Mbna America Bank, N.A. v. Bodalia

• Decision Date: 30 June 2006
• Docket Number: 2040847.
• Citation: 949 So.2d 935
• Parties: MBNA AMERICA BANK, N.A. v. Niketa BODALIA.
• Court: Alabama Court of Civil Appeals

949 So.2d 935

MBNA AMERICA BANK, N.A. v. Niketa BODALIA.

2040847.

Court of Civil Appeals of Alabama.

June 30, 2006.

Certiorari Denied August 11, 2006. Alabama Supreme Court 1051500.

Naomi A. Cohen Ivker of Zarzaur & Schwartz, P.C., Birmingham, for appellant.

Michael A. Dasinger III of Hoiles, Dasinger & Hollon, P.C., Robertsdale, for appellee.

MURDOCK, Judge.

MBNA America Bank, N.A. ("MBNA"), appeals from a judgment of the Baldwin Circuit Court denying its motion to set aside a judgment confirming an arbitration award in favor of Niketa Bodalia. We reverse and remand because the judgment confirming the arbitration award was void for lack of subject-matter jurisdiction.

This case involves competing arbitration awards purporting to adjudicate claims arising out of Bodalia's use of an MBNA credit card. Bodalia opened a credit-card account with MBNA, and MBNA extended credit to Bodalia. In 2003, the unpaid balance on Bodalia's credit card was approximately $8,500.

Bodalia's credit-card agreement with MBNA contained an arbitration agreement requiring that all disputes between Bodalia and MBNA be resolved by binding arbitration conducted by the National Arbitration Forum ("NAF"). The credit-card agreement provided that MBNA could amend the terms of the agreement at any time. MBNA reserved the right to terminate the cardholder's right to receive credit if the cardholder rejected any proposed amendment.

In April 2003, Bodalia sent a letter to MBNA purporting to amend the creditcard agreement to require that disputes be arbitrated "through an arbitration service of [her] choice only." Bodalia later designated the National Arbitration Council, Inc. ("NAC"), as the arbitration service. As "consideration" for the purported modification of her credit-card agreement, Bodalia enclosed a check in the amount of $10.00. MBNA cashed the check.¹

In May 2003, Bodalia sent to MBNA a written demand for arbitration and filed a claim for arbitration with NAC. In her demand for arbitration, Bodalia did not dispute any particular charges, but she asserted that MBNA had failed to lend her money as required by the credit-card agreement. According to Bodalia's theory, payments that MBNA made to merchants for goods and services were not advancements of credit, but the creation of new money that had never existed by "a process known in [MBNA's] industry as `origination' or counterfeiting." Thus, Bodalia claims, she did not owe MBNA any money and, in fact, MBNA owed her money that it had allegedly failed to lend her. Although the correctness of the NAC arbitration award is not before us, we note that Bodalia's claim was without legal merit.²

On July 11, 2003, NAC issued a purported "arbitration award" in Florida that was apparently based solely on Bodalia's written demand for arbitration and the documents attached thereto. MBNA did not participate in the "arbitration proceeding" or respond to Bodalia's demand for arbitration. NAC's award to Bodalia was the exact amount of Bodalia's claim.³

In January 2004, MBNA filed an arbitration claim with NAF, the arbitrator referenced in the credit-card agreement, alleging that Bodalia was delinquent with respect to payment on her credit-card account. MBNA obtained an arbitration award from NAF against Bodalia in the amount of $10,333.14. That award was not satisfied by Bodalia. It does not appear that Bodalia participated in the NAF arbitration, but she does not dispute any of the specific charges and does not claim that she made any payments that were not credited.

In June 2004, MBNA, seeking to take advantage of the summary enforcement mechanism provided by Ala.Code 1975, § 6-6-12, filed in the Baldwin Circuit Court an application to confirm the arbitration award entered in its favor by NAF. On July 20, 2004, the court entered an order confirming the arbitration award as immediately enforceable as a judgment against Bodalia. On July 29, 2004, Bodalia filed an answer and counterclaim, denying MBNA's allegations and seeking the confirmation, pursuant to § 6-6-12, of her competing "arbitration award" from NAC. On August 4, 2004, the trial court vacated the order confirming MBNA's arbitration award and set the matter for a hearing.

