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The Court of Appeal reversed the judgment of the trial court denying a petition to vacate an arbitration award in a dispute involving Benaroya Pictures and Westside Corporation and Bruce Willis. Michael Benaroya contended that the trial court erred in confirming the arbitration award because the decision whether a nonsignatory to an arbitration agreement can be compelled to arbitrate is a matter solely within the authority of the trial court, not the arbitrator. The court agreed and held that while the relevant JAMS rule here permits an arbitrator to determine whom among signatories to an arbitration agreement are proper parties for the dispute to be arbitrated, the rule cannot (and does not) permit the arbitrator to determine whether a nonsignatory to the arbitration agreement can be compelled to arbitrate. The court held that the authority to decide that question resides, by law, solely with the trial court. The court remanded with directions to set aside its rulings denying Michael Benaroya and Benaroya's petition to vacate the award and granting Westside and Willis' petition to confirm; and enter new orders granting Michael Benaroya and Benaroya's petition to vacate the award as to Michael Benaroya, and granting Westside and Willis' petition to confirm the award only as to Benaroya. View "Benaroya v. Willis" on Justia Law

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In two separate actions against HomeAway, the Fifth Circuit reversed the district court's judgment in Plaintiff Ivan Arnold's case and affirmed the judgment in Plaintiff Deirdre Seim's case, holding that plaintiffs were bound to arbitrate their threshold arbitrability questions. In Arnold's case, the court held that there was a contract between the parties that contained a putative arbitration provision, the parties have agreed to delegate threshold questions about the arbitration provision to an arbitrator, and Arnold did not specifically challenge the validity of the delegation clause. In Seim's case, the district court was correct to order arbitration but should not have assessed threshold questions itself. Accordingly, the court remanded both cases with instructions to compel arbitration. View "Arnold v. HomeAway, Inc." on Justia Law

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The Fifth Circuit affirmed the district court's motion to compel arbitration. Determining that it had jurisdiction and the premature notice of appeal was effective, the court held that the Green Tree Parties had standing to compel arbitration even if some were not signatories to the arbitration. In this case, the House Parties' allegation supported application of Mississippi's intertwined claims test to permit Green Tree and WIMC to compel arbitration as non-signatories. The court also held that the district court did not err in ruling that the parties' express incorporation of the JAMS rules provided clear evidence that they agreed that the arbitrator would decide arbitrability. Finally, the district court correctly referred the question of fraud to the arbitrator. View "Green Tree Servicing LLC v. House" on Justia Law

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The Fifth Circuit affirmed the district court's motion to compel arbitration. Determining that it had jurisdiction and the premature notice of appeal was effective, the court held that the Green Tree Parties had standing to compel arbitration even if some were not signatories to the arbitration. In this case, the House Parties' allegation supported application of Mississippi's intertwined claims test to permit Green Tree and WIMC to compel arbitration as non-signatories. The court also held that the district court did not err in ruling that the parties' express incorporation of the JAMS rules provided clear evidence that they agreed that the arbitrator would decide arbitrability. Finally, the district court correctly referred the question of fraud to the arbitrator. View "Green Tree Servicing LLC v. House" on Justia Law

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The Supreme Court vacated the judgment of the superior court in favor of the Town of Cumberland granting its motion to vacate an arbitration award in favor of Defendants, the Cumberland Town Employees Union and Norman Tremblay (collectively, the Union). The Town terminated Tremblay’s employment more than one year after Tremblay was injured at work. The Union filed an arbitration demand on Tremblay’s behalf pursuant to the collective bargaining agreement (the CBA) between the Town and the Union. The arbitrator concluded that Tremblay’s grievance was arbitrable and directed the Town to reinstate Tremblay. A superior court hearing justice vacated the award, explaining that the Workers’ Compensation Court had exclusive jurisdiction over reinstatement disputes. The Supreme Court disagreed, holding (1) the Union did not seek Tremblay’s reinstatement under the Workers’ Compensation Act (WCA) but, rather, sought reinstatement based on the rights that the Union asserted the CBA afforded Tremblay beyond those delineated in the WCA; and (2) the Union’s contention that the CBA granted Tremblay greater rights than the WCA was one that the arbitrator could properly decide. View "Town of Cumberland v. Cumberland Town Employees Union" on Justia Law

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The lower courts in this case erred by requiring a signatory to arbitrate its non-contractual claims against non-signatories. Jody James Farms, JV purchased a crop revenue coverage insurance policy from Rain & Hail, LLC through the Altman Group. The insurance policy contained an arbitration clause. Neither the Altman Group nor any of its employees signed the agreement. After Rain & Hail denied coverage for a grain sorghum crop loss suffered by Jody James and the parties arbitrated the dispute, Jody James sued the Altman Group and its agent (collectively, the Agency) for breach of fiduciary duty and deceptive trade practices. The Agency successfully moved to compel arbitration under the insurance policy. At arbitration, Jody James asserted that it had a right to proceed in court against the Agency because the Agency was a non-signatory to the arbitration agreement. The arbitrator resolved that issue and the merits of the dispute in the Agency’s favor. The trial court confirmed the award. The court of appeals affirmed. The Supreme Court reversed because (1) Jody James and the Agency did not agree to arbitrate any matter; and (2) Jody James may not be compelled to arbitrate under agency, third-party-beneficiary, or estoppel theories. View "Jody James Farms, JV v. Altman Group, Inc." on Justia Law

