Justia Arbitration & Mediation Opinion Summaries

The Supreme Court conditionally granted mandamus relief in this arbitration dispute, holding that the trial court abused its discretion in determining that pre-arbitration discovery was warranted in this case.After Plaintiff's employment was terminated she sued Defendant, her former employer, claiming discrimination and retaliation. Defendant moved to compel arbitration pursuant to the company's employee handbook acknowledgment and agreement, which contained an arbitration agreement. At issue was Plaintiff's second motion to compel pre-arbitration discovery claiming that an enforceable arbitration agreement did not exist. After the trial court granted the motion Defendant sought mandamus relief. The court of appeals denied the motion. The Supreme Court conditionally granted mandamus relief, holding that the trial court clearly abused its discretion in ordering pre-arbitration discovery because Plaintiff failed to provide the trial court with a reasonable basis to conclude that it lacked sufficient information to determine whether her claims were arbitrable. View "In re Copart, Inc." on Justia Law

At issue in this appeal was a civil action to collect a debt under a contract that contained an arbitration provision. The defendants appealed the master in equity's order refusing to set aside the entry of their default. The court of appeals dismissed the appeal on the basis that an order refusing to set aside an entry of default was not immediately appealable. The defendants filed a petition for a writ of certiorari claiming the order was immediately appealable because it had the effect of precluding their motion to compel arbitration, and in fact, the order states, "Defendants' motion to stay and compel arbitration is denied as [the defendants are] in default." Finding no reversible error, the South Carolina Supreme Court affirmed the court of appeals. View "Palmetto Construction Group, LLC v. Restoration Specialists, LLC" on Justia Law

In 1989, the Plaintiffs opened Money Market Investment Accounts (MMIAs) with FNB. FNB guaranteed that the MMIAs’ annual rate of interest would “never fall below 6.5%.” The original contract did not limit an account holder’s right to enforce the agreement in court but stated: Changes in the terms of this agreement may be made by the financial institution from time to time and shall become effective upon the earlier of (a) the expiration of a thirty-day period of posting of such changes in the financial institution, or (b) the making or delivery of notice thereof to the depositor by the notice in the depositor’s monthly statement for one month.In 1997, FNB merged with BankFirst. In 2001, BankFirst merged with BB&T, which sent a Bank Services Agreement (BSA) to each account holder, which included an arbitration provision. A 2004 BSA amendment added a class action waiver. A 2017 Amendment made massive changes to the BSA, including an extensive arbitration provision and stating that continued use of the account after receiving notice constituted acceptance of the changes. The Plaintiffs maintained their accounts. In 2018, the Plaintiffs were notified that the annual percentage rate applicable to their accounts would drop from 6.5% to 1.05%.The Sixth Circuit reversed the dismissal of the Plaintiffs' breach of contract suit. Because there was no mutual assent, the 2001 BSA and its subsequent amendments are invalid to the extent that they materially changed the terms of the original agreement. BB&T gave the Plaintiffs no choice other than to acquiesce or to close their high-yield savings accounts. BB&T did not act reasonably when it added the arbitration provision years after the Plaintiffs’ accounts were established, thus violating the implied covenant of good faith and fair dealing. View "Sevier County Schools Federal Credit Union v. Branch Banking & Trust Co." on Justia Law

Homeowners Colin Masseau and Emily MacKenzie appealed a trial court’s order confirming an arbitrator’s dismissal of their claims against defendants Guy Henning and Brickkicker/GDM Home Services, LLC. Specifically, homeowners challenged the trial court’s referral of the case to arbitration on the ground that the purported arbitration agreement lacked the notice and acknowledgment provisions required under the Vermont Arbitration Act (VAA), and they urged the Vermont Supreme Court to vacate the arbitrator’s award because the arbitrator exceeded his authority by manifestly disregarding the law. The Supreme Court concluded the parties’ contract affected interstate commerce, and that the arbitration agreement was therefore governed by the Federal Arbitration Act (FAA) and is not subject to the more exacting notice and acknowledgment requirement of the VAA. The Court declined to find the arbitrator's analysis rose to the level of "manifest disregard." View "Masseau v. Luck" on Justia Law

