Justia Arbitration & Mediation Opinion Summaries

Appellant Rolland Weddell and nonparty Michael Stewart were former business partners. When disputes arose between the partners, they agreed to informally settle their disputes by presenting them to a panel of attorneys (Respondents). Respondents issued a decision resolving the parties’ disputes that was largely favorable to Stewart. Thereafter, Stewart filed suit against Appellant seeking a declaratory judgment that Respondents’ decision was valid and enforceable. Appellant proceeded to confess judgment. Appellant later filed this action against Respondents asserting causes of action stemming from Respondents’ conduct in the dispute-resolution process. Respondents moved to dismiss the complaint contending that dismissal was warranted on claim preclusion principles. The district court granted the motion, finding that the three factors for claim preclusion articulated by the Supreme Court in Five Star Capital Corp. v. Ruby had been satisfied. The Supreme Court affirmed after modifying the privity requirement established in Five Star to incorporate the principles of nonmutual claim preclusion, holding that because Respondents established that they should have been named as defendants in Stewart’s declaratory relief action and Appellant failed to provide a good reason for not doing so, claim preclusion applied in this case. View "Weddell v. Sharp" on Justia Law

Daimante, LLC was the operator of a golf course that contained two subdivisions. Gary and Linda Dye, property owners within one subdivision, filed a declaratory-judgment complaint seeking a declaration that certain obligations and restrictions were unenforceable. Diamante moved to compel arbitration with the Dyes. The court of appeals affirmed the circuit court’s denial of the motion to compel arbitration, finding that Diamante had waived arbitration by unnecessary delay that prejudiced the Dyes. Class members were subsequently added to the lawsuit upon class certification and filed a second amended motion for declaratory judgment. The circuit court denied Diamante’s motion to compel arbitration based on the court’s previous ruling. The Supreme Court reversed, holding (1) the court of appeals’ decision was not conclusive on the issue of whether Diamante had waived arbitration as to the class members who were subsequently added to the lawsuit, and therefore, this argument does not compel dismissal of this appeal; and (2) because the circuit court did not issue on order as to whether there was a valid agreement to arbitrate between Diamante and the unnamed class members, the case must be reversed for the circuit court to make that determination. View "Diamante LLC v. Dye" on Justia Law

Plaintiff purchased a manufactured home from Defendant. The contract between Plaintiff and Defendant included an arbitration clause. Plaintiff later sued Defendant alleging fraud, negligence, breach of contract, and negligent misrepresentation. Defendant filed a motion to dismiss or to stay the court action and to compel arbitration. Plaintiff opposed arbitration, arguing that the arbitration agreement lacked mutuality and was unconscionable on multiple grounds. The trial court overruled Defendant’s motion. The Supreme Court reversed, holding (1) the agreement’s “anti-waiver clause” was unconscionable and invalid, but the anti-waiver provision could be severed; (2) Plaintiff’s remaining objections did not render the contract as a whole unconscionable; and (3) absent the anti-waiver clause, the contract was not unconscionable. View "Eaton v. CMH Homes, Inc." on Justia Law

Unison, a South Korean company, manufactures, sells, delivers, and services Wind Turbine Generators (WTGs). JEDI is incorporated and located in Minnesota. In a Turbine Supply Agreement (TSA), Unison agreed to design, manufacture, and sell two WTGs to JEDI for installation in Minnesota for $2,574,900. In a Financing Agreement (FA), Unison agreed to lend to JEDI the TSA contract price. Unison sued JEDI in federal court in Minnesota, asserting 17 claims for relief under the FA. JEDI moved to compel arbitration, based on an arbitration clause in the TSA. The district court denied the motion. The Eighth Circuit reversed, concluding that the arbitration clause in the TSA covers the dispute. The court noted multiple cross-references, and the interdependent nature of the parties’ obligations under both the TSA and the FA, and concluded that they are “two parts of one overarching business plan between the same parties.” View "Unison Co., Ltd. v. Juhl Energy Dev., Inc." on Justia Law

Pre-Paid Legal Services, Inc., d.b.a. LegalShield, sued its former employee Todd Cahill, claiming Cahill had breached his contract, unlawfully misappropriated Pre-Paid’s trade secrets, and tortiously interfered with contract and business relations. Cahill removed the case from state to federal court based on diversity jurisdiction, and moved to stay the district court proceedings under the Federal Arbitration Act (“FAA”) so the parties could pursue arbitration. Thereafter the district court stayed litigation pending arbitration. Cahill failed to pay his share of the arbitration fees, and the arbitrators terminated arbitration proceedings. Pre-Paid moved the district court to lift the stay and resume with litigation. The court granted the motion, adopting a magistrate judge’s report and recommendation. Finding that the district court did not err in lifting the stay under 9 U.S.C. Section 3 of the FAA because the arbitration "ha[d] been had in accordance with the terms of the agreement” and Cahill was “in default in proceeding with such arbitration," the Tenth Circuit affirmed the district court's ruling. View "Pre-Paid Legal Services v. Cahill" on Justia Law

