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A federal court in New York ordered reasonable attorney fees as a sanction under Rule 11 against a credit card debtor for a frivolous challenge to an arbitration award confirmation.
In Washington Mut. Bank v. Forgue, No. 07-MC-6027-CJS, 2007 WL 4232708 (W.D.N.Y. Nov. 27, 2007), Gretchen Forgue had a credit card account with Washington Mutual. Ms. Forgue began complaining about what she referred to as "billing errors" based on Washington Mutual's alleged failure to provide certain disclosures when she opened the account. Forgue disputed her balance as a result.
Arbitration ensued. An award was issued in favor of Washington Mutual. It sought confirmation of the award and moved for Rule 11 sanctions against Forgue. Forgue, appearing pro se, filed an objection to the award, including a motion to strike statements made by Washington Mutual.
Represented by counsel at the oral hearing, Forgue removed her objection to confirmation of the award, but opposed the motion for sanctions.
The Court concluded that Forgue did not have a non-frivolous basis for opposing confirmation of the award. Forgue did not raise any acceptable reason for vacatur of an arbitration award pursuant to the Federal Arbitration Act (FAA). See 9 U.S.C. § 10(a) (1)-(4).
Further, the Court denied Forgue's motion to strike. Washington Mutual's statements regarding why Forgue disputed her debt were not unsupported by the record, irrelevant, nor slanderous. Evidence in the record suggested that Forgue had been coached to dispute her debt as part of a scheme. Moreover, she refused to answer questions regarding that subject.
Finally, Forgue filed a counterfeit addendum in a fraudulent attempt to convince the Court that she had filed a legitimate claim with the appropriate authority in a timely manner. A fraud specialist concluded that she had not filed the claim until a later date.
Forgue was both cautioned regarding the applicability of Rule 11 and provided with a copy of the rule. See Fed. R. Civ. Pro. 11. Still, Forgue insisted that she had filed the claim, knowing it was not possible that she had done so.
Accordingly, the Court ordered sanctions against Forgue, pursuant to Rule 11, which consisted of reasonable attorney fees for the time and effort spent by defense counsel responding to her opposition of the motion to confirm the award.
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