Justia Arbitration & Mediation Opinion Summaries

At a foreclosure mediation, Homeowners and representatives of Lender agreed that foreclosure proceedings would be halted while Homeowners were being considered for a loan modification. Several months later, Homeowners petitioned for judicial review, asserting that Lender breached the parties' agreement. The district court granted the petition, finding Lender had violated the agreement and directing Lender to participate in and pay for further mediation. The Supreme Court dismissed Lender's appeal, holding (1) to preserve and promote the interests of judicial economy and efficiency, an order remanding for further mediation generally is not final and appealable; and (2) the Court lacked jurisdiction to hear this appeal because, given the remand for additional mediation, the district court's order was not final and appealable.View " Wells Fargo Bank, N.A. v. O'Brien" on Justia Law

Plaintiff and other checking account customers filed suit against the Bank for allegedly charging excessive overdraft fees in breach of their account agreement. The district court denied the Bank's renewed motion to compel arbitration. The court concluded that state law applied when courts determined whether a valid arbitration agreement is in effect, and the Federal Arbitration Act's, 9 U.S.C. 1 et seq., presumption did not; under North Carolina law, the Bank Agreement was entirely superseded, and the arbitration agreement in that agreement therefore became ineffective; the district court properly looked to the PNC Agreement to determine whether the parties agreed to arbitrate their disputes; under North Carolina law, the PNC Agreement's silence was insufficient to form such an agreement; based on the terms of the agreement, the PNC Agreement applied retroactively; and because the agreement governing the dispute at hand did not permit the Bank to compel arbitration, the district court properly denied the motion. Accordingly, the court affirmed the judgment of the district court. View "Dasher v. RBC Bank (USA)" on Justia Law

Green sued under the Truth in Lending Act, 15 U.S.C. 1606, claiming that U.S. Cash Advance misstated her loan’s annual percentage rate. The lender requested arbitration under the loan agreement, which referred to “binding arbitration by one arbitrator by and under the Code of Procedure of the National Arbitration Forum.” The agreement was signed in 2012; the Forum has not accepted new consumer cases for arbitration since 2009, when it settled a suit alleging bias in merchants’ favor. The lender asked the court to appoint a substitute arbitrator under 9 U.S.C. 5. The judge declined, stating that identification of the Forum as arbitrator was “integral.” The Seventh Circuit reversed, reasoning that the agreement calls for use of the Forum’s Code of Procedure, not for the Forum itself to conduct proceedings. The court noted that the lender will have to “live with” the judge’s broad discretion in choosing an arbitrator, who might be familiar with practices in the payday loan industry or open to use of claimant classes in arbitrations, perhaps on a theory “that a consumer who would not voluntarily waive her rights under the Truth in Lending Act probably should not be deemed to have implicitly waived her right to the only procedure that could effectively enforce those rights.” View "Green v. U.S. Cash Advance IL, LLC" on Justia Law

Plaintiffs in this consolidated interlocutory appeal were defaulted mortgagors of Rhode Island real estate. Defendants were the corresponding mortgagees, Plaintiffs' agents or assignees, who allegedly held Rhode Island mortgagees' legal titles and asserted the right to foreclosure for default on mortgage terms. Plaintiffs brought this action alleging that the ostensible assignments of their mortgagees' legal titles were invalid, leaving the assignees without the right to foreclose. The district court imposed a stay in the nature of a preliminary injunction against foreclosure and possessory proceedings and appointed a special master to mediate the claims. Defendants appealed and filed a mandamus petition, claiming that the district court erred in failing to provide notice and hearing before issuing the stay and in failing to set limits of time and cost when referring the mortgagors' cases to the special master. The First Circuit Court of Appeals remanded with instructions to hold a prompt hearing with reasonable notice on the question of whether the injunction should be continued and to establish specific limits of time and expense if the reference for mediation was to remain in effect. View "In re Mortgage Foreclosure Cases" on Justia Law

In 2008, Regents Bank issued two loans to Appellant. After Appellant failed to repay either loan, Regents filed a complaint in district court for breach of contract and judicial foreclosure. The district court stayed the proceedings and compelled arbitration as provided in the loan documents. The arbitrator ultimately ruled in Regents' favor. The district court confirmed the arbitration award and later entered an amended judgment and order of sale. Appellant appealed, arguing (1) Regents employed undue means in procuring the award, and (2) the arbitrator manifestly disregarded the law in refusing to void one of the loans. The Supreme Court affirmed the district court's order confirming the arbitration award, holding (1) Appellant failed to satisfy his burden of proving by clear and convincing evidence that the award was procured through intentionally misleading conduct; and (2) the arbitrator's refusal to void one of the loans was not a manifest disregard of the law. View "Sylver v. Regents Bank, N.A." on Justia Law

