Petitioner Gerard Lucas (hereinafter "Lucas") seeks an order pursuant to CPLR 7511 vacating and setting aside an arbitration award obtained on default in favor of respondent MBNA, after petitioner filed a jurisdictional objection to the arbitration proceeding. MBNA, by cross petition, seeks an order and judgment confirming the award pursuant to CPLR 7510.

FACTS AND PROCEDURAL BACKGROUND

On or about December 28, 2006, MBNA America Bank, N.A. (hereinafter "MBNA") served a demand upon petitioner for arbitration of its claim that petitioner was indebted to MBNA in the amount of $5959.63 as a result of his use of a credit card issued by MBNA. After a hearing on submission of documentary evidence, the arbitrator found in MBNA's favor and awarded $7,439.79.

Petitioner contends that the arbitrator exceeded his powers, engaged in misconduct and that MBNA failed to follow CPLR Article 75 procedures. Petitioner also asserts that no valid agreement to arbitrate exists and that although MBNA purported to rely upon a "Credit Card Agreement Additional Terms and Conditions" to support its request for arbitration, the document was not signed by him and contained no specific references to him.

Upon receiving the demand to arbitrate, petitioner filed a response in which he insisted

On March 27, 2007, petitioner was advised by letter that an award had been entered in MBNA's favor. Petitioner faults the arbitrator for going forward despite his challenge to the existence of an arbitration agreement, and suggests that MBNA erred by 1) failing to properly serve the demand for arbitration, 2) move to compel arbitration once he challenged the arbitrator's jurisdiction and 3) failing to notify him of the hearing date. Additionally, he argues that the notice of arbitration should have but did not contain a caveat that he had to apply for a stay of arbitration within 20 days or thereafter be precluded from objecting that a valid agreement had not been made.

In support, petitioner notes that the demand for arbitration was served by Federal Express, rather than by certified or registered mail or by personal delivery upon him, and that notice of the award was served by regular mail, rather than by registered or certified mail. Petitioner also claims the "inevitable partiality of the NAF arbitrators", urging that they would favor a creditor like MBNA, rather than risk NAF not being selected as an arbitration forum by the credit card issuer in the future.

MBNA argues in its cross petition that Lucas became bound by the terms of the subject Credit Card Agreement, including the broadly worded arbitration provision, by his acceptance and use of the MBNA issued credit card. MBNA further states that NAF acknowledged petitioner's jurisdictional objection and offered him an opportunity to submit a "Response to the Claim" pursuant to the NAF Code of Procedure; that petitioner did not submit a response and, in accordance with NAF's rules, the arbitration proceeded thereafter on submission of MBNA's papers. MBNA further notes that the demand for arbitration was served by overnight mail pursuant to NAF's Rules; that the arbitrator did not refuse to consider any evidence which petitioner wished to offer and that petitioner simply did not submit any evidence at the hearing.

In support of its cross petition, MBNA submits the affidavit of Gregory Erdman, Vice President, who avers that he is familiar with the routine and general business practices of F.I.A. [*2]Card Services, N.A. (formerly known as MBNA); that petitioner entered into a contract with MBNA for a revolving credit card, that the account was governed by a Credit Card Agreement

(a copy of which is annexed to his affidavit) and that the agreement contained an arbitration provision. Finally, Mr. Erdman states that by using the credit card, petitioner accepted the terms of the Credit Card Agreement including the agreement to arbitrate.

Petitioner asserts in reply that in order for the award to be confirmed, MBNA must submit a copy of the contract containing the provision authorizing arbitration and demonstrate proper service of the notice of the arbitration hearing and of the award. Additionally, petitioner questions whether MBNA ever mailed the Additional Terms document to him and whether it was mailed to a correct address.

LAW AND APPLICATION

The credit card agreement provides that it is "governed by the laws of the State of Delaware (without regard to its conflict of laws principles) and by any applicable federal laws." Therefore, if this agreement is binding upon the parties, Delaware law is to govern the agreement. However, since MBNA cross moved for confirmation of the award in New York, the question of whether there was a sufficient agreement to arbitrate must be analyzed under the law of this state. See MBNA America Bank, N.A. v Nelson, 15 Misc 3d 1148 (A), 841 NYS2d 826 (Civ. Ct., Richmond Cty 2007).

Petitioner challenges the procedural methods by which the demand for arbitration and the eventual award were sent to him, claiming that these methods are not permitted under CPLR Article 75. Petitioner also questions the propriety of the arbitration because he was not allegedly notified of the hearing date. Respondent MBNA relies upon NAF's Code of Civil Procedure to support its actions, as well as those of the arbitrator.^[FN1] MBNA's position, however, pre-supposes that there was an agreement to arbitrate the subject dispute before NAF.

For confirmation of an arbitration award on a credit card debt, the following must be provided: (1) submission of the written contract containing the provision authorizing arbitration; (2) proof that the cardholder agreed to arbitration in writing or by conduct; and (3) a demonstration of proper service of the notice of the arbitration hearing and of the award. See MBNA America Bank, NA v Straub, 12 Misc 3d 963, 964, 815 NYS2d 450 (Civ. Ct. NY Cty 2006). Further, the credit card issuer must tender the actual provisions agreed to, including any and all amendments, and not simply a photocopy of general terms to which the credit issuer may currently demand debtors agree. See MBNA America Bank, NA v Nelson, supra . Here as in the Nelson case the Credit Card Agreement lacks the debtor's signature and a date indicating when these terms were adopted by MBNA, nor does the proffered Agreement contain any account number, name or other identifying statements connecting it to petitioner. These deficiencies of proof are impediments, but not necessarily fatal. In the Nelson case, the court provided guidelines concerning what an affidavit from someone with knowledge of the practices, procedures and policies of the credit card issuer should contain. It also noted the defects in the [*3]affidavit which was submitted by MBNA.

To the extent that MBNA's demand for arbitration failed to comply with CPLR 7503(c) by not warning that unless petitioner applied within 20 days to stay arbitration he would be precluded from claiming in court that a valid agreement was not made, such omission does not render the demand invalid. Rather, it merely renders the demand ineffective to preclude petitioner from raising threshold issues after the 20-day limit. See Cooper v Bruckner, 21 AD3d 758, 801 NYS2d 19 (1st Dept. 2005).

Finally, CPLR 7511(b)(1) provides that an award may be vacated "if the court finds that the rights of [a] party were prejudiced by . . . corruption, fraud or misconduct in procuring the award." In this case, petitioner has failed to meet his burden of demonstrating by clear and convincing evidence that any impropriety on the part of the arbitrator existed or that his rights or the integrity of the arbitration process were in any way prejudiced. See Hausknecht v Comprehensive Medical Care of New York, P.C., 24 AD3d 778, 809 NYS2d (2nd Dept. 2005).

CONCLUSION

In these circumstances, the cross petition is dismissed without prejudice. In the event that MBNA does not renew its application within 90 days after service of a copy of this order with notice of entry, the application by petitioner Gerard Lucas is granted.

The foregoing constitutes the decision and order of this court.

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J. S. C.