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Citibank NA v. Reikowski

February 3, 2009

CITIBANK (SOUTH DAKOTA) NA, PLAINTIFF AND APPELLEE
v.
SARAH M. REIKOWSKI, DEFENDANT AND APPELLANT



Appeal from the District Court of Stutsman County, Southeast Judicial District, the Honorable Mikal Simonson, Judge.

The opinion of the court was delivered by: Crothers, Justice.

VACATED, REVERSED AND REMANDED.

[¶1] Sarah Reikowski appeals the district court's order (1) denying her motion to vacate summary judgment, (2) granting Citibank summary judgment, (3) denying her motion for a new trial, (4) denying her motion to vacate the order which vacated the stay of litigation pending arbitration and (5) dismissing her counterclaim. We conclude the first two issues are dispositive because litigation should have been stayed after Reikowski filed her motion for stay and to compel arbitration. We therefore vacate the order for summary judgment and judgment, and reverse the order denying the motion to vacate summary judgment and remand the case for entry of an order staying litigation pending arbitration.

I.

[¶2] This case has a long history, including an earlier appeal to this Court. Citibank v. Reikowski, 2005 ND 133, 699 N.W.2d 851. However, only a subset of the total facts are relevant to this appeal.

[¶3] Citibank sued Reikowski in a North Dakota court, alleging she failed to pay Citibank $13,612.45 due on a credit card account. Citibank obtained default judgment against Reikowski, which judgment this Court vacated, when the case was reversed and remanded for further proceedings. Citibank, at ¶ 11. Citibank moved for summary judgment in August 2007. On September 22, 2007, Reikowski moved under terms of the Citibank credit card agreement to stay the legal proceedings pending arbitration. On September 28, 2007, Citibank responded by agreeing to stay litigation if arbitration proceedings were commenced within 30 days and were conducted in compliance with the credit card agreement. Notwithstanding Reikowski's motion to stay litigation and to arbitrate and Citibank's concurrence, on October 1, 2007 the district court entered an order granting Citibank summary judgment. Judgment was entered in favor of Citibank on October 24, 2007. Inexplicably, on that same day the district court also entered an order staying litigation pending arbitration.

II.

[¶4] Reikowski argues the district court erred granting Citibank summary judgment because litigation should have been stayed to permit commencement of arbitration proceedings. We agree.

[¶5] The credit card agreement contains an arbitration clause stating: "At any time you or we may ask an appropriate court to compel arbitration of Claims, or to stay the litigation of Claims pending arbitration, even if such Claims are part of a lawsuit, unless a trial has begun or a final judgment has been entered."

Both parties agree no trial had begun at the time of Reikowski's motion to stay litigation pending arbitration or by when Citibank concurred. Both parties also agree no final judgment had been entered at the time of Reikowski's motion or Citibank's concurrence. These facts and the terms of the credit card agreement establish that the present dispute was subject to arbitration.

[¶6] The credit card agreement specifies that federal law and South Dakota law apply to disputes between the parties. The agreement states:

"Applicable Law: The terms and enforcement of this Agreement shall be governed by federal law and the law of South Dakota, where we are located."

Reikowski argues sections 3, 7 and 9 of the Federal Arbitration Act ("FAA") and section 7 North Dakota's version of the Uniform Arbitration Act support her position. See 9 U.S.C. §§ 3, 7 and 9 (1999) and N.D.C.C. ch. 32-29.3-07. Citibank responds Reikowski failed to argue in the district court that North Dakota's arbitration law controlled and her argument is therefore waived. Citibank also argues that the credit card agreement requires application of South Dakota law, but that Reikowski has never argued for application of South Dakota law.

[ΒΆ7] We agree Reikowski did not specifically argue for application of South Dakota's arbitration laws. We have previously addressed the situation where the correct law was not cited ...


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