Justia Arbitration & Mediation Opinion Summaries

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In this interlocutory appeal, the Supreme Court reversed the order of the circuit court denying BHC Pinnacle Point Hospital, LLC's motion to compel arbitration of a class action complaint filed by Employees, individually and on behalf of all others similarly situated, holding that Employees' claims fell within the scope of their voluntary arbitration agreements with Pinnacle Pointe. In their complaint, Employees alleged that Pinnacle Point violated the minimum wage and overtime provisions of the Arkansas Minimum Wage Act (AMWA), Ark. Code Ann. 11-4-201 et seq. Pinnacle Point filed a motion to dismiss the complaint and compel arbitration, asserting that Employees' claims fell within the scope of their respective alternative resolution for conflicts agreements they executed with Pinnacle Pointe. The circuit court denied the motion. The Supreme Court reversed, holding that the circuit court erred as a matter of law in denying Pinnacle Pointe's motion to compel arbitration. View "BHC Pinnacle Pointe Hospital, LLC v. Nelson" on Justia Law

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Zeon fired Jenkins on the ground that he violated the company’s attendance policy. Jenkins had missed work because of a 30-day jail sentence based on a felony conviction. The company had refused to suspend him for 30 days, something his 22 years of service made him eligible for, because it did not want to send the message that employees could commit crimes without consequences and nd it declined to let him use vacation days for the time because other employees had already scheduled their days for the relevant weeks. Consistent with the collective bargaining agreement, the local union took Jenkins’ discharge to arbitration. The arbitrator reinstated Jenkins. In a suit under the Labor Management Relations Act, 29 U.S.C. 185(c), the district court vacated the award on the ground that the arbitrator misread the agreement and exceeded his authority in doing so. The Sixth Circuit reversed, noting the deferential standard for arbitration awards. Although the arbitrator’s merits analysis “has some eyesores,” it does not defeat the conclusion that he arguably construed the contract. View "Zeon Chemicals, L.P. v. United Food & Commercial Workers" on Justia Law

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Plaintiff Warner Wiggins appeals a circuit court's order compelling him to arbitrate his claims against Warren Averett, LLC. Warren Averett was an accounting firm. Eastern Shore Children's Clinic, P.C. ("Eastern Shore"), a pediatric medical practice, was a client of Warren Averett. In September 2010, while Wiggins, who was a medical doctor, was a shareholder and employee of Eastern Shore, Warren Averett and Eastern Shore entered an agreement pursuant to which Warren Averett was to provide accounting services to Eastern Shore ("the contract"). The contract contained an arbitration clause. Thereafter, Wiggins and Warren Averett became involved in a billing dispute related to the preparation of Wiggins's personal income-tax returns. In 2017, Wiggins filed a single-count complaint alleging "accounting malpractice" against Warren Averett. Warren Averett filed an answer to Wiggins's complaint, asserting, among other things, that Wiggins's claims were based on the contract and were thus subject to the arbitration clause. A majority of the Alabama Supreme Court concluded the determination of whether Wiggins' claims were covered under the terms of the arbitration clause was delegated to an arbitrator to decide. Therefore, it affirmed the trial court's order. View "Warner W. Wiggins v. Warren Averett, LLC" on Justia Law

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The chapter filed suit against defendant and the housing corporation for constructive fraud, breach of fiduciary duty, unjust enrichment, negligent misrepresentation, and others. The Court of Appeal reversed the trial court's denial of the housing corporation's motion to compel arbitration and held that the chapter must arbitrate its claims against the housing corporation. In this case, the international fraternity is an overarching and governing international organization, and the local chapter of this fraternity is merely a subordinate fraternal component of the international fraternity. Furthermore, the international fraternity and the housing corporation wanted arbitration, and thus this was in effect a stipulation for arbitration. Therefore, the chapter lacked legal power to disregard the instruction from the international fraternity. The court also held that the housing corporation has not waived its right to arbitrate. View "Gamma Eta Chapter of Pi Kappa Alpha v. Helvey" on Justia Law

