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. Someone off their meds? C'mon John, it is called the politics of Empire. Get with the program, will ya? How can we build one world under secularist ideals without breaking a few eggs? Of course, once it is fully built, is the American public who will feel the deadly grip of the velvet glove. One cannot lay down with dogs without getting fleas. The cup of wrath is nearly full, John Smith, nearly full. Oops, there I go, almost sounding as alarmist as Smith. Guess he and I both need to listen to this again: https://www.youtube.com/watch?v=CRnQ65J02XA

  2. Charles Rice was one of the greatest of the so-called great generation in America. I was privileged to count him among my mentors. He stood firm for Christ and Christ's Church in the Spirit of Thomas More, always quick to be a good servant of the King, but always God's first. I had Rice come speak to 700 in Fort Wayne as Obama took office. Rice was concerned that this rise of aggressive secularism and militant Islam were dual threats to Christendom,er, please forgive, I meant to say "Western Civilization". RIP Charlie. You are safe at home.

  3. It's a big fat black mark against the US that they radicalized a lot of these Afghan jihadis in the 80s to fight the soviets and then when they predictably got around to biting the hand that fed them, the US had to invade their homelands, install a bunch of corrupt drug kingpins and kleptocrats, take these guys and torture the hell out of them. Why for example did the US have to sodomize them? Dubya said "they hate us for our freedoms!" Here, try some of that freedom whether you like it or not!!! Now they got even more reasons to hate us-- lets just keep bombing the crap out of their populations, installing more puppet regimes, arming one faction against another, etc etc etc.... the US is becoming a monster. No wonder they hate us. Here's my modest recommendation. How about we follow "Just War" theory in the future. St Augustine had it right. How about we treat these obvious prisoners of war according to the Geneva convention instead of torturing them in sadistic and perverted ways.

  4. As usual, John is "spot-on." The subtle but poignant points he makes are numerous and warrant reflection by mediators and users. Oh but were it so simple.

  5. ACLU. Way to step up against the police state. I see a lot of things from the ACLU I don't like but this one is a gold star in its column.... instead of fighting it the authorities should apologize and back off.

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