Justia Arbitration & Mediation Opinion Summaries

In August 2012, Aliments, a Canadian snack purveyor, contacted its American broker, Sterling, to purchase thousands of pounds of raw pistachios. Sterling contacted Pacific, another broker, which called Nichols, a California pistachio grower, who agreed to the proposed quantity and price. In September, Sterling contacted Pacific with another order from Aliments. Pacific contracted with Nichols again. Sterling sent sales confirmations to Aliments and Pacific. Pacific did not forward the Sterling sales confirmations to Nichols but issued its own confirmations to Nichols and Sterling. Neither Aliments nor Nichols was aware that two confirmations existed, with the same terms, including a 30-day credit term. However, while Sterling’s confirmations contained arbitration clauses, not all of the confirmations generated by Pacific contained arbitration clauses. Aliments believed that the Sterling confirmations, though unsigned by either party, represented binding contracts to purchase pistachios from Nichols, with payment due 30 days from delivery, “as usual.” Nichols thought that the 30-day term was but a placeholder. The parties were unable to agree to payment terms. Despite being notified of an arbitration, Nichols did not attend. Aliments was awarded $222,100 in damages. Nichols refused to pay. The district court denied Aliments’ petition to enforce the award and granted Nichols’s cross-petition to vacate because no genuine issue of material fact existed as to whether the parties failed to enter into “an express unequivocal agreement” to arbitrate. The Third Circuit vacated, finding multiple issues of fact. View "Aliments Krispy Kernels Inc v. Nichols Farms" on Justia Law

Robert Newell’s wife Lisa passed away at their home in 2013. Newell requested that Lisa's body be transported to Mobile Memorial Gardens Funeral Home. However, unbeknownst to Newell, Lisa's body was transported to Radney Funeral Home. The following day Newell, accompanied by his sister, two daughters, and a son-in-law, went to Mobile Memorial Gardens Funeral Home to make the final arrangements for Lisa. Richard Johnson III, an employee of Mobile Memorial Gardens, informed Newell at that time that Lisa's body had been transported to Radney Funeral Home instead of Mobile Memorial Gardens. According to Newell, Johnson informed him that Lisa's body had been transported to Radney because Radney was now a part of the Dignity Memorial Company (both a part of SCI Alabama Funeral Services, LLC) and because Mobile Memorial Gardens did not have a crematory service. Newell informed Johnson during the meeting that he wanted Lisa's remains cremated and that he wanted to conclude the process as soon as possible. Newell executed a contract providing for the disposition of Lisa's remains by cremation. Newell contended that after Lisa's memorial service, SCI did not return any of his telephone calls or e-mails inquiring as to the status of Lisa's remains. Newell eventually went to Radney Funeral Home, learning at that time that Lisa had not yet been cremated because the funeral home had not yet received the death certificate. Newell alleged that he was emotionally distraught over the state of Lisa’s remains, and ultimately sued SCI for negligence, wantonness, the tort of outrage, and fraud. SCI moved to compel arbitration, but Newell resisted, arguing the terms of the arbitration provision at issue were grossly favorable to SCI and that SCI had overwhelming bargaining power over a grieving husband. The trial court granted the motion. Newell appealed. Finding no error in the judgment granting SCI’s motion to compel arbitration, the Supreme Court affirmed. View "Newell v. SCI Alabama Funeral Services, LLC" on Justia Law

