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Beneficial National Bank v. Payton: Difference between revisions
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m (DeRien moved page Beneficial National Bank, U.S.A. v. Payton to Beneficial National Bank v. Payton: shorten) |
Latest revision as of 17:15, August 2, 2023
Beneficial National Bank v. Payton | |
Court | Southern District of Mississippi |
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Citation | 214 F. Supp. 2d 679 |
Date decided | August 23, 2001 |
Facts
In 1925, Congress passed the Federal Arbitration Act.
Mr. Payton opened a revolving credit account with Beneficial National Bank ("Beneficial" which closed down in 2019).
Beneficial reserved the right to "change the terms" if customers received a notice within 30 days.
In 1995, Payton bought a satellite system using his Beneficial account.
In 1996, Beneficial notified all of its customers about a mandatory arbitration clause.
In 1999, Beneficial assigned its accounts to Household Bank. Household Bank also had an arbitration clause.Procedural History
In 2001, Payton sued Beneficial & Household banks for "fraudulently" inducing his satellite purchase in a Mississippi trial court.
Beneficial & Household removed the suit to the United States District Court for the Southern District of Mississippi to compel arbitration under the Federal Arbitration Act.
Payton filed a motion to dismiss for lack of diversity jurisdiction; the district court denied Payton's mootion.Issues
Is a mandatory arbitration clause added to a contract valid if the contract language allows changes to terms & the individual receives notice of the addition but doesn't object?
[Payton hadn't object to the arbitration notices sent to him.]