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HomeMy WebLinkAbout2009-8349DISCOVER BANK, : IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA V. : CIVIL ACTION IDA BARNHART, Defendant : NO. 09-8349 CIVIL TERM IN RE: PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT BEFORE OLER and GUIDO, JJ. OPINION and ORDER OF COURT OLER, J., January 6, 2011. In this credit card case, Plaintiff Discover Card has sued Defendant for a balance said to be due on her account in the amount of $8,162.60, plus interest, attorneys' fees, and costs of suit.' For disposition at this time is a motion for summary judgment filed by Plaintiff.2 For the reasons stated in this opinion, Plaintiffs motion for summary judgment must be denied, without prejudice. STATEMENT OF FACTS The allegations of Plaintiffs complaint maybe summarized as follows: Defendant applied for and received a credit card having final digits of 2268,3 made use of the card to the extent of accruing a balance of $8,162.60 as of September 10, 2009,4 defaulted on her obligation to Plaintiff by failing to make monthly payments when due,5 and as a consequence was obligated to Plaintiff in the amount of $8,162.60,6 plus interest in accordance with an attached statement of account at the rate of 28.990% per annum from ' Plaintiff's Complaint, filed December 3, 2009 (hereinafter "Plaintiff's Complaint") 2 Plaintiff's Motion for Summary Judgment, filed October 25, 2010 (hereinafter "Plaintiff's Motion for Summary Judgment"). ' Plaintiff's Complaint, ¶3. 4 Plaintiff's Complaint, ¶4. ' Plaintiff's Complaint, ¶5. 6 Plaintiff's Complaint, ¶6. September 10, 2009,' attorneys' fees in accordance with the parties' agreement in the amount of $125.00,8 and costs of suit.9 Defendant's pro se answer to Plaintiff's pleading did not respond on a paragraph - by -paragraph basis to the complaint, but stated that she "generally deme[d] the allegations due to the complaint based on lack of information and belief," 10 and recited three "affirmative defense[s]," as follows: First Affirmative Defense "(Agreement to Arbitrate) The credit card agreement may state that disputes may be resolved by binding arbitration. Defendant elects to have all disputes related to the credit card agreement resolved by binding arbitration." Second Affirmative Defense "(Amount in Dispute) The account balance claimed by plaintiff is not accurate and the total amount that is owed, if any, is in dispute." Third Affirmative Defense "(Financial Hardship) Due to a serious financial crisis, defendant does not have sufficient funds to pay the full amount of the undisputed debt, if any. My family suffered a loss in wages, which forced us to live on one income. During that time I had to utilize credit for necessities such as food. After we were back to earning two wages, we had childcare expenses that we did not have before and took all of my husband's pay. I had to continue using credit for necessities and fell further behind. I had tried to make payments to the best of my ability but I kept falling behind. I want to pay off my creditors. Because of this desire to pay them off, I have elected to use a debt settlement company, Global Debt Management, to assist me with this." Defendant concluded her responsive pleading by requesting that "Plaintiff takes nothing by way of his complaint" and seeking an award of "Defendant's costs of suit. ,12 Plaintiff's Complaint, ¶6. s Plaintiff's Complaint, ¶¶7, 8. 9 See Plaintiff's Complaint, ad damnum. 10 Defendant's Response, filed December 23, 2009 (hereinafter, "Defendant's Response.") " Defendant's Response. 'Z Defendant's Response. 2 On October 25, 2010, Plaintiff filed the motion for summary judgment sub judice, attaching to it a copy of the parties' purported "Cardmember Agreement." 13 A provision of this agreement reads as follows: Arbitration of Disputes. Agreement to arbitrate. In the event of any past, present or future claim or dispute (whether based upon contract, tort, statute, common law or equity) between you and us arising from or relating to your Account, any prior account you have had with us, your application, the relationships which result from your Account or the enforceability or scope of this arbitration provision, of the Agreement or of any prior agreement, you or we may elect to resolve the claim or dispute by binding arbitration. IF EITHER YOU OR WE ELECT ARBITRATION, NEITHER YOU NOR WE SHALL HAVE THE RIGHT TO LITIGATE THAT CLAIM IN COURT OR TO HAVE A JURY TRIAL ON THAT CLAIM. PRE -HEARING DISCOVERY RIGHTS AND POST - HEARING APPEAL RIGHTS WILL BE LIMITED. NEITHER YOU NOR WE SHALL BE ENTITLED TO JOIN OR CONSOLIDATE CLAIMS IN ARBITRATION BY OR AGAINST OTHER CARDMEMBERS WITH RESPECT TO OTHER ACCOUNTS, OR LITIGATE IN COURT OR ARBITRATEANYCLAIMSASAREPRESENTATIVE OR MEMBER OF A CLASS OR IN A PRIVATE ATTORNEY GENERAL CAPACITY ("Class Action Waiver"). Notwithstanding anything else to the contrary in this arbitration provision, only a court, and not an arbitrator, shall determine the validity and effect of the Class Action Waiver. Even if all parties have opted