If American Financial Freedom, Inc. (“AFFS”) and Member are not able to resolve their differences informally, including by mediation, Member and AFFS agree that any dispute, regardless of when it arose, shall be resolved at the option of the Member or AFFS by arbitration in accordance with this AFFS Arbitration of Disputes Agreement (“Agreement”).
Arbitration
“Arbitration” is a means of having any independent third party resolve a Dispute. Either Member or AFFS can request that a Dispute be submitted to Arbitration. Either of us can do this at any time regardless of whether a lawsuit has been filed or not, unless such a lawsuit has resulted in a judgment, other than default judgment. Class or collective actions shall not be permitted in Arbitration. UNDER ARBITRATION, YOU WILL NOT HAVE THE RIGHT TO GO TO COURT OR TO HAVE A JURY TRIAL, TO ENGAGE IN PRE-ARBITRATION DISCOVERY, EXEPT AS PROVIDED FOR IN THE ARBITRATION RULES, OR TO PARTICIPATE AS A REPRESENTATIVE OR MEMBER OF ANY CLASS OF CLAIMANTS PERTAINING TO ANY DISPUTE. OTHER RIGHTS THAT YOU WOULD HAVE IF YOU WENT TO COURT MAY ALSO NOT BE AVAILABLE IN ARBITRATION.
Dispute
A “Dispute” is any controversy or claim of any kind, which arises out of, or is in any way, related to, your Contract with AFFS. It includes common law, statutory and equitable claims including the enforceability or validity of this Arbitration agreement. “Dispute” also includes AFFS’s claims against you, including collection of sums due to AFFS.
Each Arbitration will be administered by the American Arbitration Association, (the “AAA”), pursuant to its Arbitration Rules then in effect except as otherwise agreed herein. Copies of the current Rules are available for viewing online at the AAA’s website, http://www.adr.org. The Arbitration will be conducted in the state of Delaware. Except as otherwise stated in this Agreement, AFFS shall pay all costs of Arbitration, but such costs shall not include attorneys' fees. Each Arbitration will be governed by the Federal Arbitration Act (Title 9 of the United State Code), and, to the extent any provision of that Act is inapplicable, the laws of the state of Delaware. To find out how to initiate Arbitration, simply call any office of the AAA for more information or visit the above-mentioned website.
The party demanding arbitration shall submit a written claim to the other party, setting out the basis of the claim and proposing the name of a neutral arbitrator. The responding party shall have 120 days in which to respond to this demand in a written answer. If this response is not timely made, or if the responding party agrees with the person proposed as the arbitrator, then the person named by the demanding party shall serve as the arbitrator. If the responding party submits a written answer rejecting the proposed arbitrator then, unless the parties agree on an arbitrator, on the request of either party, the American Arbitration Association shall select an arbitrator. The arbitration shall take place in Delaware, at a time and place selected by the arbitrator. A prearbitration hearing shall be held within 120 days after the arbitrator’s selection. The arbitration shall be held within 120 days after the prearbitration hearing. The arbitrator shall establish any deadlines necessary to accomplish this goal. Each party shall be entitled to discovery of essential documents and witnesses, as determined by the arbitrator. No less than 60 days before the arbitration, a party may serve a document request calling for any document that would be discoverable in civil litigation. The party served with this request shall deliver the requested documents and any objections within 10 business days. The arbitrator may resolve any dispute over the exchange of documents. Each party may take no more than ten depositions, unless additional depositions are allowed by the arbitrator for good cause. All depositions must be completed as of 30 days before the arbitration hearing. The arbitrator may resolve any disputes over the depositions as they would be resolved in civil litigation. Within 60 days after completion of the arbitration, the arbitrator shall submit a tentative decision in writing, specifying the reasoning for the decision and any calculations necessary to explain the award. Each party shall have 60 days in which to submit written comments to the tentative decision. Within 60 days after the deadline for written comments, the arbitrator shall announce the final award and issue a final decision in writing.
The arbitrator shall have the authority to award any remedy or relief that a court in Delaware could order or grant. The arbitrator, however, is not authorized to change or alter the terms of the AFFS Membership Agreement or of this Arbitration Agreement.
In an Arbitration in which the Dispute or the award made exceeds $25,000.00 in the aggregate, or there is a request for equitable relief with a potential financial impact in excess of $25,000.00 in the aggregate, the award of the arbitrator shall specify the facts and the law on which it is based. In such Arbitration, (1) the arbitrator shall not have the power to make any award which is not supported by substantial evidence, or which is based on legal error; (2) an award shall not be binding upon the parties, unless the findings of fact are supported by substantial evidence, and the conclusions of law are not erroneous under the substantive law of the state of Delaware; and (3) the parties shall have, in addition to the grounds referred to in the Federal Arbitration Act for vacating, modifying or correcting an award, the right to judicial review of (a) whether the findings of fact rendered by the arbitrator are supported by substantial evidence, and (b) whether the conclusions of law are erroneous under the substantive law of the state of Delaware. Judgment confirming an award in such a proceeding may be entered only if a court determined that the award is supported by substantial evidence and not based on legal error under the substantive law of the state of Delaware. All statutes of limitations applicable to any Dispute shall apply to any Arbitration between Member and AFFS.
If a Dispute is properly filed in a small claims or justice court, and it the small claims or justice court has jurisdiction to resolve the claim, including all crossclaims and counterclaims, then the party that demands Arbitration and removes the Dispute from the small claims or justice court shall pay the administrative fee of the AAA and the fees, costs and expenses of the arbitrator.
