Justia Arbitration & Mediation Opinion Summaries

In 2008, the workers’ compensation insurance policy for South Jersey (SJ), a trash-removal business, neared expiration, SJ, through its insurance agent, entered into a three-year Reinsurance Participation Agreement (RPA) with Applied Underwriters. The RPA stated that any disputes would be arbitrated in Tortola or in an agreed location and indicated that it would be governed by Nebraska law. The RPA and its attachments total 10 pages. SJ claims that it believed the RPA was a workers’ compensation insurance policy; that Applied fraudulently presented it as such; that the RPA is actually a retrospective rating insurance policy under which premiums would be based on claims paid during the previous period; and that it was promised possible huge rebates. SJ acknowledged that Applied is not an insurer and cannot issue workers’ compensation insurance. Applied represented that SJ purchased a primary workers’ compensation policy from Continental, which entered into a pooling agreement with California; all are Berskshire Hathaway companies. The pooling agreement was a reinsurance treaty. According to Applied, the RPA was not insurance, but an investment instrument. For 34 months, SJ paid monthly premiums of $40,000-$50,000, expecting a rebate. Claims paid on its behalf were $355,000 over three years. After the RPA expired, Applied declared that SJ owed $300,632.94. SJ did not pay. Applied filed a demand for arbitration. SJ sought declaratory relief as to the arbitration provision and rescission of the RPA. The district court denied the motion to compel arbitration. The Third Circuit reversed. SJ’s challenges to the arbitration agreement apply to the contract as a whole, rather than to the arbitration agreement alone; the parties’ dispute is arbitrable. View "South Jersey Sanitation Co., Inc v. Applied Underwriters Captive Risk Assurance Co., Inc." on Justia Law

Following the death of Cletus Roth, a resident of a nursing facility operated by The Evangelical Lutheran Good Samaritan Society, Roth’s estate and his adult children filed an action against Good Samaritan, alleging, inter alia, wrongful death, negligence, and loss of consortium. After removing the case to federal court, Good Samaritan moved to compel arbitration. The federal district court directed that the claims of Roth’s estate be submitted to arbitration but asked the Supreme Court to answer two certified questions of Iowa law relating to the adult children’s loss-of-consortium claims. The Supreme Court answered (1) Iowa Code 613.15 does not require that adult children’s loss-of-parental-consortium claims be arbitrated when the deceased parent’s estate’s claims are otherwise subject to arbitration; and (2) in light of the Court’s answer to the previous question, the second question has become moot. View "Roth v. Evangelical Lutheran Good Samaritan Society" on Justia Law

After a 2013 fire at the Milwaukee County Courthouse, the county filed a claim with its primary insurer, the State of Wisconsin Local Government Property Insurance Fund. The Fund had engaged Lexington as either its reinsurer or excess insurer (the parties disagree) and maintained a separate insurance policy with Cincinnati Insurance that covered machinery and equipment at the Courthouse. The Fund paid all but a small portion of the county’s claimed losses, filed a reimbursement claim with Lexington, and insisted that the remaining unpaid portion of the county’s claim should be paid by Cincinnati. Pursuant to separate Joint Loss Agreements (JLA) in the county’s policies, the Fund and Cincinnati agreed to arbitrate their dispute. The district court denied Lexington’s motion to be allowed to participate in the arbitration. The Seventh Circuit affirmed. The Fund policy JLA provides a procedure whereby the parties could “signify” an agreement to arbitrate. No such signals were exchanged between Lexington and any other party; no agreement to arbitrate exists between Lexington and the other insurers. Absent such an agreement, Lexington is not entitled to insert itself into the arbitration between the Fund and Cincinnati. View "State of Wisconsin Local Government Property Insurance Fund v. Lexington Insurance Co." on Justia Law

Kiva Lodge Condominium Owners' Association, Inc. ("Kiva Lodge") was an Alabama nonprofit corporation formed for the purpose of administering and maintaining the Kiva Dunes Clubhouse and Condominium ("Kiva Dunes") located in Gulf Shores. In 2009, Kiva Lodge contracted with Hudak & Dawson Construction Co., Inc. ("Hudak") to be the general contractor for the remediation of deficiencies in Kiva Dunes buildings that were allowing water to enter the buildings. Hudak subcontracted the stucco and/or sealant portion of the work to Don Colvin d/b/a Colvin Plastering ("Colvin"). The Hanover Insurance Company ("Hanover"), as surety for Hudak, issued to Kiva Lodge a performance bond ensuring and/or securing the full performance of Hudak's contractual obligations. In September 2012, Kiva Lodge informed Hudak and Colvin of leaks and bubbling in the stucco exterior of the buildings at Kiva Dunes caused by water intrusion. Kiva Lodge alleged that Hudak and Colvin failed to determine and/or disclose the course of the problems and the proper scope of repairs necessary. It also alleged that Hanover breached the terms of its performance bond by failing to promptly remedy the default, complete the work within the scope of the contract in accordance with the terms and conditions, or arrange for payment of an alternative contractor to complete the work. Hanover filed a motion to dismiss Kiva Lodge's claims against Hanover on the ground that, under its performance bond, its claims were time-barred, falling outside of a two-year statute of limitations. In 2015, the circuit court heard arguments concerning Kiva Lodge's motion to compel arbitration, eventually granting the stay and ordering the parties to arbitration. The court also denied Hanover's motion to dismiss. Hudak, Colvin, and Hanover timely appealed the circuit court's order. After review, the Supreme Court found no reversible error in the trial court's order and affirmed. View "Hanover Insurance Co. v. Kiva Lodge Condominium Owners' Association, Inc." on Justia Law

