Justia Arbitration & Mediation Opinion Summaries

Plaintiffs DDK Hotels, DDK Hospitality, and DDK Management filed suit against Defendants Williams-Sonoma and West Elm, asserting claims for breach of contract, breach of the implied covenant of good faith and fair dealing, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, and unjust enrichment. West Elm then brought an action in the Delaware Court of Chancery, seeking to dissolve the joint venture, which the Delaware court dismissed. Plaintiffs then filed a supplemental complaint in the district court to assert an additional claim for breach of the prevailing party provisions of Section 21(h) of the joint venture agreement. Defendants then moved to compel arbitration for that claim, which the district court denied.The Second Circuit affirmed the district court's order denying defendants' motion to compel arbitration, concluding that the joint venture agreement does not "clearly and unmistakably" delegate arbitrability to the arbitrator and that the district court therefore correctly ruled on the scope of the arbitration agreement. Finally, the court rejected DDK Hospitality's request for prevailing party fees and noted that DDK Hospitality may pursue its request for fees on remand. View "DDK Hotels, LLC v. Williams-Sonoma, Inc." on Justia Law

JP-Richardson, LLC (JP) appealed a court a judgment confirming an arbitration award in favor of Pacific Oak SOR Richardson Portfolio JV, LLC F/K/A KBS SOR Richardson Portfolio JV, LLC (Pacific Oak) in a business dispute. Pacific Oak removed JP as the managing member of a joint venture real estate company. JP initiated arbitration, seeking to be reinstated as the managing member. The arbitrator determined Pacific Oak’s decision to remove JP was justified, and JP owed over $1 million (the cost of arbitration). On appeal, JP argued the trial court erred by denying its petition to vacate the award and by granting Pacific Oak’s motion to confirm the award. Concluding JP’s contentions lacked merit, the Court of Appeal affirmed the judgment. View "JP-Richardson v. Pacific Oaks etc." on Justia Law

Soliman entered a California Subway sandwich shop. An employee showed her an in-store, hard-copy advertisement, on which Subway offered to send special offers if she texted a keyword. Soliman sent a text message to Subway. Subway began sending her, via text message, hyperlinks to electronic coupons. Soliman alleges that she later requested by text that Subway stop sending her messages, but her request was ignored. She filed suit under the Telephone Consumer Protection Act. Subway moved to compel arbitration, arguing that a contract was formed because the in-store advertisement, from which Soliman got the keyword and shortcode, included a reference to terms and conditions, including an arbitration requirement, located on Subway’s website and provided the URL.The Second Circuit affirmed the denial of the motion to compel arbitration. Under California law, Soliman was not bound by the arbitration provision because Subway did not provide reasonably conspicuous notice that she was agreeing to the terms on the website. Because of barriers relating to the design and content of the print advertisement, and the accessibility and language of the website itself, the terms and conditions were not reasonably conspicuous under the totality of the circumstances; a reasonable consumer would not realize she was being bound to such terms by sending a text message to Subway in order to receive promotional offers. View "Soliman v. Subway Franchisee Advert. Fund Trust, Ltd." on Justia Law

Pillar hired Epiphyte to convert its cryptocurrency into Euros. Epiphyte informed Pillar that it used Payward’s online exchange to convert its clients’ cryptocurrencies. Pillar transferred its cryptocurrency into Epiphyte’s account on Payward’s platform. After Epiphyte converted the currency but before the exchanged funds were transferred to Pillar’s bank account, four million Euros belonging to Pillar were stolen from Epiphyte’s account.Pillar sued Payward, alleging Payward knew or should have known that Epiphyte was using its Payward account on Pillar's behalf, failed to use standard security measures that would have prevented the theft, and falsely advertised that it provided the best security in the business. Payward moved to compel arbitration, claiming that Epiphyte agreed to Payward’s “Terms of Service” when it created an account, as required for all users, that those Terms included an arbitration agreement, and that Pillar was bound by that agreement.The court of appeal affirmed the denial of Payward’s motion. There is no evidence Epiphyte was acting as Pillar’s agent when it agreed to the Terms two years before Pillar hired it or that the agency relationship automatically bound the principal to the agent’s prior acts. There is no evidence Pillar knew the arbitration agreements existed or had a right to rescind them. No ratification occurred. There was no intent to benefit Pillar or similar parties. Pillar’s claims are not inextricably intertwined with the Terms. View "Pillar Project AG v. Payward Ventures, Inc." on Justia Law

