a)]
c. Voluntary dismissal by agreement of the parties. A lawsuit may be dismissed upon the filing of a written agreement to dismiss that has been signed by all of the parties who have appeared in the lawsuit. A particular claim or claims in a lawsuit may be dismissed upon the filing of a written agreement to dismiss that has been signed by the parties to that claim or claims. [ARCP 41(a)]
d. Dismissal in other circumstances. Except as provided in sections (b), (c), and (e), a lawsuit or claim shall be dismissed only upon motion and by court order, and only on terms and conditions that the court determines are fair and proper. Dismissal of a complaint will not result in dismissal of a counterclaim unless agreed to by the parties. [ARCP 41(a)-(b)]
Rule 41 - Dismissal of Actions
(2)By Other Court Order; Effect. Except as provided in Rule 41(a)(1), an action may be dismissed at the plaintiff's request only by court order, on terms that the court considers proper. If a defendant has pleaded a counterclaim before being served with the plaintiff's motion to dismiss, the action may be dismissed over the defendant's objection only if the counterclaim can remain pending for independent adjudication. Unless the order states otherwise, a dismissal under this Rule 41(a)(2) is without prejudice.
(b) Involuntary Dismissal; Effect. If the plaintiff fails to prosecute or to comply with these rules or a court order, a defendant may move to dismiss the action or any claim against it. Unless the dismissal order states otherwise, a dismissal under this Rule 41(b) and any dismissal not under this rule-except one for lack of jurisdiction, improper venue, or failure to join a party under Rule 19 -operates as an adjudication on the merits.
 

as noted above 

Well, the lawsuit is not in small claims.  

They claim to own the account, so they have to follow the terms of the agreement which includes the arbitration provision and rules of the listed arbitration forum.  No where in the provision does it state that arbitration is not required if the arbitration fees are more than the court filing fees.

Moreover the arbitration references the JAMS rules which included the fees. 

Finally the response is dated March 16, 2022 they had 15 days from your mailing to respond that's March 15th so who is untimely. 

 

The plaintiff does not appear to understand that it failed to comply with the court’s order when it failed to pay the required arbitration fees.