Plaintiffs Emelia Jackson and Tahisha Roach purchased used cars from BM Motoring, LLC, and Federal Auto Brokers, Inc., doing business as BM Motor Cars (collectively, BM). As part of the transaction, each plaintiff signed an identical DRA, which required resolution of disputes through an arbitration in accordance with the rules of the AAA before a retired judge or an attorney. Two months later, Jackson filed a demand for arbitration against BM with the AAA, asserting a claim under the New Jersey Consumer Fraud Act (CFA) for treble damages and other relief based on overcharges and misrepresentations by BM. Despite repeated requests by the AAA, BM did not advance the filing fees that the DRA obligated it to pay, or otherwise respond to the claim. The AAA dismissed Jackson’s arbitration claim for non-payment of fees. Six months after her vehicle purchase, Roach filed a complaint in the Superior Court against BM, and similarly, received no response from BM in response to the arbitration demand. Plaintiffs then filed this action against defendants, who moved to dismiss the complaint in favor of arbitration. Defendants contended that they did not contemplate using the AAA as the forum for arbitration, and consistently had not arbitrated customer disputes before the AAA, because of the excessive filing and administrative fees that the AAA charged. In opposition to the motion, plaintiffs asserted that defendants materially breached the DRA by failing to advance filing and arbitration fees, and waived their right to arbitration. Defendants contended that they neither breached the DRA nor waived arbitration because the AAA was not the appropriate arbitral forum. The trial court found that the parties intended to resolve disputes by arbitration. The court ordered the parties to attempt to reinstate plaintiffs’ claims with the AAA; if the AAA refused to administer the claim, plaintiffs could reinstate their complaint. The AAA reinstated the arbitration, and the court dismissed plaintiffs’ complaint with prejudice. The Appellate Division affirmed the dismissal of the complaint, finding that there was a sufficient factual dispute as to the proper forum for arbitration that defendants conduct did not constitute a material breach of the DRA, nor did they voluntarily and intentionally waive their right to enforce the DRA. The Supreme Court reversed the trial court’s judgment, finding defendants’ non-payment of filing and arbitration fees amounted to a material breach of the DRA. Defendants were therefore precluded from enforcing the arbitration provision, and the case proceeded in the courts. View "Roach v. BM Motoring, LLC" on Justia Law

ECC appealed a final arbitration award of almost $7 million against them and in favor of Manatt. ECC argued that the trial court erred in confirming the interim award because the arbitrator violated mandatory disclosure rules, and that the trial court erred in confirming the final award. The court concluded that ECC did not establish that the arbitrator violated mandatory disclosure rules; ECC forfeited its argument that the 2007 engagement agreement was illegal; ECC did not establish that Manatt procured the final award by fraud or undue means; and ECC did not establish that the arbitrator improperly refused to hear evidence. Accordingly, the court affirmed the judgment. View "ECC Capital v. Manatt, Phelps & Phillips" on Justia Law

Plaintiff-respondent Roberto Betancourt sued his employer, defendant-appellant Prudential Overall Supply (Prudential). In Betancourt's complaint, he alleged Betancourt and other Prudential employees worked over eight hours per day or more than 40 hours per week, and that Prudential failed to compensate Betancourt and other employees for all the hours they worked, as well as for missed breaks and meal periods. Prudential moved to compel arbitration but the trial court denied Prudential’s motion. Prudential argued on appeal the trial court erred. Finding no error, the Court of Appeal affirmed the judgment. View "Betancourt v. Prudential Overall Supply" on Justia Law

Bernard Norton, by and through Kim Norton, brought a wrongful death action against a number of defendants who were affiliated with a nursing home in which his wife, Lola Norton, died. Bernard claimed that negligent treatment caused Lola’s death. The defendants filed a motion to dismiss the complaint or, in the alternative, to stay the proceedings and compel arbitration of all claims in accordance with an agreement entered into by Lola at the time she was admitted to the nursing home. The trial court granted the motion to stay and compel arbitration, and Bernard appealed, contending that, as a wrongful death beneficiary, he could not be bound to Lola’s arbitration agreement. The Court of Appeals reversed the trial court and found that Lola’s beneficiaries were not required to arbitrate their wrongful death claims against the defendants. The Supreme Court granted certiorari to determine whether an arbitration agreement governed by the Federal Arbitration Act (“FAA”) and entered into by a decedent and/or her power of attorney, which bound the decedent and her estate to arbitration, was also enforceable against the decedent’s beneficiaries in a wrongful death action. The Court found that such an arbitration agreement did bind the decedent’s beneficiaries with respect to their wrongful death claims, and, accordingly, reversed the Court of Appeals. View "United Health Services of Georgia, Inc. v. Norton" on Justia Law