In a putative class action, plaintiffs Joe Maldonado, Alfredo Mendez, J. Peter Tuma, Jonabette Michelle Tuma, and Roberto Mateos Salmeron (collectively referred to as “the Customers”), claimed Fast Auto Loans, Inc., (Lender) charged unconscionable interest rates on loans in violation of California Financial Code sections 22302 and 22303. Lender filed a motion to compel arbitration and stay the action pursuant to an arbitration clause contained within the Customers’ loan agreements. The court denied the motion on the grounds the provision was invalid and unenforceable because it required consumers to waive their right to pursue public injunctive relief, a rule described in McGill v. Citibank, N.A., 2 Cal.5th 945 (2017). On appeal, Lender argued the “McGill Rule” did not apply, but even if it did, other claims were subject to arbitration. Alternatively, Lender contended the McGill Rule was preempted by the Federal Arbitration Act . Finding Lender’s contentions on appeal lacked merit, the Court of Appeal affirmed the trial court’s order. View "Maldonado v. Fast Auto Loans" on Justia Law

At issue in this appeal was whether the arbitration provision in the retainer agreement plaintiff Brian Delaney signed when he engaged the representation of Sills Cummis & Gross P.C. was enforceable in light of the fiduciary responsibility that lawyers owe their clients and the professional obligations imposed on attorneys by the Rules of Professional Conduct (RPCs). In 2015, Delaney, a sophisticated businessman, retained Sills to represent him in a lawsuit. He met with a Sills attorney who presented him with a four-page retainer agreement. It was understood that Trent Dickey was slated to be the attorney primarily responsible for representing Delaney reviewed and signed the retainer agreement in the presence of the Sills attorney without asking any questions. After the representation was terminated, a fee dispute arose and, in August 2016, Sills invoked the JAMS arbitration provision in the retainer agreement. While the arbitration was ongoing, Delaney filed a legal malpractice action against Dickey and the Sills firm. The complaint alleged that Dickey and Sills negligently represented him. The complaint also alleged that the mandatory arbitration provision in the retainer agreement violated the Rules of Professional Conduct and wrongly deprived him of his constitutional right to have a jury decide his legal malpractice action. The trial court held that the retainer agreement’s arbitration provision was valid and enforceable. Additionally, the court determined that Delaney waived his right to trial by jury by agreeing to the unambiguously stated arbitration provision. The Appellate Division disagreed, stressing that Sills should have provided the thirty-three pages of JAMS arbitration rules incorporated into the agreement, that Sills did not explain the costs associated with arbitration, and that the retainer included a fee-shifting provision not permissible under New Jersey law. The New Jersey Supreme Court held that, for an arbitration provision in a retainer agreement to be enforceable, an attorney must generally explain to a client the benefits and disadvantages of arbitrating a prospective dispute between the attorney and client. "Delaney must be allowed to proceed with his malpractice action in the Law Division. We affirm and modify the judgment of the Appellate Division and remand to the Law Division" for further proceedings. View "Delaney v. Dickey" on Justia Law

In this case involving an agreement to arbitrate, the Supreme Court reiterated the elements of equitable estoppel required for an outside party not contemplated by the agreement to enforce an arbitration clause against a signatory and reversed the trial court's determination that a third party could compel arbitration, holding that none of the traditional elements of equitable estoppel were satisfied.Jane Doe's legal guardian (Guardian) arranged for Jane to live at Carmel Senior Living (CSL) and initialed an arbitration agreement. Guardian later filed a complaint against CSL; its management company, Spectrum; and one of its employees, claiming that the employee had sexually abused Jane and that CSL and Spectrum (together, CSL) were vicariously liable. Guardian later amended the complaint to add Certiphi Screening, the company CSL had hired to run background checks on new employees. The defendants demanded arbitration. The trial court granted the motions to compel arbitration, concluding that the agreement covered CSL and that equitable estoppel mandated arbitration of Guardian's claims against Certiphi. The Supreme Court reversed in part, holding that Certiphi did not meet the requirements of equitable estoppel. View "Doe v. Carmel Operator, LLC" on Justia Law

