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. I have an open CHINS case I failed a urine screen I have since got clean completed IOP classes now in after care passed home inspection my x sister in law has my children I still don't even have unsupervised when I have been clean for over 4 months my x sister wants to keep the lids for good n has my case working with her I just discovered n have proof that at one of my hearing dcs case worker stated in court to the judge that a screen was dirty which caused me not to have unsupervised this was at the beginning two weeks after my initial screen I thought the weed could have still been in my system was upset because they were suppose to check levels n see if it was going down since this was only a few weeks after initial instead they said dirty I recently requested all of my screens from redwood because I take prescriptions that will show up n I was having my doctor look at levels to verify that matched what I was prescripted because dcs case worker accused me of abuseing when I got my screens I found out that screen I took that dcs case worker stated in court to judge that caused me to not get granted unsupervised was actually negative what can I do about this this is a serious issue saying a parent failed a screen in court to judge when they didn't please advise

  2. I have a degree at law, recent MS in regulatory studies. Licensed in KS, admitted b4 S& 7th circuit, but not to Indiana bar due to political correctness. Blacklisted, nearly unemployable due to hostile state action. Big Idea: Headwinds can overcome, esp for those not within the contours of the bell curve, the Lego Movie happiness set forth above. That said, even without the blacklisting for holding ideas unacceptable to the Glorious State, I think the idea presented above that a law degree open many vistas other than being a galley slave to elitist lawyers is pretty much laughable. (Did the law professors of Indiana pay for this to be published?)

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  4. Joe, you might want to do some reading on the fate of Hoosier whistleblowers before you get your expectations raised up.

  5. I had a hospital and dcs caseworker falsify reports that my child was born with drugs in her system. I filed a complaint with the Indiana department of health....and they found that the hospital falsified drug screens in their investigation. Then I filed a complaint with human health services in Washington DC...dcs drug Testing is unregulated and is indicating false positives...they are currently being investigated by human health services. Then I located an attorney and signed contracts one month ago to sue dcs and Anderson community hospital. Once the suit is filed I am taking out a loan against the suit and paying a law firm to file a writ of mandamus challenging the courts jurisdiction to invoke chins case against me. I also forwarded evidence to a u.s. senator who contacted hhs to push an investigation faster. Once the lawsuit is filed local news stations will be running coverage on the situation. Easy day....people will be losing their jobs soon...and judge pancol...who has attempted to cover up what has happened will also be in trouble. The drug testing is a kids for cash and federal funding situation.