                 NOT FOR PUBLICATION WITHOUT THE
               APPROVAL OF THE APPELLATE DIVISION

                                  SUPERIOR COURT OF NEW JERSEY
                                  APPELLATE DIVISION
                                  DOCKET NO. A-0850-14T3

MIDLAND FUNDING LLC
A/P/O WEBBANK,                       APPROVED FOR PUBLICATION

                                       September 29, 2016
     Plaintiff-Respondent,
                                       APPELLATE DIVISION
v.

ROBERTA BORDEAUX,

     Defendant-Appellant.

————————————————————————————————————————————————————————————————

         Argued December 16, 2015 – Decided September 29, 2016

         Before Judges Fuentes, Koblitz and Gilson.

         On appeal from Superior Court of New Jersey,
         Law Division, Special Civil Part, Bergen
         County, Docket No. DC-7527-14.

         Leah M. Nicholls (Public Justice) of the
         Washington DC and Virginia bars, admitted
         pro hac vice, argued the cause for appellant
         (Kim   Law   Firm,  LLC   and  Ms.   Nichols,
         attorneys; Karla Gilbride (Public Justice)
         of the California bar, admitted pro hac
         vice, and Yongmoon Kim, of counsel and on
         the briefs).

         Lawrence J. Bartel argued the cause for
         respondent   (Marshall,   Dennehey,  Warner,
         Coleman & Goggin, P.C. and Forster, Garbus &
         Garbus, attorneys; LaTi W. Spence and Glenn
         S. Garbus, on the brief).

     The opinion of the court was decided by

FUENTES, P.J.A.D.
       Plaintiff Midland Funding, L.L.C., A/P/O Webbank is in the

business of purchasing consumer debt from the original creditor

at a substantial discount.              Plaintiff thereafter attempts to

collect the full amount of the alleged outstanding balance, plus

accrued interest and late fees, from the debtor.                     The issue in

this appeal concerns the enforceability of an arbitration clause

that    plaintiff     alleges     was    part    of    the   consumer         credit

application form prepared by the original creditor.                     Plaintiff

alleges that this application form was provided to and accepted

by defendant as a condition of receiving credit.

       This issue arose in the context of a small claims case that

plaintiff    filed    in   the   Law    Division,     Special   Civil    Part    to

collect $1018.04 from defendant.             After joinder of issues, which

included     a    counterclaim    alleging      violations      of     fair    debt

collection practices, the trial court granted plaintiff's motion

to enforce the arbitration clause and dismissed the case with

prejudice.       Based on the record before us, we conclude that the

trial court erred in its decision to compel defendant to submit

to arbitration.       The evidence plaintiff provided to the trial

court in support of its motion to compel arbitration did not

establish that defendant knowingly agreed to waive her rights to

have the matter adjudicated in state court.




                                         2                               A-0850-14T3
      Plaintiff filed a small claims civil action1 in the Bergen

County Superior Court, Law Division, Special Civil Part, seeking

to   collect    from       defendant       Roberta     Bordeaux    on    a    past     due

consumer debt.         Plaintiff alleged that "[u]pon information and

belief," defendant "made credit card purchases or took money

advances   under      a    credit     card    or   line    of   credit       account   or

promissory     note       or   loan   in     the   total   amount       of   $1018.04."

Plaintiff further claimed that it is "the current owner of this

debt and retains all rights, title, and interest to this debt."

The complaint stated that the loan originated with Webbank and

proceeded to list "the last four digits of the original account

number . . . ."            As required by Rule 4:5-1(b)(2), plaintiff's

counsel certified that the dispute was not subject to any other

action or arbitration proceeding "now or contemplated."

      Defendant filed an answer denying liability, as well as a

counterclaim    alleging         that      defendant    violated    the      Fair    Debt

Collection Practices Act (FDCPA),2 15 U.S.C.A. §§ 1692–1692p.


1
  Small claims civil actions are defined, in relevant part, as
"all actions in contract . . . when the amount in dispute,
including any applicable penalties, does not exceed, exclusive
of costs, the sum of $ 3,000." R. 6:1-2(a)(2).
2
  "[T]he FDCPA prohibits a debt collector from, among other
conduct,   using   'any    false,   deceptive,   or   misleading
representation or means in connection with the collection of any
debt,' . . . and using 'unfair or unconscionable means to
collect or attempt to collect any debt.'"       Hodges v. Sasil
                                                     (continued)


                                             3                                  A-0850-14T3
Plaintiff filed an answer to defendant's counterclaim, denied

liability    under    the    FDCPA,       asserted      six    separate   affirmative

defenses, and reserved its right to assert further defenses "as

discovery warrants."          Pursuant to Rule 4:5-1(b)(2), plaintiff's

counsel     certified       that    "[n]o       other     action    or    arbitration

proceeding    is     contemplated."             After   joinder     of    issues,   the

parties engaged in discovery, which included defendant's motion

to compel plaintiff to respond to interrogatories.