Homeowner attended a first Foreclosure Mediation Program (FMP) mediation with Citimortgage, after which Defendant was denied a loan modification. The district court subsequently ordered a second mediation. PennyMac Corp. later obtained beneficial interest in the deed of trust and promissory note and attended the second mediation. The mediator determined that PennyMac failed to bring the promissory note, deed of trust, and other documents to the mediation and that PennyMac's representative lacked authority to negotiate. Homeowner filed a petition for judicial review, requesting sanctions, attorney fees, and a judicially imposed loan modification. The district court imposed sanctions against PennyMac but declined to impose a loan modification or monetary sanctions beyond the amount of attorney fees. The Supreme Court affirmed, holding (1) Homeowner had standing to challenge the district court's order on appeal; and (2) the district court acted within its discretion in denying an FMP certificate and in determining sanctions. View " Jacinto v. PennyMac Corp." on Justia Law

First Franklin Financial Corporation and Jason Gardner attended foreclosure mediation. The parties disputed the outcome of the mediation. Gardner argued that the parties reached a binding agreement requiring First Franklin to offer a trial loan modification plan to Gardner and subsequently filed a motion for sanctions. The district court granted the motion and ordered First Franklin to pay monetary sanctions and to enter into a loan modification with Gardner on the terms agreed upon by the parties at foreclosure mediation. First Franklin filed an interlocutory appeal. The Supreme Court granted the appeal and held that the motion court did not err (1) in finding that Gardner and First Franklin entered into a binding agreement requiring First Franklin to offer the loan modification to Gardner; and (2) in finding that First Franklin did not mediate in good faith and in granting Gardner's motion for sanctions. View "First Franklin Fin. Corp. v. Gardner" on Justia Law

A dispute between a bank customer (Customer) and her bank (Bank) over missing endorsements was submitted to arbitration through the American Arbitration Association. The arbitrator issued a written award in Bank's favor and then granted Bank's motion for an order confirming the arbitration award and for entry of judgment on the order. Customer objected, arguing that, pursuant to Nev. Rev. Stat. 38.239, she should have been afforded the opportunity to oppose the motion to confirm and/or to file a competing motion to vacate, modify, or correct the award. The district court denied the motion. The Supreme Court affirmed, holding that the district court erred in summarily confirming the arbitration award against Customer without giving Customer the opportunity to be heard in opposition to the motion to confirm, even though the ninety-day period for Customer to move to vacate, modify, or correct the award had yet to run. View "Casey v. Wells Fargo Bank, N.A." on Justia Law

Appellant, a Nevada homeowner, elected mediation pursuant to the Nevada Foreclosure Mediation Program (FMP) to produce a loan modification. When the mediation did not result in a loan modification, Appellant filed a petition for judicial review asking for sanctions against Respondent, BAC Home Loans Servicing, LP (BAC), alleging that BAC failed to comply with the FMP's document production and good faith requirements. The district court rejected Appellant's petition, finding (1) there was no irregularity as to the submitted documents; (2) BAC met its burden of showing a lack of bad faith; and (3) absent a timely appeal, a letter of certification would issue. The Supreme Court affirmed, holding (1) although BAC's document production lacked a key assignment, Appellant filled the gap with a document he produced; and (2) the district court therefore did not abuse its discretion in denying sanctions and allowing the FMP certificate to issue. View "Einhorn v. BAC Homes Loans Servicing" on Justia Law

Plaintiffs in these five separate putative class actions alleged that Wells Fargo and Wachovia Bank unlawfully charged them overdraft fees for their checking accounts, which were governed by agreements that provided for arbitration of disputes on an individual basis. On appeal, Wells Fargo argued that it did not waive its right to compel arbitration because it would have been futile to move to compel arbitration before the Supreme Court decided AT&T Mobility LLC v. Concepcion. The court concluded that Concepcion established no new law. Because the court concluded that it would have been futile for Wells Fargo to argue that the Federal Arbitration Act, 9 U.S.C. 1 et seq., preempted any state laws that purported to make the classwide arbitration provisions unenforceable, the court affirmed the denial of its motion to compel arbitration. View "Garcia v. Wells Fargo Bank, N.A." on Justia Law