Friday, January 11, 2013

Georgia Court of Appeals to Decide Arbitration Issue in Debt Settlement Case

On December 20, 2012, the Georgia Court of Appeals granted an application for interlocutory appeal filed on behalf of a debt settlement company by Richard J. Capriola and David B. Weinberg, commercial litigation and class action defense attorneys at Winter Capriola Zenner, LLC (“WCZ”).  In doing so, the Court of Appeals took an uncommon action and agreed to review a trial court’s denial of a motion to compel arbitration in the middle of the litigation instead of waiting until a final judgment in the case.  

The issue in the appeal addresses whether the Federal Arbitration Act preempts a Georgia trial court’s ruling that statutory claims under Georgia’s Debt Adjustment Act, O.C.G.A. § 18-5-1, et. seq., do not have to be arbitrated even though the plaintiff entered into a debt adjustment contract containing a broad arbitration provision applying to “all disputes or claims.”  

If the Court of Appeals reverses and directs the trial court to enforce the arbitration agreement, the putative class action lawsuit will be dismissed and the matter will be referred to the American Arbitration Association, (“AAA”) for arbitration as provided in the parties’ agreement. 

As in many of the almost 20 Georgia debt adjustment class action lawsuits WCZ has defended, the issue of arbitration agreements is a threshold defense which has been consistently and successfully asserted to compel the parties to arbitration as they agreed.  

“We believe the law clearly supports the enforcement of arbitration provisions in debt settlement and similar consumer contracts, and we look forward to the Court of Appeals clarifying this important issue for litigants and trial courts” said Capriola.  “The United States Supreme Court, Georgia Court of Appeals and the 11th Circuit routinely reverse trial courts’ denials to compel arbitration just like the one in this case, and we are prepared to appeal this matter until we achieve justice for our client” added Weinberg.  A ruling is expected before the end of 2013.  Check back here or contact WCZ for updates. 

For further information, please contact Winter CapriolaZenner LLC, Atlanta, Georgia.  (404) 844-5700 or email David or email Rich.

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