The Supreme Court reversed the determination of the trial court that Jane Doe could compel her legal guardian (Guardian) to arbitrate her claims against it and affirmed the trial court's order compelling Guardian to arbitrate as to the remaining defendants, holding that this Court declines to adopt any alternative theories to the doctrine of equitable estoppel.After Jane had been living at Carmel Senior Living (CSL) for a few months, Guardian filed a complaint against CSL, CSL's management company and one of its employees, and Certiphi Screening, the company CSL had hired to run background checks on new employees, alleging that Jane had been sexually abused. The trial court granted CSL's and Certiphi's motions to compel arbitration under the arbitration agreement in the residency contract, determining that the agreement covered CSL under and agency theory and that equitable estoppel mandated arbitration of Guardian's claims against Certiphi. The Supreme Court reversed in part, holding (1) Certiphi was not one of the third-party beneficiaries provided for in the arbitration agreement and could not meet the requirements of equitable estoppel; and (2) this Court declines to endorse any alternative equitable estoppel theories. View "Doe v. Carmel Operator, LLC" on Justia Law

Kathleen Melaas appealed a district court order granting a motion to compel arbitration and dismissing her complaint against Diamond Resorts U.S. Collection Development, LLC. She alleged Diamond Resorts offered vacation and timeshare packages, she attended a sales meeting with a Diamond Resorts representative, the sales meeting lasted approximately five hours, and she asked to leave the meeting on at least one occasion and Diamond Resorts refused to allow her to leave. She claimed Diamond Resorts knew she was a diabetic and experienced fatigue and confusion, Diamond Resorts knew she was a vulnerable adult subject to a durable power of attorney for financial management, and Diamond Resorts would not allow her to leave the sales meeting until she signed the timeshare agreement. Melaas asserted she lacked the capacity to enter into the agreement, Diamond Resorts used high-pressure and abusive sales tactics and knowledge of her medical condition to unduly influence and coerce her into signing the agreement, and any consent was obtained by duress and menace. After a hearing, the district court granted Diamond Resorts’ motion to compel arbitration and dismissed Melaas’ complaint. The North Dakota Supreme Court found that the forum selection clause in section 17 of the contract was not part of the arbitration agreement. The forum selection clause stated, “This Agreement is governed by Nevada law without regard to Nevada’s choice of law rules. You must bring any legal action in Clark County, Nevada.” When the term “Agreement” was used in the contract, the Court found it referred to the entire contract and not the arbitration agreement. To the extent Diamond Resorts argued the action should have been brought in Nevada, it was a venue issue and not a jurisdictional issue, and the right could be waived. The issue of improper venue was waived if it was omitted from a motion to dismiss or if it was not made by motion or included in the responsive pleading. On remand, if any of the parties argue the case must be dismissed under the forum selection clause, the district court must first determine whether a contract exists. If the court determines a contract exists, it could then consider the forum selection clause issue, including whether the issue was waived. The order compelling arbitration and dismissing Melaas' complaint was reversed, and the matter remanded for further proceedings. View "Melaas v. Diamond Resorts U.S. Collection Development" on Justia Law

The Supreme Judicial Court held that this action against Uber Technologies, Inc. and Easier, LLC (collectively, Uber) was not arbitrable because there was no enforceable agreement between Uber and Plaintiffs.Plaintiffs brought this action under Mass. Gen. Laws ch. 272, 98A claiming that three Uber drivers refused to provide one plaintiff with rides because he was blind and accompanied by a guide dog. Citing a provision in Uber's cellular telephone application, which Plaintiffs had used to register with Uber, Uber moved to compel arbitration. The judge granted the motion. The arbitrator ruled in favor of Uber on all claims. Thereafter, the United States Court of Appeals for the First Circuit held in Cullinane v. Uber Technologies, Inc., 893 F.3d 53 (1st Cir. 2018) that Uber's registration process did not create a contract. Thereafter, the judge reversed his decision granting the motion to compel arbitration, concluding that there was no enforceable contract requiring arbitration. The Supreme Judicial Court remanded the case, holding (1) Uber's terms and conditions did not constitute a contract with Plaintiffs; and (2) therefore, Uber could not enforce the terms and conditions against Plaintiffs, including the arbitration agreement. View "Kauders v. Uber Technologies, Inc." on Justia Law