Justia Arbitration & Mediation Opinion Summaries

Brokers Webb and Beversdorf were fired by Jefferies. They challenged their termination. As their employment contracts required, they filed claims in the Financial Industry Regulatory Authority’s arbitration forum. They signed FINRA's required “Arbitration Submission Agreement.” Their dispute proceeded in arbitration for two-and-a-half years. They withdrew their claims before a final decision was rendered. Under FINRA’s rules, that withdrawal constituted a dismissal with prejudice. Webb and Beversdorf then sued FINRA in Illinois, alleging that FINRA breached its contract to arbitrate their dispute with Jefferies by failing to properly train arbitrators, failing to provide arbitrators with appropriate procedural mechanisms, interfering with the arbitrators’ discretion, and failing to permit reasonable discovery. They sought damages in “excess of $50,000” and a declaratory judgment. The district court held that FINRA was entitled to arbitral immunity and dismissed the suit. The Seventh Circuit vacated, concluding that the federal courts lacked jurisdiction under the diversity statute, 28 U.S.C. 1332, which grants jurisdiction when there is complete diversity of citizenship between the parties and the amount in controversy exceeds $75,000, exclusive of interest and costs. While Illinois law permits plaintiffs to recover legal expenses as damages in limited circumstances, those circumstances are not present here, so the amount in controversy requirement was not satisfied. View "Webb v. Financial Industry Regulatory Authority" on Justia Law

Warrior Met Coal, LLC sued Eickhoff Corporation alleging certain pieces of heavy mining equipment Eickhoff had manufactured and sold to Warrior Coal were defective. Eickhoff subsequently moved the trial court to compel Warrior Coal to arbitrate its claims pursuant to an arbitration provision in contracts executed after the sale of the equipment, not the original purchase-order contracts associated with the allegedly defective equipment. The trial court denied the motion to compel arbitration and Eickhoff appeals. The Alabama Supreme Court determined the breach-of-warranty, breach-of-contract, and products-liability claims asserted by Warrior Coal in its action against Eickhoff were at least arguably connected to the master service agreements inasmuch as those contracts addressed Eickhoff's obligation to provide an employee to assist with the maintenance and operation of the longwall shearers (the allegedly defective equipment). Accordingly, because the parties also agreed in the master service agreements that the AAA commercial arbitration rules would govern any arbitration, and because those rules empowered the arbitrator to decide questions of arbitrability, the trial court erred when it instead at least implicitly resolved the arbitrability issue in favor of Warrior Coal in its order denying Eickhoff's motion to compel. That order was accordingly reversed and the case remanded for the trial court to enter an order granting Eickhoff's motion to compel arbitration and staying proceedings in the trial court during the pendency of the arbitration proceedings. View "Eickhoff Corporation v. Warrior Met Coal, LLC" on Justia Law

The law of the case from the first appeal in this case was not relevant in the second appeal because, on remand from the first appeal, the trial court had relied on new evidence to decide that Nicholas Giancola had signed an arbitration agreement.Plaintiff brought this survival action and wrongful death action, claiming that Giancola’s death was caused by injuries that he sustained while he was at Walton Manor Health Care Center. Walton Manor moved to compel arbitration, arguing that Giancola had entered into a binding arbitration agreement with Walton Manor. The trial court ordered arbitration of the survival action, finding that Giancola’s mother had signed the arbitration agreement and that she had apparent authority to bind her son to its terms. The appellate court reversed. On remand, the trial court referred the appropriate counts to arbitration, concluding that Giancola had signed the arbitration agreement. The appellate court held that the trial court had violated the law-of-the-case doctrine when it reconsidered the issue of who had signed the arbitration agreement. The Supreme Court reversed, holding that the law-of-the-case doctrine did not prevent the trial court on remand from considering new evidence as to whether Giancola signed the arbitration agreement. View "Giancola v. Azem" on Justia Law

