Justia Arbitration & Mediation Opinion Summaries

Plaintiff appealed the trial court's confirmation of a Revised Final Award in an underlying arbitration proceeding. In this case, the arbitrator's denial of a fee award in the Final Award falls under Moshonov v. Walsh, not DiMarco v. Chaney, as it was predicated on substantive determinations of law and fact regarding issues submitted in the arbitration. As explained in Moshonov, those determinations of law and fact, erroneous or not, do not exceed the arbitrator's powers. Therefore, the trial court erred in denying plaintiff's petition to vacate the fee award contained in the Revised Final Award. Accordingly, the court reversed and remanded with instructions. View "Cooper v. Lavely & Singer" on Justia Law

Dr. Rueben C. Setliff, III filed a derivative action against several Managers individually and in their capacities as members of the management committee of Black Hills Surgical Physicians, LLC (BHSP), alleging that the Managers breached their fiduciary duties under BHSP’s operating agreement. The circuit court ruled that the dispute was subject to arbitration. The arbitrator ordered that Setliff recover attorney’s fees and costs against the Managers and ruled that the Managers were entitled to be indemnified by BHSP under the operating agreement. The circuit court concluded that the arbitrator did not exceed her authority in making the award of fees and costs and confirmed Setliff’s award. The Supreme Court reversed the circuit court’s order affirming the award, holding that the arbitrator exceeded her powers in awarding Setliff his attorney’s fees and expenses in direct violation of BHSP’s operating agreement. View "Black Hills Surgical Physicians v. Steliff" on Justia Law

The Bank sought to vacate an arbitration award in favor of 21st Century. The court concluded that the district court did not clearly err in determining that the Bank had actual or constructive notice of the arbitration; the record contained several communications showing that various bank organizers knew of the forthcoming proceedings; and because the Bank had actual or constructive notice and Bernstein Seawell & Kove v. Bosarge requires no more, the court did not need to decide whether 21st Century failed to comply with section 15.2 of the Agreement. The court also concluded that the contract did not expressly require senior management to engage in negotiations; even if senior management were required to engage in a second round of negotiations, the Agreement did not expressly condition the ability to arbitrate a dispute on failed senior management negotiations; and the record supported the district court's finding regarding good-faith negotiations on the operational level. Accordingly, the court affirmed the judgment of the district court.View "21st Century Financial Services v. Manchester Financial Bank" on Justia Law

After Reno's financing collapsed, Reno initiated an arbitration before FINRA to resolve its claims against Goldman arising out of their contractual relationship. Goldman then filed this action to enjoin the FINRA arbitration. The court concluded that it, rather than FINRA, must determine the arbitrability of this dispute. Although Reno qualified as Goldman's customer under FINRA Rule 12200, the court held that Reno disclaimed its right to FINRA arbitration by agreeing to the forum selection clauses in the parties' contracts. Therefore, the court reversed the district court's denial of a preliminary injunction and final judgment in favor of Reno. Despite Goldman's "overwhelming likelihood of success on the merits," the court remanded to the district court to consider the remaining Winter v. Natural Res. Def. Council, Inc. factors. View "Goldman, Sachs & Co. v. City of Reno" on Justia Law

In consolidated appeals and petition for a writ of mandamus arose out of litigation stemming from the alleged breach of a lease agreement, which litigation was originally initiated by the lessor, Goodall-Brown Associates, L.P. Following the entry of an order compelling the matter to arbitration, the defendants Sloss Real Estate Group, Inc. ("SREG"), the lessee; Sloss Goodall-Brown, LLC, the assignee of SREG; Cadence Bank, N.A., and Second Avenue Holdings, LLC, the successors in interest to Goodall-Brown's original mortgage lender; and Leigh Ferguson, Catherine Crenshaw, Jack Peterson, A. Page Sloss, Jr., Ronald Capello, and Vicki Bolton (collectively, "the individual defendants"), and Sloss Real Estate Company ("SREC"), the alleged alter ego of the individual defendants in conjunction with SREG and Sloss Goodall, unsuccessfully sought dismissal of Goodall-Brown's claims based on the trial court's alleged lack of subject-matter jurisdiction to order the matter to arbitration because, they argued, Goodall-Brown lacked standing to assert the claims. In case no. 1111422, Cadence appealed the trial court's order effectively compelling it to arbitration. In case no. 1111449, the Sloss defendants renewed their contention that the trial court lacked the requisite subject-matter jurisdiction to compel the parties to arbitration. Alternatively, in case no. 1111526, the Sloss defendants petitioned the Supreme Court for a writ of mandamus to direct the trial court to void its order compelling the matter to arbitration and to dismiss the underlying action based on Goodall-Brown's alleged lack of standing and that court's resulting lack of subject-matter jurisdiction. In case no. 1121455 and case no. 1130054, Second Avenue appealed the trial court's denial of its request to enjoin discovery in the arbitration proceeding ordered by that court as to Second Avenue, pending resolution of the other appeals and petition. Upon review of the cases, the Supreme Court: affirmed in case 1111422; denied the petition in 1111526; and dismissed the appeals in cases nos. 1111449, 1121455, and 1130054. View "Cadence Bank N.A. v. Goodall-Brown Associates, L.P. " on Justia Law

