Justia Arbitration & Mediation Opinion Summaries

After Zetor filed suit against Ridgeway for trademark infringement, Ridgeway sought to enforce an arbitration clause in a prior settlement agreement between the parties. The Eighth Circuit affirmed the district court's motion denying Ridgeway's motion to compel arbitration, holding that Zetor's claims have no relation to the terms of the settlement agreement; Zetor's claims rest on independent trademark and copyright grounds, which have no relation to the terms of the agreement and in no way depend on its existence; and the plain language of the contract did not apply to wholly independent claims arising several years later. View "Zetor North America, Inc. v. Ridgeway Enterprises" on Justia Law

Any limitation on an arbitrator’s authority to modify a disciplinary action pursuant to a collective bargaining agreement (CBA) provision requiring that discipline be imposed only for just cause must be specifically bargained for by the parties and incorporated into the CBA.The common pleas court in this case vacated an arbitration award that changed the disciplinary sanction recommended by the chief of police against Sergeant David Hill of the Findlay Police Department from termination to a length suspension. The court of appeals affirmed, concluding that the arbitration award did not draw its essence from the CBA between the city of Findlay and the Ohio Patrolmen’s Benevolent Association and was arbitrary, capricious, and unlawful. The Supreme Court reversed, holding (1) because the CBA placed no limitation on the arbitrator’s authority to review the disciplinary action imposed and fashion a remedy, the arbitrator acted within his authority; and (2) the arbitrator’s award drew its essence from the CBA and was not arbitrary, capricious, or unlawful. View "Ohio Patrolmen's Benevolent Ass’n v. City of Findlay" on Justia Law

In case no. 1130590, Kathryn L. Honea appealed the denial of her motion to vacate an arbitration award entered in favor of Raymond James Financial Services, Inc. ("Raymond James"), and Bernard Michaud, an employee of Raymond James (collectively, "RJFS"). In case no. 1130655, RJFS appealed the trial court's denial of its motion to dismiss for lack of jurisdiction; that appeal was dismissed. Honea opened several investment accounts with Raymond James. Honea and Raymond James executed a "client agreement" that included an arbitration provision. Honea filed a complaint in the Jefferson Circuit Court asserting that she had opened four accounts with Raymond James and that Michaud had acted as her financial advisor as to those accounts. She alleged that RJFS engaged in "abusive brokerage practices" in that her investments were not diversified, "were far too risky," and "were of poor quality." The arbitration panel dismissed Honea's breach-of-fiduciary-duty, negligence, wantonness, fraud, and Alabama Securities Act claims and proceeded to hear the breach-of-contract claims. An arbitration panel entered an award in favor of RJFS. The arbitration panel found that "Michaud did not sufficiently know his client nor make sufficient inquiry to attempt to know his client, her holdings, and/or her investment experience. These failures contributed to losses in [Honea's] account." However, the arbitration panel "denied" Honea's breach-of-contract claims, stating that they were "barred by the applicable statutes of limitations." Although the Alabama Supreme Court found one contract appeared to govern this case and that RJFS breached its duties by failing to properly understand Honea's investment knowledge before March 2000, Honea contended that allegedly improper transactions--the excessive use of margin and overly aggressive, high-risk trading occurring after March 2000--represented independent breaches of the FINRA rules. Those claims accrued within the six-year limitations period before her complaint was filed. Further, any knowledge by Honea of her losses did not mean that the trading activity was proper. Thus, to the extent that any transactions after March 2000 would be considered separate breaches of contract unrelated to the failure to properly know Honea, her holdings, or her investment experience, or setting up an "unsuitable" account, the Court found Honea demonstrated probable merit--for purposes of a Rule 59(g) hearing--that those claims would not be barred by the statute of limitations. Honea demonstrated that, in relation to the certain breach-of-contract claims, she was entitled to a Rule 59(g) hearing on her motion to vacate the arbitration award. View "Honea v. Raymond James Financial Services, Inc." on Justia Law

The district court erred in granting a motion to vacate an arbitration award affirming a school district’s termination of a principal. The Supreme Court reversed the district court’s order granting Respondents’ motion to vacate the award, holding (1) the arbitrator did not exceed his authority as an arbitrator because his decision did not contradict the express language of the parties’ collective bargaining agreement; (2) the arbitrator did not manifestly disregard the law because he acknowledged Nev. Rev. Stat. 391.3116 and applied the statute in reaching his decision; and (3) the arbitration award was not arbitrary or capricious because substantial evidence supported the arbitrator’s findings. View "Washoe County School District v. White" on Justia Law

Hunt worked as a truck driver. In 2010, he signed an Independent Contractor Operating Agreement with Moore Brothers, a small Norfolk, Nebraska company. Three years later, Hunt and Moore renewed the Agreement. Before the second term expired, however, relations between the parties soured. Hunt hired Attorney Rine. Rine filed suit in federal court, although the Agreements contained arbitration clauses. Rine resisted arbitration, arguing that the clause was unenforceable as a matter of Nebraska law. Tired of what it regarded as a flood of frivolous arguments and motions, the district court granted Moore’s motion for sanctions under 28 U.S.C. 1927 and ordered Rine to pay Moore about $7,500. The court later dismissed the action without prejudice. The Seventh Circuit affirmed. It was within the district court’s broad discretion, in light of all the circumstances, to impose a calibrated sanction on Rine for her conduct of the litigation, culminating in the objectively baseless motion she filed in opposition to arbitration. View "James Hunt v. Moore Brothers, Inc." on Justia Law