Plaintiff Rae Weiler sought a declaration that defendants Marcus & Millichap Real Estate Investment Services, Inc., et al., had to either: (1) pay plaintiff’s share of the costs in the previously ordered arbitration; or (2) waive their contractual right to arbitrate the underlying claims and allow them to be tried in the superior court. Plaintiff and her husband allegedly lost more than $2 million at the hands of defendants. She sued for breach of fiduciary duty, negligence and elder abuse claims. After being ordered to arbitration and pursuing her claims in that forum for years, plaintiff asserted she could no longer afford to arbitrate. According to plaintiff, if she had to remain in arbitration and pay half of the arbitration costs (upwards of $100,000) she would be unable to pursue her claims at all. Plaintiff initially sought relief from the arbitrators (pursuant to Roldan v. Callahan & Blaine 219 Cal.App.4th 87 (2013)); they ruled it was outside their jurisdiction, and directed her to the superior court. So, plaintiff filed this declaratory relief action in the superior court, again seeking relief under Roldan. The Court of Appeal concluded, based primarily on Roldan, plaintiff may be entitled to the relief she seeks. However, the superior court granted summary judgment to defendants on the grounds the arbitration provisions were valid and enforceable, and that plaintiff’s claimed inability to pay the anticipated arbitration costs was irrelevant. This, the Court found, was error: “Though the law has great respect for the enforcement of valid arbitration provisions, in some situations those interests must cede to an even greater, unwavering interest on which our country was founded - justice for all.” Consistent with Roldan, and federal and California arbitration statutes, a party’s fundamental right to a forum she or he can afford may outweigh another party’s contractual right to arbitrate. In this case, the Court found triable issues of material fact regarding plaintiff’s present ability to pay her agreed share of the anticipated costs to complete the arbitration. The trial court therefore erred in granting defendants’ motion for summary judgment. View "Weiler v. Marcus & Millichap Real Estate Investment Services" on Justia Law

Plaintiff Rae Weiler sought a declaration that defendants Marcus & Millichap Real Estate Investment Services, Inc., et al., had to either: (1) pay plaintiff’s share of the costs in the previously ordered arbitration; or (2) waive their contractual right to arbitrate the underlying claims and allow them to be tried in the superior court. Plaintiff and her husband allegedly lost more than $2 million at the hands of defendants. She sued for breach of fiduciary duty, negligence and elder abuse claims. After being ordered to arbitration and pursuing her claims in that forum for years, plaintiff asserted she could no longer afford to arbitrate. According to plaintiff, if she had to remain in arbitration and pay half of the arbitration costs (upwards of $100,000) she would be unable to pursue her claims at all. Plaintiff initially sought relief from the arbitrators (pursuant to Roldan v. Callahan & Blaine 219 Cal.App.4th 87 (2013)); they ruled it was outside their jurisdiction, and directed her to the superior court. So, plaintiff filed this declaratory relief action in the superior court, again seeking relief under Roldan. The Court of Appeal concluded, based primarily on Roldan, plaintiff may be entitled to the relief she seeks. However, the superior court granted summary judgment to defendants on the grounds the arbitration provisions were valid and enforceable, and that plaintiff’s claimed inability to pay the anticipated arbitration costs was irrelevant. This, the Court found, was error: “Though the law has great respect for the enforcement of valid arbitration provisions, in some situations those interests must cede to an even greater, unwavering interest on which our country was founded - justice for all.” Consistent with Roldan, and federal and California arbitration statutes, a party’s fundamental right to a forum she or he can afford may outweigh another party’s contractual right to arbitrate. In this case, the Court found triable issues of material fact regarding plaintiff’s present ability to pay her agreed share of the anticipated costs to complete the arbitration. The trial court therefore erred in granting defendants’ motion for summary judgment. View "Weiler v. Marcus & Millichap Real Estate Investment Services" on Justia Law

When reviewing a decision of a common pleas court confirming, modifying, vacating, or correcting an arbitration award, an appellate court should accept finding of fact that are not clearly erroneous but should decide questions of law de novo.The Supreme Court affirmed the judgment of the Eleventh District Court of Appeals, which reversed the decision of the trial court vacating an arbitration award and reinstated the arbitration award, holding that the court of appeals conducted a proper de novo review of the trial court’s decision. Because the court of appeals’ judgment conflicted with judgments of the Eighth District and the Twelfth District, where the court of appeals concluded that the standard of review for an appellate court reviewing a trial court decision confirming or vacating an arbitration award is an abuse of discretion, the Supreme Court determined that a conflict existed and agreed to resolve the matter. View "Portage County Board of Developmental Disabilities v. Portage County. Educators' Association for Developmental Disabilities" on Justia Law

McCall resigned from Shaw and later became the CEO of Allied, Shaw’s direct competitor. Shaw sued, citing noncompete and nonsolicitation agreements in McCall’s employment contract. Those agreements call for arbitration and state that the employer may seek injunctive relief without waiving the right to arbitrate. The state court issued a Joint Protective Order. Aptim acquired the rights to McCall’s employment agreement but withdrew a subsequent motion for substitution in the suit. Aptim filed a demand for arbitration with the American Arbitration Association. Shaw filed an amended petition, deleting its request for damages, and a motion to dismiss the amended petition with prejudice. McCall filed an opposition, an answer, a counterclaim, a petition for declaratory judgment, a motion to consolidate, and a motion for constructive contempt against Aptim for demanding arbitration in violation of the protective order, though Aptim was not then a party to the case. Aptim, without Shaw, sued in federal court to compel arbitration and to stay the state-court proceeding. Before the federal court ruled, the state court issued an order joining Aptim in the state-court action, retroactively effective, finding that Aptim and Shaw had waived their arbitration rights. The federal district court then ordered arbitration and stayed the state-court action. The Fifth Circuit affirmed, finding that the factors weighed against abstention because the case does not involve jurisdiction over a thing and federal law provides the rules of decision on the merits and strongly favors arbitration. View "Aptim Corp. v. McCall" on Justia Law

