Justia Arbitration & Mediation Opinion Summaries

Wayne Farms LLC appealed a circuit court order compelling it to arbitrate its claims asserted against Primus Builders, Inc., and staying the action. Wayne Farms was a poultry producer located in Dothan, Alabama. Wayne Farms sought to expand its poultry-processing facility, and, to that end, entered into a "Design/Build Agreement" with Primus in 2017, that specifically addressed work to be completed by Primus in connection with the expansion of Wayne Farms' freezer warehouse. Primus subcontracted with Republic Refrigeration, Inc.; Republic hired Steam-Co, LLC for "passivation services." Upon draining a condenser for the freezer warehouse, it was discovered that the interior of the condenser was coated with corrosive "white rust." Primus then replaced the damaged condenser at a cost of approximately $500,000 under a change order, pursuant the Design/Build Agreement with Wayne Farms. Wayne Farms paid Primus for both the original damaged condenser and the replacement condenser. Both Primus and Steam-Co have claimed that the other is responsible for the damage to the condenser. Wayne Farms sued Primus and Steam-Co asserting claims of breach of contract and negligence and seeking damages for the damaged condenser and the cost of replacing it. Primus moved the trial court to compel arbitration as to the claims asserted against it by Wayne Farms. Primus also moved the trial court to dismiss, or in the alternative, stay Steam-Co's cross-claims against it. Wayne Farms opposed Primus's motion to compel arbitration, arguing that no contract existed between the parties requiring it to arbitrate claims arising from the passivation process. The Alabama Supreme Court found that the contract between Wayne Farms and Primus specified arbitration would apply to only those disputes arising from obligations or performance under the Design/Build Agreement, Wayne Farms could not be compelled to arbitrate with Primus a dispute arising from the performance of passivation work that was not an obligation agreed to in the Design/Build Agreement. Judgment was reversed and the matter remanded for further proceedings. View "Wayne Farms LLC v. Primus Builders, Inc." on Justia Law

Plaintiff Anna Sandoval-Ryan signed admission documents on behalf of her brother, Jesus Sandoval, following his admission to Sacramento Post-Acute (Post- Acute), a skilled nursing facility owned by Oleander Holdings, LLC (Oleander) and Plum Healthcare Group, LLC (Plum Healthcare). Among the documents plaintiff signed were two agreements to arbitrate claims arising out of the facility’s care for Sandoval. Sandoval’s condition deteriorated while being cared for at the facility, and he was transferred to a hospital where he later died. Plaintiff sued defendants Post-Acute, Oleander, and Plum Healthcare in superior court; she brought claims on her own behalf and on behalf of Sandoval. Defendants moved to compel arbitration of plaintiff’s claims. The trial court denied the motion on the basis the agreements were invalid because they were secured by fraud, undue influence, and duress. Defendants appealed the trial court’s ruling, contending the parties agreed to allow the arbitrator to decide threshold questions of arbitrability, and the trial court erred by deciding the issue instead. Absent clear and unmistakable language delegating threshold arbitrability issues to the arbitrator, the Court of Appeal concluded defendants’ claim lacked merit. View "Sandoval-Ryan v. Oleander Holdings" on Justia Law

Michael Falligant, as next friend of Michelle McElroy, who Falligant alleged was an incapacitated person, filed an action against TitleMax of Alabama, Inc. ("TitleMax"), alleging that TitleMax wrongfully repossessed and sold McElroy's vehicle. TitleMax filed a motion to compel arbitration of Falligant's claims, which the circuit court denied. TitleMax appealed. After review, the Alabama Supreme Court determined TitleMax met its burden of proving that a contract affecting interstate commerce existed, and that that contract was signed by McElroy and contained an arbitration agreement. The burden then shifted to Falligant to prove that the arbitration agreement was void. But the Court concluded Falligant failed to present substantial evidence indicating that McElroy was permanently incapacitated and, thus, lacked the mental capacity to enter into the contracts. Because Falligant failed to create a genuine issue of fact, the circuit court erred in ordering the issue of McElroy's mental capacity to trial. Accordingly, the circuit court's decision was reversed, and the matter remanded back to the circuit court for further proceedings. View "TitleMax of Alabama, Inc. v. Falligant" on Justia Law

