This dispute arose out of a video game publishing agreement entered into by Timegate and Gamecock. Under the terms of the agreement, Timegate was to be the developer and Gamecock was to be the publisher of a futuristic military-style video game entitled "Section 8." When their business relationship deteriorated, the parties proceeded with arbitration and the arbitrator awarded Gamecock monetary compensation and a perpetual license in the video game's intellectual property. The district court vacated the arbitrator's award, determining that the perpetual license was not consistent with the "essence" of the underlying contract. Because the agreement bestowed broad remedial powers upon the arbitrator and because it was fraudulently induced and irreversibly violated by Timegate, the perpetual license was a rational and permissible attempt to compensate Gamecock and maintain the agreement's essence. Accordingly, the court reversed and remanded, finding that the perpetual license was a remedy that furthered the essence of the publishing agreement. View "TimeGate Studios, Inc. v. Southpeak Interactive, L.L.C., et al" on Justia Law

Plaintiffs filed a claim with their insurer (Insurer) for underinsured motorist benefits after a car accident. Pursuant to a provision of the insurance policy, the parties submitted the dispute to an arbitration panel. Prior to the arbitration hearing, Insurer sought broad discovery under Wis. Stat. 804. Plaintiffs refused to comply with such discovery on the grounds that Wis. Stat. 788.07 controlled and permitted only the taking of certain depositions. The arbitration panel decided that Insurer was entitled to chapter 804 discovery. The circuit court reversed and directed that arbitration discovery would proceed as allowed by section 788.07. The court of appeals reversed, holding that Plaintiffs were not allowed to seek an interlocutory appeal, and that full chapter 804 discovery was available to Insurer. The Supreme Court affirmed as modified, holding (1) because no unusual circumstances justified an interlocutory appeal, Plaintiffs' action in the circuit court was premature; and (2) because Insurer failed to include an explicit, specific, and clearly drafted arbitration clause stating otherwise, discovery in this case was limited to that provided for in section 788.07. Remanded. View "Marlowe v. IDS Prop. Cas. Ins. Co." on Justia Law

The Whites were dealers of Kinkade’s artwork. The parties agreed to arbitrate disputes in accordance with the Commercial Arbitration Rules of the American Arbitration Association. In 2002, they commenced arbitration in which Kinkade claimed that the Whites had not paid hundreds of thousands of dollars, and the Whites counterclaimed that they had been fraudulently induced to enter the agreements. Kinkade chose Ansell as its arbitrator; the Whites chose Morganroth. Together Ansell and Morganroth chose Kowalsky as the neutral who would chair the panel. The arbitration dragged on; in 2006, Kinkade discovered that the Whites’ counsel, Ejbeh, had surreptitiously sent a live feed of the hearing to a hotel room. Ejbeh’s replacement departed after being convicted of tax fraud. The Whites did not comply with discovery requests, but after closing arguments and over objections, the panel requested that the Whites supply additional briefs. The Whites and their associates then began showering Kowalsky’s law firm with business. Kinkade objected, to no avail. A series of arbitration irregularities followed, all favoring the Whites. Kowalsky entered a $1.4 million award in the Whites’ favor. The district court vacated the award on grounds of Kowalsky’s “evident partiality.” The Sixth Circuit affirmed. View "Thomas Kinkade Co. v. White" on Justia Law

In this appeal, the court considered the enforceability of an arbitration clause included in a franchise agreement between plaintiff and Shuttle Express. The court concluded that the Supreme Court's recent decision in AT&T Mobility LLC v. Concepcion required reversal of the district court's holding that the class action waiver in the franchise agreement was an unconscionable contract provision; the district court erred in holding that the other two challenged provisions of the franchise agreement also rendered the arbitration clause unconscionable; and therefore, the court vacated the district court's judgment and remanded for entry of an order compelling arbitration. View "Muriithi v. Shuttle Express, Inc." on Justia Law

NSP sought to vacate an arbitration award, arguing that the arbitrator exceeded his authority under a Collective Bargaining Agreement (CBA) with the Union to grant an award after first determining that NSP had just cause for making its termination decision. The court held that the language of the arbitrator's decision was sufficient to show that the arbitrator found the termination was supported by just cause. Having answered the first submitted question in the affirmative, the arbitrator had no authority to address the second question of remedy or to fashion a remedy different than the termination. Therefore, the district court properly vacated the arbitrator's award for reaching beyond his authority under the CBA. View "Northern States Power Co. v. IBEW, Local 160" on Justia Law