Respondents-Appellants DynaResource de Mexico, S.A. de C.V. and DynaResource, Inc. (“DynaResources”) appealed the district court’s confirmation of an arbitration award in Applicant-Appellee Goldgroup’s favor. This case involves a protracted dispute over a contract relating to a gold mining operation in Mexico. Goldgroup is a subsidiary of a Canadian company with a portfolio of projects in Mexico. DynaUSA, a Texas-based company, incorporated DynaMexico specifically for the purpose of developing the San Jose de Gracia property in the Sinaloa region of Northern Mexico. In 2006, Goldgroup and DynaResources entered into an Earn In/Option Agreement (the “Option Agreement”) which gave Goldgroup the right to earn up to a 50 percent equity interest in DynaMexico if Goldgroup invested a total of $18 million in four phases over approximately four years. The Option Agreement contained a dispute resolution provision specifying that “[a]ll questions or matters in dispute under this Agreement shall be submitted to binding arbitration . . . in Denver, Colorado under the Rules of the American Arbitration Association (‘AAA’) by a single arbitrator selected by the parties.” The Option Agreement also states that Mexican law applies “in respect to the shares of DynaMexico and the acquisition thereof,” and that venue and jurisdiction for any dispute under the Option Agreement would be in Denver. In 2011, Goldgroup exercised its option, became a 50 percent shareholder in DynaMexico, and appointed two directors. However, before the parties could agree on the fifth director, their relationship broke down due to a dispute over management issues. In 2012, DynaResources filed the first of numerous lawsuits between the parties; Goldgroup defended in part by arguing that DynaResources’s claims were subject to arbitration. Finding no reversible error to the district court's judgment, the Tenth Circuit Court of Appeals affirmed. View "Goldgroup Resources v. Dynaresource De Mexico" on Justia Law

Putnam purchased a service-only (satellite) Subaru facility in San Francisco. Putnam entered into a temporary “Dealer Candidate Satellite Service Facility Agreement.” Subaru and Putnam subsequently executed a Subaru Dealer Agreement for the sale and service of vehicles at a Burlingame dealership and a five-year (renewable) Satellite Service Facility Agreement, which contained an arbitration provision. In 2017, Subaru stated that it would not approve Putnam’s proposed relocation of the satellite facility and would not renew the Satellite Agreement in 2019. Putnam filed protests with the New Motor Vehicle Board. Subaru moved to compel arbitration.The trial court found that the Satellite Agreement did not come within the Motor Vehicle Franchise Contract Arbitration Fairness Act, an exception to the Federal Arbitration Act. Putnam was compelled to arbitrate claims arising from that agreement. The court denied Subaru’s request to compel Putnam to dismiss its Board protests, which were stayed pending arbitration. An arbitrator found that the Satellite Agreement was a franchise, that Subaru was required to show good cause, and that Subaru had established good cause for terminating the Satellite Agreement.The court of appeal affirmed the confirmation of the arbitration award, rejecting arguments that the arbitrator lacked jurisdiction to make a good cause determination; enforcement of the arbitration provision was illegal under the Vehicle Code; public policy underlying California’s New Motor Vehicle Board Act precluded the arbitrator from making a good cause determination; and that Putnam’s due process rights were violated when Subaru failed to provide the required notice of the reasons for termination. View "Subaru of America, Inc. v. Putnam Automotive, Inc." on Justia Law

Gulf LNG Energy, LLC owned and operated a liquefied natural gas (“LNG”) terminal in Mississippi (the “Pascagoula Facility”). Gulf LNG Pipeline, LLC (collectively with Gulf LNG Energy, LLC, “Gulf”), owned and operated a five-mile long pipeline that distributed LNG from the Pascagoula Facility to downstream inland pipelines. Eni USA Gas Marketing LLC (“Eni”), marketed natural gas products and offered related services to customers in the U.S. In 2007, Gulf and Eni entered into a Terminal Use Agreement (the “TUA”), whereby Gulf would construct the Pascagoula Facility, and Eni would use the Facility to receive, store, regasify, and deliver imported LNG to downstream businesses. Under the TUA, Eni agreed to pay Gulf fees for using the Facility, including monthly Reservation Fees and Operating Fees. In 2016, Eni filed for arbitration, alleging the U.S. natural gas market had undergone a “radical change” due to “unforeseen, vast new production and supply of shale gas in the United States [that] made import of LNG into the United States economically irrational and unsustainable.” Eni alleged the essential purpose of the TUA had been frustrated and thus terminated because of “fundamental and unforeseeable change in the United States natural gas/LNG market,” and sought a declaration that Eni could terminate the TUA at any time because Gulf breached warranties and covenants. After the first arbitration, the panel order Eni to pay Gulf "just compensation ...for the value their partial performance of the TUA conferred upon Eni." Gulf subsequently sued Eni to collect the arbitration award; judgment was entered in Gulf's favor. Eni initiated a second arbitration, again asserting breaches of the TUA. Gulf moved to dismiss the second arbitration. The Court of Chancery ruled the issues raised in the second arbitration were already decided in the first (and subsequent court case). The Delaware Supreme Court, after its review of these proceedings, determined: (1) the Court of Chancery had jurisidction to enjoin a collateral attack on the first arbitration award; and (2) the Court of Chancery should have enjoined all claims in the second arbitration between the parties, because the admitted goal of the second arbitration was to "raise irregularities and revisit the financial award in the first arbitration." The Court, therefore, affirmed part of the Court of Chancery's judgment affirming dismissal of the second arbitration, and reversed any part of the lower court's judgment allowing certain issues in the second arbitration to be considered. View "Gulf LNG Energy v. ENI USA Gas Marketing" on Justia Law