to litigate a claim in court, you or we may elect arbitration with respect to any claim made by a new party or any new claims later asserted in that lawsuit and nothing undertaken therein shall constitute a waiver of any rights under this arbitration provision. We will not invoke our right to arbitrate an individual claim you bring in small claims court or your state's equivalent court, if any, unless such action is transferred, removed or appealed to a different court. Governing Law and Rules. Your Account involves interstate commerce and this provision shall be governed by the Federal Arbitration Act (FAA). The arbitration shall be conducted, at the option of whoever files the arbitration claim, by either the American Arbitration Association (AAA) or the National Arbitration Forum (NAF) in accordance with their procedures in effect when the claim is filed. For a copy of their procedures, to file a claim or for other information, contact AAA at 335 Madison Ave., Floor 10, New York, NY 10017-5905, www.adr.org (phone 1-800-778-7879) or NAF at PO Box 50191, Minneapolis, MN 55405 (phone 1-800-474-2371). No other arbitration forum will be permitted, except as agreed to pursuant to either the Changes to this Agreement section or a writing signed by both parties. Unless consented to by all parties, no arbitration may be administered by any administrator that has any formal or informal policy, rule or procedure that is inconsistent with or purports to override the terms of this section. If we elect to resolve a claim or dispute by binding arbitration and the arbitrator issues an award in your favor on a claim or claims with respect to which you would not otherwise be entitled to recover your arbitration filing, administrative and hearing fees, reasonable attorneys' fees and/or other arbitration costs, we will be responsible for paying or reimbursing such costs and fees if awarded by the arbitrator. is See Exhibit A, p. 12-13, affixed to Plaintiff's Motion for Summary Judgment. 3 Fees and Costs. At your written request, we will advance any arbitration fiing, administrative and hearing fees which you would be required to pay to pursue a claim or dispute as a result of our electing to arbitrate that claim or dispute. Send requests to Discover Card, PO Box 15192, Wilmington, DE 19886-1020. The arbitrator will decide who will ultimately be responsible for paying those fees. You will only be responsible for paying or reimbursing our arbitration filing, administrative or hearing fees to the extent you would have been responsible for paying "attorneys' fees and court or other collection costs" had the action proceeded in court. In no event will you be required to pay any fees or costs incurred by us in connection with an arbitration proceeding where such a payment or reimbursement is prohibited by applicable law. Hearings and Decisions. Any arbitration hearing will take place in the federal judicial district where you reside. The arbitrator shall follow applicable substantive law to the extent consistent with the FAA and applicable statutes of limitations and shall honor claims of privilege recognized at law and shall be authorized to award all remedies permitted by the substantive laws that would apply if the action were pending in court. If requested by any party, the arbitrator shall write an opinion containing the reasons for the award. The arbitrator's decision will be final and binding except for any appeal rights under the FAA and except that if the amount in controversy exceeds $100,000, any party may appeal the award within 30 days to a three -arbitrator panel, which shall review the award de novo. Unless applicable law provides otherwise, the appealing party will pay the cost of the appeal, regardless of its outcome. However, we will consider in good faith any reasonable request for us to bear the fees charged by the arbitration administrator and the arbitrators in connection with the appeal. Judgment upon any award by the arbitrator may be enforced in any court having jurisdiction. Other Beneficiaries of this Provision. Our rights and obligations under this arbitration provision shall inure to the benefit of and be binding upon our parent corporations, subsidiaries, affiliates (including, without limitation, DFS Services LLC), predecessors, successors, assigns, as well as the officers, directors and employees of each of these entities, and will also inure to the benefit of any third party named as a co-defendant with us or with any of the foregoing in a claim which is subject to this arbitration provision. Your rights and obligations under this arbitration provision shall inure to the benefit of and be binding upon all persons contractually liable under this Agreement and all Authorized Users of the Account. Survival of this Provision. This arbitration provision shall survive termination of your Account as well as voluntary payment in full by you, any legal proceedings by us to collect a debt owed by you, any bankruptcy by you and any sale by us of your account. 