Phillips 66 Company appealed the district court’s grant of summary judgment and order compelling arbitration in its dispute with the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union and its Local 13-857. The Union filed two grievances on behalf of employees of the Company and sought arbitration pursuant to the grievance procedure in the parties’ collective bargaining agreement (“CBA”). The Company refused to arbitrate. The Union sued and the district court issued an order compelling arbitration. The Company argued on appeal that the grievances were not arbitrable under the CBA. Finding no reversible error in the district court's order, the Tenth Circuit affirmed. View "United Steel, Paper & Forestry, Rubber Manufacturing, Energy, Allied Industrial & Svc. Workers Int'l Union v. Phillips 66 Co." on Justia Law

Plaintiff Da Loc Nguyen appealed a trial court's order granting the motion of his former employer, defendant Applied Medical Resources Corporation, to compel arbitration based on an arbitration clause contained in his employment application. The court ordered plaintiff to submit his individual claims to arbitration and struck all class and representative claims except for the representative Private Attorney General Act (PAGA) cause of action. Plaintiff argued the order was immediately appealable based on the "death knell doctrine." As to the merits of the appeal, plaintiff argued the court erred in finding the arbitration clause was not unconscionable, severing the cost provision, and dismissing the class claims with prejudice. The Court of Appeals rejected all but the last argument, finding that the trial court erred in dismissing the class claims because whether the arbitration provision contemplated class arbitration was a question for the arbitrator to decide. The Court of Appeals issued a peremptory writ of mandate commanding the trial court to vacate that portion of its order dismissing the class claims to allow the arbitrator to decide whether the arbitration clause permitted arbitration on a class-wide basis. In all other respects, the peremptory writ challenging the order compelling arbitration was denied. View "Nguyen v. Applied Medical Resources Corp." on Justia Law

Plaintiff filed suit against his employer, alleging violations of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), 38 U.S.C. 4301-4334. Plaintiff claimed that he was fired from his job after providing notice of his deployment to Afghanistan in the United States Navy Reserve. The court joined its sister circuits and held that the plain text of USERRA does not preclude the compelled arbitration of disputes arising under its provisions. Furthermore, plaintiff has failed to establish that the legislative history evinces Congress’s intent to prevent the enforcement of the arbitration agreement he signed. Accordingly, the court affirmed the district court's order compelling arbitration and dismissing the complaint. View "Ziober v. BLB Resources" on Justia Law

Plaintiff, who was injured when the car she was driving was rear-ended by an underinsured motorist, claimed uninsured/underinsured motorist coverage and medical payments coverage under two State Farm Mutual Automobile Insurance Company policies. An arbitration panel found that the accident caused Plaintiff $378,000 in damages, $125,000 of which were identified as medical costs. The parties' dispute regarding the extent of coverage available to Plaintiff proceeded to trial. The superior court determined that only one of the State Farm policies covered Plaintiff, deferred to the arbitration award as to Plaintiffs' actual damages, established the amount owed by State Farm, and reduced the arbitration award accordingly. The Supreme Court affirmed in part and vacated in part, holding (1) the superior court correctly determined that only one of the policies covered Plaintiff, but (2) the court’s decision regarding the amount due under that policy was in error. Remanded. View "Graf v. State Farm Mut. Auto. Ins. Co." on Justia Law

Susan Berube was terminated from her employment with the Department of Health and Human Services (DHHS) for having alcohol on her breath while meeting with a client. The Maine State Employees Association, SEIU Local 1989 (MSEA) initiated the grievance process, which included an arbitration proceeding, on Berube’s behalf. The arbitrator entered an award reinstating Berube to her employment position. The State and the DHHS filed a motion to vacate the arbitration award. The superior court denied the motion. On appeal, the Supreme Court vacated the judgment and remanded with instructions to vacate the arbitration award, holding that the arbitrator exceeded her powers by determining that the grievance was arbitrable because the arbitration request was filed after the deadline established in the collective bargaining agreement. View "State v. Maine State Employees Ass’n" on Justia Law

Plaintiff, individually and on behalf of other similarly situated individuals, filed suit against his former employer, IBC, contending that IBC violated the Fair Labor Standards Act (FLSA), 29 U.S.C. 201 et seq., by failing to pay proper overtime rates. The district court denied IBC's motion to compel arbitration. The court concluded that, upon a motion to compel arbitration, a court should address the arbitrability of the plaintiff’s claim at the outset of the litigation. Therefore, the district court was required to consider the arbitrability of plaintiff's claim before conditionally certifying the collective. The court further concluded that, because the arbitration agreement contains a delegation clause, any disputes about the arbitrability of plaintiff's claim or the scope of the arbitration agreement must be decided by the arbitrator, not the courts. Accordingly, the court concluded that the district court erred in denying the motion to compel arbitration and the court reversed and remanded. The court vacated the stay pending appeal. View "Reyna v. Int'l Bank of Commerce" on Justia Law