Justia Arbitration & Mediation Opinion Summaries

Southeast Construction, L.L.C. ("SEC"), appealed a circuit court order that found WAR Construction, Inc., had provided SEC with certain releases as previously ordered by the circuit court and that SEC was accordingly now required to pay the outstanding $263,939 remaining on a $373,939 judgment previously entered on a February 16, 2011, arbitration award obtained by WAR against SEC, along with interest accruing from February 16, 2011. After review, the Supreme Court affirmed that judgment to the extent it held that WAR provided all required releases and that SEC was obligated to fulfill the judgment entered on the arbitration award. However, the Court reversed the judgment inasmuch as it held that SEC is required to pay interest on the award as calculated from February 16, 2011. On remand, the circuit court was instructed to calculate interest on the principal at the rate set forth in the arbitration award accruing from September 8, 2014. View "Southeast Construction L.L.C. v. WAR Construction, Inc." on Justia Law

Petitioners sued Respondents. Respondents, represented by counsel, made a settlement offer. The offer subsequently expired. Respondents’ counsel later extended a new settlement offer with terms that mirrored the prior offer. Petitioners’ attorney timely accepted the offer, and the trial court accepted the settlement (February 8 settlement). After Respondents’ attorney learned that he lacked authority to extend the settlement offer, he made a new settlement offer, which materially varied from the February 8 settlement. Petitioners moved to enforce the February 8 settlement. The trial court granted the motion, concluding that Respondents’ attorney had actual and apparent authority to extend the settlement offer and, alternatively, that Respondents were equitably estopped from disputing that authority. The court of appeals reversed, concluding that because Respondents’ assent to the agreement was not in writing, the requirements of Ariz. R. Civ. P. 80(d) were not met, and the agreement was unenforceable as a matter of law. The Supreme Court reversed, holding (1) because the parties in this case did not dispute the existence and terms of the February 8 settlement, Rule 80(d) did not apply; (2) even if Rule 80(d) applied, the agreement satisfied the rule; and (3) the agreement was enforceable because the attorney acted within the apparent authority given by his clients. View "Robertson v. Alling" on Justia Law

Oregel filed a class action against his former employer, PacPizza, alleging that PacPizza failed to fully reimburse delivery drivers for necessary expenses associated with using their personal vehicles to deliver pizza on PacPizza’s behalf. Seventeen months and more than 1,300 attorney hours later, PacPizza petitioned to compel arbitration. The agreement to arbitrate appeared, in a very small font, on the employment application. There is no evidence that Oregel was given a copy of the application or saw it at any point after he submitted it. The trial court denied the petition, finding PacPizza waived its right to enforce a purported arbitration agreement. The court of appeal affirmed. Although the trial court made no express finding of bad faith, the tone of its ruling is suggestive of such a finding and, had it been made, sufficient evidence would have supported the finding. While California has a strong public policy in favor of arbitration, that goal was frustrated by defendant’s conduct.” View "Oregel v. PacPizza, LLC" on Justia Law

Union Electric is a power company, and EIM is a trade-association-owned excess carrier for power companies. Union, as an association member, is a partial owner of EIM and is the named insured in a $100 million excess liability policy issued by EIM. Union and other power companies drafted the general form policy; Union negotiated the present policy with EIM. The policy requires that coverage disputes go through a mini-trial and arbitration. An exclusive forum-selection clause and a choice-of-law clause named New York. After failure of a Missouri reservoir caused extensive damage, Union paid to settle claims; EIM paid $68 million of the policy's $100 million limit. Union filed suit in Missouri seeking the remaining $32 million plus damages for breach of contract and vexatious refusal to pay. The district court dismissed, based on the forum-selection clause, The Eighth Circuit reversed and remanded for consideration of the relationship between the mini-trial requirement, the arbitration provision, and a public policy argument. On remand, the court denied the motion to dismiss, noting that arbitration agreements in insurance contracts are unenforceable under Missouri law and that contractual choice-of-law provisions have been held unenforceable if they would allow enforcement of such an agreement. The Supreme Court, in a different case, subsequently supported enforcement of contractual forum-selection clauses "[i]n all but the most unusual cases." Relying on that case, EIM moved for a transfer stating that it would not seek enforcement of the arbitration provision. The court held that the motion was not untimely and that the forum-selection clause was enforceable. The Eighth Circuit denied a writ of prohibition or mandamus to prevent the transfer, stating that Union did not establish entitlement to extraordinary relief. View "Union Elec. Co. v. Energy Mut. Ins. Ltd." on Justia Law

Appellant Rolland Weddell and nonparty Michael Stewart were former business partners. When disputes arose between the partners, they agreed to informally settle their disputes by presenting them to a panel of attorneys (Respondents). Respondents issued a decision resolving the parties’ disputes that was largely favorable to Stewart. Thereafter, Stewart filed suit against Appellant seeking a declaratory judgment that Respondents’ decision was valid and enforceable. Appellant proceeded to confess judgment. Appellant later filed this action against Respondents asserting causes of action stemming from Respondents’ conduct in the dispute-resolution process. Respondents moved to dismiss the complaint contending that dismissal was warranted on claim preclusion principles. The district court granted the motion, finding that the three factors for claim preclusion articulated by the Supreme Court in Five Star Capital Corp. v. Ruby had been satisfied. The Supreme Court affirmed after modifying the privity requirement established in Five Star to incorporate the principles of nonmutual claim preclusion, holding that because Respondents established that they should have been named as defendants in Stewart’s declaratory relief action and Appellant failed to provide a good reason for not doing so, claim preclusion applied in this case. View "Weddell v. Sharp" on Justia Law

