|
In Teltschik v. JP Morgan Chase & Co., Civil Action No. H-06-2190, 2006 WL 2620515 (S.D. Tex. Sept. 12, 2006), a United States District Court in Texas compelled arbitration of a credit cardholder’s claims against her bank. The cardholder, Teltschik, attempted to cancel her arbitration agreement with the bank by writing a new agreement on the back of checks sent to the bank.
According to Teltschik, the new “contract” canceled the provisions of the cardholder agreement, including its arbitration clause, and purportedly became active once the checks were “presented, collected, or negotiated.” Among other provisions, the text demanded an accounting, provided for a $39/day liquidated damages fee for each day that accounting was overdue, and set liquidated damages at $1,000,000 in the event the bank ever tried to invoke arbitration.
However, in light of Buckeye Check Cashing, Inc. v. Cardegna, No. 04-1264, 2006 WL 386362 (2006), the Court held that Teltschik’s challenge implicated the entire agreement, as opposed to the arbitration clause in particular, and compelled arbitration of Teltschik’s claims. The Court found these claims appropriate for arbitration because Teltschik’s claims involved other provisions of the original cardholder agreement that were not related to the arbitration clause.
Subscribe to a free weekly update on ADR case law and
legislation
|