Sara Krinsk filed a putative class action lawsuit against SunTrust Bank, alleging that it improperly revoked a line of credit on her home, based on an alleged company wide policy to dispatch with certain credit risks after issues with collateralized mortgage debt came to light in 2008 and 2009. After participating in the litigation for nine months, and after plaintiff amended her complaint greatly enlarging the putative class, SunTrust moved to compel arbitration based on the arbitration provision in the parties’ contract, which also precluded class arbitration. The district court denied the motion, finding SunTrust had waived its right to arbitrate due to its participation in the litigation to that point. SunTrust appealed, arguing that the Plaintiff’s amendment of her complaint shortly before SunTrust moved to compel arbitration revived its right to arbitrate anew. The Eleventh Circuit agreed, finding the case presented “one of those limited circumstances” warranting revival of arbitration rights because the amended complaint significantly altered the scope of the case. Krinsk v. Suntrust Banks, Inc., No. 10-11912 (11th Cir. Sept. 7, 2011)
This post written by John Pitblado.