Plaintiff-respondent Sarah Coughenour worked for defendant-appellant Del Taco, LLC, starting when she was 16 years old. When she was first employed by Del Taco, she signed a “Mutual Agreement to Arbitrate” (Agreement). After Coughenour reached the age of 18, she continued working for Del Taco for four months. Coughenour quit and filed a lawsuit against Del Taco for sexual harassment committed by one of their employees, wage and hour claims brought pursuant to the Labor Code, and other claims under the Fair Housing and Employment Housing Act. Del Taco moved to compel arbitration. The trial court denied the Motion, finding that Coughenour’s filing of the lawsuit was a disaffirmance of the Agreement within the meaning of Family Code section 6710, which allowed a person upon reaching majority age to disaffirm a contract entered into while a minor. Del Taco appealed the denial of its motion, arguing that by working for Del Taco for four months after she reached the age of majority, Coughenour ratified the Agreement, which estopped her power to disaffirm the Agreement. In the alternative, Del Taco argued that Coughenour did not disaffirm the Agreement within a “reasonable time” after reaching the age of 18 as required by Family Code section 6710. The Court of Appeal affirmed denial of Del Taco's motion: [t]he filing of the lawsuit was notice that [Coughenour] disaffirmed the Agreement." The trial court did not abuse its discretion by concluding that Coughenour disaffirmed the Agreement within a reasonable time. View "Coughenour v. Del Taco" on Justia Law

The Supreme Court reversed the order of the circuit court denying Petitioner's motion to dismiss Respondent's civil lawsuit or, in the alternative, to compel arbitration, holding that the arbitration provision was clear and unambiguous and was therefore an enforceable agreement to arbitrate.Respondent purchased real estate improved with several structures. After Petitioner inspected the structures Respondent signed the contract. After Respondent allegedly discovered issues with his property he filed a complaint against Petitioner alleging breach of contract, negligence and fraud. Petitioner filed a motion to dismiss, or alternatively, a motion to stay further proceedings and compel arbitration on the grounds that the parties' contract contained an enforceable arbitration provision. The circuit court concluded that the arbitration provision was ambiguous. The Supreme Court reversed and remanded for further proceedings, holding that the arbitration provision was clear and unambiguous. View "Home Inspections of VA & WV, LLC v. Hardin" on Justia Law

Gulf LNG Energy, LLC owned and operated a liquefied natural gas (“LNG”) terminal in Mississippi (the “Pascagoula Facility”). Gulf LNG Pipeline, LLC (collectively with Gulf LNG Energy, LLC, “Gulf”), owned and operated a five-mile long pipeline that distributed LNG from the Pascagoula Facility to downstream inland pipelines. Eni USA Gas Marketing LLC (“Eni”), marketed natural gas products and offered related services to customers in the U.S. In 2007, Gulf and Eni entered into a Terminal Use Agreement (the “TUA”), whereby Gulf would construct the Pascagoula Facility, and Eni would use the Facility to receive, store, regasify, and deliver imported LNG to downstream businesses. Under the TUA, Eni agreed to pay Gulf fees for using the Facility, including monthly Reservation Fees and Operating Fees. In 2016, Eni filed for arbitration, alleging the U.S. natural gas market had undergone a “radical change” due to “unforeseen, vast new production and supply of shale gas in the United States [that] made import of LNG into the United States economically irrational and unsustainable.” Eni alleged the essential purpose of the TUA had been frustrated and thus terminated because of “fundamental and unforeseeable change in the United States natural gas/LNG market,” and sought a declaration that Eni could terminate the TUA at any time because Gulf breached warranties and covenants. After the first arbitration, the panel order Eni to pay Gulf "just compensation ...for the value their partial performance of the TUA conferred upon Eni." Gulf subsequently sued Eni to collect the arbitration award; judgment was entered in Gulf's favor. Eni initiated a second arbitration, again asserting breaches of the TUA. Gulf moved to dismiss the second arbitration. The Court of Chancery ruled the issues raised in the second arbitration were already decided in the first (and subsequent court case). The Delaware Supreme Court, after its review of these proceedings, determined: (1) the Court of Chancery had jurisidction to enjoin a collateral attack on the first arbitration award; and (2) the Court of Chancery should have enjoined all claims in the second arbitration between the parties, because the admitted goal of the second arbitration was to "raise irregularities and revisit the financial award in the first arbitration." The Court, therefore, affirmed part of the Court of Chancery's judgment affirming dismissal of the second arbitration, and reversed any part of the lower court's judgment allowing certain issues in the second arbitration to be considered. View "Gulf LNG Energy v. ENI USA Gas Marketing" on Justia Law