A final determination of liability but not damages in arbitration can satisfy the final requirement of Article V(1)(e) of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards when the parties have agreed to submit the issue of liability to the arbitrator for a distinct determination prior to a separate proceeding to assess damages.At issue in this appeal was the district court’s judicial recognition of an English arbitrator’s determination of joint contract liability against the seller and the renovator of a building. The parties agreed to bifurcate litigation of the liability and damages issues. Accordingly, the district court treated the liability judgment, which was decided before the damages issues, as final and thus entitled to judicial recognition. Specifically, the district court held the contractor for the renovation work bound as a party to the agreement providing for arbitration of disputes. The renovator and contractor appealed, claiming that the arbitrator’s judgment of liability in the bifurcated arbitration proceeding lacked the finality required for judicial confirmation of a foreign arbitral award under 9 U.S.C. 207. The First Circuit affirmed, holding that the arbitrator’s liability judgment was final in this instance and that the contractor could indeed be subjected to arbitration. View "University of Notre Dame (USA) in England v. TJAC Waterloo, LLC" on Justia Law

The circuit court’s order denying Appellant’s petition to compel arbitration was not a final, appealable judgment under Md. Code Ann. Cts. & Jud. Proc. 12-301.Appellees were individuals who each purchased vehicles from the automobile dealership operated by Appellant. Appellees filed a class action lawsuit against Appellant, challenging Appellant’s practice of providing customers with an alleged free lifetime limited warranty for their vehicles conditioned on the consumer’s continued use of and payment for other services provided by Appellant. Appellant filed an independent action seeking to compel arbitration in the class action case. The circuit court concluded that Appellees’ claims were not subject to binding arbitration. Appellant appealed. Appellees filed a motion to dismiss on the basis that the order denying arbitration was not an appealable final judgment. The court of special appeals denied the motion. The Court of Appeals vacated the judgment of the court of special appeals and remanded to that court with instructions to dismiss the appeal, holding that the circuit court’s order denying Appellant’s petition to compel arbitration was not a final, appealable judgment, depriving the court of special appeals of jurisdiction to hear an appeal of that order. View "Deer Automotive Group, LLC v. Brown" on Justia Law

The Eighth Circuit affirmed the district court's order compelling arbitration and dismissing plaintiff's case without prejudice where he alleged violations of minimum wage laws, as well as fraud. In this case, plaintiff signed a Volunteer Release, Waiver and Indemnification Agreement when he volunteered as a concession worker for a fundraiser. The court held that the agreement was not unconscionable under Missouri law because the agreement was easy to understand, with no evidence that it was non-negotiable. Furthermore, the agreement did not lack consideration where the consideration was that plaintiff was giving up his right to sue in return for his opportunity to volunteer and DNCS's contribution to Washington University, something neither was legally bound to do. Finally, the underlying factual allegations were covered by the arbitration provision. View "Leonard v. Delaware North Companies Sport Service, Inc." on Justia Law

Plaintiff Carmen Zubillaga was injured in an automobile accident. The other driver was at fault. Her insurer, defendant Allstate Indemnity Company (Allstate), rejected her demand for $35,000, the full amount of her remaining underinsured motorist (UIM) coverage, although it made her a series of offers increasing to $15,584 instead. After an arbitrator awarded plaintiff $35,000, the amount of her demand, she sued Allstate for breach of the implied covenant of good faith and fair dealing. While an insurance company has no obligation under the implied covenant of good faith to pay every claim its insured makes, the insurer cannot deny the claim, without fully investigating the grounds for its denial. To protect its insured’s contractual interest in security and peace of mind, it is essential that an insurer fully inquire into possible bases that might support the insured’s claim before denying it. The Court of Appeal found the problem in this case was that the undisputed facts showed the insurer’s opinions were rendered in October and November 2012, but insurer continued to rely on them through the arbitration in September 2013, without ever consulting with its expert again or conducting any further investigation. Summary judgment in favor of the insurer was reversed and the matter remanded for further proceedings. View "Zubillaga v. Allstate Indemnity Company" on Justia Law

Rainbow Cinemas, LLC ("Rainbow"), Ambarish Keshani, and Harshit Thakker (collectively, "the defendants") appealed a circuit court order denying their motion to compel arbitration of a contract dispute with Consolidated Construction Company of Alabama ("CCC"). In the contract at issue here, CCC agreed to provide specified services in constructing a movie theater for Rainbow. The parties signed the American Institute of Architects "Document A101-2007 -- Standard Form of Agreement Between Owner and Contractor where the basis of payment is a Stipulated Sum" ("the agreement"). The agreement incorporated by reference American Institute of Architects "Document A201-2007 -- General Conditions of the Contract for Construction" ("the general conditions"). In 2016, after having already initiated the arbitration process, CCC sued the defendants. Among other things, CCC alleged that the defendants had fraudulently induced it into entering into the contract. Specifically, CCC alleged that the defendants knew that the contract required an initial decision maker and that the defendants also "knew they had not contracted for [initial-decision-maker] services from the [initial decision maker]." CCC alleged that the defendants "failed to inform CCC ... that Rainbow had not contracted with [architect Hay] Buchanan to act as [the initial decision maker]." The Alabama Supreme Court reversed and remanded, finding that the contract incorporated the AAA's Construction Industry Arbitration Rules, which state that "[t]he arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope, or validity of the arbitration agreement." Although the question whether an arbitration provision may be used to compel arbitration between a signatory and a nonsignatory is a threshold question of arbitrability usually decided by the court, here that question was delegated to the arbitrator. The arbitrator, not the court, had to decide that threshold issue. View "Rainbow Cinemas, LLC v. Consolidated Construction Company of Alabama" on Justia Law