Justia Arbitration & Mediation Opinion Summaries

Marlene Baker LaBerge, a 73-year-old woman, was a resident and patient of a 24- hour skilled nursing facility owned by Italian Maple Holdings, LLC dba La Paloma Healthcare Center (La Paloma). LaBerge's heirs, Paul LaBerge, Suzanne Marx, and Talmadge Baker (collectively Plaintiffs) sued La Paloma and Plum Healthcare, LLC (together Defendants) for elder abuse, violations of the Patient's Bill of Rights as codified at Health and Safety Code section 1430, negligence, and wrongful death. In response, Defendants filed a petition to compel arbitration based on the two arbitration agreements that LaBerge had executed. The two arbitration agreements included language required by Code of Civil Procedure section 1295, subdivision (c), requiring such agreements to include a 30-day "cooling off" period, during which the parties to the agreement may rescind it. Ten days after LaBerge signed the agreements (and therefore, prior to the expiration of the statutorily-required 30- day rescission period), LaBerge passed away. The superior court denied the petition to compel arbitration, relying on Rodriguez v. Superior Court, 176 Cal.App.4th 1461 (2009) to conclude that the agreements were not effective until the 30-day rescission period passed without either party rescinding the agreements; because LaBerge died before the expiration of the 30-day rescission period, the agreements could not be given effect. On appeal, Defendants contended the trial court’s interpretation was wrong, and the Court of Appeal should decline to follow Rodriguez because that case was factually distinguishable from this case. The Court of Appeal concluded the trial court erred in interpreting section 1295, subdivision (c), and that the arbitration agreements were valid and enforceable. Pursuant to the plain language of section 1295, subdivision (c), the terms of those agreements governed the parties' relationship upon their execution; the fact that one signatory died before the expiration of the statutory 30-day rescission period does not render the terms of the parties' agreements unenforceable in the absence of other grounds for not enforcing them. View "Baker v. Italian Maple Holdings" on Justia Law

Plaintiff Carmen Zubillaga was injured in an automobile accident. The other driver was at fault. Her insurer, defendant Allstate Indemnity Company (Allstate), rejected her demand for $35,000, the full amount of her remaining underinsured motorist (UIM) coverage, although it made her a series of offers increasing to $15,584 instead. After an arbitrator awarded plaintiff $35,000, the amount of her demand, she sued Allstate for breach of the implied covenant of good faith and fair dealing. While an insurance company has no obligation under the implied covenant of good faith to pay every claim its insured makes, the insurer cannot deny the claim, without fully investigating the grounds for its denial. To protect its insured’s contractual interest in security and peace of mind, it is essential that an insurer fully inquire into possible bases that might support the insured’s claim before denying it. The Court of Appeal found the problem in this case was that the undisputed facts showed the insurer’s opinions were rendered in October and November 2012, but insurer continued to rely on them through the arbitration in September 2013, without ever consulting with its expert again or conducting any further investigation. Summary judgment in favor of the insurer was reversed and the matter remanded for further proceedings. View "Zubillaga v. Allstate Indemnity Company" on Justia Law

In this arbitration dispute, the district court erred by directing the entry of final judgment rather than staying the proceeding, and the court of appeals, faced with a final appealable judgment, should have vacated the judgment and entered a stay of the underlying action pending completion of the arbitration.Plaintiff sued Defendants to stop arbitration proceedings after Defendants demanded arbitration and an arbitrator determined that the dispute was arbitrable. The district court granted summary judgment for Defendants and compelled arbitration. Instead of staying the underlying action, the district court directed the entry of judgment. Plaintiff appealed, arguing that the district court’s order was a final judgment because it dismissed, rather than stayed, the underlying proceeding. The court of appeals disagreed and dismissed the appeal as taken from a nonfinal order and judgment. The Supreme Court reversed, holding (1) the district court erred by directing the entry of final judgment rather than staying the proceeding, as required by Minn. Stat. 572B.07(f); and (2) the proper course for the court of appeals, faced with a final judgment that was appealable under Minn. R. Civ. App. P. 103.03(a), was to direct the district court to vacate the judgment and enter a stay of the underlying action pending completion of the arbitration. View "City of Rochester v. Kottschade" on Justia Law

