Defendants seek to enforce three arbitration agreements signed by the decedent, Kenisha Parker, against plaintiffs, who are her relatives. Plaintiffs filed suit for wrongful death, medical malpractice, and survivorship after Kenisha died after undergoing lipoplasty and suction lipectemy. The court concluded that the three arbitration agreements are subject to limited preemptive effect of the Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq.; the 30-day rescission right in Code of Civil Procedure section 1295, subdivision (c) is preempted by the FAA; and thus the motions to compel arbitration should have been granted. Accordingly, the court reversed the order denying defendants' motion to compel arbitration. View "Scott v. Yoho" on Justia Law

In May 2013, plaintiffs Annemarie Morgan and Tiffany Dever filed suit against defendants Sanford Brown Institute, its parent company, Career Education Corporation, and Sanford Brown's chief executive officer, admission and financial aid officers, and clinical director. Sanford Brown was a private, for-profit educational institution with a campus in Trevose, Pennsylvania, that offered medical-related training programs. In the complaint, plaintiffs claimed that defendants misrepresented the value of the school's ultrasound technician program and the quality of its instructors, instructed students on outdated equipment and with inadequate teaching materials, provided insufficient career-service counseling, and conveyed inaccurate information about Sanford Brown's accreditation status. The complaint further alleged that Sanford Brown employed high-pressure and deceptive business tactics that resulted in plaintiffs financing their education with high-interest loans, passing up the study of ultrasound at a reputable college, and losing career advancement opportunities. The Sanford Brown enrollment agreement included payment terms for tuition and fees, disclaimers, and an arbitration provision. Without answering the complaint, defendants filed a motion to compel arbitration and to dismiss plaintiffs' claims. The Appellate Division found the parties clearly and unmistakably agreed an arbitrator would determine issues of arbitrability and that plaintiffs failed to specifically attack the delegation clause. The panel therefore determined that arbitrability [was] for the arbitrator to decide. The Supreme Court reversed, finding that the Appellate Division and trial court did not have the benefit of "Atalese v. U.S. Legal Servs. Grp.," (219 N.J. 430, 436 (2014), cert. denied, __ U.S. __, 135 S. Ct. 2804, 192 L. Ed.2d 847 (2015)) at the time they rendered their decisions. The New Jersey Court held in "Atalese" that an arbitration provision in a consumer contract that fails to explain in some minimal way that arbitration is a substitute for a consumer s right to pursue relief in a court of law was unenforceable. This case was therefore remanded for further proceedings in light of Atalese. View "Morgan v. Sanford Brown Institute" on Justia Law

Kentucky Shakespeare Festival, Inc. (KSF) and Brantley Dunaway entered into an employment agreement. Two years later, KSF terminated Dunaway’s employment. When KSF informed Dunaway that he was not entitled to a bonus for the 2013 fiscal year, Dunaway filed an action for breach of contract. Nearly one year later, KSF filed a motion for partial summary judgment and declaratory relief, arguing that KSF’s determination that Dunaway was not entitled to a bonus was a binding “arbitration award” issued by an independent accounting firm. The circuit court denied relief, concluding that the employment agreement did not contain an agreement to forgo litigation and arbitrate any bonus dispute. The court of appeals affirmed. The Supreme Court affirmed, holding that no arbitration agreement existed between KSF and Dunaway, and because no arbitration proceeding occurred, there was no arbitration award to be confirmed. View "Kentucky Shakespeare Festival, Inc. v. Dunaway" on Justia Law

After Renee Tillman filed suit against her law firm, arbitration proceeded for a time until Tillman ran out of funds. The arbitration was then terminated and now the parties disagree about what should now happen to Tillman’s federal court case against the firm. The court concluded that Tillman's case “has been had in accordance with the terms of the agreement,” so it is no longer appropriate to stay the proceedings below; the district court appropriately excused Tillman’s failure to pay for arbitration on the grounds of financial incapacity; and, under these circumstances, the court held that the FAA does not require dismissal of Tillman’s case. Rather, Tillman's case should go forward in federal court and thus the court remanded with instructions on how to proceed. View "Tillman v. Rheingold firm" on Justia Law