In July 2007, NMG, a luxury fashion retailer, notified its employees that acceptance of the NMG Arbitration Agreement was a mandatory condition of employment which would be implied for all employees who continued to work at NMG beyond July 15, 2007. Tanguilig unsuccessfully tried to negotiate its terms. Tanguilig chose not to return to work after July 15, and sued alleging, among other things: wrongful termination in violation of public policy; wrongful retaliation; wrongfully requiring employees to agree to allegedly illegal terms, failure to provide 10-minute rest periods and 30-minute meal periods and to pay overtime wages and minimum wage in violation of the Labor Code; and failure to pay wages owed at the time of discharge. Early in the proceedings, the court dismissed Tanguilig’s wrongful termination and related claims. Several years later, it dismissed the remaining claims under California’s five-year dismissal statute, Code of Civil Procedure 583.310. The court of appeal affirmed, rejecting Tanguilig’s argument that the trial court erred in failing to toll the five-year clock under section 583.340(c), for the period during which an order compelling a co-plaintiff to arbitration was in effect. Tanguilig made no factual showing that she could not have brought her claims to trial while that order was in effect View "Tanguilig v. Neiman Marcus Group, Inc." on Justia Law

Plaintiff James Bearden sued Dolphus McGill after they were involved in a car accident. They went to mandatory arbitration, and the arbitrator awarded plaintiff Bearden $44,000.00 in damages. Bearden moved for statutory costs under RCW 4.84.010 as the prevailing party. The arbitrator, consistent with MAR 6.4(d), filed an amended award granting the fee request. The amended award granted $1,187.00 in costs to the plaintiff, amounting to a total award of $45,187.00. Defendant McGill requested a trial de novo. At trial, the jury awarded Bearden $42,500.00 in damages and $3,296.39 in RCW 4.84.010 costs for a total award of $45,796.39. Bearden moved for attorney fees under MAR 7.3, arguing that McGill had not improved his position at trial because the trial award of $45,796.39 exceeded the arbitral award of $45,187.00. The trial judge agreed and awarded Bearden $71,800.00 in attorney fees and costs incurred as a result of the trial. McGill appealed, arguing that the trial court erred by including trial costs in the MAR 7.3 comparison. The Court of Appeals vacated the award of attorney fees and costs to Bearden, holding that the proper comparison was between the common elements of the awards in both proceedings, including only "those costs and fees litigated before both the arbitrator and trial court." The Washington Supreme Court reaffirmed that the determination of whether a requesting party's position was improved should follow the reasoning of an ordinary person. Accordingly, the Court held that statutory costs should be included. The Court of Appeals was therefore reversed. View "Bearden v. McGill" on Justia Law

Alfa Insurance Corporation, ALFA Mutual General Insurance Corporation, ALFA Life Insurance Corporation, and ALFA Specialty Insurance Corporation (collectively, "Alfa") petitioned the Alabama Supreme Court for a writ of mandamus seeking review of an order entered by the Montgomery Circuit Court on December 18, 2015. Although Alfa set forth three issues for review, the Supreme Court reviewed only one: whether the circuit court had jurisdiction to enter the December 18, 2015, order and whether it exceeded its discretion by not setting that order aside. R.G. "Bubba" Howell, Jr., and M. Stuart "Chip" Jones were insurance agents for an Alfa insurance agency in Mississippi. Their agency agreements with Alfa included an arbitration provision, as well as a provision requiring Howell and Jones to purchase "errors and omissions" insurance coverage. In 2012, Alfa accused Howell and Jones of selling competing products in contravention of their agency agreements; Howell and Jones, however, alleged that their actions had been approved by Alfa. Regardless, Alfa forced Howell to resign his position as an Alfa agent on December 31, 2012, and discharged Jones on January 1, 2013. After review, the Supreme Court concluded the circuit court exceeded its discretion in entering the December 18, 2015, order compelling discovery pretermitted discussion of the other, two discovery issues. View "Ex parte Alfa Insurance Corporation et al." on Justia Law