Defendant Extreme Contracting, LLC appealed a trial court’s order granting a default judgment to plaintiff Hermitage Inn Real Estate Holding Co., LLC in a contract dispute. The court held defendant responsible for enforcing a mandatory arbitration clause in the parties’ contract and ordered defendant to “initiate” arbitration by a certain date. When defendant failed to do so, the court considered this a failure to obey a “scheduling order” under Vermont Rule of Civil Procedure 16.2, and as a sanction, it granted a default judgment to plaintiff under Rule 37(b)(2)(C). Defendant argued, among other things, that a default judgment was inappropriate here. It contended that the court should have granted its motion to dismiss plaintiff’s suit given the mandatory arbitration provision, and that as the defendant, it should not have been required to “initiate” arbitration. It also argued that the court erred in denying its motion to vacate the default judgment. After review, the Vermont Supreme Court agreed the court erred, and based on that order ultimately granted a sanction unsupported by the facts and the law. The Court reversed the trial court’s decision and remanded for entry of an order requiring plaintiff to initiate arbitration or face dismissal of its suit. View "Hermitage Inn Real Estate Holding Co., LLC v. Extreme Contracting, LLC" on Justia Law

The Fifth Circuit held that, because the matter was not ripe at the time the district court entered judgment in this case, the district court's judgment was void for lack of subject matter jurisdiction. Therefore, the court vacated the judgment. The court explained that, even though subsequent intervening events have created a controversy that was now ripe, the court could not retroactively resurrect the district court's void judgment under the facts of this case. Nevertheless, because the basic underlying controversy, originally raised and pursued by these same parties, was now ripe, the court remanded the case to the district court for such orders and proceedings as the district court deemed necessary and appropriate. View "Lower Colorado River Authority v. Papalote Creek II LLC" on Justia Law

SSC Selma Operating Company, LLC, doing business as Warren Manor Health and Rehabilitation Center, and SavaSeniorCare Administrative Services, LLC, appealed a circuit court order denying their motion to compel arbitration of a retaliatory-discharge claim filed against them by Jackie Fikes. Fikes sued the companies, seeking to recover worker's compensation benefits pursuant to the Alabama Workers' Compensation Act, and alleging that the companies had discharged her from her employment in violation of Ala. Code 1975, sec. 25–5–11.1, solely because she had filed a claim for worker's compensation benefits. Fikes alleged that in 2013, she suffered a work-related injury when she attempted to lift a patient while working for the companies as a certified nurse assistant; that she underwent medical treatment for her work-related injury; and that she returned to work under light-duty restrictions until Spring 2014, at which time, she says, the companies wrongfully terminated her employment. Fikes requested in the complaint that the worker's compensation claim and the retaliatory-discharge claim be severed in order for the retaliatory discharge claim to be tried by a jury. The companies moved to compel arbitration of the retaliatory discharge claim pursuant to their employment-dispute resolution program ("the EDR program") under which Fikes had agreed to be bound. Fikes responded, arguing that the retaliatory-discharge claim was not covered by the EDR program. After review, the Alabama Supreme Court concluded Fikes failed to demonstrate her retaliatory-discharge claim was not covered by the EDR program. Accordingly, the Court reversed the trial court's order denying the companies' motion to compel arbitration of that claim. View "SSC Selma Operating Company, LLC v. Fikes" on Justia Law

Temporary staffing company Real Time Staffing Services, LLC doing business as Select Staffing (Real Time) hired Garcia in 2011 as an hourly employee. Real Time then assigned Garcia to work for Pexco, LLC. As part of the hiring process with Real Time, Garcia filled out an employment application which included an arbitration agreement between Garica and Real Time. Pexco was not a signatory to the arbitration agreement. Garcia filed suit against Real Time, Pexco, and Aerotek, Inc. for violations of the Labor Code and unfair business practices pertaining to payment of wages during his assignment with Pexco. The operative complaint alleged “each and every one of the acts and omissions alleged herein was performed by, and/or attributable to, all DEFENDANTS, each acting as agents and/or employees, and/or under the direction and control of each of the other DEFENDANTS, and that said acts and failures to act were within the course and scope of said agency, employment and/or direction and control.” Each cause of action in the operative complaint was alleged against “All Defendants” and no distinction was made between Real Time or Pexco. Real Time and Pexco moved to compel individual arbitration of Garcia’s claims. The trial court granted the motion to compel arbitration. Garcia appealed the order granting Pexco’s motion to compel individual arbitration. The Court of Appeal found Garcia was equitably estopped from denying Pexco’s right to arbitrate and the agency exception applied. View "Garcia v. Pexco, LLC" on Justia Law

