Weldon v. Asset Acceptance, LLC

• Citation: 896 N.E.2d 1181
• Decision Date: 25 November 2008
• Docket Number: No. 53A01-0804-CV-159.,53A01-0804-CV-159.
• Parties: Kevin M. WELDON, Appellant-Defendant, v. ASSET ACCEPTANCE, LLC, Appellee-Plaintiff.
• Court: Court of Appeals of Indiana

896 N.E.2d 1181

Kevin M. WELDON, Appellant-Defendant, v. ASSET ACCEPTANCE, LLC, Appellee-Plaintiff.

No. 53A01-0804-CV-159.

Court of Appeals of Indiana.

November 25, 2008.

Kevin M. Weldon, Bloomington, IN, Appellant Pro Se.

Robert E. Stochel, Hoffman & Stochel, Crown Point, IN, Attorney for Appellee.

OPINION

BAKER, Chief Judge.

Appellant-defendant Kevin M. Weldon appeals the trial court's orders denying his motion to vacate an arbitration award and for summary judgment and entering summary judgment in favor of appellee-plaintiff Asset Acceptance, LLC (Asset Acceptance). Finding that Weldon failed to file his motion to vacate within the three-month deadline set forth by the Federal Arbitration Act¹ and that under the circumstances presented herein, the trial court was required to confirm the arbitration award, we affirm.

FACTS

In the mid-1990s, Weldon had a credit card with MBNA America Bank, N.A. (MBNA). Weldon eventually fell behind on his credit card payments, and he admits that his last payment to MBNA occurred in November 1999. The credit card agreement provides that any disputes would be resolved by binding arbitration. Appellant's App. p. 140. At some point, Asset Acceptance became the assignee of MBNA.

In early October 2006, Asset Acceptance filed a claim with the National Arbitration Forum (NAF) for the outstanding balance on Weldon's credit card, which totaled nearly $30,000. The NAF attested that it served Weldon with notice of the arbitration via UPS, appellant's app. p. 144, though Weldon denies receiving the documents. Weldon did not respond to the first or second notices sent to him. On December 11, 2006, the arbitrator entered an award in favor of Asset Acceptance in the amount of $29,348.85. The NAF stated that it sent the judgment by regular mail to Weldon on December 12, 2006, id. at 145, though Weldon denies that he received it.

On May 22, 2007, Asset Acceptance filed a motion with the trial court to confirm the arbitration award. In June 2007, Weldon received notice of the trial court proceedings. Weldon contends that June 2007 was the first time he learned of the arbitration proceedings and award that had been entered against him six months earlier. On July 5, 2007, the trial court held an initial hearing on Asset Acceptance's motion, at which time Weldon contested the validity of the arbitration award and requested some time to file responsive pleadings. The trial court granted Weldon's request.

On August 6, 2007, Weldon filed a motion to vacate the arbitration award and for summary judgment, arguing that the arbitration proceedings had been filed outside of the allegedly applicable six-year statute of limitations. On August 20, Weldon filed a second motion to vacate the arbitration award and dismiss with prejudice on separate grounds than those raised in the August 6 motion. Specifically, Weldon argued that Asset Acceptance had not established that it was a valid assignee of MBNA, that Asset Acceptance had failed to attach certain required documents to its complaint, that he had never agreed to binding arbitration, and that he was never properly served with notice of the underlying arbitration proceedings.

On August 31, 2007, Asset Acceptance responded to Weldon's August 6 motion, arguing that the relevant statute of limitations is one year and the trial court proceedings were instituted within that timeframe. It further argued that Weldon was properly served under the relevant rules and that he had waived all arguments by failing to participate in the underlying arbitration. On October 29, 2007, Asset Acceptance filed a cross-motion for summary judgment and a response to Weldon's August 20 motion, arguing that Asset Acceptance had complied with all relevant statutory conditions such that the trial court was required to confirm the arbitration award. It further argued that Weldon had failed to offer admissible evidence in support of his argument that the arbitration award should be vacated. On December 17, 2007, the trial court summarily denied Weldon's motions and granted Asset Acceptance's cross-motion, entering summary judgment in Asset Acceptance's favor in the amount of $29,348.58 plus costs. Weldon now appeals.