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Yates Construction, LLC, and D.W. Caldwell, Inc., entered into a construction subcontract for the roof installation on a residential dormitory at Auburn University in Auburn, Alabama. When Caldwell completed both the repairs and the roof installation, it had yet to receive total payment for the structural repairs. The companies disputed the scope and expense of these repairs and quickly negotiated to an impasse. Thereafter, Caldwell filed a claim against Yates for causing delay and increased costs by failing to pay for work performed, which was in breach of the agreements between the parties. The parties proceeded to arbitration. Although the arbitration record was neither recorded nor transcribed, the parties conceded that the arbitrator considered arguments, reviewed evidence, and heard witness testimony over the course of three days. He then reopened the proceedings for additional documentation, before issuing his thirteen-page award. Within two weeks of the arbitrator’s decision to deny Yates’s motion for reconsideration, Caldwell requested that the circuit court confirm the award under Mississippi Code Section 11-15-125. Yates moved the trial court to alter, amend, or vacate the award under Mississippi Code Section 11-15-25. With the understanding that Yates would provide oral argument on its motion at the award confirmation hearing, Caldwell filed a request to limit the presentation of proof before the circuit court. Ultimately, the trial court reviewed fourteen exhibits and the testimony of one witness in making its decision. Based on this evidence, the court issued its order modifying the arbitrator’s award. Finding that the arbitrator had duplicated the labor costs for shingle installation in its award–once under the original subcontract and once under the oral agreement to repair the structural damage (referred to as the Repair Agreement)–it amended the award, reducing the total by $104,507. After its review, the Mississippi Supreme Court determined: (1) the miscalculations alleged in this matter were not evident from the award itself, nor were they apparent from the agreed-upon record; and (2) the judge erred when he allowed the parties to present witness testimony regarding the extent of any alleged miscalculations, rather than relying on the award and the arbitration record as the relevant law suggested. Finding error, the Court therefore reversed the circuit court’s decision and remanded this case to the circuit court with directions to confirm the arbitration award. Furthermore, because the subcontract between the parties provided that each contractor would be responsible for his own fees and costs, the Court declined to assess costs to one party over the other, and instead, enforced their bargained-for agreement. View "D. W. Caldwell, Inc. v. W.G. Yates & Sons Construction Company" on Justia Law

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Fair notice at a relatively early stage of litigation was a primary factor in considering whether a party has acted consistently with its arbitration rights. In appeals stemming from class actions brought by bank customers, Wells Fargo challenged the district court's denial of its motion to compel arbitration with the unnamed plaintiffs comprising the classes. The Eleventh Circuit held that the district court's finding that Wells Fargo waived its arbitration rights as against those unnamed plaintiffs was erroneous. In this case, Wells Fargo did not act inconsistently with its arbitration rights and thus did not waive those rights with its express reservation of its arbitration rights as to future plaintiffs in response to the district court's scheduling order. Accordingly, the court vacated the district court's order. View "Gutierrez v. Wells Fargo Bank" on Justia Law

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Brokers Webb and Beversdorf were fired by Jefferies. They challenged their termination. As their employment contracts required, they filed claims in the Financial Industry Regulatory Authority’s arbitration forum. They signed FINRA's required “Arbitration Submission Agreement.” Their dispute proceeded in arbitration for two-and-a-half years. They withdrew their claims before a final decision was rendered. Under FINRA’s rules, that withdrawal constituted a dismissal with prejudice. Webb and Beversdorf then sued FINRA in Illinois, alleging that FINRA breached its contract to arbitrate their dispute with Jefferies by failing to properly train arbitrators, failing to provide arbitrators with appropriate procedural mechanisms, interfering with the arbitrators’ discretion, and failing to permit reasonable discovery. They sought damages in “excess of $50,000” and a declaratory judgment. The district court held that FINRA was entitled to arbitral immunity and dismissed the suit. The Seventh Circuit vacated, concluding that the federal courts lacked jurisdiction under the diversity statute, 28 U.S.C. 1332, which grants jurisdiction when there is complete diversity of citizenship between the parties and the amount in controversy exceeds $75,000, exclusive of interest and costs. While Illinois law permits plaintiffs to recover legal expenses as damages in limited circumstances, those circumstances are not present here, so the amount in controversy requirement was not satisfied. View "Webb v. Financial Industry Regulatory Authority" on Justia Law

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Warrior Met Coal, LLC sued Eickhoff Corporation alleging certain pieces of heavy mining equipment Eickhoff had manufactured and sold to Warrior Coal were defective. Eickhoff subsequently moved the trial court to compel Warrior Coal to arbitrate its claims pursuant to an arbitration provision in contracts executed after the sale of the equipment, not the original purchase-order contracts associated with the allegedly defective equipment. The trial court denied the motion to compel arbitration and Eickhoff appeals. The Alabama Supreme Court determined the breach-of-warranty, breach-of-contract, and products-liability claims asserted by Warrior Coal in its action against Eickhoff were at least arguably connected to the master service agreements inasmuch as those contracts addressed Eickhoff's obligation to provide an employee to assist with the maintenance and operation of the longwall shearers (the allegedly defective equipment). Accordingly, because the parties also agreed in the master service agreements that the AAA commercial arbitration rules would govern any arbitration, and because those rules empowered the arbitrator to decide questions of arbitrability, the trial court erred when it instead at least implicitly resolved the arbitrability issue in favor of Warrior Coal in its order denying Eickhoff's motion to compel. That order was accordingly reversed and the case remanded for the trial court to enter an order granting Eickhoff's motion to compel arbitration and staying proceedings in the trial court during the pendency of the arbitration proceedings. View "Eickhoff Corporation v. Warrior Met Coal, LLC" on Justia Law