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A federal district court in Utah rejected a cardholder’s claim that he had never agreed to arbitrate because the cardholder’s use of the card demonstrated his acceptance of the card’s terms and conditions, including the arbitration agreement.
In Cline v. Chase Manhattan Bank USA, National Ass'n, No. 2:07CV650 DAK, 2008 WL 4200154 (D. Utah Sept. 12, 2008), Chase issued Cline a credit card. Along with the credit card, Chase sent Cline a cardmember agreement containing an agreement to arbitrate. Thereafter, Cline defaulted on his credit card account.
Chase filed an arbitration claim for the unpaid balance with the National Arbitration Forum (FORUM). Cline objected, claiming he never agreed to arbitrate his claims and stating that he would not respond to any further communication regarding the arbitration proceedings. After determining the parties had a valid agreement to arbitrate, the arbitrator issued an award in favor of Chase.
Cline later sued Chase for breach of contract, and Chase responded by asking the court to confirm the arbitration award. In opposing confirmation and claiming breach of contract, Cline maintained that Chase breached the parties’ contract by submitting the dispute over the unpaid balance to the FORUM.
In ruling on that issue, the Court examined the cardmember agreement and its plain language stating that an arbitrator would resolve all disputes and claims related to the credit relationship. Based on that language, the Court rejected Cline’s contentions that he never agreed to arbitrate. As the Court noted, Cline’s acceptance of the confirmation agreement was clearly demonstrated by his use of the credit card. Accordingly, the Court confirmed the arbitration award in favor of Chase.
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