ILNews

Court affirms arbitration dismissal

Jennifer Nelson
January 1, 2008
Keywords
Back to TopCommentsE-mailPrintBookmark and Share
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.
ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
2015 Distinguished Barrister &
Up and Coming Lawyer Reception

Tuesday, May 5, 2015 • 4:30 - 7:00 pm
Learn More


ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. why is the State trying to play GOD? Automatic sealing of a record is immoral. People should have the right to decide how to handle a record. the state is playing GOD. I have searched for decades, then you want me to pay someone a huge price to contact my son. THIS is extortion and gestapo control. OPEN THE RECORDS NOW. OPEN THE RECORDS NOW. OPEN THE RECORDS NOW.

  2. I haven't made some of the best choices in the last two years I have been to marion county jail 1 and two on three different occasions each time of release dates I've spent 48 to 72 hours after date of release losing a job being denied my freedom after ordered please help

  3. Out here in Kansas, where I now work as a government attorney, we are nearing the end of a process that could have relevance in this matter: "Senate Bill 45 would allow any adult otherwise able to possess a handgun under state and federal laws to carry that gun concealed as a matter of course without a permit. This move, commonly called constitutional carry, would elevate the state to the same club that Vermont, Arizona, Alaska and Wyoming have joined in the past generation." More reading here: http://www.guns.com/2015/03/18/kansas-house-panel-goes-all-in-on-constitutional-carry-measure/ Time to man up, Hoosiers. (And I do not mean that in a sexist way.)

  4. This is why it is important to consider Long term care insurance. For you and for your loved ones

  5. I am terrified to see Fracking going on not only in Indiana but in Knox county. Water is the most important resource we have any where. It will be the new gold, and we can't live without it and we can live without gold. How ignorant are people?

ADVERTISEMENT