Justia Arbitration & Mediation Opinion Summaries

The issue on appeal to the Supreme Court was whether the appellate court erred in reversing a trial court's denial of Harold Wright's exception of res judicata. Mr. Wright was paralyzed and incapacitated by a medical accident in 1973. He received $1.7 million in damages. The court declared Mr. Wright an interdict and appointed his wife as his curatrix. In conjunction with the proceeding, the court issued an order allowing the curatrix to invest the damages in long-term bonds. No portion of the Mr. Wright's capital estate could be withdrawn from any long range investments without specific orders from the court. Through his investment bank Defendant A.G. Edwards & Sons, Inc. (and with the court's permission), Mr. Wright received disbursements from the invested damages award. In 2002, Mrs. Wright sued Defendant alleging breach of fiduciary duty. Specifically, she argued that A.G. Edwards and its agents misappropriated the entire $1.7 million and disbursed principal in violation of the court's order. Furthermore, Mrs. Wright alleged that when one of her account managers left A.G. Edwards to work for Morgan Stanley, he took Mr. Wright's remaining principal with him. The dispute went to arbitration. While pending, Mr. Wright died, thereby terminating the interdiction proceeding. An arbitration panel issued an award in favor of Defendants. Mr. Wright's estate then filed a motion with the district court, and Defendants filed several exceptions including an exception of res judicata where they contended the arbitration proceeding precluded further court action. The trial court denied the exception, and the appellate court reversed, dismissing the estate's claims. Upon review, the Supreme Court found that the arbitration award was unconfirmed, and therefore did not have a preclusive effect. Accordingly, the Court reversed the appellate court's ruling and remanded the case for further proceedings. View "Interdiction of Harold Wright" on Justia Law

Aurora Healthcare, Inc., Aurora Cares, LLC, (d/b/a Tara Cares) and Birmingham Nursing and Rehabilitation Center East, LLC appealed a circuit court order that denied their motion to compel arbitration. Mary Pettway, then 75 years old, was discharged from the hospital at the University of Alabama at Birmingham and admitted to a nursing home in Birmingham owned and operated by the defendants. She was returned to the hospital and then readmitted to the nursing home twice in the weeks following her initial discharge. Upon Pettway's first readmission, an arbitration agreement was executed, along with the other admission documents, on her behalf. Pettway was finally returned to the hospital, where she died on December 10, 2003. Sharon Ramsey, in her capacity as administratrix of Pettway's estate, filed a complaint against the defendants. The complaint asserted a variety of statutory and common-law claims allegedly arising from Pettway's death, including a wrongful-death claim. The defendants filed a motion to dismiss or for a change of venue. The parties litigated the issue of venue vigorously until the Wilcox Circuit Court entered an order transferring the case to the Jefferson Circuit Court. The "Aurora" defendants filed a motion to dismiss on the ground that they did not own the nursing home at which Pettway resided during the relevant period. Because the Supreme Court concluded that there was insufficient evidence in the record to support a determination that Ramsey was substantially prejudiced by defendants' belated assertion of their right to arbitration, "the order of the circuit court denying the defendants' motion to compel arbitration must be reversed. We are unable to determine, however, whether this case is due to be arbitrated." Accordingly, the Court reversed the circuit court's order denying the defendants' motion to compel arbitration. The Court remanded the case for that court to consider the motion to compel arbitration in light of the issues associated with the validity and scope of the arbitration agreement proffered by the defendants. View "Aurora Healthcare, Inc. v. Ramsey" on Justia Law