In 1993, plaintiff Dean Altobelli began working as an attorney for Miller, Canfield, Paddock and Stone, P.L.C. (“the Firm”). Upon joining the Firm, plaintiff signed the “Miller Canfield Operating Agreement” (“Operating Agreement”), a document governing the Firm’s internal affairs. By January 2006, plaintiff had become a senior principal at the Firm. However, in late May or early June 2010, plaintiff decided he wanted to pursue a new opportunity as an assistant coach for the University of Alabama football team. Plaintiff proposed a 7- to 12-month leave of absence from the Firm to defendant Michael Hartmann, the Firm’s CEO, and defendant Michael Coakley, who was the head of the Firm’s litigation group but was not a managing director. Plaintiff suggested that the Firm permit him to maintain his ownership interest and return to the Firm as a senior principal any time before June 1, 2011. Plaintiff avers that Hartmann initially promised plaintiff that he could spend as much time at the University of Alabama as he wanted and still receive certain allocated income from his clients. Hartmann disputed this, claiming that plaintiff voluntarily withdrew from the partnership. Plaintiff claimed he was improperly terminated, and that the Firm shorted plaintiff's income as a result. Plaintiff's attempt to resolve the matter through the direct settlement and mediation process, as outlined in the arbitration clause of the Operating Agreement, was unsuccessful. In November 2011, plaintiff filed a demand for arbitration as provided for in the arbitration clause. Despite having made the demand for arbitration, he filed suit alleging that the seven individuals named as defendants were responsible for engaging in tortious conduct with regard to plaintiff's request for a leave of absence and retention of his equity ownership in the Firm. Defendants moved for summary judgment and a motion to compel arbitration as required by the arbitration clause. Plaintiff moved for summary judgment too. The circuit court denied defendants’ motions and granted plaintiff's motion for partial summary judgment, finding as a matter of law that plaintiff did not voluntarily withdraw from the Firm. Rather, the circuit court concluded that defendants had improperly terminated plaintiff's ownership interest without authority. The Court of Appeals affirmed. The Supreme Court reversed the part of the Court of Appeals’ opinion regarding the motion to compel arbitration and instead held that this case was subject to binding arbitration under the arbitration clause of the Operating Agreement. Accordingly, the lower courts should not have reached the merits of plaintiff’s motion for partial summary disposition, as the motion addressed substantive contractual matters that should have been resolved by the arbitrator. The case was remanded back to the trial court for further proceedings. View "Altobelli v. Hartmann" on Justia Law

Plaintiff Alice Finn appealed a Superior Court order denying her motion to affirm, and granting the defendants Ballentine Partners, LLC (BPLLC), Ballentine & Company, Inc., Roy C. Ballentine, Kyle Schaffer, Claudia Shilo, Andrew McMorrow, and Gregory Peterson's motion to vacate a final arbitration award. Ballentine and Finn founded Ballentine Finn & Company, Inc. (BFI). Each owned one half of the company’s stock, and Finn served as the Chief Executive Officer. Later, four other individuals became shareholders of BFI. In 2008, Ballentine and the other shareholders forced Finn out of the corporation and terminated her employment. At the time of her termination, Finn held 37.5% of the shares of BFI. BFI gave Finn a promissory note in the amount of $4,635,684, which represented 1.4 times earnings for her shares for the 12 months before her termination. This amount was below the fair market value of Finn’s shares. Finn challenged her termination before an arbitration panel in 2009. This first arbitration panel found that Finn’s termination was unlawful and awarded her $5,721,756 for the stock that BFI forced her to sell and $720,000 in lost wages. The panel recognized that BFI likely did not have sufficient liquidity to pay the award immediately, so it authorized BFI to make periodic payments. After the first panel award, BFI formed BPLLC, contributed all of its assets and some of its liabilities to BPLLC, and became its sole member. BFI then changed its name to Ballentine & Company. After the reorganization, Ballentine & Co. sold 4,000 preferred units, a 40% membership interest in BPLLC, to Perspecta Investments, LLC. Perspecta paid $7,000,000 to Ballentine & Co. and made a $280,000 capital contribution to BPLLC. The defendants asserted that the membership interest had to be sold in order to raise funds to pay the arbitration award to Finn. In 2013, Finn filed a complaint and a motion to compel arbitration in superior court, alleging that she was entitled to relief under the “Claw Back” provision of the Agreement. The defendants moved to dismiss Finn’s complaint, arguing that it was barred by res judicata. A second arbitration concluded that Finn was entitled to an award based upon an unjust enrichment claim. and awarded Finn $600,000 in equitable relief. Returning to court, Finn moved to affirm, and the defendants moved to vacate in part, the second arbitration award. Applying the "plain mistake" standard of review found in RSA 542:8, the trial court ruled that the second panel’s award of additional damages to Finn on her unjust enrichment claim was barred by res judicata. Finn moved for reconsideration, arguing that the FAA applied to this case. The trial court denied the motion. Because the New Hampshire Supreme Court concluded that the trial court did not err in ruling that RSA 542:8 was not preempted by the Federal Arbitration Act (FAA), and that the second arbitration panel committed a plain mistake of law by concluding that res judicata did not bar Finn’s claim, it affirmed. View "Finn v. Ballentine Partners, LLC" on Justia Law

