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Appellate court affirms arbitration on claims against college

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With one judge frustrated that Indiana residents and students may have been “hornswoggled” by a college’s advertisements about being accredited, the Indiana Court of Appeals has upheld an order compelling arbitration on a claim that three students were fraudulently induced to enroll because of misrepresentation about that accreditation.

The order comes in the case of Connie Brumley, et al. v. Commonwealth Business College Education Corp., No. 45A04-1002-CT-66, a case from Lake Superior Court.

Three student plaintiffs alleged they were fraudulently induced to enroll in a surgical technology program at Brown Mackie’s Merrillville location by the college’s misrepresentation of its accreditation. Each signed an enrollment agreement and supplemental arbitration form, both of which contained arbitration clauses, and they paid tuition and attended the courses. But at some point they learned of the accreditation issue, and later filed suit alleging breach of express and implied contract, intentional and negligent misrepresentation, and fraud –- on the grounds they wouldn’t be able to obtain the type of surgical jobs they were being trained for.

Brown Mackie moved to compel arbitration based on the signed documents, and the original judge on the case denied the college’s motion to compel arbitration based on the enrollment agreement stating the institution was accredited when it was not. But after the case was consolidated with a similar action and transferred to Superior Judge Gerald Svetanoff, he readdressed the issue and granted the motion to compel arbitration. Though he agreed with his colleague about the enrollment agreement not being able to mandate arbitration based on its validity, Judge Svetanoff found that the rationale didn’t extend to the separate arbitration form that none of the student plaintiffs alleged was false or fraudulent.

The plaintiffs asked for interlocutory appeal, the trial court granted that certification, and the Court of Appeals accepted the appeal and heard arguments March 2.

Even though the Federal Arbitration Act and caselaw allows for arbitration agreements to be invalidated by issues such as fraud or unconscionability, the Indiana appellate panel found that the language of this Brown Mackie arbitration agreement didn’t cross any of those lines.

“We conclude that, because plaintiffs’ action challenges the enrollment agreements in their entirety rather than the arbitration clauses in particular, the plaintiffs’ claims remain subject to arbitration,” Judge Nancy Vaidik wrote.

The appellate panel also ruled on other matters that came up in the appeal, such as Brown Mackie’s need or ability to file a cross-appeal relating to the trial judge’s rationale.

Judge Michael Barnes concurred with a separate opinion, finding the majority was correct and he agreed with the arbitration provisions per se based on precedent from the Supreme Court of the United States. However, he pointed out his concerns with what possibly happened in this case, even though the students’ allegations are still unproven at this point.

“Still, if true, it is plainly evident that Brown Mackie at best was disingenuous in its advertising, and at worst was actively dishonest in touting the surgical technology degree it offered,” he wrote. “Although Brown Mackie trumpeted being ‘accredited’ in its advertising and materials, that ‘accreditation’ allegedly was insufficient to allow graduates to take the required exam for surgical technology certification. Indiana residents likely were hornswoggled here, and I am frustrated that we are powerless to intervene. I must trust that an arbitrator will fairly consider the students’ claims. I concur fully, but grudgingly.”

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  1. From back in the day before secularism got a stranglehold on Hoosier jurists comes this great excerpt via Indiana federal court judge Allan Sharp, dedicated to those many Indiana government attorneys (with whom I have dealt) who count the law as a mere tool, an optional tool that is not to be used when political correctness compels a more acceptable result than merely following the path that the law directs: ALLEN SHARP, District Judge. I. In a scene following a visit by Henry VIII to the home of Sir Thomas More, playwriter Robert Bolt puts the following words into the mouths of his characters: Margaret: Father, that man's bad. MORE: There is no law against that. ROPER: There is! God's law! MORE: Then God can arrest him. ROPER: Sophistication upon sophistication! MORE: No, sheer simplicity. The law, Roper, the law. I know what's legal not what's right. And I'll stick to what's legal. ROPER: Then you set man's law above God's! MORE: No, far below; but let me draw your attention to a fact I'm not God. The currents and eddies of right and wrong, which you find such plain sailing, I can't navigate. I'm no voyager. But in the thickets of law, oh, there I'm a forester. I doubt if there's a man alive who could follow me there, thank God... ALICE: (Exasperated, pointing after Rich) While you talk, he's gone! MORE: And go he should, if he was the Devil himself, until he broke the law! ROPER: So now you'd give the Devil benefit of law! MORE: Yes. What would you do? Cut a great road through the law to get after the Devil? ROPER: I'd cut down every law in England to do that! MORE: (Roused and excited) Oh? (Advances on Roper) And when the last law was down, and the Devil turned round on you where would you hide, Roper, the laws being flat? (He leaves *1257 him) This country's planted thick with laws from coast to coast man's laws, not God's and if you cut them down and you're just the man to do it d'you really think you would stand upright in the winds that would blow then? (Quietly) Yes, I'd give the Devil benefit of law, for my own safety's sake. ROPER: I have long suspected this; this is the golden calf; the law's your god. MORE: (Wearily) Oh, Roper, you're a fool, God's my god... (Rather bitterly) But I find him rather too (Very bitterly) subtle... I don't know where he is nor what he wants. ROPER: My God wants service, to the end and unremitting; nothing else! MORE: (Dryly) Are you sure that's God! He sounds like Moloch. But indeed it may be God And whoever hunts for me, Roper, God or Devil, will find me hiding in the thickets of the law! And I'll hide my daughter with me! Not hoist her up the mainmast of your seagoing principles! They put about too nimbly! (Exit More. They all look after him). Pgs. 65-67, A MAN FOR ALL SEASONS A Play in Two Acts, Robert Bolt, Random House, New York, 1960. Linley E. Pearson, Atty. Gen. of Indiana, Indianapolis, for defendants. Childs v. Duckworth, 509 F. Supp. 1254, 1256 (N.D. Ind. 1981) aff'd, 705 F.2d 915 (7th Cir. 1983)

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  3. The family is the foundation of all human government. That is the Grand Design. Modern governments throw off this Design and make bureaucratic war against the family, as does Hollywood and cultural elitists such as third wave feminists. Since WWII we have been on a ship of fools that way, with both the elite and government and their social engineering hacks relentlessly attacking the very foundation of social order. And their success? See it in the streets of Fergusson, on the food stamp doles (mostly broken families)and in the above article. Reject the Grand Design for true social function, enter the Glorious State to manage social dysfunction. Our Brave New World will be a prison camp, and we will welcome it as the only way to manage given the anarchy without it.

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  5. Some in the Hoosier legal elite consider this prayer recommended by the AG seditious, not to mention the Saint who pledged loyalty to God over King and went to the axe for so doing: "Thomas More, counselor of law and statesman of integrity, merry martyr and most human of saints: Pray that, for the glory of God and in the pursuit of His justice, I may be trustworthy with confidences, keen in study, accurate in analysis, correct in conclusion, able in argument, loyal to clients, honest with all, courteous to adversaries, ever attentive to conscience. Sit with me at my desk and listen with me to my clients' tales. Read with me in my library and stand always beside me so that today I shall not, to win a point, lose my soul. Pray that my family may find in me what yours found in you: friendship and courage, cheerfulness and charity, diligence in duties, counsel in adversity, patience in pain—their good servant, and God's first. Amen."

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