MBNA v. Baumie

THIS OPINION HAS NO PRECEDENTIAL VALUE.  IT SHOULD NOT
BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE
239(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA

In The Court of Appeals

MBNA America
Bank, N.A., Respondent,

v.

Joseph E.
Baumie, Appellant.

Appeal From Spartanburg County

 J. Derham Cole, Circuit Court Judge

Unpublished Opinion No. 2008-UP-205

Submitted March 4, 2008 – Filed March 25,
2008

REVERSED

Joseph E. Baumie, of Inman, for Appellant.

Eric C. Hale and Roy W. Boggs, of Columbia, for Respondent.

PER CURIAM:  A
credit card holder, Joseph E. Baumie, argues the circuit court erred in
confirming an arbitration award issued by the National Arbitration Forum in
favor of MBNA America Bank, N.A., the issuer of Baumie’s credit card. 
Specifically, Baumie argues MBNA failed to produce evidence of an arbitration
agreement between the parties.  We reverse.[1]

FACTS

MBNA filed an arbitration claim against
Baumie in the National Arbitration Forum (Forum) alleging it had issued Baumie a
credit card and he subsequently defaulted on their agreement.  Baumie contested
arbitration several times in writing to the Forum, asserting he never agreed to
arbitrate.  Despite Baumie’s assertions, the Forum went forward with the
arbitration and determined the parties entered into an arbitration agreement.  The
Forum found in favor of MBNA in the amount of $11,241.84. 

MBNA filed a complaint in circuit court
seeking confirmation of the arbitration award.  Baumie answered and filed a counterclaim
and a motion to dismiss.  MBNA filed a motion to confirm the arbitration
award, and Baumie filed a motion opposing the confirmation.  Following a
hearing, the circuit court took the matter under advisement, and subsequently
issued an order confirming the award and entering judgment against Baumie in
the amount of $11,241.84.  This appeal followed.

STANDARD OF REVIEW

Unless the parties otherwise provide, the question of
the arbitrability of a claim is an issue for judicial determination.  Zabinski
v. Bright Acres Assocs., 346 S.C. 580, 596, 553 S.E.2d 110, 118 (2001).  Determinations
of arbitrability are subject to de novo review, but if any evidence reasonably
supports the circuit court’s factual findings, this court will not overrule
those findings.  Stokes v. Metropolitan Life Ins. Co., 351 S.C. 606, 609-10,
571 S.E.2d 711, 713 (Ct. App. 2002).

LAW/ANALYSIS

Baumie
argues the circuit court erred by confirming the arbitration award because MBNA
had not produced sufficient evidence of an arbitration agreement.  We agree. 

The Federal
Arbitration Act requires courts to enforce privately negotiated arbitration
agreements according to their terms.  Zabinski v. Bright Acres Assocs., 346
S.C. 580, 592, 553 S.E.2d 110, 116 (2001).  However, “arbitration is a matter of contract, and a
party cannot be required to arbitrate any dispute which he has not agreed to
arbitrate.” Chassereau v. Global Sun Pools, Inc., 373 S.C. 168, 171-2,
644 S.E.2d 718, 720 (2007) (citing Zabinski at 596, 553 S.E.2d at
118). 

If a
party challenges the enforcement of an arbitration award on the grounds that
there was not an arbitration agreement between the parties, it naturally
follows the court must first ascertain whether the agreement actually existed. 
The party seeking enforcement of the award, then, must present evidence of the
agreement itself because “[t]he burden is on a party pleading a fact to prove
it.”  Jackson v. Frier, 146 S.C. 322, 144 S.E. 66,
68, (1928); Hammond v. Halsey, 287 S.C. 46, 49, 336 S.E.2d 495,
497 (Ct. App. 1985).

In the instant
case, the only evidence of the arbitration agreement provided by MBNA was a photocopy
of a seven-page pamphlet entitled “Credit Card Agreement Additional Terms and
Conditions,” outlining the terms and conditions of an agreement.  However, MBNA
offers no evidence to authenticate the pamphlet or show it was in fact sent to Baumie.  Furthermore, while the pamphlet explains the terms of an arbitration
agreement, its language merely refers to some other agreement.  Outside of the
pamphlet, MBNA did not provide any evidence whatsoever of any actual agreement
between itself and Baumie, nor did it produce any evidence that Baumie in fact
agreed to arbitration.  Accordingly, because MBNA failed to produce any
evidence of an actual arbitration agreement between the parties, the circuit
court erred in confirming the arbitration award.

We
note several other jurisdictions[2] have arrived at similar decisions regarding whether consumers agreed to
arbitration with MBNA. See, e.g., MBNA Am. Bank, N.A. v. Boata,
893 A.2d 479 (Conn. App. 2006); MBNA Am. Bank, N.A. v. Rogers, 838
N.E.2d 475 (Ind. App. 2005); MBNA Am. Bank, N.A. v. Hart, 710 N.W.2d 125
(N.D. 2006); MBNA Am. Bank, N.A. v. Terry, 2006 WL 513952 (Ohio Ct. App.
2006); MBNA Am. Bank, N.A. v. Berlin, 2005 WL 3193850 (Ohio Ct. App.
2005); MBNA Am. Bank, N.A. v. Perese, 2006 WL 398188 (Texas App. 2006). 
In a similar case involving MBNA, the Kansas Supreme Court addressed this very
issue and found:

MBNA
failed to attach a copy of the arbitration agreement to its motion to confirm
the award.  This violated the Federal Arbitration Act for which MBNA
intermittently expresses respect. . . . This alone would have justified the district
court in its decision to deny MBNA’s motion to confirm the award. 

MBNA Am. Bank, N.A. v.
Credit, 132 P.3d 898, 901 (Kan. 2006) (citing 9 U.S.C.
§ 13 (2000)).  According to 9 U.S.C.A. § 13 (2000):

The
party moving for an order confirming, modifying, or correcting an award shall,
at the time such order is filed with the clerk for the entry of judgment
thereon, also file the following papers with the clerk: (a) The agreement; the selection or
appointment, if any, of an additional arbitrator or umpire; and each written
extension of the time, if any, within which to make the award.

While the language of the
statute requires the clerk to file the agreement with the judgment and does not
address the documents to be filed when commencing an action to confirm the award,
it does not relieve MBNA of the burden of showing an agreement to arbitrate existed. 
As stated by the Kansas Supreme Court, “[g]iven MBNA’s casual approach to this
litigation, we are not surprised that [a national trend in which consumers are
questioning MBNA and whether arbitration agreements exist] may be growing.”  Credit,
132 P.3d at 902.

CONCLUSION

Because MBNA failed
to produce evidence showing an arbitration agreement between itself and Baumie,
the circuit court erred in confirming the arbitration award.  Accordingly, the
order of the circuit court is

REVERSED.

ANDERSON, SHORT, and THOMAS, JJ., concur.

[1] We decide this case without oral argument pursuant to
Rule 215, SCACR.

[2] This court has also recently addressed this issue in MBNA Am. Bank, N.A. v. Christianson, Op. No. 4349 (S.C. Ct. App. Filed March 4, 2008)
(Shearouse Adv. Sh. No. 10 at 74).