    Before     the    return       date   of    defendant's       discovery   motion,

plaintiff filed a motion to compel arbitration.                      The matter was

originally scheduled for oral argument on August 22, 2014.                            On

the day before the return date of plaintiff's motion, however,

defendant    filed     a    motion    for       summary       judgment.     The     oral

argument hearing was then adjourned until September 19, 2014.

The following constitutes the entire verbatim record of what

occurred at the oral argument hearing.

            THE COURT:   All right.   Why shouldn't this
            be in arbitration?        Your credit card
            agreement   says  any   dispute[]   goes  to
            arbitration. Right?

            DEFENSE COUNSEL: Well, I have -- I have two
            points.   First, the -- the party moving to
            compel [the] arbitration bears the burden of


(continued)
Corp., 189 N.J. 210, 222 (2007) (quoting 15 U.S.C.A. § 1692e; §
1692f).




                                            4                                 A-0850-14T3
         proof that the arbitration agreement exists.
         And the --

         THE COURT: Well, it exists. Okay. So . . .
         just tell me . . . if they sign[ed] a credit
         card agreement that says any disputes go to
         arbitration, what are we doing here?

         DEFENSE COUNSEL: And my second point is that
         it   doesn't  exist   because  .  .   .  the
         certification[] . . . attached a partial
         agreement without no --

         THE   COURT:  This  agreement  contains  an
         arbitration clause. Please read this. It's
         going to arbitration.   Thank you.   Have a
         nice day.

         PLAINTIFF'S COUNSEL:      Thank you, Your Honor.

         THE COURT:    So it's going to arbitration.
         Summary judgment is denied.      Motion to
         answer    interrogatories  [propounded   by
         defendant] is moot. Thank you.

The transcript shows that the oral argument hearing began at

9:10 a.m. and concluded at 9:11 a.m.          As the record reflects,

the motion judge did not address defendant's summary judgment

motion or defendant's discovery motion to compel plaintiff to

respond to interrogatories.

    On October 15, 2014, defendant filed her notice of appeal,

challenging the order compelling arbitration.        Pursuant to Rule

2:5-1(b), on November 5, 2014, the trial court placed on the

record supplementary findings of fact and conclusions of law

explaining   its   reasons   for   granting   the   motion   to    compel




                                   5                              A-0850-14T3
arbitration.    The   court   made   the   following   findings   and

conclusion of law in this supplemental statement:

         The only issue that is being appealed is the
         determination by the [c]ourt that the motion
         to compel arbitration should not have been
         granted and that the [c]ourt's determination
         that the other issues were moot since
         arbitration was being granted was in error.

         At the outset, it's clear . . . in my mind[]
         that the defendant used the credit agreement
         to make purchases and is now looking to
         avoid payment on that agreement by use of
         the procedural . . . requirements . . . of
         the Fair Debt Collection Practices Act and
         the fact that summary judgment should have
         been granted . . . based on the statute of
         limitations defense.

               . . . .

         The   plaintiff's  position   is   that  the
         defendant became bound to the agreement upon
         the accepting of the purchases from Dell and
         that the right to arbitrate has not been
         waived, that very little discovery has been
         exchanged, and no binding decision of the
         [c]ourt has been rendered yet, since the
         summary judgment denial was after the date
         of the arbitration determination[;] and[]
         therefore, there's been no showing that the
         plaintiff has completely waived its right to
         arbitrate.

         The defendant, on the other hand, citing
         Cole [v.] Jersey City Medical Center, 215
         N.J. 265 [(2013)], feels that arbitration
         should not have been granted.

         In Cole, the proponent of the arbitration
         provision   moved    to  compel   arbitration
         [twenty-one] months after entering the case
         as a party.       Now, in that case, the
         proponent   had    previously   carried   out



                                 6                          A-0850-14T3
discovery,   including  interrogatories   and
depositions of at least [twelve] people, and
during the discovery period the proponent
failed to invoke the arbitration provision.

Now, the Supreme Court in Cole indicated
that . . . determining . . . whether or not
there's been a waiver is dependent on the
totality  of   the  circumstances  and  the
[c]ourt should determine whether or not a
[party's] litigation conduct was consistent
with the reserve[d] right to arbitrate the
dispute.

The factors will be addressed by the [c]ourt
individually:

Number one is the delay . . . in making the
arbitration[.]   [T]he   defense    in  this
matter[,] I find[,] is not inordinate. It's
made during discovery in the accelerated
time periods of the Special Civil Part.