A stock transfer restriction required a selling shareholder first to offer his stock to the company at his desired price and then, if the company rejected it, to offer it at a price to be determined by arbitrators. Plaintiff invoked this process by tendering an offer to the company (Defendant) but later changed his mind regarding his desire to sell. When Plaintiff sought to withdraw from the process of valuing his stock, Defendant moved to compel arbitration. The superior court denied the motion to compel, concluding that a mere disagreement over the value of stock was legally insufficient to give rise to arbitration. The Supreme Judicial Court affirmed on other grounds, holding (1) a stock valuation may be conducted through arbitration so long as an actual controversy exists regarding the value of the stock; and (2) because the shareholder in this case decided not to sell the stock prior to the commencement of arbitration, the controversy to be arbitrated was rendered moot. View "Vale v. Valchuis" on Justia Law

Petitioners, truck drivers, seek relief from an order granting the motion of real party in interest Southern Counties Express to compel arbitration of petitioners’ wage and hour complaints to the Labor Commissioner. The court concluded that the trial court erred by failing to determine whether petitioners' claims are exempt from the Federal Arbitration Act, 9 U.S.C. 1 et seq. The court found writ review appropriate in this case where the order compelling arbitration was entered without having afforded the parties the hearing and consideration to which the law entitled them. Accordingly, the court vacated and remanded. View "Garcia v. Super. Ct." on Justia Law

When James Maddalena, a correctional officer with the Department of Corrections (DOC), admitted that another officer was smoking marijuana, in his presence, while on duty, Maddalena was terminated from employment with the DOC. The Rhode Island Brotherhood of Correctional Officers (RIBCO) filed a grievance on behalf of Maddalena in accordance with its collective bargaining agreement (CBA), contending that Maddalena was terminated without just cause. The matter proceeded to arbitration. An arbitrator determined that there was not just cause for Maddalena’s termination and provided that Maddalena be suspended without pay for sixty days. A justice of the superior court granted the DOC’s motion to vacate the arbitration award and denied RIBCO’s motion to confirm the award, determining that the arbitrator exceeded his authority and reached an irrational result because his decision was based upon a manifest disregard of the CBA. The Supreme Court affirmed, holding that the trial justice did not err in concluding that the arbitrator manifestly disregarded the CBA and that the arbitration award was irrational. View "State Dep’t of Corr. v. R.I. Brotherhood of Corr. Officers" on Justia Law

Plaintiff filed suit against his employer, Archstone, in California state court alleging, among other claims, unlawful retaliation in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and equivalent state-law claims. Archstone moved to federal district court. On appeal, Archstone challenged the district court's denial of its motion to compel arbitration pursuant to a Company Policy Manual containing a Dispute Resolution Policy. The court concluded, pursuant to Kummetz v. Tech Mold, Inc., that the scope of the Federal Arbitration Act (FAA), 9 U.S.C. 2, is narrowed by other federal statutes, such as Title VII, which "limit the enforcement of arbitration agreements with regard to claims arising under" the statute. This case is distinguishable from Kummetz and Nelson v. Cyprus Bagdad Copper Corp. where the acknowledgment that plaintiff signed explicitly notified plaintiff that the Manual contained a Dispute Resolution Policy. Archstone presented plaintiff the "express" choice lacking in both Kummetz and Nelson and plaintiff knowingly waived his right to judicial forum for claims. Accordingly, the court reversed and remanded. View "Ashbey v. Archstone Prop. Mgmt." on Justia Law

The Andermanns obtained mobile phone service from U.S. Cellular in 2000. Their renewable two-year contract was renewed for the last time in 2012. It included an arbitration clause that “survives the termination of this service agreement” and provided that “U.S. Cellular may assign this Agreement … without notice.” In 2013 U.S. Cellular sold the Andermanns’ contract to Sprint, without notice to the Andermanns. Months later Sprint sent Andermanns a letter, informing them of the sale and that their mobile service would be terminated on January 31, 2014 because Andermanns’ phones were not compatible with Sprint’s network. In December Sprint phoned to remind them that their service was about to expire, and added that Sprint had “a great set of offers and devices available to fit [their] needs.” Sprint made six such calls. Andermanns answered none, but filed a purported class action, contending that the unsolicited advertisements contained in the calls violated the Telephone Consumer Protection Act, 47 U.S.C. 227. Sprint requested arbitration, 9 U.S.C. 4. The district court denied Sprint’s motion. The Seventh Circuit reversed, finding connection to the contract, asking: What would Sprint have done if forbidden to call the customers whom it had inherited from U.S. Cellular and must now terminate because of technical incompatibility? View "Andermann v. Sprint Spectrum, L.P." on Justia Law