Justia Arbitration & Mediation Opinion Summaries

This case arose when plaintiffs filed a nationwide consumer class action against Life of the South Insurance Company (Life of the South). At issue was whether Life of the South had a right to enforce against plaintiffs the arbitration clause in the loan agreement, between plaintiffs and the car dealership where they purchased their vehicle, where the loan agreement lead plaintiffs to enter into a separate credit life insurance contract with Life of the South. The court held that the loan agreement did not show, on its face or elsewhere, an intent to allow anyone other than plaintiffs, the car dealership, and Chase Manhattan, and the assignees of the dealership of Chase Manhattan, to compel arbitration of a dispute and Life of the South was none of those. The court also held that because the only claims plaintiffs asserted were based on the terms of their credit life insurance policy with Life of the South, which did not contain an arbitration clause, equitable estoppel did not allow Life of the South to compel plaintiffs to arbitrate. Accordingly, the court affirmed the district court's denial of Life of the South's motion to compel arbitration. View "Lawson, et al. v. Life of the South Ins. Co." on Justia Law

Alabama Title Loans, Inc., Accurate Adjustments, LLC and Kevin Sanders all appealed a trial court order that denied their motions to compel arbitration filed against them by Plaintiff Kimberly White. In 2009, Ms. White borrowed money from Alabama Title Loans (ATL), securing the loan with an interest in her automobile. ATL required Ms. White to surrender the title to the automobile. The title-loan agreement contained an arbitration clause. Ms. White subsequently paid off her loan and borrowed more money against her car several more times. In August 2009, Ms. White said she went to ATL ready to pay off her loan in full. In January 2010, ALT contracted with Accurate Adjustments to conduct a "self-help" repossession of Ms. White's automobile. The police were called, and Accurate and ATL were required to release the automobile when it could not produce the title they claimed gave them the right to repossess. Ms. White filed suit alleging multiple theories: assault and battery, negligence, wantonness, trespass, wrongful repossession and conversion. At trial, the court denied the title-loan parties' motion to compel arbitration without making any findings of fact. Based on the broad language of the arbitration clause in the title-loan agreements executed by Ms. White, the Supreme Court held that the trial court should have granted the title-loan parties' motions to compel arbitration. The Court reversed the trial court's decision and remanded the case for further proceedings.

The Pasillases purchased a home with a loan from American Brokers Conduit. The note and deed of trust were assigned to HSBC, and later, Power Default Services became a substitute trustee. The servicer for the loan was American Home Mortgage Servicing (AHMSI). After defaulting on their mortgage, the Pasillases elected to mediate pursuant to the foreclosure mediation program provided for in Nev. Rev. Stat. 107.086. Two mediations occurred but neither resulted in a resolution. Afterwards, the mediator filed a statement indicating that the respondents HSBC, Power Default, and AHMSI failed to participate in good faith and failed to bring to the mediation each document required. The Pasillases subsequently filed a petition for judicial review, requesting sanctions. The district court refused the request. On appeal, the Supreme Court reversed, holding that because the respondents did not bring the required documents to the mediation and did not have access to someone authorized to modify the loan during mediation, the district court erred in denying the Pasillas's petition for judicial review. Remanded to determine sanctions.

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.