14 Argument on Plaintiff's Motion for Summary Judgment was held on December 15, 2010. DISCUSSION "[A]s a matter of public policy, our courts favor the settlement of disputes by arbitration ...." LSI Title Agency, Inc. v. Evaluation Services, Inc., 2008 PA Super 126, ¶20, 951 A.2d 384, 391. "Generally, it is the defendant who seeks to invoke and enforce 14 Exhibit A, pages 12-14, affixed to Plaintiff's Motion for Summary Judgment. (Mistakes in original) 4 an arbitration provision in a contract after having been hailed to the civil courts by the plaintiff." Id. at ¶20, 951 A.2d at 392. Typically, a defendant's election to avail himself or herself of the arbitration option is presented as an affirmative defense in the defendant's answer to the complaint. See, e.g., Kwalick v. Bosacco, 329 Pa. Super. 235, 478 A.2d 50 (1984); Nationwide Mutual Fire Ins. Co. v. Hamilton, 2010 WL 1445554 (W.D. Pa.). "[A] waiver of a right to proceed to arbitration pursuant to the term of a contract providing for binding arbitration should not be lightly inferred and unless one's conduct has gained him an undue advantage or resulted in prejudice to another he should not be held to have relinquished the right." LSI Title, 2008 PA Super at ¶20, 951 A.2d at 392. Under Section 7304(d) of the Judicial Code, "[i]f [an] application for an order to proceed with arbitration is made in [an] action or proceeding and is granted, the court order to proceed with arbitration shall include a stay of the action or proceeding." Act of October 5, 1980, P.L. 693, §501(a), 42 Pa. C.S. §7304(d). On a motion for summary judgment, the record includes pleadings, depositions, answers to interrogatories, admissions and affidavits, and reports signed by an expert witness. Pa. R.C.P. 1035.1. In the present case, Defendant's answer to Plaintiff's complaint indicated her election to proceed to binding arbitration with respect to the dispute between the parties. The agreement between the parties attached to Plaintiff's motion for summary judgment permitted her to do so. Accordingly, the record upon which Plaintiff's motion is to be disposed of reveals that the motion is, at best, premature. For these reasons, the following order will be entered: ORDER OF COURT AND NOW, this 6th day of January, 2011, upon consideration of Plaintiff's Motion for Summary Judgment, following oral argument held on December 15, 2010, and for the reasons stated in the accompanying opinion, (a) Defendant is afforded a period of thirty days from the date of this order to comply in all respects with the 5 procedure provided for in the parties' credit card agreement for the filing of an arbitration claim with respect to the parties' dispute, and to file with the prothonotary, and serve upon Plaintiff's counsel, a certification in this case that she has done so, (b) in the event that Defendant has not timely complied in all respects with clause (a) of this order, Defendant shall be deemed without further order of court to have waived her right to arbitration, (c) Plaintiff's motion is denied, without prejudice to its right to file a new motion for summary judgment upon the occurrence of a deemed waiver of Defendant's right to arbitration in accordance with clause (b) of this order, and (d) in all other respects, the present action is stayed. BY THE COURT, s/ J. Wesley Oler, Jr. J. Wesley Oler, Jr., J. Benjamin R. Bibler, Esq. Weltman, Weinberg & Reis, Co. 1400 Koppers Building 436 Seventh Avenue Pittsburgh, PA 15219 Attorney for Plaintiff Ida M. Barnhart 71 Moongale Drive Carlisle, PA 17013 Defendant, pro Se DISCOVER BANK, : IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA V. : CIVIL ACTION IDA BARNHART, Defendant : NO. 09-8349 CIVIL TERM IN RE: PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT BEFORE OLER and GUIDO, JJ. ORDER OF COURT AND NOW, this 6th day of January, 2011, upon consideration of Plaintiff's Motion for Summary Judgment, following oral argument held on December 15, 2010, and for the reasons stated in the accompanying opinion, (a) Defendant is afforded a period of thirty days from the date of this order to comply in all respects with the procedure provided for in the parties' credit card agreement for the filing of an arbitration claim with respect to the parties' dispute, and to file with the prothonotary, and serve upon Plaintiff's counsel, a certification in this case that she has done so, (b) in the event that Defendant has not timely complied in all respects with clause (a) of this order, Defendant shall be deemed without further order of court to have waived her right to arbitration, (c) Plaintiff's motion is denied, without prejudice to its right to file a new motion for summary judgment upon the occurrence of a deemed waiver of Defendant's right to arbitration in accordance with clause (b) of this order, and (d) in all other respects, the present action is stayed. BY THE COURT, J. Wesley Oler, Jr., J. Benjamin R. Bibler, Esq. Weltman, Weinberg & Reis, Co. 1400 Koppers Building 436 Seventh Avenue Pittsburgh, PA 15219 Attorney for Plaintiff Ida M. Barnhart 71 Moongale Drive Carlisle, PA 17013 Defendant, pro Se