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After the condominium association sued the developer alleging construction defects, the association began arbitration without obtaining a vote of its members. However, the association's governing documents required arbitration of such disputes and a vote of at least 51 percent of the association's membership prior to beginning arbitration. The members later overwhelmingly voted to pursue the arbitration, but the arbitrator dismissed the arbitration for lack of a membership vote prior to its commencement. The Court of Appeal reversed the trial court's confirmation of the award and entry of judgment for the developer. The court disagreed with Branches Neighborhood Corp. v. CalAtlantic Group, Inc. (2018) 26 Cal.App.5th 743, which held that unless the association has obtained approval by a vote of at least 51 percent of its members prior to beginning arbitration, it has forever forfeited its right to pursue its claims in any forum in spite of an overwhelming ratifying vote. The court stated that this interpretation directly violates the public policy expressed in Code of Civil Procedure section 1286.2, subdivision (a)(4). In this case, the court held that the language of section 7.01B of the covenants, conditions, and restrictions (CC&R's) violates explicit legislative expressions of public policy. Furthermore, the Legislature has also determined that provisions such as section 7.01B are unconscionable. The court stated that Senate Bill No. 326 bars the use of provisions such as section 7.01B as a defense for developers against claims of condominium associations. View "Dos Vientos v. CalAtlantic Group, Inc." on Justia Law

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The issue this case presented for the Court of Appeal's review centered on whether a binding arbitration clause in an insurance policy issued by plaintiff Philadelphia Indemnity Ins. Co., applied to a third party, defendant SMG Holdings, Inc. The policy had been issued to Future Farmers of America, which was holding an event inside the Fresno Convention Center. Future Farmers had licensed the use of the convention center from its property manager, SMG. As part of the license, Future Farmers agreed to obtain coverage for itself and to name SMG as an additional insured. Thereafter, Future Farmers obtained a policy from Philadelphia Indemnity, which provided coverage for “managers, landlords, or lessors of premises” as well as for any organization “as required by contract.” The policy also contained an arbitration clause for coverage disputes. During the Future Farmers event, an attendee was injured in the convention center parking lot. When the injured man sued SMG, which also managed the parking lot, SMG tendered its defense to Philadelphia under the policy. Philadelphia refused, believing SMG was not covered under the policy for an injury occurring in the parking lot. After two years, Philadelphia petitioned the trial court to compel arbitration against SMG. The trial court denied the petition, concluding no evidence was presented that the parties to the policy intended to benefit SMG, and Philadelphia was equitably estopped from claiming SMG was required to arbitrate the dispute. Philadelphia contended: (1) the trial court erred in determining SMG was neither a third party beneficiary of the policy, nor equitably estopped from avoiding the policy’s arbitration clause; (2) alternatively, the court erred in finding Philadelphia estopped from compelling SMG to arbitrate; and (3) the coverage dispute was encompassed by the arbitration clause and arbitration should be ordered. The Court of Appeal agreed SMG could be compelled to arbitrate. Judgment was reversed, the trial court's order vacated, and the trial court directed to order arbitration of the coverage dispute. View "Philadelphia Indemnity Ins. Co. v. SMG Holdings, Inc." on Justia Law

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Facebook employee Bigger sued Facebook alleging violations of the Fair Labor Standards Act (FLSA), 29 U.S.C. 201, overtime-pay requirements, on behalf of herself and all similarly situated employees. The district court authorized notice of the action to be sent to the entire group of employees. Facebook argued the authorization was improper because many of the proposed recipients had entered arbitration agreements precluding them from joining the action. The Seventh Circuit remanded, stating that, in authorizing notice, the court must avoid even the appearance of endorsing the action’s merits. A court may not authorize notice to individuals whom the court has been shown entered mutual arbitration agreements waiving their right to join the action and must give the defendant an opportunity to make that showing. When a defendant opposing the issuance of notice alleges that proposed recipients entered such arbitration agreements, the court must determine whether a plaintiff contests the defendant’s assertions about the existence of valid arbitration agreements. If no plaintiff contests those assertions, then the court may not authorize notice to the employees whom the defendant alleges entered valid arbitration agreements. If a plaintiff contests the defendant’s assertions, then— before authorizing notice to the alleged “arbitration employees”—the court must permit the parties to submit additional evidence on the agreements’ existence and validity. View "Bigger v. Facebook, Inc." on Justia Law