Plaintiff filed suit against the University and others alleging that the parties' collective bargaining agreements' (CBA) "Conflict of Interest/Outside Activities" policy was unconstitutionally vague, that his termination breached the CBA, and that the University had used his insubordination as a pretext for First Amendment retaliation. Plaintiff's action stemmed from the University's termination of plaintiff after he attracted national news media attention for publicly questioning whether the Sandy Hook Elementary School shooting had in fact occurred.The Eleventh Circuit affirmed the district court's summary judgment rulings and its denial of plaintiff's post-trial motions for judgment as a matter of law and for a new trial. The court held that the district court correctly concluded that plaintiff's failure to exhaust the CBA's mandatory grievance-and-arbitration procedures barred his claim that the University breached the CBA by firing him. Although the court affirmed the district court on the constitutional claims, the court applied a different analysis. Without deciding the issue, the court assumed for the purposes of this appeal that plaintiff could constitutionally challenge the Policy on vagueness grounds. The court held that plaintiff's vagueness challenge failed on the merits, and his facial and as-applied First Amendment challenges to the Policy's reporting requirement failed. Furthermore, plaintiff's challenge to the Policy's conflict-of-interest provision failed on the merits. Because plaintiff's constitutional challenges failed, his declaratory judgment claim based on the same grounds also failed. Finally, the court concluded that the district court did not abuse its discretion in excluding the Faculty Senate meeting transcript. View "Tracy v. Florida Atlantic University Board of Trustees" on Justia Law

The Eleventh Circuit held that section 685.300(i)(1) defines the term "borrower defense claim" to include—rather than exclude—breach-of-contract and misrepresentation claims—and, accordingly, that section 685.300(f) prohibits Grand Canyon from enforcing its pre-dispute arbitration agreement with respect to plaintiff's claims here. In this case, Grand Canyon urges a reading of section 685.300 that would not only (1) exclude bread-and-butter breach-of-contract and misrepresentation claims—the claims that complaining borrowers are most likely to bring—but also (2) include non-contract and non-misrepresentation claims only if reduced to judgment, thereby rendering that aspect of the borrower-defense-claim protection meaningless. Therefore, the court reversed the district court's decision to the contrary. View "Young v. Grand Canyon University, Inc." on Justia Law

Plaintiff Gerriann Fagan appealed a circuit court order granting defendant Warren Averett Companies, LLC's motion to compel arbitration. Fagan was the owner of The Prism Group, LLC, a human-resources consulting firm. In February 2015, Warren Averett approached her and asked her to join Warren Averett and to build a human-resources consulting practice for it. In February 2015, she agreed to join Warren Averett, entering into a "Transaction Agreement" which provided that: Fagan would wind down the operations of The Prism Group; Fagan would become a member of Warren Averett; Warren Averett would purchase The Prism Group's equipment and furniture; Warren Averett would assume responsibility for The Prism Group's leases; and that Warren Averett would assume The Prism Group's membership in Career Partners International, LLC. The Transaction Agreement further provided that Fagan would enter into a "Standard Personal Service Agreement" ("the PSA") with Warren Averett; that Fagan's title would be president of Warren Averett Workplace; and that Fagan would be paid in accordance with the compensation schedule outlined in the PSA. Fagan alleged that she subsequently resigned from Warren Averett when she was unable to resolve a claim that Warren Averett had failed to properly compensate her in accordance with the PSA. On or about February 28, 2019, Fagan filed a demand for arbitration with the American Arbitration Association ("AAA"). The employment-filing team of the AAA sent a letter dated March 4, 2019, to the parties informing them of the conduct of the arbitration proceedings. On April 18, 2019, the employment-filing team notified the parties that Warren Averett had failed to submit the requested filing fee and that it was administratively closing the file in the matter. On April 30, 2019, Fagan sued Warren Averett in circuit court. The Alabama Supreme Court determined Warren Averett's failure to pay the filing fee constituted a default under the arbitration provision of the PSA. Accordingly, the trial court erred when it granted Warren Averett's motion to compel arbitration. View "Fagan v. Warren Averett Companies, LLC" on Justia Law

Ohio law allows nonsignatory agents to compel arbitration under general principles of contract and agency law. The Eighth Circuit reversed the district court's denial of Navient's motion to compel arbitration against plaintiff. The court disagreed with the district court's finding that the relevant arbitration clause does not include Navient as a party and so Navient cannot compel arbitration. Rather, the court held that Ohio law permits plaintiff to compel arbitration as a nonsignatory agent of the holder of the loan. The court also held that Ohio's rule of alternate estoppel prevents plaintiff from disavowing the arbitration clause because his claim arises out of the same contract. Therefore, plaintiff is estopped from avoiding the arbitration clause because his claims are integrally intertwined with the contract containing the agreement to arbitrate. Accordingly, the court remanded for further proceedings. View "Neal v. Navient Solutions, LLC" on Justia Law