Plaintiff signed a contract with Defendant for the construction of a house. The contract contained an arbitration clause. Plaintiff later brought suit against Defendant, claiming that there were defects in the house. Defendant filed a motion to dismiss and compel arbitration. The circuit court denied the motion, finding that the arbitration clause was unconscionable. Defendant appealed, arguing that the circuit court erred by ruling on questions of arbitrability despite the existence of a delegation provision in the arbitration agreement that vested the arbitrator with authority to determine issues of arbitrability relating to the dispute. The Supreme Court determined that the circuit court was within its rights not to enforce the delegation language because the language did not reflect the parties’ clear and unmistakable intention to delegate issues about the validity, revocability, or enforceability of the arbitration agreement to an arbitrator. The United States Supreme Court granted Defendant’s requested writ of certiorari, vacated the Supreme Court’s opinion, and remanded for further consideration in light of their decision in DIRECTV, Inc. v. Imburgia. The Supreme Court reversed the circuit court’s order, holding that because Plaintiffs never specifically challenged the delegation language before the circuit court or Supreme Court, Plaintiffs waived any right to challenge the delegation language. Remanded for arbitration. View "Schumacher Homes of Circleville v. Spencer" on Justia Law

Appellants Courtyard Gardens Health and Rehabilitation, LLC and others (“collectively Courtyard”), appealed a circuit court order denying their motion to dismiss and compel arbitration of the claims brought against them by appellee Patricia Sheffield, as special administrator of the estate of Maylissia Holliman. Courtyard argued: (1) the circuit court erroneously ruled that Johnathan Mitchell, Holliman’s emergency custodian, did not have authority to bind her to the arbitration agreement; and (2) that the arbitration agreement was unenforceable because of the unavailability of the National Arbitration Forum (“NAF”). After review of this matter, the Supreme Court affirmed the court’s ruling that the custodian did not have authority to execute the arbitration agreement. Because the agreement was invalid, the Court did not address appellants' second point. View "Courtyard Gardens Health & Rehab. v. Sheffield" on Justia Law

William E. Rice and others filed suit against Attorney Gary P. Downs for legal malpractice, breach of fiduciary duty, and breach of a written agreement Downs drafted to govern a limited liability corporation he formed with Rice and others. Both parties appealed after arbitration. The court concluded that Rice’s malpractice, breach of fiduciary duty, and rescission claims do not arise out of the operating agreements. Accordingly, the court reversed with respect to the court’s order compelling arbitration of Rice’s legal malpractice, breach of fiduciary duty, and rescission causes of action and otherwise affirmed the judgment. View "Rice v. Downs" on Justia Law

Bayles rolled over his 401(k) retirement account, signing an Ameriprise Brokerage Individual Retirement Account Application. Bayles later signed an Active Portfolios Application-IRA Account Application. The first page of each application states that a copy of the related Brokerage Agreement must be provided to the client; the IRA Application states: You acknowledge that you have received and read the Ameriprise Brokerage Client Agreement and agree to abide by its terms….. This brokerage account is governed by a predispute arbitration clause which is found on Section 26.... You acknowledge receipt of the predispute arbitration clause." Similar language appears in the Portfolios Application. Bayles died in 2013. His wife thought she was the beneficiary, but decedent’s children were the designated primary beneficiaries on both accounts. Mrs. Bayles challenged Ameriprise’s payout of the proceeds. The defendants unsuccessfully moved to compel arbitration. The trial court found the absence of a signature on a brokerage agreement created an ambiguity that invalidated the arbitration clause. The Supreme Court of Appeals of West Virginia reversed and remanded. Decedent signed the IRA Application, expressly acknowledging the arbitration clause, but there are unresolved issues, including whether the arbitration clause is unconscionable and whether anyof Mrs. Bayles’ claims “fall within the substantive scope of that arbitration agreement.” View "Jeffrey N. Evans/Ameriprise Fin. Servs. v. Bayles" on Justia Law