FIA Card Services, N.A. v. Weaver

36 So. 3d 950, 2009 La.App. 1 Cir. 1464, 2010 La. App. LEXIS 456, 2010 WL 1170138
Louisiana Court of Appeal·Decided March 26, 2010·No. 2009 CA 1464·Published·Cited by 3 cases

Opinions

GUIDRY, J.

|2A credit card debtor appeals a judgment confirming an arbitration award. Finding no error in the ruling of the district court, we affirm.

FACTS AND PROCEDURAL HISTORY

According to the arbitration claim, and documentation submitted in conjunction therewith, FIA Card Services, N.A. (FIA Card Services), formerly known as MBNA America Bank, N.A., provided a credit account to William F. Weaver, and despite repeated demands for payment, Mr. Weaver did not pay the amounts due on the account. The credit agreement between the parties contained a mandatory arbitration provision requiring that any dispute regarding the credit account be resolved in the National Arbitration Forum (NAF) under the NAF Code of Procedure. A copy of the credit agreement was attached to the arbitration claim.

Two separate notices regarding the arbitration proceedings were mailed to Mr. Weaver at an address in Baton Rouge, Louisiana, to which he did not respond. On July 24, 2007, the NAF issued an award in favor of FIA Card Services after making the following findings: (1) that the claim was properly served on Mr. Weaver in accordance with the rules of the NAF; (2) that the claim involved interstate commerce and therefore the Federal Arbitration Act, 9 U.S.C. §§ 1-16(FAA), governed the arbitration; (8) that on or before February 22, 2007, the parties had entered into a valid, enforceable, written agreement to arbitrate that governed all the issues in dispute and no party had asserted that the arbitration agreement was invalid or unenforceable; and (4) that the evidence and applicable substantive law supported the award issued in favor of FIA Card Services.

On November 5, 2007, FIA Card Services filed a petition to confirm the arbitration award rendered against Mr. Weaver in the Nineteenth Judicial District Court. Mr. Weaver answered the petition to admit that he had received notice of the arbitration proceedings, but declared that the proceedings were conducted in an | .^inconvenient forum that held no personal jurisdiction over him. Mr. Weaver further denied the remaining allegations of the petition, and specifically denied that he had ever entered into any type of contractual agreement with FIA Card Services. Thereafter, FIA Card Services filed a motion for issuance of a rule to show cause why judgment should not be rendered in its favor recognizing and confirming the arbitration,1 or in the alternative, to show cause why Mr. Weaver should not be compelled to answer all outstanding discovery. Following a hearing on the rule, the district court rendered judgment in favor of FIA Card Services against Mr. Weaver in the amount of the arbitration award plus interest. Following the denial of his motion for new trial, Mr. Weaver appealed.

DISCUSSION

It is undisputed that the credit card agreement in this matter involves interstate commerce and therefore is subject to the FAA, to the extent that a provision exists in the credit agreement to submit to arbitration any controversy arising out of the agreement. See 9 U.S.C. § 2. Relying [952] on recent jurisprudence out the second and fifth circuit courts of appeal, Mr. Weaver asserts that the evidence introduced at trial does not support the judgment appealed because no proof was presented that he entered into an arbitration agreement with FIA Card Services. As a preliminary matter, we must first determine whether the district court could even consider Mr. Weaver’s claim that a valid agreement to arbitrate did not exist between the parties.

In Chase Bank USA, N.A. v. Leggio, 43,751, pp. 4-5 (La.App.2d Cir.12/3/08), 999 So.2d 155, 158; Chase Bank USA, N.A. v. Leggio, 43,567, pp. 2-3 (La.App.2d Cir.11/19/08), 997 So.2d 887, 889; and NCO Portfolio Management Inc. v. Gougisha, 07-604, p. 7 (La.App. 5th Cir.4/29/08), 985 So.2d 731, 734 (on rehearing), writ denied, 08-1146 (La.9/26/08), 992 So.2d 986, the second and fifth circuits both found that a debtor’s failure to adhere to the time limit imposed in the FAA2 to vacate, modify, or correct an arbitration award did not bar the confirming court’s consideration of whether a valid written agreement to arbitrate existed between the parties. Those courts held that the determination of whether a valid written agreement to arbitrate the controversy exists is a first and crucial step in any confirmation proceeding.3 We decline to follow those decisions.

While we agree that a party should not be compelled to submit a dispute to arbitration when he has not agreed to do so, we find that Mr. Weaver’s failure to timely and properly assert his objection to the arbitration proceedings precluded the district court from considering the objection in the proceeding to confirm the arbitration award in this matter, as shall be explained.

In his answer to the petition and to discovery propounded of him, Mr. Weaver admitted that he received notice of the arbitration proceedings and award, but based on his belief that the forum in which the proceedings were conducted was inconvenient and lacked authority to exercise personal jurisdiction over him, he failed to respond to or participate in the arbitration proceedings.4

15While the FAA clearly grants a party a right to challenge an arbitration award, the grounds on which the challenge can be asserted are severely limited when a party waits until an award has been rendered to assert the challenge. Specifically, 9 U.S.C. § 9 provides that once a party applies to a court for an order confirming an arbitration award, “the court must grant such an [953] order unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11 of’ title 9 of the United States Code. Section 10 provides the limited grounds by which an arbitration award may be vacated5 as:

(1) where the award was procured by corruption, fraud, or undue means;
(2) where there was evident partiality or corruption in the arbitrators, or either of them;
(3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or
(4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.

9 U.S.C § 10(a).

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FIA Card Services, N.A. v. Weaver, 36 So. 3d 950, 2009 La.App. 1 Cir. 1464, 2010 La. App. LEXIS 456, 2010 WL 1170138 (La. Ct. App. 2010).

36 So. 3d 950 (FIA Card Services, N.A. v. Weaver) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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