The parties, involved in patent infringement cases, agreed to a settlement that required dismissal of their lawsuits and included an arbitration provision and request that a bank subordinate its interests in defendant's patents to the settlement. Defendant stated that the bank had agreed; the parties executed the agreement and dismissed their suits. When plaintiff became aware that the bank would not cooperate, defendant demanded arbitration, but plaintiff went to court to vacate dismissal of its claims and seek compliance with the agreement. The court dismissed for lack of subject matter jurisdiction. Before the Federal Circuit ruled on an appeal, the parties participated in mediation. Plaintiff took a voluntary dismissal, then filed new claims, including claims against defendant's bank and attorneys, claiming that defendant and its attorneys lied or the bank reneged on its commitment. The district court held that defendant had waived its right to arbitrate and that the bank and attorneys, not parties to the settlement, could not be compelled to arbitrate. The Seventh Circuit reversed in part, holding that defendant's participation in earlier litigation did not amount to waiver under the Federal Arbitration Act. 9 U.S.C. 1, and vacated with respect to the bank and attorneys. Plaintiff may want to arbitrate with those parties if it must arbitrate with defendant. View "Kawasaki Heavy Indus., Ltd. v. Bombardier Recreational Prods., Inc.l" on Justia Law

Defendant AT&T Mobility, LLC appealed a trial court’s denial of its motion to compel arbitration. AT&T claimed the trial court erred by ruling that AT&T had not been assigned Plaintiff Pike Porter’s cell phone contract before sending him unsolicited text messages and erred in failing to hold an evidentiary hearing on this issue. AT&T also argued that even if Plaintiff's claims arose before AT&T purchased his contract, the trial court erred as a matter of law in holding that AT&T cannot enforce the binding arbitration agreement in Plaintiff's original cell phone contract. The court also noted that the arbitration agreement could not bind Plaintiff "with regard to events between him and AT&T that took place at a time when his only contract was with Unicel, not AT&T." AT&T highlighted four pieces of evidence it submitted along with its motion to amend and reconsider as "undisputed" proof that it purchased Plaintiff's contract in December 2008. Upon review of AT&T's evidence, the Supreme Court concluded the document did not establish that Plaintiff's contract was one of the 100,000 to 150,000 contracts sold, nor did it suggest that "certain Unicel assets" included all of the wireless contracts Unicel held in Vermont. Accordingly, the Court affirmed the trial court's decision in favor of Plaintiff. View "Porter v. AT&T Mobility, LLC" on Justia Law

This case was an interlocutory appeal from a circuit court which granted the "Motions to Compel Arbitration" of Pass Marianne, LLC (Pass) and Alfonso Realty, Inc. (Alfonso). On appeal, the Supreme Court considered: (1) whether Pass waived its right to arbitration, and (2) whether a principal’s waiver of its contractual right to arbitrate operates to waive that right for its agent. In 2005, Pass entered into a contract with Carl E. Woodward, LLC (Woodward) for the construction of a new condominium development, Pass Marianne Condominiums, in Pass Christian, Mississippi. In February, Pass and Lemon Drop Properties, LLC (Lemon Drop) entered into a "Preconstruction Sales and Purchase Agreement" for Unit No. 209 within the Pass Marianne Condominiums. Because of Hurricane Katrina, construction of the Pass Marianne Condominiums was not completed until 2007. On October 3, 2007, Pass executed a warranty deed conveying Unit No. 209 to Lemon Drop, and Woodward furnished a "Warranty of Completion of Construction" to Lemon Drop. On October 28, 2008, Lemon Drop filed a Complaint in the circuit court against Pass and Woodward, which sought, inter alia, rescission of the Agreement due to alleged defects in design and construction. Upon review, the Supreme Court concluded that while Pass waived its right to compel arbitration, that waiver was not imputed to its agent, Alfonso. As there was no evidence of waiver by Alfonso, it should have been entitled to proceed in arbitration. Therefore, as to Alfonso the Court affirmed the circuit court's order granting arbitration was affirmed. But regarding Pass, Court reversed and remanded the circuit court's order for further proceedings. View "Lemon Drop Properties, LLC. v. Pass Marianne, LLC" on Justia Law

