Portfolio Recovery Assocs. v. Stein CA2/1

BACKGROUND

In June 2005, MBNA America Bank (MBNA) approved Stein for a $48,000 line of credit with an 84-month term (LOC Account) and transferred $45,000 to two accounts Stein had designated. Along with the approval letter, MBNA sent Stein a form account agreement (MBNA Agreement), which contained an arbitration provision providing: “Any claim or dispute . . . by either you or us against the other . . . arising from or relating in any way to this Agreement . . . or your Account . . . shall be resolved by binding arbitration.”1 Soon thereafter, Bank of America Corporation acquired MBNA. In 2010, five years after opening the LOC Account, Stein stopped making payments. Bank of America (through a subsidiary2) sold Stein’s LOC Account in 2011 to Portfolio Recovery Associates LLC (PRA) as part of a pool of charged-off accounts. On March 8, 2013, PRA filed the instant action, alleging breach of written contract and an account stated claim, and seeking the unpaid balance on Stein’s LOC Account of $30,825.08. Stein answered and asserted 41 affirmative defenses, not including PRA’s failure to pursue arbitration under the MBNA Agreement. PRA and Stein proceeded with discovery and trial was…