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A federal court in Arizona held that a third party to an arbitration agreement cannot compel arbitration unless they offer proof that they are an agent or assign of a party to the agreement.
In Starr v. Hameroff Law Firm, P.C., No. CIV06-520TUCFRZGEE, 2007 WL 3231988 (D. Ariz. Oct. 31, 2007), Michael and Lorita Starr were the defendants in a collection proceeding in state court. The Starrs brought suit against the state court plaintiff, Unifund (which had acquired the debt from Bank One) and its law firm, Hameroff (collectively “the Defendants”) for alleged violations of the Fair Debt Collection Practices Act (FDCPA).
The Defendants moved to compel arbitration, citing an arbitration agreement in the original credit card agreement with Bank One. The arbitration agreement applied only to disputes with the Starrs and Bank One’s “employees, agents, or assigns.”
The Court agreed with the Starrs’ argument that the Defendants could not invoke the arbitration agreement because the Defendants offered no proof that they were or are agents or assigns of Bank One. As the Defendants did not show that the arbitration agreement applied to this dispute, the motion to compel arbitration was denied.
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