November 11, 2015 Articles

Young Lawyers: Recent Trends Impacting Enforcement of Arbitration Agreements

By P. Jean Baker

In Atalese v. U.S. Legal Services Group, L.P., 99 A.3d 306 (N.J. 2014), cert. denied, 135 S. Ct. 2804 (2015), the plaintiff, Patricia Atalese, entered into a contract with U.S. Legal Services Group (USLSG) to provide debt-adjustment services. Atalese paid USLSG approximately $5,000. She sued under the New Jersey Consumer Fraud Act and Truth-in-Consumer Contract, Warranty and Notice Act, alleging that USLSG misrepresented that the monies were spent on numerous attorneys negotiating with her creditors. She maintained that the only work performed was preparation by one attorney of a single one-page answer for a collection action in which she represented herself. Further she alleged that USLSG settled a single debt, knowingly omitted that USLSG was not a licensed debt adjuster in New Jersey, and violated New Jersey's usury law.

USLSG moved to compel arbitration based on an arbitration provision in the 23-page service agreement. The arbitration provision provided for arbitration before a single arbitrator in accordance with the rules of either the Judicial Arbitration and Mediation Services (JAMS) or the American Arbitration Association (AAA), as mutually agreed upon by the parties or selected by the party filing the claim. The cost of arbitration, excluding legal fees, was to be split equally or born by the losing party.

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