Arbitration of FCRA claim survives bankruptcy discharge

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A man’s Fair Credit Reporting Act claim can be arbitrated even though the debt was addressed and discharged in bankruptcy proceedings, the Indiana Court of Appeals ruled today.

Brian Brough entered into a contract with Green Tree Servicing, in which Green Tree loaned Brough money to buy a mobile home. The contract included an arbitration clause. Brough also agreed that Green Tree could share information about him and his account with credit reporting agencies.

Brough defaulted on the contract and filed for bankruptcy in 2003. His debt to Green Tree was addressed in the proceedings and the bankruptcy court discharged Brough’s petition in November 2008. Green Tree then filed a suit against Brough, which wasn’t identified in the appeal, and Brough filed a counterclaim alleging Green Tree violated the Fair Credit Reporting Act by reporting to credit agencies that he still owed the company a debt under the contract even though the matter was discharged in bankruptcy.

The trial court granted Brough’s request to vacate the arbitration order.

At issue in Green Tree Servicing LLC v. Brian D. Brough, No. 88A01-0911-CV-550, is whether the FCRA claim is subject to the arbitration provision in the contract.

The appeals court looked to U.S. District Court rulings from New York and Illinois to conclude that FCRA claims can be subject to arbitration clauses. In addition, Brough even admitted his claim is subject to the arbitration clause, noted Senior Judge John Sharpnack.

The judges also disagreed with Brough’s argument that the whole contract is not valid because it was terminated by his bankruptcy discharge. Again, the court looked outside of Indiana for authority and relied on In re Wells Fargo Bank, N.A., 300 S.W.3d 818 (Tex. Ct. App. 2009). In that case, homeowners who defaulted on a home equity loan and filed for bankruptcy claimed they didn’t have to arbitrate the suit they filed against the lender because the bankruptcy proceedings released them from any further obligations under their agreements with the lender, including an agreement to arbitrate. The Texas appellate court ruled the arbitration agreement survived bankruptcy.

As is the case In re Wells, Brough’s bankruptcy proceeding ended, so the arbitration of his FCRA claim won’t jeopardize the bankruptcy case or affect his discharge, wrote Senior Judge Sharpnack. The contract’s arbitration clause wasn’t terminated by his bankruptcy discharge. The trial court must order the parties to attend arbitration.


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

  2. 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.

  3. (A)ll (C)riminals (L)ove (U)s is up to their old, "If it's honorable and pro-American, we're against it," nonsense. I'm not a big Pence fan but at least he's showing his patriotism which is something the left won't do.

  4. While if true this auto dealer should be held liable, where was the BMV in all of this? How is it that the dealer was able to get "clean" titles to these vehicles in order to sell them to unsuspecting consumers?

  5. He has refused his Assent to Laws, the most wholesome and necessary for the public good. He has forbidden his Governors to pass Laws of immediate and pressing importance, He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance. He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation: For imposing Taxes on us without our Consent: He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation and tyranny, already begun with circumstances of Cruelty & perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation.. He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless [ ] Savages, whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions. GOD BLESS THE GOVERNORS RESISTING! Count on the gutless judiciary to tie our children down and facilitate the swords being drawn across their throats. Wake Up America ...