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Asset Acceptance, LLC v. Newby

Supreme Court of Arkansas

June 19, 2014




Dover Dixon Horne PLLC, bye: Michael G. Smith, for appellant.

Emerson Poynter LLP, by: Scott E. Poynter and Corey D. McGaha; The Cruz Law Firm, by: Kathy A. Cruz; Arnold, Batson, Turner & Turner, by: Todd M. Turner; and Joel Hargis, for appellee.

COURTNEY HUDSON GOODSON, Associate Justice. HANNAH, C.J., and CORBIN and DANIELSON, JJ., dissent. HANNAH, C.J., and CORBIN, J., join.


Page 120


Appellant Asset Acceptance, LLC (Asset) appeals an order of the Pulaski County Circuit Court denying its motion to compel arbitration of a suit filed by Asset against appellee Amy Murphy Newby and a counterclaim filed by Newby individually and on behalf of a class of similarly situated persons (Newby). For reversal, Asset contends that the circuit court erred in concluding that Asset had waived its right to arbitration by filing its complaint in circuit court. Asset also asserts that it presented enough specific evidence to show that its claim against Newby, as well as her counterclaim, were subject to an arbitration agreement. Newby has filed a cross-appeal of the circuit court's decision denying sanctions against Asset pursuant to Arkansas Rule of Civil Procedure 11. As this case is an interlocutory appeal from a denied motion to compel arbitration, our jurisdiction is proper pursuant to Arkansas Rule of Appellate Procedure--Civil 2(a)(12) (2013). We affirm on direct appeal and dismiss the cross-appeal.

Asset acquires debts and collects defaulted debts, including credit-card debts. On February 28, 2012, Asset filed a complaint against Newby, alleging that she had received a credit card from Asset and that her account was past due and remained unpaid. The complaint sought a judgment in the amount of $6,204.35, interest in the amount of $4,907.73, and costs and attorney's fees. On April 13, 2012, Newby filed an answer and asserted a counterclaim against Asset. In her answer, Newby denied that she had ever been issued a credit card by Asset and denied owing Asset for any overdue balance. She asserted a class-action counterclaim alleging violations of the Fair Debt Collection Practices Act and the Arkansas Deceptive Trade Practices Act, and claims of unjust enrichment, malicious prosecution, and abuse of process. Essentially, Newby contended that Asset had a history of making false or reckless allegations regarding the existence of outstanding debts.

On October 11, 2012, Asset filed a motion to compel arbitration, asserting that the original credit card was issued to Newby by Chase Bank (Chase) Visa Credit and was subject to a Cardholder Agreement that contained an arbitration provision. According to Asset, the Cardholder Agreement provides, in relevant part:

Any dispute may be resolved by binding arbitration. Arbitration replaces the right to go to court. You will not be able to bring a class action or other representative action in court.

Page 121

This Arbitration Agreement is made pursuant to a transaction involving interstate commerce, and shall be governed by and enforceable under the Federal Arbitration Act (The " FAA" ), 9 U.S.C. § 1-16 as it may be amended. This Arbitration Agreement set forth the circumstances and procedures under which claims (as defined below) may be resolved by arbitration instead of being litigated in court.

Asset attached a copy of an undated and unsigned Cardholder Agreement, which it contended governed Newby's account, a bill of sale purporting to show that Asset purchased several accounts from Chase, and a spreadsheet excerpt that purported to show that Newby had an outstanding balance on her account.

On October 24, 2012, Newby filed a motion in opposition to the motion to compel arbitration. In that motion, Newby asserted that Asset had waived its right to compel arbitration by filing an action in court, that Asset was not entitled to arbitration because Chase was not named as a codefendant in any action, and that Asset had failed to produce evidence of Newby's assent to arbitrate. Subsequently, Asset filed a documentary supplement to its motion to compel arbitration on February 12, 2013. Attached to that supplement were additional documents purporting to show that Newby had a credit card with Chase and that she had failed to make timely payments on her account. Included with these documents were additional account statements that Asset contended were mailed to Newby at her previous place of residence.

Newby's motion for sanctions was filed on November 21, 2012. In her motion, Newby contended that Asset's motion to compel arbitration was not well-grounded in fact and was not warranted under existing law. Newby asserted that Asset took an " affirmative step" by filing its lawsuit in circuit court and that Asset " implemented the litigation machinery" of the circuit court by issuing subpoenas for discovery, in addition to requesting damages, attorney's fees, and interest. Moreover, Newby contended that Asset's ...

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