Justia Arbitration & Mediation Opinion Summaries

Nuance appealed the district court's order remanding this case back to the arbitration panel for clarification of the arbitration award concerning an alleged breach of a corporate merger agreement. The court dismissed the appeal based on lack of jurisdiction because a district court order remanding a case back to an arbitration panel for clarification is not a final order. View "Murchison Capital Partners, L.P., et al v. Nuance Communications, Inc." on Justia Law

In 2007 the McDonalds opened a J.P. Morgan Bank investment account and a brokerage account with its affiliate, J.P. Morgan Securities (JPMS). Different contracts governed the accounts. The Bank managed the money in the investment account, while the McDonalds directed the funds in their JPMS brokerage account. By the end of 2008, the McDonalds had lost $1.5 million from the Bank investment account. The money held in the JPMS account produced a profit. The McDonalds filed an arbitration demand, alleging breach of fiduciary duty, self-dealing, and other misrepresentation and mismanagement. They did not name the Bank, but named only JPMS and Bank employees who set up and oversaw the accounts. The McDonalds claimed that the employees ignored their stated investment goals by putting nearly all their money in an illiquid proprietary hedge fund. The claim charged JPMS (not the Bank) with vicarious liability for failing to supervise. JPMS is registered with the Financial Industry Regulatory Authority, as are the employees. FINRA is an industry self-regulatory organization, and under its rules JPMS and the employees were subject to arbitration at the McDonalds’ request, an obligation reiterated in the contract governing the JPMS account. The Bank is not a member of FINRA; the Bank’s contract did not provide for arbitration. The Bank sought to prevent arbitration. The district court dismissed, finding that the Bank lacked standing to block the arbitration to which it was not a party and that the two employees were indispensable parties. The Seventh Circuit reversed. The Bank has standing to sue because the arbitration would violate a forum-selection clause in its contract with the McDonalds. The McDonalds cannot avoid that clause by naming only an affiliate and the employees, who are not necessary parties.View "J.P. Morgan Chase Bank, N.A. v. McDonald" on Justia Law

Plaintiff filed a class action suit against Lebo, alleging violations of California's Fair Employment and Housing Act (FEHA), Gov. Code 12940 et seq., and Unfair Competition Law, Bus. & Prof. Code, 17200 et seq. On appeal, plaintiff challenged the trial court's order granting defendants' motion to compel him to arbitrate his individual claims, as well as defendants' motion to dismiss all class claims without prejudice. The court held that the question whether the parties agreed to class arbitration was for the arbitrator rather than the trial court to decide, and that the trial court erred by deciding that issue in this case. The court did not reach the merits of whether the arbitration provisions plaintiff signed permit arbitration. The court also did not address plaintiff's argument that the trial court failed to consider extrinsic evidence demonstrating that the parties impliedly agreed to arbitrate on a class-wide basis. Accordingly, the court reversed and remanded with instructions. View "Sandquist v. Lebo Automotive" on Justia Law

The Randolph-Sheppard Act, 20 U.S.C. 107–107e, gives blind persons a priority in winning contracts to operate vending facilities on federal properties. Fort Campbell, Kentucky, operates a cafeteria for its soldiers. For about 20 years, Kentucky’s Office for the Blind (OFB) has helped blind vendors apply for and win the base’s contracts for various services. In 2012, the Army, the federal entity that operates Fort Campbell, published a solicitation, asking for bids to provide dining-facility-attendant services. Rather than doing so under the Act, as it had before, the Army issued this solicitation as a set aside for Small Business Administration Historically Underutilized Business Zones. OFB, representing its blind vendor, filed for arbitration under the Act, and, days later, filed suit, seeking to prevent the Army from awarding the contract. The district court held that it lacked jurisdiction to consider a request for a preliminary injunction. The Sixth Circuit vacated. OFB’s failure to seek and complete arbitration does not deprive the federal courts of jurisdiction. View "Commonwealth of Kentucky v. United States" on Justia Law

Defendant provides residential real estate brokerage services in Seattle, Washington. Plaintiff lives in California. In 2009 the parties executed a form contract drafted by defendant. Defendant engaged plaintiff as a Contract Field Agent (CFA) as “an independent contractor.” In 2013, plaintiff filed suit on behalf of himself and similarly situated individuals, alleging defendant improperly classified CFAs as independent contractors when they were actually employees under California’s Labor Code and Unfair Competition Laws and claimed unpaid overtime, missed meal and rest periods, inaccurate and untimely wage statements, waiting time penalties, and unreimbursed business expenses. Defendant sought arbitration under the Agreement, which provides that it is to be governed by the laws of the state of Washington. The trial court denied defendant’s motion to compel arbitration, holding that the arbitration clause was governed by the Federal Arbitration Act (FAA); that the arbitration clause did not apply to plaintiff’s statutory claims because those claims were based on statutes, not the contract; and noted “unrebutted evidence of substantial procedural unconscionability.” The court of appeal reversed, Under California law, there is a strong policy favoring the enforcement of choice-of-law provisions and, even under California law, plaintiff’s unconscionability claim lacks merit. View "Galen v. Redfin Corp." on Justia Law

