Justia Arbitration & Mediation Opinion SummariesArticles Posted in Contracts
Hernandez v. Meridian Management Services, LLC
Plaintiff signed an arbitration contract with an employer called Intelex Enterprises, LLC. While working for Intelex, Plaintiff also worked for other firms (Other Firms). These Other Firms were legally separate from Intelex but functionally related to it. The Other Firms did not contract for arbitration with Plaintiff. After termination, Plaintiff sued the Other Firms but not Intelex: Intelex has never been a party to the case. The Other Firms moved to compel arbitration based on Plaintiff’s agreement with Intelex. The trial court denied the Other Firms’ motion to enforce a contract they had not signed. The Second Appellate District affirmed. The court held that the Other Firms cannot equitably estop Defendant because they do not show she is trying to profit from some unfair action. They have no proof of agency. And they are not third-party beneficiaries of Intelex’s contract. The court explained that the Other Firms point to six places in the record they say show agency, but these materials do not measure up. The citation to Plaintiff’s complaint spotlights text that omits Intelex and cannot show agency. A different citation is to their attorney’s declaration recounting irrelevant procedural history. Other citations refer to Plaintiff’s admission that she worked for both Intelex and the Other Firms. This admission does not establish agency. View "Hernandez v. Meridian Management Services, LLC" on Justia Law
Taylor Morrison of Texas, Inc. v. Ha
In this dispute over an arbitration clause within a contract, the Supreme Court held that the minor children who joined Plaintiffs, their parents, in bringing this action seeking damages for construction defects in their home may be compelled to arbitrate along with their parents on the basis of direct-benefits estoppel.Plaintiffs, Tony and Michelle Ha, signed a purchase agreement with Taylor Woodrow Communities-League City, Ltd. to build a home in Texas. The agreement included an arbitration provision. The Has sued both Taylor Woodrow Communities-League City, Ltd. and Taylor Morrison of Texas, Inc., for negligent construction and other claims, alleging the home developed significant mold problems due to construction defects. Plaintiffs' second amended petition named both Tony and Michelle and their three children. Taylor Morrison moved to compel arbitration, but the trial court denied the motion as it pertained to Michelle and the children. The court of appeals affirmed. The Supreme Court reversed, holding that when a family unit resides in a home and files suit for factually intertwined construction-defect claims concerning the home, a nonsignatory spouse and minor children have accepted direct benefits under the signatory spouse’s purchase agreement such that they may be compelled to arbitrate through direct-benefits estoppel. View "Taylor Morrison of Texas, Inc. v. Ha" on Justia Law
Taylor Morrison of Texas, Inc. v. Skufca
In this dispute over an arbitration clause within a contract, the Supreme Court held that the minor children who joined Plaintiffs, their parents, in bringing this action seeking damages for construction defects in their home may be compelled to arbitrate along with their parents on the basis of direct-benefits estoppel.Plaintiffs, Jack and Erin Skufca, signed a purchase agreement with Taylor Woodrow Communities-League City, Ltd. to build a home in Texas. The agreement included an arbitration provision. Plaintiffs sued both Taylor Woodrow Communities-League City, Ltd. and Taylor Morrison of Texas, Inc., for construction defects and fraud, alleging that less than a year after they moved in, the home developed mold issues that caused their minor children to be ill. The petition listed Jack and Erin as plaintiffs individually, as well as Erin as next friend of the couple's children. Taylor Morrison moved to compel arbitration, but the trial court denied the motion as it pertained to the children. The court of appeals affirmed. The Supreme Court reversed, holding that the minor children sued based on the contract and were subject to its terms, including the arbitration clause. View "Taylor Morrison of Texas, Inc. v. Skufca" on Justia Law
Darby v. Sisyphian, LLC
Plaintiff sued Sisyphian for (1) failure to pay minimum wage, (2) failure to pay overtime wages, (3) failure to pay wages for missed meal periods, (4) failure to pay wages for missed rest breaks, (5) waiting time penalties (6) failure to provide accurate wage statements and (7) unfair competition. In reliance on the arbitration clause in the Entertainment Agreement, the trial court granted Sisyphian’s motion to compel arbitration of Plaintiff’s claims. The arbitrator concluded that Plaintiff’s complaint contained a viable prayer for attorney fees for the claims on which she prevailed. Plaintiff filed a petition to confirm the final arbitration award. Following the entry of judgment for Plaintiff in the amount of $105,109.75, Sisyphian appealed. Sisyphian argued that the trial court erred in confirming the final arbitration award because, in reconsidering its initial attorney fees order, the arbitrator exceeded his powers The Second Appellate District affirmed. The court explained that because Plaintiff’s petition to confirm was procedurally proper because no party sought dismissal of Plaintiff’s petition, and because Sisyphian’s filings seeking to vacate or correct the arbitration award were not timely filed, the trial court, in this case, was obligated to confirm the final arbitration award. Further, because Sisyphian forfeited its right to seek to vacate or correct the final arbitration award before the trial court, the court may not consider its arguments to do so on appeal. View "Darby v. Sisyphian, LLC" on Justia Law
KEVIN JOHNSON V. WALMART INC.