In September 2004, the trial court held a hearing at which it heard arguments and received documents, but it did not hear any oral testimony. After briefing by the parties, the trial court entered a separate written judgment on November 16, 2004, confirming the NAC award in Bodalia's favor.⁴ MBNA did not file a postjudgment motion, see Rule 59, Ala. R. Civ. P., and it did not file an appeal within the 42-day appeal period, which expired on December 28, 2005. See Rule 4(a)(1), Ala. R.App. P.; Sanderson Group, Inc. v. Smith, 809 So.2d 823 (Ala.Civ.App.2001). MBNA's counsel claimed that it did not receive a copy of the order confirming Bodalia's arbitration award until January 2005.⁵

On February 16, 2005, more than 30 days after the expiration of the appeal period, MBNA filed a motion under Rule 77(d), Ala. R. Civ. P., to file an out-of-time appeal. That motion was denied on March 18, 2005. MBNA does not contend that it should have been allowed to pursue its untimely appeal or that the trial court erred in denying its Rule 77(d) motion. See Lawrence v. Alabama State Pers. Bd., 910 So.2d 126, 128 (Ala.Civ.App.2004) (Rule 77(d) provides the exclusive remedy when a party claims a lack of notice, and Rule 60(b)(6), Ala. R.App. P., cannot be used to extend the time in which to appeal).

On May 13, 2005, MBNA filed a motion under Rule 60(b)(4) and (6), Ala. R. Civ. P., to vacate the November 2004 judgment confirming Bodalia's arbitration award. That motion was denied.

MBNA appeals from the denial of its Rule 60(b) motion, contending (1) that the November 2004 judgment was void because the trial court lacked subject-matter jurisdiction to confirm an arbitration award made in the State of Florida and (2) that the November 2004 judgment should have been set aside because the confirmation of Bodalia's award was obtained by fraud on the court. In response, Bodalia contends (1) that MBNA's appeal from the November 2004 judgment was untimely, (2) that MBNA's fraud argument is untimely because MBNA's motion to vacate was filed more than 4 months after entry of the November 2004 judgment, (3) that her arbitration award was valid, and (4) that the trial court had subject-matter jurisdiction to confirm her award.

A Rule 60(b) motion to vacate a judgment is not a substitute for an appeal, and we review only the trial court's decision to grant or deny the motion to vacate. We review de novo an order granting or denying a motion under Rule 60(b)(4).

"The standard of review on appeal from the denial of relief under Rule 60(b)(4) is not whether there has been an abuse of discretion.... If the judgment is valid, it must stand; if it is void, it must be set aside. A judgment is void only if the court rendering it lacked jurisdiction of the subject matter or the parties, or if it acted in a manner inconsistent with due process."

Satterfield v. Winston Indus., Inc., 553 So.2d 61, 64 (Ala.1989).

The dispositive issue in this appeal is whether the Baldwin Circuit Court had subject-matter jurisdiction to confirm NAC's arbitration award to Bodalia. If not, the judgment is void and should be set aside. International Longshoremen's Ass'n v. Davis, 470 So.2d 1215, 1217 (Ala. 1985), aff'd, 476 U.S. 380, 106 S.Ct. 1904, 90 L.Ed.2d 389 (1986) (a judgment entered without subject-matter jurisdiction is void and may be set aside at any time, either on direct or collateral attack); and McCarthy v. McCarthy, 785 So.2d 1138, 1140 (Ala. Civ.App.2000).

Bodalia sought summary enforcement of the NAC arbitration award under the Alabama Arbitration Act ("the AAA"), Ala.Code 1975, §§ 6-6-1 through -15. See generally Moss v. Upchurch, 278 Ala. 615, 179 So.2d 741 (1965).⁶ Under that act, provision is made for the summary enforcement of arbitration awards by Ala. Code 1975, § 6-6-12, which provides:

"If the award is not performed in 10 days after notice and delivery of a copy thereof, the successful party may, if an action is pending, cause the award and the file of papers in the case to be returned to the court in which the action is pending or, if no action is pending, cause the submission and award to be returned to the clerk of the circuit court of the county in which the award is made. Such award has the force and effect of a judgment, upon which execution may issue as in other cases."

(Emphasis added.)

Thus, § 6-6-12 specifies the location for filing a confirmation petition. If no action is pending, the petition shall be filed in the county in which the award was made. See Dunigan v. Sports Champions, Inc., 824 So.2d 720 (Ala.2001) (construing the analogous provision of Ala.Code 1975, § 6-6-15,⁷ to authorize an appeal of an arbitration award to be filed only in the court where an action was pending or in the county where the award was made).

In her brief to this court, Bodalia concedes that the NAC arbitration award was made in Florida and that the NAC award could not be enforced in the Baldwin Circuit Court if § 6-6-12 is taken literally. She argues, however, that § 6-6-12 "would certainly apply to where the person receiving the award is located and not where the award was rendered." Even aside from the fact that Bodalia cites no authority for this argument, we find it unpersuasive. Section 6-6-12 was designed to provide a prevailing party in an arbitration proceeding a summary means for enforcing an arbitration award without the necessity of filing a normal civil action based on the parties' agreement to submit the dispute to arbitration. See Moss, supra. Our Supreme Court's interpretation of § 6-6-15, an analogous provision concerning appeals from arbitration awards (see note 7 and accompanying text, supra), is persuasive in discerning the proper operation of § 6-6-12.

In Dunigan, 824 So.2d...