Timothy Bevel appeals from an order granting a motion to compel arbitration. In March 2015, Bevel financed the purchase of a used Bennington brand boat and a Yamaha brand boat motor from Guntersville Boat Mart, Inc., and he rented a boat slip on Lake Guntersville to dock the boat. The sale and boat-slip rental were documented by a one-page bill of sale, which contained an arbitration provision. According to Bevel, the boat was seized several months after the transaction for allegedly defaulting on payments on the boat and boat-slip rental. Bevel disputed that he owed those payments. The matter was submitted to arbitration. The Supreme Court found, however, that the arbitration provision at issue here did not become part of the contract between the parties, and, thus, it could not be enforced against Bevel. Accordingly, the Court reversed the trial court's order compelling arbitration, and the case remanded the case for further proceedings. View "Bevel v. Marine Group, LLC" on Justia Law

Defendant was in debt under a credit card account that he opened and maintained with Bank of America, N.A. Bank of America assigned the right to collect the debt to CACH, LLC, and CACH filed a complaint seeking to recover $10,288.04 from Defendant. After CACH filed a motion for summary judgment, Defendant filed a motion to compel arbitration pursuant to the arbitration provision of the Cardholder Agreement entered into between Defendant and Bank of America. The hearing justice denied Defendant’s motion to compel arbitration because he had failed to raise a right to arbitrate as an affirmative defense in his answer. The justice then granted summary judgment in favor of CACH. The Supreme Court affirmed, holding (1) the hearing justice did not err in denying Defendant’s motion to compel arbitration; and (2) the superior court did not err in granting CACH’s motion for summary judgment. View "CACH, LLC v. Potter" on Justia Law

CBF, appellants and award-creditors, challenged the district court's two judgments dismissing CBF's initial action to enforce and subsequent action to confirm a foreign arbitral award against appellees as alter-egos of the then defunct award-debtor. The court granted appellees' petition for rehearing for the limited purpose of vacating the original decision and simultaneously issuing this amended decision to correct the court's instructions to the district court with regards to the applicable law for an enforcement action at Section I.c., infra. In No. 15‐1133, the court held that the district court both (1) erred in determining that the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards and Chapter 2 of the Federal Arbitration Act, 9 U.S.C. 201 et seq., require appellants to seek confirmation of a foreign arbitral award before the award may be enforced by a United States District Court and (2) erred in holding that appellants' fraud claims should be dismissed prior to discovery on the ground of issue preclusion as issue preclusion was an equitable doctrine and appellants plausibly alleged that appellees engaged in fraud. Therefore, the court vacated the judgment and remanded for further proceedings. In 15‐1146, the court held that the appeal of the judgment dismissing the action to confirm was moot and accordingly dismissed that appeal. View "CBF Industria De Gusa S/A v. AMCI Holdings, Inc." on Justia Law

Stephen Kaplan appeals from a judgment confirming a $30 million arbitration award against him. This matter arose when several investors (plaintiffs1) sued Kaplan and a limited liability company (referred to as Houston LLC2) alleging defendants breached fiduciary duties pertaining to plaintiffs' investment in a self-storage facility located in Texas. Plaintiffs sought compensatory damages and declaratory relief, but did not seek punitive damages. After the court granted defendants' unopposed motion to compel the matter to private arbitration, the arbitration hearing was stayed while Kaplan was criminally prosecuted for his conduct in soliciting and handling investments in self-storage facilities, including the property at issue in plaintiffs' lawsuit. After Kaplan pled guilty to a wire fraud charge in the criminal action but before his sentencing hearing, a telephonic arbitration hearing was scheduled. The arbitrator awarded plaintiffs $30,835,152.57 without specifying the grounds or nature of the award. Kaplan then requested that the arbitrator vacate or modify the award, but the assigned arbitrator recused himself from all further arbitration proceedings and the arbitration administrator declined to reassign the case. Although the award did not specify the nature of the damages, the parties agreed a substantial portion of the award consists of punitive damages. After review, the Court of Appeal concluded the judgment had to be reversed: the arbitrator exceeded his authority by awarding punitive damages without adequate prior notice to Kaplan, in violation of the parties' arbitration agreement and fundamental procedural fairness principles. View "Emerald Aero, LLC v. Kaplan" on Justia Law