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Debt Collection Firm Wins Arbitration Argument Involving Repossessed Car

Wednesday, December, 3, 2014

The Markind Law Group in New Jersey has convinced a federal judge that an arbitration agreement included in a contract for the sale of a vehicle that has since been repossessed can still be enforced.  The arbitration clause had been challenged by Thomas Brown, the former owner of the car.


Brown signed a sales contract that included a mandatory arbitration clause, then saw the vehicle be repossessed.  The dealership retained Markind to handle the collections on the balance still owed on the car.  Brown had argued that his contract was with the dealer, not with the law firm, and thus he could not be compelled into arbitration with Markind.


The judge, however, disagreed stating that “The fact that defendants are non-signatories to the sales contract does not prevent them from enforcing the arbitration provision.”


While admitting he entered into the contract freely, Brown had further claimed that Markind attempted to deceive him and made false statements about the nature of his contractual obligations and had violated the Fair Debt Collection Practices Act.  He had also sought to gain class action status in order to bring others into the litigation, but failed in this endeavor as well.


Brown, on behalf of a putative class, alleged that the firm “made false or misleading representations with regard to the character and legal status of his debt and his obligation to reimburse the cost of the debt collectors' services” in violation of the Fair Debt Collection Practices Act, according to the opinion.