Justia Arbitration & Mediation Opinion Summaries

Appellant Moises Leyva received a quitclaim deed in exchange for taking over monthly mortgage payments on a house. Leyva did not expressly assume the mortgage note. After defaulting on the mortgage, Leyva elected to pursue mediation with the lender, Wells Fargo, through the state foreclosure mediation program. Leyva then filed a petition for judicial review in district court, claiming that Wells Fargo mediated in bad faith and should be sanctioned because it failed to produce essential documents. The district court concluded that Wells Fargo did not act in bad faith. On appeal, the Supreme Court held, as a threshold matter, that the foreclosure mediation statute, Nev. Rev. Stat. 107.086, and the foreclosure mediation rules (FMRs) dictate that a homeowner, even if he is not the named mortgagor, is a proper party entitled to request mediation following a notice of default. The Court then concluded that the district court abused its discretion when it denied Leyva's petition for judicial review, holding that (1) Wells Fargo failed to produce the documents required under the statute, and (2) Wells Fargo's failure to bring the required to the documents to the mediation is a sanctionable offense under the statute and FMRs. Reversed and remanded.

This lawsuit arose from the dispute between the parties about how much appellant was obligated to pay appellee for auto-glass goods and services rendered on behalf of appellant's insureds. Appellants appealed from the district court's orders dismissing its counterclaim that appellee violated Minnesota's anti-incentive statute, Minn. Stat. 325F.783, granting summary judgment in favor of appellee on appellant's counterclaim for breach of contract, and denying appellant's motion to vacate the arbitration award. The court held that, given the plain language of the statute and the ordinary meaning of the terms of rebate and credit, appellee's practice did not violate the anti-incentive statute. The court also held that even if the blast faxes at issue constituted offers to enter into unilateral contracts, appellee rejected the offers when its actions failed to conform to the terms of the offer. The court further held that the arbitration award did not require reversal or new proceedings because the award was based on the finding that appellant failed to pay the competitive price standard set forth in the applicable endorsement and Minnesota law.

Respondents filed a complaint against AT&T Mobility LLC ("AT&T"), which was later consolidated with a putative class action, alleging that AT&T had engaged in false advertising and fraud by charging sales tax on phones it advertised as free. AT&T moved to compel arbitration under the terms of its contract with respondents and respondents opposed the motion contending that the arbitration agreement was unconscionable and unlawfully exculpatory under California law because it disallowed classwide procedures. The district court denied AT&T's motion in light of Discover Bank v. Superior Court and the Ninth Circuit affirmed. At issue was whether the Federal Arbitration Act ("FAA"), 9 U.S.C. 2, prohibited states from conditioning the enforceability of certain arbitration agreements on the availability of classwide arbitration procedures. The Court held that, because it "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress," quoting Hines v. Davidowitz, California's Discover Bank rule was preempted by the FAA. Therefore, the Court reversed the Ninth Circuit's ruling and remanded for further proceedings consistent with the opinion.