LISA JEFFERSON, ETC. v. MIDLAND CREDIT MANAGEMENT, INC. (L-0023-21, HUDSON COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0535-21

LISA JEFFERSON, on behalf of
herself and those similarly situated,

Plaintiff-Appellant,

v.

MIDLAND CREDIT
MANAGEMENT, INC.,

Defendant-Respondent.
_____________________________

Argued June 6, 2022 – Decided June 30, 2022

Before Judges Rothstadt, Mayer, and Natali.

On appeal from the Superior Court of New Jersey, Law
Division, Hudson County, Docket No. L-0023-21.

Scott C. Borison (Borison Firm LLC) of the District of
Columbia, Maryland, and California bars, admitted pro
hac vice, argued the cause for appellant (Kim Law Firm
LLC, and Scott C. Borison, attorneys; Scott C. Borison
and Yongmoon Kim, of counsel and on the briefs).

Han Sheng Beh argued the cause for respondent
(Hinshaw & Culbertson LLP, attorneys; Han Sheng
Beh, on the brief).
PER CURIAM

Plaintiff Lisa Jefferson appeals from an August 6, 2021 order granting

summary judgment, compelling arbitration, and dismissing her complaint

against defendant Midland Credit Management, Inc. (MCM), and a September

24, 2021 order denying her motion for reconsideration and other relief. We

affirm the order compelling arbitration. However, we remand the matter to the

trial court to enter an amended order staying the case pending arbitration.

In 2012, Credit One Bank issued a credit card to Jefferson. Credit One

Bank mailed the credit card and a copy of a Visa/Mastercard Cardholder

Agreement, Disclosure Statement and Arbitration Agreement (Agreement) to

Jefferson. The Agreement defined the parties to the contract, and specified

"we," "us," "our," and "Credit One Bank" referred to "Credit One Bank, N.A.,

its successors or assigns." By using the credit card, Jefferson consented to the

terms of the Agreement.

The Agreement included an arbitration provision (Arbitration Provision).

The Arbitration Provision, distinguished by use of bold font and capital letters,

specified any dispute would be resolved by binding arbitration and governed by

the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1 to 16. The Arbitration

Provision read:

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 ARBITRATION

PLEASE READ THIS PROVISION OF YOUR
CARD AGREEMENT CAREFULLY. IT
PROVIDES THAT EITHER YOU OR WE CAN
REQUIRE THAT ANY CONTROVERSY OR
DISPUTE BE RESOLVED BY BINDING
ARBITRATION. ARBITRATION REPLACES
THE RIGHT TO GO TO COURT, INCLUDING
THE RIGHT TO A JURY AND THE RIGHT TO
PARTICIPATE IN A CLASS ACTION OR
SIMILAR PROCEEDING. IN ARBITRATION, A
DISPUTE IS RESOLVED BY A NEUTRAL
ARBITRATOR INSTEAD OF A JUDGE OR JURY.
ARBITRATION PROCEDURES ARE SIMPLER
AND MORE LIMITED THAN RULES
APPLICABLE IN COURT. IN ARBITRATION,
YOU MAY CHOOSE TO HAVE A HEARING AND
BE REPRESENTED BY COUNSEL.

The Arbitration Provision also identified the claims subject to arbitration:

Claims subject to arbitration include not only [c]laims
made directly by you, but also [c]laims made by anyone
connected with you or claiming through you, such as a
co-applicant or authorized user of your account, your
agent, representative or heirs, or a trustee in
bankruptcy. Similarly, [c]laims subject to arbitration
include not only [c]laims that relate directly to us, a
parent company, affiliated company, and any
predecessors and successors (and the employees,
officers and directors of all of these entities), but also
[c]laims for which we may be directly or indirectly
liable, even if we are not properly named at the time the
[c]laim is made. . . .

Additionally, the Arbitration Provision survived:

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 (i) termination or changes in the Agreement, the
account and the relationship between you and us
concerning the account; (ii) the bankruptcy of any
party; and (iii) any transfer or assignment of your
account, or any amounts owed on your account, to any
other person.

Credit One Bank sold its receivables to MHC Receivables, LLC (MHC),

who then sold them to FNBM, LLC (FNBM). Credit One Bank did not retain

any interest in the credit card accounts or associated receivables after the sale.

