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In ordering arbitration of a truth-in-lending claim against a credit card issuer, a federal court in Pennsylvania applied the rule that proper mailing of a legal document, such as an arbitration agreement, gives rise to a rebuttable presumption of receipt.
In Azur v. MBNA Corp., No. 06-1047, 2007 WL 1656255 (W.D. Pa. June 7, 2007), Azur sued MBNA for alleged violations of the Truth in Lending Act. Specifically, Azur claimed that his executive assistant, Vanek, made fraudulent charges to his MBNA credit card.
MBNA moved to compel arbitration pursuant to an arbitration clause that was added to the cardmember agreement in 1999. In opposing the motion, Azur argued that there was no valid arbitration agreement, and he requested an opportunity to conduct limited discovery on this issue. The Court granted Azur's discovery request because the use of multiple account numbers created some ambiguity. See Azur v. MBNA Corp., No. 06-1047, 2007 WL 120049 (W.D. Pa. Jan. 10, 2007).
Once the deadline for discovery and supplemental briefing had passed, MBNA's motion to compel arbitration was ripe for a decision. Azur continued to argue that there was no valid arbitration agreement.
The Court rejected this argument because MBNA submitted evidence that notice of the amendment adding the arbitration clause was mailed to Azur and not returned as undelivered. As the Court explained, "evidence of proper mailing gives rise to a rebuttable presumption of receipt, and actual evidence of receipt need not be proven where circumstantial evidence, such as evidence of the sender's customary mailing practices, establishes the same."
Azur attempted to overcome the presumption of receipt by pointing out that Vanek, the executive assistant who allegedly used the card, opened his mail. However, Azur cited no authority for the proposition that the presumption of receipt does not apply where a person has authorized someone else to open their mail. Given Azur's failure to rebut the presumption of receipt, the Court granted MBNA's motion to compel arbitration.
The presumption of receipt – sometimes referred to as the "mailbox rule" – is necessitated by the difficulty of proving actual receipt. The Florida Supreme Court has explained the reasoning behind the presumption: "[T]here is no evidence as to the actual act of mailing or to the receipt of the letters . . . . To expect such evidence would be totally unreasonable. No secretary can remember the simple act of mailing one particular letter – which was, in no way, unique – five years after the act of mailing was completed." Brown v. Giffen Industries, Inc., 281 So.2d 897, 899-900 (Fla. 1973).
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