Court affirms arbitration dismissal

Jennifer Nelson
January 1, 2008
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The Indiana Court of Appeals today upheld the dismissal with prejudice of a bank's application to confirm an arbitration award regarding credit card debt because the bank failed to follow the proper procedure outlined in the Federal Arbitration Act.

In MBNA America Bank v. Aaron Kay, No. 49A02-0711-CV-961, MBNA submitted a purported dispute over credit card debt by Aaron Kay to the National Arbitration Forum. Kay objected to the arbitration. The arbitrator found in favor of the bank and entered the award in Minnesota; Kay lived in Indiana.

MBNA filed an application to confirm the award in Marion Superior Court. Kay filed a response in opposition to the application. The trial court denied the application and dismissed it with prejudice.

MBNA appealed, arguing the court erred by dismissing the application with prejudice based on Kay's dispute in arbitration over the forum clause in the cardholder agreement. The bank also claimed challenges to the validity of a contract and an arbitration clause must be decided by the arbitrator and not the court.

The Court of Appeals affirmed the trial court's decision because the bank didn't petition any United States District Court for an order directing that a disputed arbitration proceed in the manner provided for in the written agreement for arbitration, as found in 9 U.S.C.A. Section 4, wrote Senior Judge Betty Barteau. Once a party objects to arbitration, a court has to decide if a valid arbitration agreement exists.

Because there was no federal court determination that a valid agreement existed, the arbitration award the bank was seeking confirmation on wasn't properly obtained, she wrote. The procedure outlined in the Federal Arbitration Act wasn't followed and as such, the court didn't err in dismissing MBNA's application to confirm the award.

Granting the dismissal with prejudice was not an error because it is generally recognized that a dismissal with prejudice is a dismissal on the merits and here the court reached the merits of whether the application should be granted, Senior Judge Barteau wrote.

The Court of Appeals also affirmed the trial judge's order that MBNA correct any inaccuracy in Kay's credit record regarding the present dispute.

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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.