Justia Arbitration & Mediation Opinion Summaries

This appeal stemmed from Brian Pedigo’s suit against Rent-A-Center, Inc., for actual and punitive damages, alleging claims of malicious prosecution, false imprisonment, and intentional infliction of emotional distress. Pedigo decided to make the rental- purchase of a back-lit, LED television and entered a Rental Purchase Agreement (RPA) for the lease. Pedigo had failed to fulfill his payment obligations under the RPA and was more than twenty days past-due under the agreement. Finding the contract had been breached, RAC manager Kristopher Robertson sought to recover the television from Pedigo. Through his attempts at recovery, Robertson discovered that the television was pawned shortly after it was leased. After discovering Pedigo had pawned the television, Robertson filed a complaint with the police. Based on this information, an arrest warrant for the theft of rental property was issued for Pedigo on May 1, 2013. He was indicted on October 22, 2013, for defrauding RAC, and was arrested and incarcerated on December 11, 2013. On June 9, 2014, the State retired the October 2013 felony charge, ending the prosecution of the criminal matter. After a preliminary review of this matter, the Circuit Court found in favor of Rent-A-Center, ruling that the parties entered a valid and enforceable arbitration agreement which covered Pedigo’s claims. The Mississippi Supreme Court found however, such a ruling was in error. Though broad, the arbitration agreement did not contemplate Pedigo having to arbitrate his claim that Rent-A-Center maliciously swore out a criminal affidavit, causing his wrongful incarceration. Accordingly, the Supreme Court reversed the previous ruling and remanded the case to the circuit court for further proceedings. View "Pedigo v. Robertson" on Justia Law

After RAC Acceptance East, LLC swore out a warrant for Mira Brown’s arrest for theft by conversion of furniture that she had rented from RAC, Brown filed a lawsuit against RAC alleging malicious prosecution and other torts. The trial court entered an order granting RAC’s motion to compel Brown to arbitrate her claims pursuant to the arbitration agreement incorporated into the parties’ rental agreement. The Court of Appeals affirmed that order, concluding that whether RAC had waived its right to demand arbitration by its conduct in initiating the related criminal proceeding against Brown was a matter for the court to decide and that the trial court had correctly ruled that RAC did not waive arbitration. The Georgia Supreme Court granted certiorari, and affirmed the Court of Appeals’ judgment on the ground that the delegation provision in the parties’ arbitration agreement clearly gave the arbitrator, not the courts, the authority to determine that RAC did not waive by prior litigation conduct its right to seek arbitration, and the arbitrator’s decision on the waiver question could not be properly challenged as legally erroneous. View "Brown v. RAC Acceptance East, LLC" on Justia Law

At issue in this appeal were denials of motions to compel arbitration filed by Locklear Chrysler Jeep Dodge, LLC ("Locklear CJD"), and Locklear Automotive Group, Inc. ("Locklear Group"), in actions filed by plaintiffs who alleged they were victims of identity theft resulting from personal information they had provided Locklear CJD in order to explore the possibility of financing the purchase of a vehicle from Locklear CJD. In case no. 1160435, the Alabama Supreme Court affirmed the trial court order denying the motion to compel arbitration; in the other appeals, the Court reversed the trial court's orders and remanded for further proceedings. Plaintiffs in these cases purchased vehicles from Locklear CJD. All the plaintiffs signed an arbitration agreement as part of their vehicle purchases; the operative language of those arbitration agreements was the same. And all the plaintiffs alleged that they were the victims of identity theft that resulted from providing personal information to Locklear CJD when they filled out credit applications for the vehicle purchases. With respect to Case 1160435, the Supreme Court determined that on the face of the arbitration agreement, its terms did not apply to the interaction of the Lollars and the defendants that occurred in 2015. The Lollars purchased their vehicle in 2013; vehicle purchase to which the 2013 arbitration agreement referred and related was one transaction. The Lollars' 2015 visit to the dealership for the purpose of exploring whether to enter into an entirely different transaction with Locklear CJD (and their provision of financial information to Locklear CJD during that visit) was an unrelated matter to which the arbitration clause did not apply. View "Locklear Chrysler Jeep Dodge, LLC v. Hood" on Justia Law