Plaintiff filed suit against his former employer, GE, alleging claims of discrimination and retaliation. The district court granted GE's motion to compel arbitration and dismissed the case, only to reopen it later to withdraw its prior order compelling the arbitration. The Fifth Circuit held that the district court lacked subject matter jurisdiction to withdraw its order compelling arbitration and reopen the case due to a default in the arbitral process. Therefore, the Fifth Circuit vacated and remanded for further proceedings, noting that the district court's jurisdiction was limited to determining whether an agreement to arbitrate still existed and enforcing that agreement. View "Salas v. GE Oil & Gas" on Justia Law

Plaintiffs Emelia Jackson and Tahisha Roach purchased used cars from BM Motoring, LLC, and Federal Auto Brokers, Inc., doing business as BM Motor Cars (collectively, BM). As part of the transaction, each plaintiff signed an identical DRA, which required resolution of disputes through an arbitration in accordance with the rules of the AAA before a retired judge or an attorney. Two months later, Jackson filed a demand for arbitration against BM with the AAA, asserting a claim under the New Jersey Consumer Fraud Act (CFA) for treble damages and other relief based on overcharges and misrepresentations by BM. Despite repeated requests by the AAA, BM did not advance the filing fees that the DRA obligated it to pay, or otherwise respond to the claim. The AAA dismissed Jackson’s arbitration claim for non-payment of fees. Six months after her vehicle purchase, Roach filed a complaint in the Superior Court against BM, and similarly, received no response from BM in response to the arbitration demand. Plaintiffs then filed this action against defendants, who moved to dismiss the complaint in favor of arbitration. Defendants contended that they did not contemplate using the AAA as the forum for arbitration, and consistently had not arbitrated customer disputes before the AAA, because of the excessive filing and administrative fees that the AAA charged. In opposition to the motion, plaintiffs asserted that defendants materially breached the DRA by failing to advance filing and arbitration fees, and waived their right to arbitration. Defendants contended that they neither breached the DRA nor waived arbitration because the AAA was not the appropriate arbitral forum. The trial court found that the parties intended to resolve disputes by arbitration. The court ordered the parties to attempt to reinstate plaintiffs’ claims with the AAA; if the AAA refused to administer the claim, plaintiffs could reinstate their complaint. The AAA reinstated the arbitration, and the court dismissed plaintiffs’ complaint with prejudice. The Appellate Division affirmed the dismissal of the complaint, finding that there was a sufficient factual dispute as to the proper forum for arbitration that defendants conduct did not constitute a material breach of the DRA, nor did they voluntarily and intentionally waive their right to enforce the DRA. The Supreme Court reversed the trial court’s judgment, finding defendants’ non-payment of filing and arbitration fees amounted to a material breach of the DRA. Defendants were therefore precluded from enforcing the arbitration provision, and the case proceeded in the courts. View "Roach v. BM Motoring, LLC" on Justia Law

Defendant Glenn Ciripompa was a tenured high school math teacher in the Bound Brook School District. Defendant's behavior came under the scrutiny of the Bound Brook Board of Education (Board) after the Board received copies of student Twitter posts alleging "Mr. C" was electronically transmitting nude photographs. An investigation uncovered defendant's pervasive misuse of his District-issued laptop and iPad, as well as evidence of inappropriate behavior toward female colleagues, often in the presence of students. The results of the investigation spurred the Board to seek defendant's termination from his tenured position and served as the substantive allegations of the two-count tenure complaint against defendant. In this appeal, the issue presented for the Supreme Court's review centered on whether an arbitrator exceeded his authority by applying the standard for proving a hostile-work-environment, sexual-harassment claim in a law against discrimination (LAD) case to a claim of unbecoming conduct in the teacher disciplinary hearing. After review, the Supreme Court found that the arbitrator impermissibly converted the second charge of unbecoming conduct into one of sexual harassment. The arbitrator's review was not consonant with the matter submitted; rather, he imperfectly executed his powers as well as exceeded his authority by failing to decide whether Count II stated a successful claim of unbecoming conduct in support of termination. The arbitrator's award was therefore ruled invalid. View "Bound Brook Bd. of Edu. v. Ciripompa" on Justia Law