by Structured Settlement Watchdog
In December 2022, the Maryland Court of Appeals reaffirmed that question of whether valid agreement to arbitrate exists is question for trial court, not arbitrator, to determine. It is well settled that where party denies existence of valid agreement to arbitrate, court—not arbitrator—determines if agreement exists. Court held that where respondents alleged trial court’s approval of transfer of their structured settlement payment rights was procured through fraud and deceit, respondents denied existence of valid arbitration agreement and question of whether valid arbitration agreement exists is question for court to determine, not arbitrator. Because respondents alleged fraud as to arbitration clause in agreement in particular, existence of valid arbitration agreement is in dispute and issue of existence of agreement to arbitrate is matter
for court to decide. In addition, because plain language of arbitration clause expressly conditions arbitration on closure of transaction, by challenging validity of court’s approval of transfer, respondents challenge existence of agreement to arbitrate, which is issue for court and not arbitrator to determine. In other words, for variety of reasons, Court concluded that trial court erred in compelling arbitration of question of whether arbitration clause in agreements is valid.
Access Funding, LLC, et al. v. Chrystal Linton, et al., No. 5, September Term, 2022 ARBITRATION – EXISTENCE OF AGREEMENT TO ARBITRATE – FRAUD – TRANSFER OF STRUCTURED SETTLEMENT PAYMENT RIGHTS –
The Court of Appeals ruling came a month following the criminal convictions of three men associated with the corrupt structured settlement factoring scheme. See Access Funding's Boghosian and Lawyers Charles E Smith and Anuj Sud Convicted of Theft Scheme - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary (typepad.com) The convictions of 43 year olds Raffi Michael Boghosian, lawyer Charles Edward Smith Jr, and disbarred lawyer Anuj Sud, relating to their involvement with the structured settlement factoring company Access Funding between 2013 and 2015. Each was found guilty of Theft Scheme Over $100,000 and Conspiracy to Commit Theft Scheme Over $100,000 after a trial in the Circuit Court for Baltimore City.