Bank of America, N.A. v. District of Columbia
80 A.3d 650
D.C.2013Background
- Bank of America appeals a trial court order denying its motion to compel arbitration under the FAA concerning the District's False Claims Act and related claims arising from a CDA used to issue fraudulent tax refunds.
- The District alleges a protracted fraudulent scheme by District employees and Bank personnel, involving the CDA and various District employees and Bank staff.
- The 2005 contract contains a merger clause and governs dispute resolution and modification authority, allegedly superseding prior dispute-resolution and forum clauses, including North Carolina arbitration provisions.
- The District argues OCFO officials lacked authority under the Procurement Practices Act (PPA) to bind the District to arbitration or North Carolina forum, and the PPA constrains contracting officers from settling fraud claims.
- The trial court held the 2005 contract superseded earlier agreements, found District officials lacked authority to bind the District to NC arbitration, and retained FCA claims in Superior Court while dismissing other counts.
- The Court of Appeals affirms that there was no valid arbitration agreement in North Carolina and remands for counts to proceed in Superior Court or CAB as appropriate, based on the PPA and contract integration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was there a valid agreement to arbitrate in North Carolina? | District contends no valid arbitration agreement existed due to lack of authority. | Bank asserts the Treasury Booklet and related documents created an arbitration obligation in NC. | No valid North Carolina arbitration agreement exists. |
| Are OCFO officials authorized to bind the District to arbitration or forum in dispute resolution? | District argues PPA restrictions prevent OCFO from consenting to arbitration. | Bank contends OCFO officials had authority to bind District to arbitration and forum terms. | OCFO lacked authority to bind District to arbitration and NC forum under the PPA. |
| Does the 2005 contract supersede prior dispute-resolution and forum clauses? | District argues 2005 contract governs and supersedes earlier terms. | Bank argues pre-2005 documents remain controlling or can be modified by later documents. | 2005 contract is completely integrated on dispute resolution and supersedes prior inconsistent terms. |
| Should the FCA and related claims be sent to CAB or Superior Court under the PPA? | District contends FCA and related claims stay in Superior Court per PPA; not contracts claims under CAB. | Bank argues many counts arise under contract and should be CAB, not Superior Court. | Counts involving fraud are in Superior Court; other contract-related matters require further count-by-count analysis. |
Key Cases Cited
- Rent-A-Center, West, Inc. v. Jackson, 130 S. Ct. 2772 (U.S. 2010) (delegation and arbitrability issues under FAA; specific challenge to delegation affects court vs. arbitrator.)
- Buckeye Check Cashing v. Cardegna, 546 U.S. 440 (U.S. 2006) (arbitration clause severable; challenges to contract validity go to arbitrator unless to the clause itself.)
- Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (U.S. 1967) (fraud in the inducement of the arbitration clause itself adjudicated by court; contract overall to arbitrator.)
- Keeton v. Wells Fargo & Co., 987 A.2d 1118 (D.C. 2010) (arbitration clause validity resolved in court; authority questions govern binding effect.)
- District of Columbia v. Greene, 806 A.2d 216 (D.C. 2002) (PPA limitations on contracting officers’ authority to bind the District; CAB as exclusive tribunal for contract disputes.)
- Abadie v. District of Columbia, 843 A.2d 738 (D.C. 2004) (OCFO applicability of PPA; statutory exemptions and control-year considerations.)
- Andersen LLP v. Carlisle, 129 S. Ct. 1896 (U.S. 2009) (whether appellate review is proper where arbitration exists but may be superseded; category of order governs jurisdiction.)