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Can I challenge my bank’s dispute resolution agreement?

San Diego, CA |

I’m suing my bank, a national bank. The dispute resolution section of the deposit agreement allows small claims, individual arbitration, and trial by judge without a jury except in California where only judicial reference (a judicial referee) is allowed. Is there any case law I can use to challenge the preclusion of trial by judge? In addition, if I can challenge that, is there any case law I can use to challenge the preclusion of a trial by jury?

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Attorney answers 2

Best Answer
Posted

The starting point for your research should be Tarrant Bell Property v. Superior Court (2011) 51 Cal.4th 538. Note that this is ONLY the starting point. I have not researched subsequent decisions, or whether the CA legislature has done anything to alter the holding in that case. Nor do I know if the fact that the bank is a "national" bank as opposed to an entity chartered by a state at all relevant. This is ONLY the place to start your research.

I would have to read the language of your agreement, but it would appear that you also need to get around the arbitration provision in your agreement. Tarrant Bell only talks about judicial references, not arbitrations. The arbitration agreement will be much harder. You will need to prove unconscionability, which is not easy. Much will depend on the exact language used in the arbitration provision in your contract.

There are lots of decisions by the California courts on the enforceability of arbitration provisions by the California courts. I hesitate to point you to just one, since I don't know what your agreement says. This is an area where you will hone your research skills.

Asker

Posted

The jury trial waiver was easy. Grafton Partners LP v. Superior Court, 116 P. 3d 479, Cal. Supreme Court (2005) holds that pre-dispute contractual jury trial waivers are unenforceable under California law.

Asker

Posted

Besides Tarrant Bell which holds that a court has the discretion to decide whether or not a case goes to judicial reference even if the agreement between the parties requires judicial reference, I found Pardee Construction Co. v. Superior Court, 123 Cal. Rptr. 2d 288 (2002), which applies the doctrine of unconscionability to determine whether mandatory judicial reference is enforceable.

Charles Richard Perry

Charles Richard Perry

Posted

It isn't clear to me whether the agreement can force you to arbitration, as an alternative to judicial reference. In other words, it isn't clear to me whether you ALSO have to find a way to invalidate the reference to arbitration in order to invalidate the provision. That, I think, is the difficult part here.

Asker

Posted

The agreement states, in relevant part, “You have the right to compel us at your option, and we have the right to compel you at our option, to determine any individual Claim with a value of less than $1 Million by arbitration. All other Claims will be resolved in court by a judge without a jury; except those brought in California state court, in which case such Claims will be determined by general reference to a referee under California Code of Civil Procedure (C.C.P.) Section 638. The arbitration, judicial reference or trial by a judge will take place on an individual basis without resort to any form of class or representative action.”

Asker

Posted

I think my job is to knock down these different forms of dispute resolution and waivers so I can stay in superior court with a jury trial. As part of this, as far as the arbitration option I think the bank has waived its right to compel arbitration, leaving judicial reference and the jury trial waiver to knock down. See my separate post at http://www.avvo.com/legal-answers/time-limits-to-compel-arbitration--1342271.html

Charles Richard Perry

Charles Richard Perry

Posted

I agree as to your need to knock down all parts of the provision in order to stay in court.

Asker

Posted

I elaborated on another point here: http://www.avvo.com/legal-answers/does-the-unenforceability-of-a-contractual-jury-tr-1344145.html

Asker

Posted

I went on with a further question regarding the legality of the dispute resolution agreement: http://www.avvo.com/legal-answers/is-a-class-action-lawsuit-waiver-enforceable--1344175.html

Posted

hire a lawyer.