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 Post subject: OUTRAGE! Judges protect fraud from court
PostPosted: Mon Apr 04, 2011 11:04 am 
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Did anyone catch the April 3 news article concerning the appellate decision in the suit against Brown Mackie College?

What is happening to the United States of America? Is this what our soldiers fight and die for?

Judge reluctantly turns away students' fraud claim against Brown Mackie College
By Dan Carden dan.carden@nwi.com, (317) 637-9078 | Posted: Sunday, April 3, 2011 3:00 pm

INDIANAPOLIS | In an unusually heartfelt opinion, an Indiana Court of Appeals judge said he wished the court could assist three Lake County women who claim they were defrauded by Brown Mackie College of Merrillville.

Connie Brumley, Ronisha Smith and Stephanie Anderson sued the for-profit career preparation college alleging the school's accreditation claims for its surgical technology degree program were false.

According to court records, the three students said they were unable to secure the surgical jobs they were being trained for because Brown Mackie's accreditation did not allow them to take a required certifying exam administered by a national surgical technology board.

The college said its enrollment agreement with the students requires their fraud claim be submitted to arbitration and specifically prohibits taking any dispute to court.
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The big problem is that arbitration rulings are not subject to appeal, unless said ruling itself is a virtual fraud or erroneous on its face. Some very nasty if not utterly weird decisions have been issued under the rubric of alternative dispute resolution and the subcategory of arbitration. Consider the arbitration ruling in the case of Advanced Micro Devices vs. Intel. A while back, Intel was under contract to provide blueprint designs to AMD and simply flatout refused to do so. Indeed, it openly admitted it never intended to supply the designs.

Subjected to mandatory arbitration, the panel chided AMD for refusing to violate patent/copyright protections and reverse engineering Intel's microchip. Yeah, the panel essentially ruled that AMD was acting like a cry-baby and awarded it no damages, other than to finally compel Intel to turn over the design - nevermind the money lost.

Today, despite the specious sophistry of our courts, Fraud in the inducement of a contract, especially misrepresentations that go to the heart of the agreement, render the entirety of a contract void ab initio (from the outset). Any other view in equity or at law is both morally and legally outrageous.

Here it's interesting that Judge Sventanoff switched the basis of the lawsuit to one of contract enforcement when, I submit, it was clearly a matter of contractual formation. (Meanwhile, it's interesting to note that Judge Sventanoff apparently indulges forum shopping by Brown Mackie. )

If true, what is there to enforce? Absent accreditation the course of study is illusory, and it becomes little more than a course on par with learning to cut stained glass, a hobby, and not a means of seriously earning a living or acquiring a marketable skill. The plaintiffs would not have tendered good money and taken the course if it wouldn't have qualified them for a certification exam. Still, overriding Judge Pera, Svetanoff, sua sponte redefined the contractual situation and recast the operative issues.

I contend that where there is fraud in the inducement of a contract, due to the utterly illusory nature of the consideration, the agreement is void from the beginning and cannot be said to have legally constituted a binding agreement. But here the Indiana Appellate division cites to the federal arbitration act observing, “A written provision in . . . a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2 (2006); accord Ind. Code § 34-57-2-1.

The appellate court relies on Lightning Litho, Inc. v. Danka Indus., Inc., 776 N.E.2d 1238, 1241 (Ind. Ct. App. 2002) to justify the specious distinction that "Fraudulent inducement does not prevent the formation of a contract altogether, but it does render the contract “voidable.” Id.

Surely it jests. What the court skillfully omits mentioning is that the fraudulently induced contract is presumptively void and only a subsequently informed decision or action by the defrauded party to affirm it renders such a contract "voidable."

I submit that as a principle of law, equity and moral sanity, contracts induced by fraud are void from the beginning, not merely voidable. Nothing can or should alter the void ab initio status of fraudulently induced agreements. To permit a presumption of voidability is to confer upon illusory consideration the outrageous status of legally binding detriment.


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PS - The argument here presupposes the absence of mutual assent as a foregone conclusion of fraud in the inducement.


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