Locklear Chrysler Jeep Dodge, LLC, and Locklear Automotive Group, Inc. (collectively, "Locklear"), sought a writ of mandamus to order the Bibb Circuit Court to vacate certain discovery orders in actions filed against Locklear by Rhonda Cook, James McKinney, and James Daniel Parker (collectively, "the purchasers"), who alleged that they were victims of identity theft by a Locklear employee. In July and August 2016, each purchaser alleged that the employee used the personal information from the purchaser's credit application to purchase thousands of dollars in cellular-telephone services. They asserted claims of negligence, wantonness, invasion of privacy, conversion, fraud, tort of outrage, civil conspiracy, violations of Alabama's Consumer Identity Protection Act, and breach of fiduciary duty. Shortly after filing their lawsuits, the purchasers sought general discovery, including interrogatories, requests for production of documents, requests for admissions, and notices of deposition. In response to the three actions, Locklear filed a motion in each action seeking an order compelling arbitration staying the action. The trial court held a hearing on the motions, but did not rule on them. Subsequently, each of the purchasers filed a motion to compel Locklear's responses to their discovery requests and to deem admitted their requests for admissions. The trial court granted the purchasers' motions. Locklear then filed three petitions for mandamus review. While the mandamus petitions were pending, the trial court granted Locklear's motions to stay discovery. The Alabama Supreme Court noted that, in the instant case, the issue presented for its review was not to review the trial court's order denying a motion to compel arbitration; the trial court has not yet ruled on Locklear's motion to compel. The Supreme Court was reviewing the trial court's general discovery orders, and concluded the trial court exceeded its discretion by allowing general discovery before the resolution of the issue whether the purchasers must arbitrate their claims. Furthermore, because it would be unfair to require Locklear conduct merit-based discovery prior to deciding the arbitration issue, and because Locklear could not be afforded the relief it seeks after that discovery has been conducted, Locklear does not have an adequate remedy by ordinary appeal. Accordingly, the Court granted the petitions and issued the writs, directing the trial court to vacate its orders requiring Locklear to respond to the purchasers' discovery requests, including the requests for admissions and to sit for depositions. View "Ex parte Locklear Chrysler Jeep Dodge, LLC" on Justia Law

Daphne Automotive, LLC, and its employee, Robin Sanders appealed a circuit court order denying their motion to compel arbitration of the claims filed against them by Eastern Shore Neurology Clinic, Inc. ("Eastern Shore"), and Rassan Tarabein. Tarabein owned Eastern Shore and another company, Infotec, Inc. Tarabein hired his nephew, Mohamad Tarbin, as an employee of Infotec. As part of the nephew's compensation, Tarabein agreed to provide him with the use of a vehicle for as long as he was employed with Infotec. Accordingly, Tarabein purchased, through Eastern Shore, a vehicle from Daphne Automotive. Tarabein, the nephew, and the dealership agreed that the dealership would arrange for the vehicle to be titled in the nephew's name, but that Eastern Shore would be listed on the title as lienholder. In conjunction with the sale, the nephew signed the sales contract, which contained an arbitration clause. Tarabein executed only the documents to establish Eastern Shore as lienholder on the title for the vehicle. In January 2014, the Department of Revenue issued an original certificate of title for the vehicle that listed no lienholders to the nephew. A few months later, the nephew was terminated from his job with Infotec, and Tarabein attempted to take back the vehicle, but the nephew refused. According to Tarabein, the dealership never informed him that it had failed to list Eastern Shore as a lienholder on the application for the certificate of title. As a result, the nephew held title to the vehicle free and clear, and Eastern Shore held a reissued certificate of title for the same vehicle, listing it as lienholder. Eastern Short attempted to repossess the vehicle; the nephew avoided being arrested by producing the free-and-clear title to the vehicle. According to Tarabein, he became aware of the existence of the second certificate of title after the attempted arrest. Tarabein thereafter sued the dealership for a variety of claims; the dealer moved to compel arbitration. The Alabama Supreme Court concluded the dealership failed to meet its burden of proving the existence of a contract calling for arbitration: the sales contract was limited in its scope with respect to disputes arising to parties to the contract and the agreements, here, between the nephew and the dealership. Accordingly, the Court found the trial court did not err in denying the dealership’s motion to compel arbitration. View "Daphne Automotive, LLC v. Eastern Shore Neurology Clinic, Inc." on Justia Law

In consolidated class actions, plaintiffs claimed the brokers who represented them in the sale of their homes and a group of companies that provided services in connection with those sales violated their fiduciary duties by failing to disclose alleged kickbacks paid by the service providers to the brokers in connection with the sales. Defendants filed motions to compel arbitration on the basis of three separate agreements, at least one of which was executed by each plaintiff. The trial court found the arbitration clauses in two of the agreements inapplicable, but compelled the signatories of the third agreement to arbitrate with their brokers. Invoking the doctrine of equitable estoppel, the court also required the signatories of the third agreement to arbitrate their claims against the service providers, who were not parties to the arbitration agreements. The court of appeals reversed with respect to the two arbitration clauses the lower court found inapplicable. Each of the plaintiffs executed one or the other of these two agreements. The court dismissed the cross-appeal of the plaintiffs who were required to arbitrate because an order compelling arbitration is not appealable. View "Laymon v. J. Rockcliff, Inc." on Justia Law