Plaintiff Gerriann Fagan appealed a circuit court order granting defendant Warren Averett Companies, LLC's motion to compel arbitration. Fagan was the owner of The Prism Group, LLC, a human-resources consulting firm. In February 2015, Warren Averett approached her and asked her to join Warren Averett and to build a human-resources consulting practice for it. In February 2015, she agreed to join Warren Averett, entering into a "Transaction Agreement" which provided that: Fagan would wind down the operations of The Prism Group; Fagan would become a member of Warren Averett; Warren Averett would purchase The Prism Group's equipment and furniture; Warren Averett would assume responsibility for The Prism Group's leases; and that Warren Averett would assume The Prism Group's membership in Career Partners International, LLC. The Transaction Agreement further provided that Fagan would enter into a "Standard Personal Service Agreement" ("the PSA") with Warren Averett; that Fagan's title would be president of Warren Averett Workplace; and that Fagan would be paid in accordance with the compensation schedule outlined in the PSA. Fagan alleged that she subsequently resigned from Warren Averett when she was unable to resolve a claim that Warren Averett had failed to properly compensate her in accordance with the PSA. On or about February 28, 2019, Fagan filed a demand for arbitration with the American Arbitration Association ("AAA"). The employment-filing team of the AAA sent a letter dated March 4, 2019, to the parties informing them of the conduct of the arbitration proceedings. On April 18, 2019, the employment-filing team notified the parties that Warren Averett had failed to submit the requested filing fee and that it was administratively closing the file in the matter. On April 30, 2019, Fagan sued Warren Averett in circuit court. The Alabama Supreme Court determined Warren Averett's failure to pay the filing fee constituted a default under the arbitration provision of the PSA. Accordingly, the trial court erred when it granted Warren Averett's motion to compel arbitration. View "Fagan v. Warren Averett Companies, LLC" on Justia Law

In 2016, plaintiff-appellee Isaac Sutton went shopping for a vehicle at the defendant-appellant David Stanley Chevrolet, Inc.'s (hereafter DSC) car dealership. He agreed to purchase a 2016 Chevy Silverado on credit and he agreed to trade-in his 2013 Challenger. He was informed by DSC that his credit was approved. In addition, he was given $22,800.00 for the Challenger for which he still owed $25,400.00. The documents for the purchase of the vehicle amounted to approximately eighty-six pages, which included a purchase agreement and a retail installment sale contract (RISC). He left the dealership that evening with the Silverado and left his Challenger. Several days later he was informed by DSC that his financing was not approved and he would need a co-signor to purchase the Silverado. Sutton visited DSC but was then told he did not need a co-signor and there was no need to return the vehicle. At the end of June his lender for his 2013 Challenger contacted him about late payments. Sutton contacted DSC who said it was not their responsibility to make those payments since they did not own the Challenger he traded-in. A few days later, he was notified by DSC that his Challenger had been stolen and the matter was not the responsibility of DSC. Sutton had to make an insurance claim on his Challenger and DSC took back the Silverado. In the meantime, Sutton continued to make payments on the Challenger. Plaintiff and his wife Celeste Sutton sued DSC over the whole transaction involving the Challenger. DSC moved to compel arbitration. Plaintiffs alleged they were fraudulently induced into entering the arbitration agreement. The trial court found there was fraudulent inducement and overruled the motion to compel arbitration. The Oklahoma Court of Civil Appeals reversed the trial court and remanded for further proceedings concerning the unconscionability of the arbitration agreement. The Oklahoma Supreme Court granted certiorari, and found the trial court's order was fully supported by the evidence. The opinion of the Oklahoma Court of Civil Appeals was therefore vacated and the matter remanded to the trial court for further proceedings. View "Sutton v. David Stanley Chevrolet" on Justia Law

After Buyers purchased two care facilities from Sellers, Buyers filed suit alleging that Sellers made fraudulent or, at best, negligent misrepresentations in the parties' sale agreements. Buyers also brought claims against Sellers' representatives in their individual capacities.The Fifth Circuit affirmed the district court's dismissal of Buyers' claims with prejudice for failure to state a claim. The court held that the district court properly dismissed Buyers' non-fraud claims for negligent misrepresentation and breach of contractual representations and warranties because these claims were subject to arbitration. In regard to the remaining claims, the court held that Buyers have not adequately pleaded a misrepresentation with respect to both facilities and thus they failed to meet the particularity requirements of Federal Rule of Civil Procedure 9(b). Therefore, because there was no misrepresentation, there was no fraud. View "Colonial Oaks Assisted Living Lafayette, LLC v. Hannie Development, Inc." on Justia Law