When Rita Licata was transferred to a nursing facility operated by Defendant Rita’s son Salvatore signed an agreement with the facility to arbitrate disputes arising from Rita’s stay at the facility. Salvatore signed the agreement in the space provided for the resident’s “authorized representative.” Rita suffered personal injuries at the nursing facility resulting in her death. Salvator filed a complaint as administrator of Rita’s estate against Defendant for, inter alia, wrongful death and negligence. Defendant filed a motion to dismiss the complaint and to compel arbitration. The motion judge denied the motion, concluding that Salvatore lacked authority to execute the arbitration agreement on Rita’s behalf. The Supreme Court affirmed, holding (1) Salvatore lacked authority to execute the agreement on Rita’s behalf; and (2) the arbitration agreement did not otherwise bind Rita’s estate.View "Licata v. GGNSC Malden Dexter LLC" on Justia Law

Barbara Johnson, in her capacity as her husband Dalton’s health care agent, signed an agreement with a nursing facility to arbitrate disputes arising from Dalton’s stay at the facility. While a resident of the facility, Dalton suffered burns and later died. The administrators of Dalton’s estate, filed a complaint against nursing home defendants and others, arguing that Barbara, as Dalton’s health care agent, did not have the authority to execute the arbitration agreement on his behalf. A superior court judge entered an order compelling mediation or arbitration. The Supreme Court vacated the order of the superior court, holding that a health care agent’s decision to enter into an arbitration agreement is not a health care decision under the health care proxy statute, and therefore, an agreement to arbitrate all claims arising out of a principal’s stay in a nursing facility does not bind the principal where the agreement was entered into solely by a health care agent under the authority of a health care proxy. View "Johnson v. Kindred Healthcare, Inc." on Justia Law

Respondents filed a complaint for accounting against Petitioner, their employer, after a dispute over the terms of their employment agreement. In response, Petitioner filed a petition to compel arbitration, asserting that, because Respondents’ claims arose out of their employment agreements, the circuit court was required to compel arbitration under an arbitration clause contained in the employment agreement. The circuit court denied Petitioner’s petition. The intermediate appellate court dismissed Petitioner's appeal, concluding that the denial of Petitioner’s motion to compel arbitration did not constitute a final judgment. The Supreme Court affirmed, holding that an order denying a request to compel arbitration filed in an existing action is not a final judgment because the denial of the petition does not put the parties out of court or otherwise terminate the proceedings and does not deny the party requesting arbitration the means of further prosecuting or defending rights and interests in the subject matter of the proceeding. View "Am. Bank Holdings, Inc. v. Kavanaugh" on Justia Law

Charles Gower petitioned the Supreme Court to vacate an arbitration award in favor of Turquoise Properties Gulf, Inc., Caribe Realty, Inc., Larry Wireman, and Judy Ramsey Wireman(collectively, "Turquoise"). The underlying dispute arose from Gower's preconstruction agreement to purchase a condominium unit in a complex developed by Turquoise. The arbitrator's decision was based in large part on Turqoise's successfully raising a statute-of-limitations defense to Gower's claims. The Supreme Court found that Turquoise expressly argued, and then abandoned, one specific statute-of-limitations defense and then it never again urged the arbitrator to apply a statute of limitations to the various claims actually brought by the claimants. Through its arguments, Turquoise distilled the issues and arguments submitted to the arbitrator for consideration. Gower argued, and the Supreme Court agreed, that Turquoise "affirmatively chose to forgo any statute of limitations defense to the [c]laimants' ... claims and therefore did not submit [the] same to the Arbitrator for decision." Therefore, the Supreme Court concluded that because the issue of the applicability of a statute of limitations was not submitted to the arbitrator for decision, the arbitrator exceeded his powers in applying a statute of limitations to Gower's claims. The Court reversed the judgment entered on the arbitrator's award, and remanded the case for further proceedings. View "Gower v. Turquoise Properties Gulf, Inc., et al. " on Justia Law

Cavalier Manufacturing, Inc. appealed a circuit court order that denied its motion to alter, amend, or vacate an arbitration award entered in favor of Janie Gant. Gant purchased a mobile home manufactured by Cavalier from Demopolis Home Center, L.L.C. ("DHC"). At the time of purchase, Gant and representatives of Cavalier and DHC executed an alternative-dispute-resolution agreement in which they agreed to arbitrate any disputes that might arise among them stemming from Gant's purchase of the mobile home. The mobile home was also covered by a manufacturer's warranty issued by Cavalier that likewise contained a provision requiring arbitration of any disputes that might arise between her and Cavalier relating to the mobile home. Gant was not satisfied with the manner in which DHC delivered and installed the mobile home on her property. Eventually Gant sued, and the matter was submitted to arbitration. The arbitrator awarded Gant $45,550 on her breach-of-express-warranty claim, plus an additional sum to be determined for attorney fees. Cavalier argued on appeal that the trial court erred by confirming the arbitration award in favor of Gant. Finding no error, the Supreme Court affirmed. View "Cavalier Manufacturing, Inc. v. Gant " on Justia Law