NOT FOR PUBLICATION WITHOUT THE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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3
(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).
A-0535-21
4
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.
A-0535-21
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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.
A-0535-21
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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
A-0535-21
7
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
A-0535-21
8
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
A-0535-21
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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
A-0535-21
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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.").
A-0535-21
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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
A-0535-21
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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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