Jefferson's indebtedness arising from her use of the Credit One Bank credit card

became a receivable, and her account was transferred to MCH and FNBM.

On March 11, 2015, MHC and FNBM sold, assigned, and conveyed their

collective rights, title, and interest to a series of accounts, originating with Credit

One Bank and including Jefferson's account, to Sherman Originator III, LLC

(Sherman). MHC and FNBM did not retain any rights, title, or interest in the

accounts or receivables transferred to Sherman.

In March 2015, Sherman sold Jefferson's account to Midland Funding,

LLC (Midland Funding) as part of a pool of charged off accounts. 1 Sherman

sold, assigned, and transferred all rights, title, and interest in Jefferson's account

1
The term "charged off" means the creditor "ceased its own efforts to bring the
account current, closed the account, and referred it for collection." Cooper v.
Pressler & Pressler, LLP, 912 F.Supp. 178, 181 n.3 (D.N.J. 2012).
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to Midland Funding. According to an affidavit provided by the Manager of

Operations for MCM, Midland Funding and MCM are affiliated entities. MCM

collects the debt and services Midland Funding's accounts. Any amounts MCM

collected from charged off accounts, such as Jefferson's account, it pays to

Midland Funding. 2

On January 4, 2021, Jefferson sued MCM asserting it violated the

Consumer Fraud Act and engaged in the unauthorized practice of law. About

four months later, MCM moved to dismiss Jefferson's complaint and compel

arbitration. Jefferson opposed the motion. The motion judge converted the

filing to a motion for summary judgment and heard oral argument on May 28,

2021. Because certain electronically filed documents in support of MCM's

motion for summary judgment were inadvertently deleted from the trial court's

filing system, the judge denied the motion without prejudice.

2
Midland Funding's website confirms it "works with its affiliate, [MCM] to
service accounts." Midland Funding, LLC,
https://www.midlandcredit.com/who-is-mcm/midland-funding-llc (last visited
June 15, 2022). MCM "is a debt collector that services accounts owned by
Midland Funding." FAQs, https://www.midlandcredit.com/help-center/faqs.
According to this website, "[i]f you received a letter from MCM, this means a
creditor you had an account with has closed your account and sold it to one of
our family of companies. You will need to work with MCM, not your original
creditor, to resolve your account." Ibid.
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 MCM refiled its motion for summary judgment, which Jefferson opposed.

In an August 7, 2021 order and attached written decision, the motion judge

granted MCM's motion to compel arbitration and dismissed Jefferson's

complaint in its entirety. The judge concluded "[t]he Agreement and Arbitration

Provision [were] valid and enforceable" because Jefferson "consented to the

terms of the Agreement, including the Arbitration Provision."

The judge also found the following: the Agreement applied to Credit One

Bank's successors and assigns; Credit One Bank validly transferred its rights,

title, and interest in various accounts, including Jefferson's account, to MHC;

MHC and FNBM validly transferred those rights to Sherman; Sherman

transferred those rights to Midland Funding; and "MCM managed and serviced"

the rights transferred to Midland Funding. Based on these findings, the judge

concluded "MCM, an affiliate of Midland [Funding], [was] entitled to enforce

the Arbitration Provision" because the language in the Arbitration Provision

applied to "[c]laims that directly related to us, a parent company, affiliated

company, and any predecessors and successors . . . ." She also found the

Agreement survived transfers or assignments of Jefferson's account. The judge

concluded:

MCM is Midland [Funding]'s affiliate tasked with
collection on [Jefferson]'s delinquent [a]ccount.

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 Accordingly, since Midland [Funding] stepped into the
shoes of Sherman and acquired the same rights of
Sherman to compel arbitration, upon assignment of
[Jefferson's] [a]ccount, Midland [Funding]'s affiliates,
including MCM, may also enforce the Arbitration
Provision under the plain language of the Agreement.

Jefferson filed a motion for reconsideration and to amend her complaint

to add a new plaintiff. MCM opposed the motion. In a September 24, 2021

order, the judge denied Jefferson's motion in its entirety, placing her reasons on

the record. The judge determined Jefferson failed to cite any evidence or case

law the court overlooked in the August 7, 2021 order compelling arbitration.