There's no indication that this is part of
[a]   litigation  strategy  in  moving  to
arbitrate.

[The] [d]iscovery conducted is very sparse
in this matter.

The request was made before the date of
trial and . . . I don't see any prejudice to
the defendant in this case if the matter is
arbitrated.

The   only  motion   concerning  arbitration
wasn't filed until July 22nd, [2014], three
months after the complaint, which is not an
inordinate period of time.

Neither   side   has   provided  information
detailing the degree of discovery that was
carried out, because there was minimal
discovery since this is just a basic credit-
card collection case.




                      7                         A-0850-14T3
                   . . . .

            Now, arbitration is a favored remedy in this
            state, and, given that fact and that there
            really   has    been   no   prejudice   to  the
            defendant    in   this    case   by   going  to
            arbitration, the [c]ourt is determining that
            the matter should be sent to arbitration.

       The appellate record shows that plaintiff's sole evidence

of the arbitration agreement's existence consists of two single-

spaced, photocopied pages.                  These pages contain a number of

provisions      written    in    a    font       that       is   smaller   than    the     size

required to be used in all appellate briefs pursuant to Rule

2:6-10.      One of the pages contains an "Arbitration Notice."

This document does not reflect that defendant agreed to be bound

to   any   of    the    provisions         listed       therein,         particularly       the

arbitration      clause     at    issue.              Nor    does    the    document       bear

defendant's signature, or any other indicia of her assent.                                  The

only   thing     that     connects         the       document       to   this    case    is   a

certification      signed        by    a     "Legal          Specialist"        employed      by

plaintiff in St. Cloud, Minnesota.3




3
   This individual did not identify herself as an attorney
admitted to practice in any jurisdiction.   We thus infer that
she performs the duties ordinarily carried out by a paralegal.
See In re Opinion No. 24 of Comm. on Unauthorized Practice of
Law, 128 N.J. 114, 123 (1992) (holding that in New Jersey,
paralegals must perform their work under the supervision of
attorneys who assume "direct responsibility for the work that
the paralegals perform").



                                                 8                                  A-0850-14T3
    This       individual      certified       that    based      on     her   "personal

knowledge" of account records maintained by plaintiff, the two

unnumbered     and    unsigned     pages       attached     to     her      certification

reflect    a    "true   and     correct     copy      of    the    credit      agreement

provided to plaintiff by its predecessor in interest as the

actual     agreement           applicable        to        Defendant's         account."

Conspicuously        missing    from   the      certified         statement     are    any

statements attesting that the two pages constitute the complete

credit application and that defendant agreed to be bound by the

provisions contained therein.

    It is now settled law in this State that "[a]n agreement to

arbitrate, like any other contract,                   'must be the product of

mutual    assent,     as   determined       under     customary          principles     of

contract law.'"         Atalese v. U.S. Legal Serv. Grp., L.P., 219

N.J. 430, 442 (2014), cert. denied, ___ U.S. ___, 135 S. Ct.

2804, 192 L. Ed. 2d 847 (2015) (quoting NAACP of Camden Cty. E.

v. Foulke Mgmt., 421 N.J. Super. 404, 424 (App. Div. 2011)).                             As

the party seeking to enforce this alleged contractual provision,

plaintiff has the burden to prove, by a preponderance of the

evidence, that defendant assented to it.                     Moreover, because the

arbitration      clause        constitutes        a    waiver          of    defendant's

constitutional right to adjudicate this dispute in a court of

law, plaintiff must prove that defendant had full knowledge of




                                           9                                     A-0850-14T3
her legal rights and intended to surrender those rights.                 Id. at

442–43.

    The   record    plaintiff      presented     to    the    trial   court    was

devoid of any evidence that satisfies the foregoing burden of

proof.    Indeed,    the    arbitration       clause   plaintiff      sought    to

enforce expressly exempts small claims disputes from the class

of cases that were intended to fall within its scope:                 "We agree

not to invoke our right to arbitrate any individual Claim you

bring in small claims court or an equivalent court so long as

the Claim is pending only in that court."              Plaintiff argues that

defendant's counterclaim removes the case from the small claims

court's jurisdiction, due to the $3000 cognizability limit.                     R.

6:1-2(a)(2).    Although the record does not support such a claim,

we need not decide this issue.

    We    are   satisfied        that   the   record     we    have    described

demonstrates plaintiff's failure to meet its burden of proving

that defendant agreed to arbitrate.             We thus reverse the order

dismissing   the   case    and    ordering    arbitration.       We   anticipate

that the court will engage counsel with more patience on remand.

    Reversed and remanded.




                                        10                              A-0850-14T3