At issue in this case was whether federal law preempts Neb. Rev. Stat. 25-2602.01(f)(4), which generally prohibits mandatory arbitration clauses in insurance contracts. Here, Allied Professionals Insurance Company (APIC), which is registered with the Nebraska Department of Insurance as a foreign risk retention group, issued a professional liability insurance policy to Dr. Brett Speece that included a provision requiring binding arbitration. After Speece filed an action seeking a declaration that APIC was obligated to provide coverage for his defense in a Medicaid proceeding, APIC filed a motion to compel arbitration. The district court overruled the motion, concluding that the arbitration clause in the policy was not valid and enforceable pursuant to section 25-2602.01, and that neither the Federal Arbitration Act (FAA) nor the Liability Risk Retention Act of 1986 (LRRA) preempted the state statute. The Supreme Court reversed the district court’s order overruling APIC’s motion to compel arbitration, holding (1) the FAA does not preempt section 25-2602.01(f)(4), but the LRRA does preempt application of the Nebraska statute to foreign risk retention groups; and (2) therefore, the district court erred when it determined that section 25-2602.01(f)(4) prohibited enforcement of the arbitration clause in the parties’ insurance contract in this case. View "Speece v. Allied Prof’ls Ins. Co." on Justia Law

In 2011, Hilltop hired Huffman and others to review the files of mortgage loans originated by PNC Bank to determine whether lawful procedures were followed during foreclosure and other proceedings. Until the end of their employment in January 2013, they regularly worked more than 40 hours per week, but were not compensated at the overtime rate because Hilltop classified them as independent contractors. Each employment relationship was governed by a now-expired contract, including an arbitration clause and a survival clause. The clauses listed in the survival clause correspond to ones detailing services essential to the job, the term of employment, compensation, termination, and confidentiality; it did not list the arbitration clause. The workers filed a purported class action. The district court denied Hilltop’s motion to dismiss and compel arbitration. The Sixth Circuit reversed, rejecting an argument that omission of the arbitration clause from the survival clause constituted a “clear implication” that the parties intended the arbitration clause to expire with the agreement. Sixth Circuit precedent indicates that the parties must proceed in arbitration on an individual basis.View "Huffman v. Hilltop Cos., LLC" on Justia Law

Plaintiff and Defendant, his employer, signed a written employment agreement detailing the terms of Plaintiff’s relationship with Defendant. Plaintiff later ceased working for Defendant, believing he had been fired. Defendant, however, believed that Plaintiff had resigned. Plaintiff’s termination became the subject of binding arbitration. The arbitration panel concluded that Plaintiff had been terminated for reasons other than cause and ordered Defendant to reinstate Plaintiff “to the position he held prior to his wrongful termination.” The Supreme Court reversed, holding (1) specific performance is not an available remedy for breach of an employment contract unless it is explicitly provided for in the contract or by an applicable statute; and (2) the arbitration panel in this case exceeded its authority by holding otherwise, as the contract clearly did not entitle Plaintiff to reinstatement. Remanded. View "Cedar Fair, L.P. v. Falfas" on Justia Law

Appellee, Peter Rosenow, brought a class-action complaint individually and on behalf of similarly situated persons against Appellants, Alltel Corporation and Alltel Communications, Inc. (collectively, Alltel), alleging violations of the Arkansas Deceptive Trade Practices Act and unjust enrichment arising from Alltel’s imposition of an early termination fee on its cellular-phone customers. Alltel filed a motion seeking to compel arbitration based on an arbitration clause contained in its “Terms and Conditions.” The circuit court denied the motion, concluding that Alltel’s arbitration provision lacked mutuality. The Supreme Court affirmed, holding that the circuit court did not err in finding that a lack of mutuality rendered the instant arbitration agreement invalid. View "Alltel Corp. v. Rosenow" on Justia Law

The parties in this case were two members of a Delaware LLC that was created to hold a subsidiary operating a wind farm on the island of Maui in Hawaii. Defendant filed an arbitration demand in Hawaii based on its understanding of the operative LLC agreement. In response, Plaintiff filed suit in the Court of Chancery seeking to enjoin the Hawaii arbitration. After the initiation of this litigation, Defendant filed a motion to compel arbitration in Hawaii. Defendant argued that the Court of Chancery should dismiss this litigation in favor of the pending Hawaii action. The Court of Chancery concluded that the parties agreed in the LLC agreement that both arbitration and questions of arbitrability shall be undertaken in a Hawaii court, and therefore, this action must be stayed or dismissed in favor of Defendant’s action currently pending in Hawaii. View "Kahuku Holdings, LLC v. MNA Kahuku, LLC" on Justia Law