Fairstead Capital Management LLC v. Blodgett
In this investment fund complex dispute brought by former partners causing two LLCs to file suit for breach of the LLC agreements after the fund principal commenced an arbitration the Court of Chancery held that, absent a further arbitration agreement, the parties must litigate the claims asserted in this action in the district court.The employment agreement of the fund principal contained a mandatory agreement to arbitrate all claims relating to his employment. The fund principal's partners eventually terminated him for cause for allegedly violating his employment agreement and, as a consequence, for canceling the fund principal's member interests in the LLC. Thereafter, the fund principal commenced an arbitration in which he sought to litigate whether he had breached his employment agreement. The former partners refused to arbitrate and then brought this suit seeking a permanent injunction barring the fund principal from arbitrating the breaches of the LLC agreements. The Court of Chancery held that the LLCs were bound by the arbitration agreement and that the court must decide which claims must be litigated and which claims were arbitrable. View "Fairstead Capital Management LLC v. Blodgett" on Justia Law
Doe v. Massage Envy Franchising, LLC
Shafer v. Scarborough, et al.
Justin Shafer appealed a district court judgment confirming an arbitration award against Diamond Development & Custom Homes, L.L.C. Shafer argued the district court erred by failing to increase the amount of damages he was awarded. He also argued the North Dakota Supreme Court should narrowly expand the standard for reviewing an arbitration award. The Court declined Shafer’s request to expand the standard of review, and concluded the district court did not err in confirming the arbitration award. View "Shafer v. Scarborough, et al." on Justia Law
HAYDAY FARMS, INC., ET AL V. FEEDX HOLDINGS, INC.
FeeDx and HayDay Farms, Inc. entered into an Exclusive Distribution and Processing Agreement (EDPA). HayDay’s President also entered into a Consulting Agreement with FeeDx through Nippon Agricultural Holgins, Inc. The agreements provided for arbitration. The EDPA also made HayDay and Nippon jointly and severally liable. Neither HayDay nor FeeDx performed its side of the agreement. The parties entered a Settlement Agreement, which modified, but did not replace, the EDPA. After the Settlement Agreement did not see fruition, the parties went to arbitration. An arbitration tribunal made awards against FeeDx, and HayDay and Nippon petitioned to confirm the award. FeeDx sought to vacate the award, arguing that it exceeded the tribunal’s powers under the Federal Arbitration Act (“FAA”). The district court vacated $7 million from the award that reflected HayDay’s unpaid installments under the Settlement Agreement, but confirmed the rest of the award. The Ninth Circuit affirmed in part, and reversed in part, the district court’s order confirming in part an arbitration award of more than $21 million entered against FeeDx. The panel held that arbitration awards that, as here, involve at least one foreign party are governed by the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“Convention”), which Congress incorporated into federal law under the FAA. 9 U.S.C. Section 203 provides federal district courts subject matter jurisdiction over actions or proceedings falling under the Convention. The panel held that the parties’ failure to assert federal question jurisdiction did not deprive the district court of subject matter jurisdiction where HayDay and Nippon’s state court petition established Section 203 jurisdiction. View "HAYDAY FARMS, INC., ET AL V. FEEDX HOLDINGS, INC." on Justia Law
Beco v. Fast Auto Loans, Inc.
Plaintiff-appellant Bernell Beco filed suit against his former employer, defendant Fast Auto Loans, Inc. (Fast Auto) alleging 14 causes of action relating to the termination of his employment. Plaintiff alleged causes of action under with), including claims under the California Fair Employment and Housing Act (FEHA), numerous wage and hour violations under the Labor Code, wrongful termination, unfair competition, and additional tort claims. Fast Auto moved to compel arbitration, arguing that Beco had signed a valid arbitration agreement at the time he was hired. The trial court found the agreement unconscionable to the extent that severance would not cure the defects and declined to enforce it. After its review, the Court of Appeal agreed with the trial court that the agreement was unconscionable, and further rejected Fast Auto’s argument that the arbitrator, not the court, should have decided the issue of unconscionability. Additionally, because the agreement included numerous substantively unconscionable provisions, the appellate court found no abuse of discretion in the trial court’s decision not to sever them. View "Beco v. Fast Auto Loans, Inc." on Justia Law