Justia Arbitration & Mediation Opinion Summaries

This action arose from a transaction involving the sale of equity in a Texas-based dental practice management company to a Chicago-based private equity firm. At issue was whether the purchasers' ability to raise the forum selection clause issue in Texas provided them with an adequate remedy at law, undermining the basis for equity jurisdiction, and if not, whether the terms of the forum selection clause were broad enough to reach the Texas claims. The court held that the forum selection clause did not provide purchasers an adequate remedy at law, and therefore, the court had subject matter jurisdiction over their claims. The court also held that the forum selection clause here, which applied to any claims arising under or relating to the transaction, was sufficiently broad in scope that the purchasers were likely to succeed in showing that it provided exclusive jurisdiction in Delaware over the claims brought by the sellers in Texas. Accordingly, the court granted purchasers' motion for preliminary injunction. View "ASDC Holdings, et al. v. The Richard J. Malouf 2008 All Smiles Trust, et al." on Justia Law

This case arose when Cat Tech sought indemnification from its insurers after Cat Tech damaged several components of a hyrotreating reactor owned by Ergon Refining, Inc. and arbitrators entered an award against Cat Tech for the damage. Insurers subsequently denied the claim, contending, inter alia, that the "your work" exclusion found in the policies precluded coverage for damage to the reactor. The district court found that insurers had no duty to indemnify Cat Tech. The court held that the information contained in the arbitration award was insufficient to properly apply the "your work" exclusion. As such, the court concluded that the district court erred when it relied on the award in granting insurer's summary judgment motion. On remand, the district court should conduct any additional fact-finding necessary to determine whether the damage suffered by Ergon's reactor was limited only to those components upon which Cat Tech worked, or instead included other components unrelated to Cat Tech's operations. Accordingly, the judgment was reversed and the case remanded for further proceedings. View "American Home Assurance Co, et al. v. Cat Tech L.L.C." on Justia Law

UBS appealed the denial of their motion for a preliminary injunction enjoining defendants from proceeding with an arbitration before the Financial Industry Regulatory Authority (FINRA), and alternatively requiring that the arbitration proceed in New York County. In the arbitration, defendants sought damages for UBS's alleged fraud in connection with defendants' issuances of auction rate securities. The court held that defendants were entitled to arbitration because they became UBS's "customer" under FINRA's rules when they undertook to purchase auction services from UBS. The court also held that the enforceability of the forum selection clause was a procedural issue for FINRA arbitrators to address and that the district court lacked jurisdiction to resolve it. View "UBS Financial Servs, Inc. v. West Virginia University Hosp." on Justia Law

In 1992 two companies began a joint venture to develop peptide compounds. The agreement provides that inventions created by joint efforts are jointly owned, but inventions attributable to a single party are owned by that party and that disputes will be arbitrated. In court-ordered arbitration, a panel decided that a certain group of patents are jointly owned, but that another group is owned by defendant. The district court confirmed those rulings, but vacated a ruling in defendant's favor on foreign patents. Holding that appeal is authorized by 9 U.S.C. 16(a)(1)(E), and that the dispute does not concern patent law, but is a contract issue, the Seventh Circuit reversed. The Federal Arbitration Act authorizes a court to vacate an award for any of four reasons, 9 U.S.C. 10(a); a conclusion that the arbitrators disregarded the law by failing to discuss the foreign patents separately from the domestic patents did not justify vacating the award. The judge mistakenly inferred from silence that the arbitrators must have had an extra-contractual ground; the arbitrators had no reason to discuss the foreign patents separately from the domestic patents. View "Affymax, Inc. v. Ortho-McNeil-Janssen Pharmaceuticals, Inc." on Justia Law

Timothy C. Allsopp appealed a trial court's denial of his motion for relief from a judgment entered in favor of James and Kisha Bolding. The Boldings sued Naysa Realty and Investments, LLC, Deleana Davis, Keller-Williams Realty Co., and Allsopp. The Boldings alleged breach of fiduciary duty, and three counts of fraud arising out of real-estate transactions in Madison County. Davis was a principal in Naysa Realty and was employed by Keller-Williams as a real-estate agent. Davis advised the Boldings, who were purchasing property, to give Allsopp power of attorney to sign certain closing documents on their behalf. A default judgment was entered against Allsopp, with leave for the Boldings to prove damages against him later. Allsopp argued on appeal that the evidence against him was insufficient to support the judgment against him. Upon review, the Supreme Court found the evidence sufficient to support the trial court's decision and affirmed the judgment in the Boldings' favor. View "Allsopp v. Bolding" on Justia Law

Petitioner William Daane defaulted on a loan secured by a mortgage on his residence. CR Title Services, the trustee of the deed of trust, filed a notice of default to initiate the foreclosure process. Daane opted to participate in the Foreclosure Mediation Program (Program). The district court later found that CitiMortgage, the beneficiary of the deed of trust, had participated in the mediation in bad faith. After the foreclosure process was reinitiated, Daane again elected for mediation in the Program. Daane subsequently brought a petition for a writ of prohibition, seeking to preclude the Program from proceeding with further mediations or issuing a letter of certification. The Supreme Court denied the writ, holding that a writ of prohibition was unwarranted to preclude the Program from conducting further proceedings with respect to Daane's residence because he had an adequate remedy in the ordinary course of law. View "Daane v. Eighth Judicial Dist. Court" on Justia Law