Consolidating several appeals, the Supreme Court addressed the effect of a municipality's financial distress and recovery planning on an arbitration award agreed to pursuant to the Policemen and Firemen Collective Bargaining Act (Act). For approximately twenty years, the City of Scranton has been designated a distressed municipality under the Municipalities Financial Recovery Act. Pursuant to the Recovery Act, the City has its Commonwealth-mandated financial advisors who assist in creating a financial recovery plan (essentially a budget). In the most recent collective bargaining agreements between the City of Scranton and its Police and Firefighter Unions expired at the close of 2002. Negotiations as to future terms and work conditions for union members resulted in impasses. Accordingly, pursuant to the Act, arbitrators were selected to establish appropriate terms and conditions. Throughout the arbitrations, the City maintained that the arbitrators lacked legal authority to award relief impinging on the City's financial recovery plan. The City attempted to resist paying the ensuing award that resulted from the arbitration. The Commonwealth Court found that it was required to vacate the awards, holding that they did not conform to the City's Recovery Plan and would result in increased financial and operational burdens on an already distressed municipality. The Unions appealed to the Supreme Court. The Court focused on the distinction between the terms "arbitration award" and "arbitration settlement": the City argued that it was not mandated to pay "awards" but "settlements." The Supreme Court found the term "settlement" ambiguous, and the plain meaning could include the "award" given by the arbitrators in this case. Accordingly, the Court reversed the Commonwealth Court's order that the award negatively impacted the City's Recovery Plan. View "City of Scranton v. Firefighters Local Union" on Justia Law

This action came before the court following the insolvency and proposed rehabilitation of a Delaware insurance company. At issue was whether the arbitration clause in the reinsurance agreements between the insolvent insurance company and the reinsurer were enforceable against the receiver under Delaware law. If so, the question became whether this court should, in its discretion, require the parties to honor their agreement to arbitrate in light of the ongoing rehabilitation of the insurer. The court held that Delaware law permitted enforcement of the arbitration clause of the reinsurance agreements against the receiver and that the parties should be required to arbitrate their competing claims to the disputed cash. In addition, the court ordered a partial stay of the proceedings pending resolution of the arbitration. View "In the Matter of The Rehabilitation of Manhattan Re-Ins. Co." on Justia Law

IPS appealed the district court's denial of its motion to compel arbitration and stay plaintiffs' claims against it. Plaintiffs cross-appeal, disputing the preemption of their claims under the Employment Income Security Act (ERISA), 29 U.S.C. 1001 et seq., and alleging a lack of federal jurisdiction. The court found that jurisdiction was proper and affirmed the district court's denial of IPS's motion to compel arbitration. View "Ehlen Floor Covering, Inc., et al. v. Innovative Pension Strategies, Inc." on Justia Law

This case arose when plaintiff hired defendant to move some of his household goods from southern California to the United Arab Emirates (UAE). When the UAE officials discovered plaintiff's box of firearms and ammunition, they arrested him, imprisoned him for 11 days, and tricked him into pleading guilty to smuggling firearms. Plaintiff alleged that he was facing deportation from the UAE and sued defendant based on various tort and contract theories. At issue was whether defendant could compel plaintiff to arbitrate pursuant to the contract's foreign arbitration clause in its shipment contract. The court affirmed the judgment of the district court and held that the district court correctly interpreted the Carmack Amendment, 49 U.S.C. 14706, to preclude foreign arbitration clauses and the Carmack Amendment, having been enacted subsequent to the federal arbitration statutes, controlled this case. View "Smallwood v. Allied Van Lines, Inc., et al." on Justia Law

This case stemmed from a property dispute between the parties. White Springs appealed the district court's confirmation of an arbitration award in favor of Glawson, challenging the grant of attorneys' fees, expert fees, and prejudgment interest and sought to vacate or modify the arbitration award under the Federal Arbitration Act (FAA), 9 U.S.C. 10, 11. The court held that the arbitration panel had the power to decide Glawson's claims for attorneys' fees and that Glawson properly submitted the issue to the panel. The court was unable to grant White Springs' request that the court review the legality of the award of expert fees and prejudgment interest on the ad valorem taxes, as the FAA did not permit it to do so. Therefore, the court found no basis to overturn any portion of the panel's final arbitration award. View "White Springs Agricultural v. Glawson Investments Corp." on Justia Law