ILNews

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. Just an aside, but regardless of the outcome, I 'm proud of Judge William Hughes. He was the original magistrate on the Home place issue. He ruled for Home Place, and was primaried by Brainard for it. Their tool Poindexter failed to unseat Hughes, who won support for his honesty and courage throughout the county, and he was reelected Judge of Hamilton County's Superior Court. You can still stand for something and survive. Thanks, Judge Hughes!

  2. CCHP's real accomplishment is the 2015 law signed by Gov Pence that basically outlaws any annexation that is forced where a 65% majority of landowners in the affected area disagree. Regardless of whether HP wins or loses, the citizens of Indiana will not have another fiasco like this. The law Gov Pence signed is a direct result of this malgovernance.

  3. I gave tempparry guardship to a friend of my granddaughter in 2012. I went to prison. I had custody. My daughter went to prison to. We are out. My daughter gave me custody but can get her back. She was not order to give me custody . but now we want granddaughter back from friend. She's 14 now. What rights do we have

  4. This sure is not what most who value good governance consider the Rule of Law to entail: "In a letter dated March 2, which Brizzi forwarded to IBJ, the commission dismissed the grievance “on grounds that there is not reasonable cause to believe that you are guilty of misconduct.”" Yet two month later reasonable cause does exist? (Or is the commission forging ahead, the need for reasonable belief be damned? -- A seeming violation of the Rules of Profession Ethics on the part of the commission) Could the rule of law theory cause one to believe that an explanation is in order? Could it be that Hoosier attorneys live under Imperial Law (which is also a t-word that rhymes with infamy) in which the Platonic guardians can do no wrong and never owe the plebeian class any explanation for their powerful actions. (Might makes it right?) Could this be a case of politics directing the commission, as celebrated IU Mauer Professor (the late) Patrick Baude warned was happening 20 years ago in his controversial (whisteblowing) ethics lecture on a quite similar topic: http://www.repository.law.indiana.edu/cgi/viewcontent.cgi?article=1498&context=ilj

  5. I have a case presently pending cert review before the SCOTUS that reveals just how Indiana regulates the bar. I have been denied licensure for life for holding the wrong views and questioning the grand inquisitors as to their duties as to state and federal constitutional due process. True story: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS Shorter, Amici brief serving to frame issue as misuse of govt licensure: https://www.scribd.com/doc/312841269/Thomas-More-Society-Amicus-Brown-v-Ind-Bd-of-Law-Examiners

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