Appellant Marcus Minix received documents from the county mediator stating that the county court had received a complaint against him for a violation of Ky. Rev. Stat. 514.030 and directing Appellant to mediation. After attending mediation, Appellant was informed he may need to return to mediation. Appellant petitioned the court of appeals for a writ prohibiting the county attorney from referring felony criminal complaints, including a felony complaint against him, to a mediator before presenting the complaints to a district court for review and issuance of a summons or warrant. The court of appeals denied the petition, finding it was without jurisdiction to address Appellant's claims. The Supreme Court affirmed, holding that a writ of prohibition may not be issued against non-judicial parties such as the Appellees, the county attorney and the mediator, and the substantive relief Appellant sought was within the original jurisdiction of the circuit court, not the court of appeals. View "Minix v. Roberts" on Justia Law

This case stemmed from plaintiff's allegations that, while she was employed with defendant on one of its cruise ships, she was drugged by other employees, raped, and physically injured while she was unconscious, and when she reported to officials of the cruise line what had happened to her, they treated her with indifference and even hostility, failed to provide her with proper medical treatment on board, and interfered with her attempts to obtain medical treatment and counseling ashore. Plaintiff subsequently asserted five claims against defendant involving violations of the Jones Act, 46 U.S.C. 30104, or the general maritime law applicable to the Seaman's Wage Act, 46 U.S.C. 10313. Plaintiff's remaining five claims involved common law tort claims. At issue was whether plaintiff's claims fell within the scope of the arbitration clause in the crew agreement. The court held that the district court did not err in holding that Counts VI, VII, VIII, IX, and X of plaintiff's complaint did not fall within the scope of the arbitration provision where all five of these claims involved factual allegations about how the cruise line and its officials treated plaintiff after learning that she had been raped, including allegations that she was kept on the ship against her will, that she was prevented from getting medical attention off the ship, that her rape kit was destroyed in the incinerator, and that her confidentiality as a rape victim was intentionally violated. The court held, however, that the remaining five counts arose directly from her undisputed status as a "seaman" employed by defendant and fell within the scope of the arbitration provision. Therefore, the district court erred in denying defendant's motion to compel arbitration for Counts I, II, III, IV, and V. View "Doe v. Princess Cruise Lines, Ltd." on Justia Law

Plaintiff brought suit against the Dealership and Porsche when the pre-owned car that she purchased from the Dealership developed serious mechanical problems during the warranty period and the Dealership refused to honor her warranty claims. Plaintiff alleged breach of implied and express warranties under the Magnuson-Moss Warranty Act (MMWA), 15 U.S.C. 2301 et seq., and breach of contract and unconscionability under California law. The district court granted the Dealership's petition to compel arbitration pursuant to the mandatory arbitration provision in the sales contract that plaintiff signed when she bought the car and stayed the action against Porsche. Plaintiff's principal argument on appeal was that the MMWA barred the provision mandating pre-dispute binding arbitration of her warranty claims against the Dealership. Although the text of the MMWA did not specifically address the validity of pre-dispute mandatory binding arbitration, Congress expressly delegated rulemaking authority under the statue to the Federal Trade Commission (FTC). The FTC construed the MMWA as barring pre-dispute mandatory binding arbitration provisions covering written warranty agreements and issued a rule prohibiting judicial enforcement of such provisions with respect to consumer claims brought under the MMWA. Because it was required to defer to the reasonable construction of a statute by the agency that Congress had authorized to interpret it, the court held that the MMWA precluded enforcement of pre-dispute agreements such as Porsche's that required mandatory binding arbitration of consumer warranty claims. The court declined to address plaintiff's remaining claims. Accordingly, the court reversed and remanded for further proceedings. View "Kolev v. Euromotors West/The Auto Gallery, et al." on Justia Law

Plaintiff brought suit against Toyota when the new car that she leased developed mechanical problems during the warranty period and Toyota failed to repair them to her satisfaction. In addition to several California state law claims, she alleged breach of warranty under the Magnuson-Moss Warranty Act (MMWA), 15 U.S.C. 2301 et seq. The district court granted Toyota's motion to dismiss for lack of subject matter jurisdiction on the ground that plaintiff did not, before filing suit in civil court, pursue her claims through the California Dispute Settlement Program (CDSP) that Toyota maintained and specified in its warranty. Plaintiff appealed, arguing that her failure to initially resort to the CDSP provided Toyota an affirmative defense to her warranty claims under the MMWA, but did not defeat subject matter jurisdiction. The court held that the prerequisite in section 2310(a) of the MMWA that a "consumer may not commence a civil action... unless he initially resorts to [an informal dispute settlement procedure]" was merely a codification of the MMWA's exhaustion requirement and did not operate as a jurisdictional bar. Accordingly, the court reversed and remanded so that the district court could consider how to proceed with the instant action, including the failure-to-exhaust issues. View "Maronyan v. Toyota Motor Sales, U.S.A., Inc." on Justia Law