Midland Funding, LLC v. Bordeaux, 447 N.J. Super. 330 (App. Div. 2016). This was a small claims case in which plaintiff sought to collect a consumer debt as to which it was an assignee. After defendant filed an answer and a counterclaim under the Fair Debt Collection Practices Act, 15 U.S.C. §1692 et seq., plaintiff answered that counterclaim, and the parties began discovery, plaintiff moved to compel arbitration. That motion was based on submission of a purported arbitration agreement.
The “sole evidence of the arbitration agreement’s existence consists of two single-spaced, photocopied pages.” Neither page bore defendant’s signature or otherwise “reflect[ed] that defendant agreed to be bound to any of the provisions listed therein, particularly the arbitration clause at issue.”
Nonetheless, a Law Division judge, in a hearing that took literally one minute and was quoted in full by the Appellate Division, gruffly granted plaintiff’s motion to compel arbitration. After defendant appealed as of right, the Law Division amplified its reasons for that ruling. The Appellate Division was unimpressed and reversed the Law Division’s decision. Judge Fuentes wrote the panel’s opinion.
Judge Fuentes observed that an arbitration agreement, like any other contract, requires mutual assent. “As the party seeking to enforce this alleged contractual provision, plaintiff has the burden to prove, by a preponderance of the evidence, that defendant assented to it.” The two pages that plaintiff offered did not do that.
Plaintiff also provided, however, a certification signed by a “Legal Specialist” (whom Judge Fuentes took to be comparable to a paralegal in plaintiff’s organization. That certification stated that the two pages were “a true and correct copy of the credit agreement provided to plaintiff by its predecessor in interest as the actual agreement applicable to Defendant’s account.” That was all well and good, but Judge Fuentes rightly noted that absent from the certification were “any statements attesting that the two pages constitute the complete credit application and that defendant agreed to be bound by the provisions contained therein” (emphases by Judge Fuentes).
Because plaintiff failed to meet its burden of showing mutual assent to the purported arbitration clause, the decision below was reversed and the case was restored. This is but the latest appellate decision to reject arbitration where the document(s) that purportedly create a right to arbitration do not do the job.
The final sentence of the opinion stated that the panel “anticipate[d] that the court will engage counsel with more patience on remand.” Defendant is doubtless glad for the victory in the Appellate Division, and for this admonition to the Law Division judge. But defendant probably wishes that the panel had remanded the matter to a different judge. The Appellate Division has the power to do that in appropriate circumstances, including in circumstances listed in Rule 1:12-1. But that power is not often exercised, and the panel chose not to exercise it here.