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COA: arbitration provision null and void

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The Indiana Court of Appeals has affirmed the denial of a payday loan company’s motion to compel arbitration in a lawsuit filed by a customer. The COA relied on a nearly identical case involving the same plaintiff in which another appellate panel found that since the arbitrator named in the agreement is no longer available, the arbitration provision is null and void on grounds of impossibility.

In Apex 1 Processing, Inc. v. Akeala Edwards, on Behalf of Herself and Others Similarly Situated, No. 49A05-1103-PL-85, Akeala Edwards filed a class-action lawsuit against Apex 1 Processing Inc., alleging it engaged in unfair trade practices. She got a payday loan through Apex’s company doing business as Paycheck Today, and she was charged $360 in finance charges on her $300 loan. The suit has not yet been certified as a class action.

Apex sought to compel Edwards to arbitrate her claim individually based on a provision in the loan agreement. The National Arbitration Forum was named as the arbitrator to be used, but the NAF has been ordered to not participate in any arbitration of consumer disputes after July 2009 based on a suit filed by the Minnesota attorney general.

This suit is similar to one Edwards filed against Geneva-Roth Capital Inc. An appellate panel in November found that the arbitration provision in that suit was null and void on the grounds of impossibility because NAF is not longer available to arbitrate. At the time, the issue was one of first impression in Indiana. In Geneva-Roth Capital v. Edwards, No. 49A02-1101-PL-43, the COA also found that 9 U.S.C.A. Section 5 of the Federal Arbitration Act does not oblige the trial court to appoint a substitute arbitrator.

“The language of the Apex contract, like that in the Geneva-Roth contract, provides claims ‘shall be resolved by binding . . . arbitration by and under the Code of Procedure of [NAF],’” wrote Judge Melissa May. “Thus, the identification of NAF as the arbitrator was integral to the contract, and the arbitration provision fails.”

The panel in the instant case adopted the reasoning in Geneva-Roth and affirmed the denial of Apex 1’s motion to compel arbitration.

 

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  2. The practitioners and judges who hail E-filing as the Saviour of the West need to contain their respective excitements. E-filing is federal court requires the practitioner to cram his motion practice into pigeonholes created by IT people. Compound motions or those seeking alternative relief are effectively barred, unless the practitioner wants to receive a tart note from some functionary admonishing about the "problem". E-filing is just another method by which courts and judges transfer their burden to practitioners, who are the really the only powerless components of the system. Of COURSE it is easier for the court to require all of its imput to conform to certain formats, but this imposition does NOT improve the quality of the practice of law and does NOT improve the ability of the practitioner to advocate for his client or to fashion pleadings that exactly conform to his client's best interests. And we should be very wary of the disingenuous pablum about the costs. The courts will find a way to stick it to the practitioner. Lake County is a VERY good example of this rapaciousness. Any one who does not believe this is invited to review the various special fees that system imposes upon practitioners- as practitioners- and upon each case ON TOP of the court costs normal in every case manually filed. Jurisprudence according to Aldous Huxley.

  3. Any attorneys who practice in federal court should be able to say the same as I can ... efiling is great. I have been doing it in fed court since it started way back. Pacer has its drawbacks, but the ability to hit an e-docket and pull up anything and everything onscreen is a huge plus for a litigator, eps the sole practitioner, who lacks a filing clerk and the paralegal support of large firms. Were I an Indiana attorney I would welcome this great step forward.

  4. Can we get full disclosure on lobbyist's payments to legislatures such as Mr Buck? AS long as there are idiots that are disrespectful of neighbors and intent on shooting fireworks every night, some kind of regulations are needed.

  5. I am the mother of the child in this case. My silence on the matter was due to the fact that I filed, both in Illinois and Indiana, child support cases. I even filed supporting documentation with the Indiana family law court. Not sure whether this information was provided to the court of appeals or not. Wish the case was done before moving to Indiana, because no matter what, there is NO WAY the state of Illinois would have allowed an appeal on a child support case!

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