Justia Arbitration & Mediation Opinion Summaries

Appellant brought an interlocutory appeal from the circuit court’s denial of its motion to compel arbitration. The appellee argued that appellant’s appeal was untimely filed. To be timely, appellant was required to file its notice of appeal within thirty days of the order denying the motion to compel arbitration, which was entered on December 28, 2009. At issue was whether appellant’s January 4, 2010 motion to dismiss constituted a post-order motion that would have extended the time for filing the notice of the appeal under Ark. R. of App. P. Civ. 4(b). The Court concluded that because the motion substantively sought to correct procedural defects in a December 21, 2009 motion, the January 4 motion was not a new motion and was treated by the circuit court as one for reconsideration. Because it was a collateral motion, it did not extend the time for filing the notice of appeal. The Court held the appellant’s notice of appeal filed on March 19, 2010 was untimely and dismissed the appeal.

Petitioner filed an arbitration claim against respondent with the Financial Industry Regulatory Authority ("FINRA") raising federal claims of securities fraud under section 10(b)(5) of the Securities and Exchange Act of 1934 ("SEC"), 15 U.S.C. 78a et seq., and SEC Rule 10b-5, as well as state-law claims. When respondent lost the FINRA arbitration, respondent appealed the arbitration order asserting various improprieties and asked the district court, and now this court, to undo the award. The court upheld confirmation of the award in full after giving careful attention to respondent's arguments and found them to be without merit. The court did hold, however, that the district court's judgment should credit respondent for approximately $75 million that petitioner received in exchange for selling some of the failed auction rate securities at issue and should have reduced respondent's liability for interest accordingly. Therefore, the court vacated the district court's judgment on that point and remanded for modification in light of the partial satisfaction of the award. The court rejected, however, respondent's attempt to alter the award's scheme for distributing interest earned on the securities portfolio.

Debtor appealed the bankruptcy court's order granting creditor relief from the automatic stay to proceed with arbitration of its claim against debtor's bankruptcy estate. At issue was whether the bankruptcy court erred by not ruling on the issue of whether the agreement to arbitrate between the parties was obtained by fraud and whether the bankruptcy court should have tailored its order to require creditor's claim to be arbitrated by allegedly, then-pending class action arbitration. The court held that the bankruptcy court correctly determined that debtor's challenge to the contract between the parties was subject to arbitration where debtor's failure to raise an independent challenge before the bankruptcy court to the agreement to arbitrate was basis alone to affirm the bankruptcy court's order. The court also held that debtor failed to appreciate that separately alleging that an agreement to arbitrate was obtained through fraud was different from offering a separate basis for the fraud and the only fraud debtor alleged was that creditor misrepresented that it was affiliated with Ford Motor, Co., that this fraud induced the arbitration, and that this fraud induced the contract as a whole. Consequently, there was no need for the bankruptcy court to intervene or, in this case, deny creditor's motion for relief from the stay. The court further held that the bankruptcy court was not required to tailor its order to require arbitration in the class action arbitration in Texas where the arbitration panel in Texas declined to certify the class and the issue was therefore, moot. Accordingly, the court affirmed the bankruptcy court's order granting creditor relief from the automatic stay to proceed with the arbitration of its claim against debtor's bankruptcy estate.

Appellant, a Montana limited partnership which owned an electrical generating plant in Rosebud County, appealed the district court's order denying its motion to vacate the arbitration award ("Final Award") in its dispute with appellee, a Delaware corporation and a regulated public utility conducting business in Montana. At issue was whether the district court abused its discretion when if failed to vacate, modify, or correct the arbitration award. The court held that the district court did not abuse its discretion in denying appellant's motion where Montana's Uniform Arbitration Act, 27-5-311 MCA, did not permit a court to vacate an arbitration award in part; where Montana law was clear that a non-breaching party was still required to prove its damages; where the district court correctly noted in its order confirming the Final Award that the legal precedent on which appellant relied for its request to modify or correct the Final Award applied only to motions to vacate an award; and where the district court correctly determined that it lacked the authority to vacate the Final Award.

Petitioners and respondent agreed to submit their claims to arbitration but could not agree on an arbitrator. Because of this disagreement, the trial judge intervened and appointed an arbitrator to preside over their dispute. At issue was whether the court of appeals lacked jurisdiction under Texas Civil Practice and Remedies Code section 51.016 of an interlocutory appeal of an order appointing an arbitrator. Also at issue was whether, in the alternative, petitioners should be granted mandamus relief to prevent form from overriding substance. The court held that the court of appeals correctly determined that it was without jurisdiction to hear an interlocutory appeal pursuant to section 51.016. The court also instructed the court of appeals to consider this appeal as a petition for writ of mandamus because petitioners specifically requested mandamus relief in the court of appeals and preserved that issue in this court and because judicial efficiency militated against requesting petitioners to file a separate original proceeding.