The trial court denied defendant Virginia College's motion to compel arbitration. Because the plaintiffs failed to allege sufficient facts to support a claim that they were fraudulently induced to agree to the arbitration provision, the Supreme Court reversed and remanded the case for further proceedings. View "Virginia College, LLC v. Blackmon" on Justia Law

SSC Montgomery Cedar Crest Operating Company, LLC appealed a circuit court judgment denying its motion to compel arbitration of the medical-malpractice claim asserted against it by Linda Bolding, as attorney in fact and next friend of her father, Norton Means. In early 2012, Means was hospitalized after experiencing stroke and/or heart-attack symptoms. He was admitted to Cedar Crest, a nursing-home facility operated by SSC Montgomery, to receive rehabilitation and nursing services while he recovered. At the time Means was admitted to Cedar Crest, he was accompanied by his daughter, Michelle Pleasant, who completed the necessary paperwork on his behalf. Among the paperwork completed and signed by Pleasant was a dispute-resolution agreement (the "DRA") providing that the "parties" waived their right to a judge or jury trial in the event a dispute arose between them and instead agreed to resolve any such dispute by way of a dispute-resolution program consisting of mediation and binding arbitration. Several months later, Means was hospitalized again. In the second hospitalization, another of his daughters, Linda Bolding, whom Means had previously granted a durable power of attorney, sued SSC Montgomery, alleging that Cedar Crest staff had negligently cared for Means, causing him to suffer dehydration, malnourishment, and an untreated infection that combined to result in his second hospitalization. SSC Montgomery filed both its answer denying Bolding's allegations and a motion to compel arbitration pursuant to the terms of the DRA. Bolding subsequently filed a response, arguing that it would be improper to enforce the DRA because Pleasant had no legal authority to act on Means's behalf at the time Pleasant executed the DRA. Following a September hearing, the trial court entered an order denying SSC Montgomery's motion to compel arbitration. SSC Montgomery then appealed to the Supreme Court. Upon review, the Court concluded that Pleasant's signature on the arbitration agreement was ineffective to bind Means, and by extension his legal representative Bolding, because the evidence indicates he was mentally incompetent at the time Pleasant executed the agreement. View "SSC Montgomery Cedar Crest Operating Company, LLC v. Bolding" on Justia Law

Second Chance Investments, LLC (SCI) purchased a fire insurance policy from Auto-Owners Insurance Company (Auto-Owners) that covered a building with the limit of insurance set at $2,095,500. The building subsequently suffered extensive fire damage. SCI filed a proof of loss claiming the building was a total loss. Auto-Owners rejected the proof of loss, contending that it did not state the actual cash value of the loss as required by the policy or provide a written estimate of repair to support the claim. After a continued dispute over whether the property was a total loss, Auto-Owners ultimately filed a complaint in district court seeking an order compelling SCI to submit the issue of whether the building was a total loss to a binding determination by an appraisal panel. The district court denied Auto-Owners' motion to compel appraisal and dismissed its complaint. The court of appeals affirmed, concluding that a court, rather than an appraisal panel, is the appropriate forum to determine whether the property suffered a total loss. The Supreme Court affirmed, holding that a party to a fire insurance policy does not have the statutory right to have an appraisal panel decide whether a claim involves a total loss. View "Auto-Owners Ins. Co. v. Second Chance Invs., LLC" on Justia Law

In a wrongful death action against a nursing home, the nursing home moved to compel arbitration, arguing that the nursing home resident was the third-party beneficiary to the admission and arbitration agreements signed by his sister. The trial court denied the motion, finding that no valid contract was signed by someone with the legal authority to do so, and the nursing home appealed. Because the resident's sister lacked the authority to contract for him, and thus no valid contract existed, the Supreme Court affirmed the trial court’s denial of the motion to compel arbitration. View "GGNSC Batesville, LLC v. Johnson" on Justia Law

Goldman Sachs appealed from an order of the district court denying their motion to compel arbitration of plaintiff's claims of gender discrimination. Plaintiff and others alleged that Goldman Sachs engaged in a continuing pattern and practice of discrimination based on sex against female employees in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000 et seq., and the New York City Human Rights Law, Administrative Code of the City of New York 8-107 et seq. On appeal, plaintiff contended that the arbitration clause in her agreement must be invalidated because arbitration would preclude her from vindicating a statutory right. The court disagreed and held that the district court erred in denying the motion to compel arbitration where plaintiff had no substantive statutory right to pursue a pattern-or-practice claim. Accordingly, the court reversed the judgment of the district court. View "Parisi v. Goldman, Sachs & Co." on Justia Law