HATTIESBURG, Miss. (Legal Newsline) – A Wyoming-based arbitration association that markets to the "economically challenged" is facing a lawsuit over allegations it is running an illegitimate arbitration sham.
PennyMac Loan Services filed a complaint Dec. 11 in the U.S. District Court for the Southern District of Mississippi against Sitcomm Arbitration Association, Mark Moffett and others, alleging tortious interference with contract, civil conspiracy and violation of the Racketeer Influenced and Corrupt Organizations Act.
PennyMac alleges in its complaint that Moffett, one of Sitcomm's arbitrators, is "neither a retired judge or an attorney."
"Sitcomm is a sham arbitration organization that uses the guise of legitimacy to market itself as an authorized and legitimate arbitration company to attract paying customers and collect fees," the suit states. "After Sitcomm extracts an arbitration 'fee' from these customers, Sitcomm then issues fake exorbitant final arbitration awards against various entities..."
The suit states the plaintiff "has been the victim" of the defendants' alleged scheme twice.
PennyMac also alleges Sitcomm does not provide proper notice of the arbitration to respondents, does not actually conduct arbitrations, hear testimony, present evidence or evaluate claims. It also alleges Sitcomm sends "false and vague notices" regarding arbitration that "do not contain the actual location of the arbitration."
PennyMac seeks monetary and other appropriate relief. It is represented by Harris Powers III and Steven Cookston of Upshaw, Williams, Biggers & Beckham LLP in Greenwood, Mississippi, and Cheryl Chang, Nicole Bartz Metral and Jessica McElroy of Blank Rome LLP in Los Angeles.
U.S. District Court for the Southern District of Mississippi case number 2:19-CV-00193-KS-MTP