In June 2009, defendant filed an arbitration demand against plaintiff alleging claims for wrongful termination and breach of contract based on plaintiff's failure to pay a performance bonus. Defendant subsequently filed a new demand for arbitration in October 2010, which included his original claims plus claims of fraud and breach of contract, after the arbitrator denied his motion to amend the original arbitration demand when he discovered evidence suggesting that plaintiff had padded estimated revenues for defendant's companies by $17 million. Plaintiff argued on appeal that the district court erred by not granting its motion for a preliminary injunction and temporary restraining order; that defendant's withdrawal from the first arbitration waived his right to a second arbitration; and that the first arbitration's October Order, denying defendant leave to amend, was an enforceable arbitration award. The court held that the Federal Arbitration Act, 9 U.S.C. 16(b)(4), precluded the court's review of the district court's order refusing to enjoin the arbitration. The court also held that a final decision with respect to an arbitration required an official dismissal of all claims and thus, where the district court stayed proceedings in lieu of dismissal, the decision was not final. The court further concluded that an arbitration award was a final adjudication of a claim on the merits and a procedural ruling that denied leave to amend was not an award since the decision had no effect on the merits of the proposed claims. Accordingly, the court dismissed the appeal for lack of jurisdiction.

Plaintiff-Appellee Spiska Engineering, Inc. (Spiska) sued Defendant-Appellee SPM Thermo-Shield, Inc. (Thermo-Shield) for breach of contract. Following a number of proceedings and appeals relating to the arbitration of the dispute, an arbitration award was confirmed, and Spiska obtained a money judgment against Thermo-Shield. A receiver was appointed to satisfy the judgment by liquidating Thermo-Shield's assets. Appellant Joseph Raver was Thermo-Shield's president, CEO and sole shareholder. Mr. Raver was not a party to the arbitration proceedings. The receiver mailed Mr. Raver a motion and notice of its intent to sell Thermo-Shield's assets. Mr. Raver appeared at a hearing at the circuit court, and objected to the sale. The court denied Mr. Raver's objection, and approved the sale. Though injunctive relief was not an issue at the hearing, the receiver included language in his proposed findings and conclusions that permanently enjoined Mr. Raver from competing with Thermo-Shield. The court adopted the receiver's findings in its final order. Mr. Raver appealed the award of injunctive relief, arguing that the court lacked jurisdiction over Mr. Raver to enjoin him. Upon review, the Supreme Court concluded that the circuit court lacked jurisdiction to enjoin Mr. Raver from competing with Thermo-Shield. The Court remanded the case for further proceedings.

Plaintiff appealed from a judgment of a single justice of this court denying his petition for relief under G.L.c. 211, 3, alleging, inter alia, violations of the Wage Act, G.L.c. 149, 148 and 150, when plaintiff filed an action in superior court against his former employers and their officers. At issue was whether the justice erred by denying plaintiff's second petition of relief from an order granting defendants' motion to compel arbitration as to some of plaintiff's claims and staying his remaining claims pending arbitration. The court held that the single justice did not err or abuse his discretion by denying relief where plaintiff offered several arguments that the justice's order was wrong on the merits and each of his arguments could be addressed in an appeal from a final judgment and where plaintiff had an alternative interlocutory remedy, namely, a petition for relief under G.L.c. 231, 118.

Plaintiff makes glucose monitors and other diabetes-related products that incorporate software written by defendant, under a contract that entitles it to use the software for two years after the contractâs initial term, 2006-2010, and any extension. It also gives plaintiff a right of first refusal should defendant agree to sell its stock or assets to one of plaintiffâs competitors "during the term of this Agreement." Defendant would not extend the contract after the original expiration date. Plaintiff learned that investors in defendant were negotiating to sell stock to a company that plaintiff considers a competitor. Defendant asserted that, because the transaction would not close until 2011, the right of first refusal did not apply. Plaintiff sought an injunction pending arbitration. Based on concerns about irreparable harm to each party, the district court entered an injunction to allow the sale to proceed, subject to a requirement that plaintiff be allowed to use the software through 2012; the injunction expires when the arbitrator renders a decision. The Seventh Circuit affirmed, modifying to add conditions to ensure that defendant remains a separate firm so that the transaction can be undone if the arbitrator rules in plaintiffâs favor.

Appellants appealed from an order of the district court denying its motion, made after a preliminary injunction was vacated by the court, to recover damages against an injunction bond posted by appellee. At issue was whether the district court correctly concluded that the damages sought were not proximately caused by the injunction, and that, in deciding this issue, the district court should have applied a presumption in favor of recovery against the bond. The court held that a wrongfully enjoined party was entitled to a presumption in favor of recovery against an injunction bond and that the district court's decision was insufficient to permit meaningful appellate review. Accordingly, the court vacated the order and remanded for reconsideration and clarification.