Regarding Jefferson's motion to amend the complaint to add a new party, t he

judge denied the motion based on the dismissal of her complaint on August 7,

2021, concluding there was no longer an active litigation.

On appeal, Jefferson argues the Arbitration Provision only applied to

Credit One Bank and the judge erred in broadly construing the "Claims Covered"

section to include MCM, a non-party to the Agreement. She also claims the

Agreement violated her constitutional right to a trial because it was unclear the

Agreement applied to parties other than Credit One Bank. Additionally,

Jefferson asserts Midland Funding did not have rights under the Agreement

because MCM failed to provide copies of the documents establishing the Credit

One Bank transfer to Midland Funding. Further, Jefferson contends MCM

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cannot claim rights through Midland Funding because MCM and Midland

Funding are separate entities. Jefferson also argues the judge erred in denying

her motion to amend the complaint. Alternatively, she claims her complaint

should have been stayed rather than dismissed. We reject Jefferson's arguments

except we remand for the judge to enter an amended order staying the litigation

pending arbitration.

We review the trial court's grant or denial of a motion for summary

judgment de novo, applying the same legal standard as the trial court. Woytas

v. Greenwood Tree Experts, Inc., 237 N.J. 501, 511 (2019). A motion for

summary judgment is appropriate "if the pleadings, depositions, answers to

interrogatories and admissions on file, together with the affidavits, if any, show

that there is no genuine issue as to any material fact challenged and that the

moving party is entitled to a judgment or order as a matter of law." R. 4:46-

2(c); see Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). "To

decide whether a genuine issue of material fact exists, the trial court must 'draw[]

all legitimate inferences from the facts in favor of the non-moving party.'"

Friedman v. Martinez, 242 N.J. 449, 472 (2020) (quoting Globe Motor Co. v.

Igdalev, 225 N.J. 469, 480 (2016)). Summary judgment "is not meant to 'shut

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a deserving litigant from his [or her] trial.'" Ibid. (quoting Brill, 142 N.J. at

540).

We review contracts, including agreements containing arbitration

provision, applying a de novo standard. Atalese v. U.S. Legal Services Group,

L.P., 219 N.J. 430, 445-46 (2014). We accord no deference to a trial court's

decision compelling arbitration. Morgan v. Sanford Brown Institute, 225 N.J.

289, 303 (2016).

We first address Jefferson's argument the judge improperly expanded the

parties entitled to compel arbitration under the Agreement to include MCM by

considering the language in the "Covered Claims" provision rather than focusing

on the language in the Arbitration Provision. We disagree.

The Agreement applied to Credit One Bank's successors or assigns. In the

Arbitration Provision, included within the Agreement, "[c]laims subject to

arbitration include not only [c]laims that relate directly to us, a parent company,

affiliated company, and any predecessors and successors . . . ." A

straightforward reading of the Arbitration Provision includes claims made

against an affiliate of a successor or assign, such as MCM. Jefferson does

contend Midland Funding is not a valid successor or assign of Credit One Bank's

accounts. Under the Arbitration Provision, MCM, as Midland Funding's

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affiliate tasked with servicing and collecting delinquent funds on charged off

accounts, has the same rights as Midland Funding, including the right to compel

arbitration.

Here, the Arbitration Provision clearly covered claims asserted by a party

to the Agreement. The term "we" is broadly defined at the beginning of the

Agreement as including successors and assigns of Credit One Bank. The

"Claims Covered" section in the Arbitration Provision follows the definition

section in the Agreement.

Jefferson is a party to the Agreement and asserted claims against MCM,

an affiliate of Midland Funding. Jefferson does not challenge MCM's status as

an affiliate of Midland Funding. Based on MCM's status as an affiliate of a

successor under the Agreement, MCM is entitled to compel arbitration of claims

identified as subject to arbitration in the Arbitration Provision.