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Plaintiffs purchased liability insurance for packages shipped through UPS before December 30, 2013. The price of that insurance was set by a contract that stated that there is no additional charge for the first $100 of coverage whether or not a shipper purchases additional declared value coverage. When Plaintiffs shipped their packages, they were charged $0.85 for each hundred-dollar increment, including the first. Plaintiffs sued UPS on behalf of a proposed class. UPS argued that the controlling phrase was “total value declared” and that “total” value necessarily includes the first $100. In moving for dismissal, UPS stated that it “reserves its right to move to compel arbitration and does not by this motion in any way waive this contractual right.” UPS referenced an arbitration clause found in an amended contract that became effective December 30, 2013, after the shipments at issue were mailed. The Sixth Circuit reversed the dismissal of the suit, relying on the complaint’s allegations that UPS routinely credits customers who complain about the overcharge and “acknowledges the validity of Solo’s reading of the contractual provision.” On remand, UPS raised the obligation to arbitrate as its first affirmative defense. After discovery, UPS moved to compel arbitration. The district court denied the motion on the basis of waiver. The Sixth Circuit affirmed. The Amended UPS Agreement did not retroactively apply to the transactions at issue and, in any event, UPS waived its right to arbitrate. View "Solo v. United Parcel Service Co." on Justia Law

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The First Circuit affirmed the decision of the district court denying Appellant's motion to vacate an arbitrator's award, holding that Appellant's attack on the merits of the arbitral award was unavailing. IBC Advanced Alloys Corp. purchased a Beralcast Corporation from Gerald Hoolahan and Gary Mattheson in exchange for cash and shares in the IBC. When Hoolahan decided to sell his shares in the company one year later, he was blocked. Hoolahan later discovered that Mattheson hadn't been similarly blocked when he placed his shares on the market. Hoolahan initiated an arbitration against IBC. During a subsequent hearing it was discovered that IBC had harbored ill-will against Hoolahan, causing it to block Hoolahan's attempt to sell. The arbitrator awarded Hoolahan damages in the amount he would have received if he had sold his shares at the same rate Mattheson received. After IBC unsuccessfully requested that the arbitrator modify the award IBC asked the district court to vacate the award. The district court denied relief. The First Circuit affirmed, holding that IBC did not make a showing that the arbitrator acted in manifest disregard of the law when deciding the award. View "Hoolahan v. IBC Advanced Alloys Corp." on Justia Law

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The Fifth Circuit affirmed the district court's confirmation of an arbitrator's award under the Federal Arbitration Act (FAA). Bechtel and its former employee entered arbitration on the employee's claims of disability discrimination, failure to accommodate, and retaliation. The court held that the district court correctly concluded it had jurisdiction to entertain the motions submitted by both parties. On the merits, the court held that Bechtel's first argument, that the arbitrator exceeded his authority by misapplying Fifth Circuit law, misunderstands the limited review of arbitration awards under the FAA. The court was also correct in denying vacatur based on Bechtel's claim that the arbitration rules agreed to by the parties required the arbitrator to follow the Federal Rules of Civil Procedure, which, according to Bechtel, did not authorize the arbitrator to reconsider its interim award that only granted $500 in nominal damages. The court explained that Bechtel's argument ignores the fact that the employee dispute resolution program also contains a provision stating that either party may file a motion for reconsideration with the arbitrator. View "Quezada v. Bechtel OG & C Construction Services, Inc." on Justia Law