Matthew Viscito, Mary Lynn Berntson, and Florence Properties, LLC (collectively "Viscito") appeal from a district court judgment of dismissal without prejudice, which awarded Kevin Christianson, Pace's Lodging Corporation, Mednational, LLC, Aurora Medical Park No. 2, LLC, and Jeff Sjoquist (collectively "Christianson") attorney's fees and costs. Viscito sued Christianson alleging a number of claims pertaining to an agreement the parties entered to build, own, and lease a hospital. Christianson moved to compel arbitration, contending the agreement required that Viscito's claims be resolved through arbitration. The district court granted the motion to compel arbitration and ordered the parties complete arbitration within six months from the date of the order. Viscito moved for an extension of time to complete arbitration. Christianson moved to dismiss with prejudice and requested an award of attorney's fees and costs. The district court held a hearing on the motions; at the conclusion, the district court ruled from the bench that the case be dismissed without prejudice and awarded Christianson reasonable attorney's fees and costs. The district court requested Christianson submit an itemized billing statement of its attorney's fees, so the court could determine the reasonableness of the fees. Christianson submitted an affidavit requesting $33,405.14, the full amount of fees and costs it had incurred defending the entire case, along with itemized billing statements documenting the work performed from July 6, 2012, to April 7, 2014, totaling the amount requested. The district court dismissed the case without prejudice and awarded Christianson $33,405.14 in attorney's fees and costs. Viscito appealed, arguing the district court abused its discretion in awarding Christianson all of its costs and attorney's fees incurred throughout the case because the court misinterpreted the rules authorizing sanctions. The Supreme Court agreed with Viscito, reversed and remanded the case for recalculation of the fees. View "Viscito v. Christianson" on Justia Law

Benihana America obtained a preliminary injunction in aid of arbitration of a dispute arising under its license agreement with Benihana of Tokyo, prohibiting Tokyo from: selling unauthorized food items at the restaurant it operates under the license agreement; using certain trademarks in connection with that restaurant in a manner not approved by the license agreement; and arguing to the arbitral panel, if it rules that Tokyo breached the license agreement, that Tokyo should be given additional time to cure any defaults. The Second Circuit affirmed with respect to the menu offering and trademark use injunctions. The court reasonably concluded that each of the relevant factors favored Benihana America. The court reversed the prohibition on arguing to the arbitral panel for an extended cure period. When a dispute is properly before an arbitrator, a court should not interfere with the arbitral process on the ground that, in its view of the merits, a particular remedy would not be warranted. Benihana America may challenge an arbitrator’s decision in court only after it has been issued. It may not subvert its agreement to arbitrate by obtaining an advance judicial determination that there are no grounds for the arbitrator to grant a particular remedy. View "Benihana, Inc. v. Benihana of Tokyo, LLC" on Justia Law

A multiemployer pension plan (the “Pension Fund”) commenced this action under 29 U.S.C. 1401(b)(2) by filing a complaint seeking to vacate or modify an arbitration order entered pursuant to section 1401(a)(1). The Pension Fund later filed an amended complaint that it argued related back to the filing date of the original complaint. The district court concluded that the Pension Fund could challenge the arbitration award only by filing a motion to vacate or modify, as provided in the Federal Arbitration Act. The court then treated the amended complaint as a motion and dismissed it, concluding that it was untimely under section 1401(a)(2) because a motion cannot “relate back” under Fed. R. Civ. P. 15. The Fourth Circuit reversed the district court’s order of dismissal and remanded for further proceedings as a civil action, holding (1) a party seeking to vacate or modify an arbitrator’s award under section 1401(b)(2) must commence an action in a district court by filing a complaint; and (2) the amended complaint in this case related back to the filing date of the original complaint, thus rendering it timely. View "Local Union 557 Pension Fund v. Penske Logistics LLC" on Justia Law

Alleging illegal tip pooling Conners filed a collective action against her former employer (a restaurant) under the Fair Labor Standards Act, 29 U.S.C. 216(b). The employer then implemented a new arbitration policy that requires all employment-related disputes between current employees and the employer to be resolved though individual arbitration. The policy purports to bind all current employees who did not opt out; each employee received an opt-out form. Citing public policy, the district court declared the policy unenforceable insofar as it could prevent current employees from joining this collective action. On interlocutory appeal, the Eighth Circuit vacated, holding that former employees like Conners lack standing under Article III of the United States Constitution to challenge the arbitration agreement, which applied only to current employees. View "Conners v. Gusano's Chicago Style Pizzeria" on Justia Law

The law firm of Leeds, Morelli & Brown, representing 587 plaintiffs with discrimination claims against their employer, Nextel Communications, agreed with Nextel to set up a dispute resolution process whereby all of the plaintiffs’ claims against Nextel would be resolved without litigation. After most of the cases were settled through that process, a group of Nextel employees sued on behalf of the entire class of the firm’s Nextel clients against both the law firm and Nextel, alleging breach of fiduciary duty, legal malpractice, and breach of contract. The Second Circuit vacated dismissal of the case. On remand the district court certified a class under FRCP(b)(3), applying New York law to all of the class members’ claims, even though the class members came from 27 different states, and holding that common issues predominated over any individual issues, even though prior state court litigation indicated that for Colorado class members, individual waivers of the law firm’s conflict of interest could have vitiated defendants’ liability. The Second Circuit vacated: the district court erred in its choice‐of‐law analysis, and a proper analysis makes clear that the individual issues in this case will overwhelm common issues. View "Johnson v. Nextel Communications Inc." on Justia Law