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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. It appears the police and prosecutors are allowed to change the rules halfway through the game to suit themselves. I am surprised that the congress has not yet eliminated the right to a trial in cases involving any type of forensic evidence. That would suit their foolish law and order police state views. I say we eliminate the statute of limitations for crimes committed by members of congress and other government employees. Of course they would never do that. They are all corrupt cowards!!!

  2. Poor Judge Brown probably thought that by slavishly serving the godz of the age her violations of 18th century concepts like due process and the rule of law would be overlooked. Mayhaps she was merely a Judge ahead of her time?

  3. in a lawyer discipline case Judge Brown, now removed, was presiding over a hearing about a lawyer accused of the supposedly heinous ethical violation of saying the words "Illegal immigrant." (IN re Barker) http://www.in.gov/judiciary/files/order-discipline-2013-55S00-1008-DI-429.pdf .... I wonder if when we compare the egregious violations of due process by Judge Brown, to her chiding of another lawyer for politically incorrectness, if there are any conclusions to be drawn about what kind of person, what kind of judge, what kind of apparatchik, is busy implementing the agenda of political correctness and making off-limits legit advocacy about an adverse party in a suit whose illegal alien status is relevant? I am just asking the question, the reader can make own conclsuion. Oh wait-- did I use the wrong adjective-- let me rephrase that, um undocumented alien?

  4. of course the bigger questions of whether or not the people want to pay for ANY bussing is off limits, due to the Supreme Court protecting the people from DEMOCRACY. Several decades hence from desegregation and bussing plans and we STILL need to be taking all this taxpayer money to combat mostly-imagined "discrimination" in the most obviously failed social program of the postwar period.

  5. You can put your photos anywhere you like... When someone steals it they know it doesn't belong to them. And, a man getting a divorce is automatically not a nice guy...? That's ridiculous. Since when is need of money a conflict of interest? That would mean that no one should have a job unless they are already financially solvent without a job... A photographer is also under no obligation to use a watermark (again, people know when a photo doesn't belong to them) or provide contact information. Hey, he didn't make it easy for me to pay him so I'll just take it! Well heck, might as well walk out of the grocery store with a cart full of food because the lines are too long and you don't find that convenient. "Only in Indiana." Oh, now you're passing judgement on an entire state... What state do you live in? I need to characterize everyone in your state as ignorant and opinionated. And the final bit of ignorance; assuming a photo anyone would want is lucky and then how much does your camera have to cost to make it a good photo, in your obviously relevant opinion?

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