Wednesday, December 25, 2013

Kortum-Managhan v. Herbergers NBGL case brief

Kortum-Managhan v. Herbergers NBGL case brief summary
204 P.3d 693 (2009)

CASE SYNOPSIS
Plaintiff consumer sought review of an order from the District Court of the Eleventh Judicial District, in and for the County of Flathead (Montana), which granted defendant creditor's motion to dismiss and to compel arbitration in an action for violation of the Federal Fair Debt Collection Practices Act and the Montana Unfair Trade Practices and Consumer Protection Act.

CASE FACTS
The consumer opened a credit card account. She later brought a suit against the creditor, claiming that it violated the Federal Fair Debt Collection Practices Act and the Montana Unfair Trade Practices and Consumer Protection Act. The creditor moved to dismiss the suit and compel arbitration. The trial court granted the motion.

DISCUSSION
  • On appeal, the court held that a credit card "bill stuffer" was not sufficient notice to cause the consumer to knowingly and intelligently waive her constitutional right to a jury trial under Mont. Constitutional art. II, § 26. 
  • The addition of an arbitration clause was not within the consumer's reasonable expectations. There were no negotiations over the arbitration provision. 
  • The creditor merely included that provision within a monthly billing statement. 
  • The "bill stuffer" was a take-it-or-leave-it part of the creditor's form contract. 
  • The "bill stuffer" was ambiguous and misleading because it sought to waive the consumer's constitutional rights with a clause blended into the end of a document when bold type, capital letters, and larger fonts were used to draw attention to other clauses. 
  • The arbitration clause was unenforceable under Mont. Code Ann. § 28-2-102(2).
CONCLUSION
The court reversed the judgment of the trial court. The court remanded the case for entry of an order vacating the order compelling arbitration, for entry of an order reinstating the consumer's cause of action, and for further proceedings.

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