The Federal Arbitration Act does not preempt all state arbitration law. A party alleging an arbitration agreement is unconscionable must demonstrate some quantum of both procedural and substantive unconscionability. A party's failure to clearly object to a defect in arbitration proceedings prior to or during arbitration may constitute a waiver of the objection. Lynne Thompson appealed a district court order compelling arbitration, a judgment confirming the arbitration award, and an order denying her motion to vacate the judgment or for a new trial. Thompson sued Lithia ND Acquisition Corp. #1, seeking to rescind a contract to purchase a vehicle and for damages for unjust enrichment and unlawful sales practices. Lithia moved to dismiss Thompson's complaint and to compel arbitration, arguing there was an enforceable agreement to arbitrate. Thompson responded to the motion, arguing the arbitration agreement was unenforceable and unconscionable and claiming she was entitled to a jury trial on the issue of the enforceability. The North Dakota Supreme Court affirmed, concluding the district court did not err in compelling arbitration or confirming the arbitrator's award. View "Thompson v. Lithia ND Acquisition Corp. #1" on Justia Law

Family Security Credit Union ("FSCU") appealed the trial court's denial of its motions to compel arbitration in eight separate but closely related cases. Action Auto Sales ("Action Auto") was a car-financing group that financed the vehicle inventory of Pine City Auto ("Pine City"), a used-car dealership. Action Auto held titles to the vehicles in inventory, and released a title only when a vehicle was sold, and Pine City paid off a proportional amount of the inventory financing. Pine City eventually went out of business without paying off the inventory financing on some of the vehicles it had sold. Action Auto sued Pine City and the purchasers of eight vehicles who had purchased vehicles from Pine City and financed those purchases through FSCU. Action Auto sought possession of the vehicles and money damages. The purchasers each filed counterclaims and cross-claims against Action Auto and Pine City and third-party claims against FSCU, alleging negligence, wantonness, and conspiracy. The purchasers' third-party claims against FSCU were based on FSCU's alleged failure to perfect its security interest in the vehicles before financing the purchasers of the vehicles. FSCU moved for each of those third-party claims to be submitted to arbitration. The purchasers opposed the motions to compel arbitration, but they did not submit any evidence. After review, the Alabama Supreme Court concluded the trial court erred in denying FSCU's motions to compel arbitration in each of the eight cases, and remanded all for further proceedings. View "Family Security Credit Union v. Etheredge" on Justia Law

In 2004, George and Thelma Nickola, were injured in a car accident. The driver of the other car was insured with a no-fault insurance policy provided the minimum liability coverage allowed by law: $20,000 per person, up to $40,000 per accident. The Nickolas’ (acting through their attorney) wrote to their insurer, defendant MIC General Insurance Company, explaining that the no-fault liability insurance policy was insufficient to cover the Nickolas' injuries. The letter also advised MIC that the Nickolas were claiming UIM benefits under their automobile policy. The Nickolas’ policy provided for UIM limits of $100,000 per person, up to $300,000 per accident, and they sought payment of UIM benefits in the amount of $160,000; $80,000 for each insured. An adjuster for defendant MIC denied the claim, asserting that the Nickolas could not establish a threshold injury for noneconomic tort recovery. The matter was ultimately ordered to arbitration, the outcome of which resulted in an award of $80,000 for George’s injuries and $33,000 for Thelma’s. The award specified that the amounts were “inclusive of interest, if any, as an element of damage from the date of injury to the date of suit, but not inclusive of other interest, fees or costs that may otherwise be allowable.” The trial court affirmed the arbitration awards but declined to award penalty interest under the UTPA, finding that penalty interest did not apply because the UIM claim was “reasonably in dispute” for purposes of MCL 500.2006(4). The Court of Appeals affirmed the trial court, holding that the “reasonably in dispute” language applied to plaintiff’s UIM claim because a UIM claim “essentially” places the insured in the shoes of a third-party claimant. The Michigan Supreme Court held that an insured making a claim under his or her own insurance policy for UIM benefits cannot be considered a “third party tort claimant” under MCL 500.2006(4). The Court reversed the Court of Appeals denying plaintiff penalty interest under the UTPA, and remanded this case back to the trial court for further proceedings. View "Estate of Nickola v MIC General Ins. Co." on Justia Law

Plaintiff opened a credit card account with Defendant Citibank, N.A. and purchased a credit protector plan. Defendant later amended the original agreement by adding an arbitration provision. The provision waived the right to seek public injunctive relief in any forum. The arbitration provision became effective in 2001. In 2011, Plaintiff filed this class action based on Defendant’s marketing of the Plan and the handling of a claim she made under it when she lost her job, alleging claims under the Consumers Legal Remedies Act (CLRA), the unfair competition law (UCL), and the false advertising law. Defendant petitioned to compel Plaintiff to arbitrate her claims on an individual basis pursuant to the arbitration provision. Based on the Broughton-Cruz rule, the trial court ordered Plaintiff to arbitrate all claims other than those for injunctive relief under the UCL, the CLRA, and the false advertising law. The Court of Appeal reversed and remanded for the trial court to order all of Plaintiff’s claims to arbitration, concluding that the Federal Arbitration Act preempts the Broughton-Cruz rule. The Supreme Court reversed, holding that the arbitration provision was invalid and unenforceable because it waived Plaintiff’s right to seek public injunctive relief in any forum. Remanded. View "McGill v. Citibank, N.A." on Justia Law