Jefferson mistakenly relies on White v. Sunoco, Inc., 870 F.3d 257, 267-

68 (3d Cir. 2017), in support of her argument that MCM is not a party to the

Agreement and therefore cannot compel arbitration. In White, the agreement

containing the arbitration clause governed the relationship between the credit

cardholder, White, and credit card issuer, Citibank. Id. at 260. However, the

party seeking to compel arbitration, Sunoco, had no connection or affiliation

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with Citibank. Ibid. Rather, Sunoco had a separate agreement with White

governing rewards points and that separate agreement lacked an arbitration

provision. Id. at 262. The facts in White are clearly distinguishable because

MCM has an affiliation and connection with Midland Funding and the

Arbitration Provision remained unaffected by the assignment or transfer of

accounts.

We next review Jefferson's claim the Agreement violated her

constitutional right to a jury trial. We reject this argument and conclude the

language in the Agreement and Arbitration Provision satisfied the requirements

for compelling arbitration under Morgan. See 225 N.J. at 294.

Here, in capital letters and bolded font, the Arbitration Provision plainly

and unambiguously advised Jefferson was foregoing her right to proceed in court

and have a jury review her claims. The Arbitration Provision also stated

Jefferson waived her right to pursue a class action. Through her use of Credit

One Bank's credit card, Jefferson assented to be bound by the Agreement,

including the clear and unequivocal terms of the Arbitration Provision.

Jefferson never denied her consenting to arbitration under the Agreement.

Rather, she argued MCM could not compel arbitration because it was not a party

to the Agreement. For the reasons previously stated, we reject that argument.

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Based on the plain language in the Agreement and Arbitration Provision, a

reasonable consumer reviewing the document would understand he or she was

subject to binding arbitration for claims arising from the use of the issued credit

card.

We next consider Jefferson's argument MCM failed to provide copies of

the agreements supporting the various assignments transferring the right to

compel arbitration commencing with Credit One Bank and ending with MCM.

We are not persuaded by Jefferson's argument. 3

Here, individuals with personal knowledge filed affidavits on behalf of

MCM regarding the assignment of "all rights, title and interest" to Credit One

Bank's receivables, including Jefferson's account. Based on the affiants' review

of the transfer documents, the affidavits detailed the history of each subsequent

assignment, including the assignment to Midland Funding.

Jefferson had ample opportunity to conduct discovery to obtain complete

and unredacted copies of the relevant agreements conveying Credit One Bank's

rights, title, and interest in the accounts, including the right to compel

arbitration. After the motion judge denied MCM's motion to dismiss, Jefferson

3
Jefferson relies on unpublished cases in support of her argument on this point.
We do not rely on unpublished cases in reviewing appeals. See R. 1:36-3 ("No
unpublished opinion shall constitute precedent or be binding upon any court.").
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had several months to request the production of documents or serve any other

discovery requests to support her theory that the right to compel arbitration was

never conveyed to Midland Funding. Rather than request discovery , Jefferson

offered her own unsubstantiated speculation that the assignment documents

failed to include the right to compel arbitration.

We are satisfied Jefferson had sufficient time to propound discovery to

support her contention that MCM never acquired the right to compel arbitration.

As our Supreme Court has held, summary judgment should be granted "after

adequate time for discovery and upon motion." Friedman, 242 N.J. at 472

(quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)). In opposing

summary judgment, Jefferson elected not to propound discovery or request

depositions of the individuals who attested to the various assignments of Credit

One Bank's accounts. As a result, she cannot belatedly argue MCM failed to

proffer sufficient evidence in support of its summary judgment motion.

We turn to Jefferson's argument the judge should have stayed the matter

pending arbitration rather than dismissed the complaint. We agree.

The FAA permits a court to "stay the trial of the action until such

arbitration has been had. . . ." 9 U.S.C. § 3. Similarly, New Jersey statutory law

provides, "[i]f the court orders arbitration, the court on just terms shall stay any

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judicial proceeding that involves a claim subject to the arbitration." N.J.S.A.

2A:23B-7. Based on the language of the FAA and N.J.S.A. 2A:23B-7, the

matter should have been stayed pending the arbitration. Thus, we remand to the

trial court to enter an amended order staying Jefferson's claims pending the

outcome of the arbitration.

To the extent we have not addressed any remaining arguments, those

arguments lack sufficient merit to warrant discussion in a written opinion. R.

2:11-3(e)(1)(E).

Affirmed as to compelling arbitration. Remanded for the entry of an

amended order consistent with this opinion. We do not retain jurisdiction.

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