DISCUSSION AND DECISION

I. Standard of Review

Summary judgment is appropriate only if the pleadings and evidence considered by the trial court show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Owens Corning Fiberglass Corp. v. Cobb, 754 N.E.2d 905, 909 (Ind.2001); see also Ind. Trial Rule 56(C). On a motion for summary judgment, all doubts as to the existence of material issues of fact must be resolved against the moving party. Owens Corning, 754 N.E.2d at 909. Additionally, all facts and reasonable inferences from those facts are construed in favor of the nonmoving party. Id. If there is any doubt as to what conclusion a jury could reach, then summary judgment is improper. Id.

An appellate court faces the same issues that were before the trial court and follows the same process. Id. at 908. The party appealing from a summary judgment decision has the burden of persuading the court that the grant or denial of summary judgment was erroneous. Id. When a trial court grants summary judgment, we carefully scrutinize that determination to ensure that a party was not improperly prevented from having his or her day in court. Id. We may affirm the grant of summary judgment upon any basis argued by the parties and supported by the record. Breining v. Harkness, 872 N.E.2d 155, 158 (Ind.Ct.App.2007), trans. denied.

II. The Arbitration Award

A. Federal Arbitration Act

Weldon argues that the trial court erroneously refused to vacate the arbitration award. To evaluate this argument, we must first determine the applicable law to be applied to the dispute.

The parties spend much of their briefs raising arguments and defenses pursuant to the Uniform Arbitration Act as adopted by Indiana. Ind.Code § 34-57-2-1 et seq. They are mistaken, however, in applying that Act, inasmuch as it does not apply to consumer loan contracts. I.C. § 34-57-2-1(b). "All consumer leases, sales, and loan contracts, as they are defined in the Uniform Consumer Credit Code are exempted from the Indiana Act. A loan includes the creation of debt pursuant to a lender credit card or similar arrangement. See Ind. Code § 24-4.5-3-106." MBNA Am. Bank, N.A. v. Kay, 888 N.E.2d 288, 290 (Ind.Ct. App.2008). Therefore, the instant action is governed by the Federal Arbitration Act (FAA). See id.; see also Am. Gen. Fin. Mgmt. Corp. v. Watson, 822 N.E.2d 253, 256 (Ind.Ct.App.2005) (holding that "[t]he FAA applies to written arbitration provisions contained in contracts involving interstate commerce when the parties agree to arbitrate"). In any event, we note that the agreement itself provides that it "shall be governed by the Federal Arbitration Act...." Appellant's App. p. 141.

Turning to the relevant portions of the FAA, therefore, we note that the statute requires the trial court to confirm an arbitration award unless it is vacated, modified, or corrected:

If the parties in their agreement have agreed that a judgment of the court shall be entered upon the award made pursuant to the arbitration, and shall specify the court, then at any time within one year after the award is made any party to the arbitration may apply to the court so specified for an order confirming the award, and thereupon the court must grant such an order unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11 of this title.

9 U.S.C. § 9 (emphasis added).²

Where, as here, the movant seeks to vacate the arbitration award, he must establish that he is entitled to relief pursuant to section 10:

(a) In any of the following cases the United States court in and for the district wherein the award was made may make an order vacating the award upon the application of any party to the arbitration —

(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). The FAA further explicitly provides that "[n]otice of a motion to vacate ... an award must be served upon the adverse party or his attorney within three months after the award is filed or delivered." 9 U.S.C. § 12 (emphasis added). The upshot of these provisions, therefore, is that if a party is unhappy with an arbitration award and hopes to have the award vacated, he must (1) file the motion to vacate the award within three months after the award was filed or delivered; and (2) establish that one or more of the circumstances outlined in section 10 exist such that vacation is warranted.

Here, the arbitration award entered against Weldon was entered on December 11, 2006, and sent to Weldon via U.S. mail on December 12, 2006. Weldon filed his motion to vacate the award on August 6, 2007, nearly eight months later, well beyond the three-month deadline set forth in section 12 of the FAA.

In an effort to ameliorate the untimeliness of the motion to vacate, Weldon argues that it was not proper to serve notice of the arbitration award on him via U.S. mail. He contends that we should look to the Indiana Uniform Arbitration Act provisions on service because the FAA is silent on that issue. Appellant's Br. p. 17. The cases he cites in support of that contention, however, look first to the parties' agreement and only turn to...