Opinion ID: 4108035
Heading Depth: 3
Heading Rank: 1

Heading: Hudson v. Citibank

Text: In April 1999 Janet Hudson opened a Citibank credit card account. The original terms of the Card Agreement did not contain an arbitration clause. In 2001 Citibank mailed Hudson a “Change-in-Terms” form along with her periodic statement. The form included an arbitration clause that allowed either party to “elect mandatory, binding arbitration” of “any claim, dispute, or controversy” (Claims). The arbitration clause stated: “All Claims are subject to arbitration, no matter what legal theory they are based on or what remedy . . . they seek. A party who initiates a proceeding in court may elect arbitration with respect to any Claim advanced in that proceeding by any other party.” The clause continued: At any time you or we may ask an appropriate court to compel arbitration of Claims, . . . even if such Claims are part of a lawsuit, unless a trial has begun or a final judgment has been entered. Even if a party fails to exercise these rights at any particular time, or in connection with any particular Claims, that party can still require arbitration at a later time or in connection with any other Claims. The clause also asserted that “[a]ny questions about whether Claims are subject to arbitration shall be resolved by interpreting this arbitration provision in the broadest way the law will allow it to be enforced.” Finally, the clause stated that “Claims must be brought in the name of an individual person or entity and must proceed on an individual (non-class, non-representative) basis.” Hudson was given the opportunity to opt out of the Change in Terms and did not. Hudson fell behind on her payments, and in November 2010 Citibank — represented by Alaska Law Offices — filed a collection action in the Kenai District -3- 7141 Court seeking the $24,170.24 that Hudson owed. Hudson did not appear in the action, and the court entered a default judgment. Alaska Law Offices moved for attorney’s fees under Alaska Rule of Civil Procedure 82, which allows the prevailing party in a default judgment to recover either its reasonable attorney’s fees or 10% of the judgment, whichever is less.2 Alaska Law Offices requested 10% attorney’s fees, arguing that its actual attorney’s fees for the default judgment were $4,834.05, exactly 20% of the recovery. The court granted Alaska Law Office’s motion and awarded $2,417 in attorney’s fees. In August 2011 Hudson filed a class-action complaint in the superior court, alleging that Citibank, Alaska Law Offices, and Clayton Walker (an attorney at Alaska Law Offices) violated the UTPA by asking the court for attorney’s fees in excess of the “reasonable” fee allowed under Rule 82. Hudson sought damages and prospective injunctive relief under the “private attorney general” provision of the UTPA. Citibank promptly moved to stay the action and to compel arbitration on an individual basis. The superior court granted Citibank’s motion to compel arbitration, but held that Hudson could be awarded statewide injunctive relief by the arbitrator.