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Lucas v. MBNA

Other Lower Courts

January 2, 2008

In the Matter of the Arbitration of Certain Controversies between Gerard Lucas, Petitioner,
v.
MBNA, Respondent.

Editorial Note:

This case is not published in a printed volume and its disposition appears in a table in the reporter.

COUNSEL

For the Petitioner(s): STEVEN A. GRANT, ESQ.

For the Respondent(s): WOLPOFF ABRAMSON, LLP.

OPINION

James G. Starkey, J.

Petitioner Gerard Lucas (hereinafter "Lucas") seeks an order pursuant to CPLR 7511 vacating and setting aside an arbitration award obtained on default in favor of respondent MBNA, after petitioner filed a jurisdictional objection to the arbitration proceeding. MBNA, by cross petition, seeks an order and judgment confirming the award pursuant to CPLR 7510.

FACTS AND PROCEDURAL BACKGROUND

On or about December 28, 2006, MBNA America Bank, N.A. (hereinafter "MBNA") served a demand upon petitioner for arbitration of its claim that petitioner was indebted to MBNA in the amount of $5959.63 as a result of his use of a credit card issued by MBNA. After a hearing on submission of documentary evidence, the arbitrator found in MBNA's favor and awarded $7,439.79.

Petitioner contends that the arbitrator exceeded his powers, engaged in misconduct and that MBNA failed to follow CPLR Article 75 procedures. Petitioner also asserts that no valid agreement to arbitrate exists and that although MBNA purported to rely upon a "Credit Card Agreement Additional Terms and Conditions" to support its request for arbitration, the document was not signed by him and contained no specific references to him.

Upon receiving the demand to arbitrate, petitioner filed a response in which he insisted that he was not a party to any agreement to arbitrate and that, accordingly, National Arbitration Forum (hereinafter "NAF") did not have jurisdiction to hear the matter.

On March 27, 2007, petitioner was advised by letter that an award had been entered in MBNA's favor. Petitioner faults the arbitrator for going forward despite his challenge to the existence of an arbitration agreement, and suggests that MBNA erred by 1) failing to properly serve the demand for arbitration, 2) move to compel arbitration once he challenged the arbitrator's jurisdiction and 3) failing to notify him of the hearing date. Additionally, he argues that the notice of arbitration should have but did not contain a caveat that he had to apply for a stay of arbitration within 20 days or thereafter be precluded from objecting that a valid agreement had not been made.

In support, petitioner notes that the demand for arbitration was served by Federal Express, rather than by certified or registered mail or by personal delivery upon him, and that notice of the award was served by regular mail, rather than by registered or certified mail. Petitioner also claims the "inevitable partiality of the NAF arbitrators", urging that they would favor a creditor like MBNA, rather than risk NAF not being selected as an arbitration forum by the credit card issuer in the future.

MBNA argues in its cross petition that Lucas became bound by the terms of the subject Credit Card Agreement, including the broadly worded arbitration provision, by his acceptance and use of the MBNA issued credit card. MBNA further states that NAF acknowledged petitioner's jurisdictional objection and offered him an opportunity to submit a "Response to the Claim" pursuant to the NAF Code of Procedure; that petitioner did not submit a response and, in accordance with NAF's rules, the arbitration proceeded thereafter on submission of MBNA's papers. MBNA further notes that the demand for arbitration was served by overnight mail pursuant to NAF's Rules; that ...


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