Justia Arbitration & Mediation Opinion Summaries

Plaintiff Amanda Kernahan purchased a “home service agreement” from defendants Home Warranty Administrator of Florida, Inc., and Choice Home Warranty. When she became dissatisfied, she filed a complaint in Superior Court seeking statutory and common law relief. Plaintiff claimed that the agreement misrepresented its length of coverage and that the deceptively labelled “MEDIATION” section of the agreement failed to inform her that she was waiving her right to a jury trial and would be deterred from seeking the additional remedies of treble damages, punitive damages, and attorney’s fees and costs. Defendants filed a motion to dismiss the complaint with prejudice in favor of arbitration, citing the "mediation" provision. The trial court denied defendants’ motion to dismiss, concluding that the arbitration provision was unenforceable. The court found the provision both ambiguous and noncompliant with Atalese v. U.S. Legal Services Group, L.P., 219 N.J. 430 (2014), “in either its form or its function.” The court subsequently denied defendants’ motion for reconsideration, rejecting defendants’ argument that language stating that all claims will be resolved “exclusively” by arbitration would or should have adequately informed plaintiff that she is waiving her right to proceed in court, as opposed to use of other available dispute resolution processes. The Appellate Division affirmed the trial court’s refusal to dismiss the complaint, and the New Jersey Supreme Court also affirmed. View "Kernahan v. Home Warranty Administrator of Florida, Inc." on Justia Law

Oliveira is a driver for a trucking company, under an agreement that calls him an independent contractor and contains a mandatory arbitration provision. Oliveira filed a class action alleging that the company denies its drivers lawful wages. The company invoked the Federal Arbitration Act, arguing that questions regarding arbitrability should be resolved by the arbitrator. The First Circuit and Supreme Court agreed that a court should determine whether the Act's section 1 exclusion applies before ordering arbitration. A court’s authority to compel arbitration under the Act does not extend to all private contracts. Section 2 provides that the Act applies only when the agreement is “a written provision in any maritime transaction or a contract evidencing a transaction involving commerce.” Section 1 provides that “nothing” in the Act “shall apply” to “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” The sequencing is significant. A “delegation clause,” giving the arbitrator authority to decide threshold questions of arbitrability is merely a specialized type of arbitration agreement and is enforceable under sections 3 and 4 only if it appears in a contract consistent with section 2 that does not trigger section 1’s exception. Because “contract of employment” refers to any agreement to perform work, Oliveira’s contract falls within that exception. At the time of the Act’s 1925 adoption, the phrase “contract of employment” was not a term of art; dictionaries treated “employment” as generally synonymous with “work," not requiring a formal employer-employee relationship. Congress used the term “contracts of employment” broadly. View "New Prime Inc. v. Oliveira" on Justia Law

The Second Circuit affirmed the district court's denial of SquareTrade's motion to compel arbitration in a putative class action seeking to hold SquareTrade accountable for alleged violations of consumer protection laws. The court agreed with the district court and held that the arbitration provision did not become part of the contract because plaintiff did not have reasonable notice of and manifest his assent to it. In this case, the consumer was presented with several documents including the Pre-Sale T&C, the body of the subsequent email, and the Post-Sale T&C, none of them specifically identified as the "Service Contract" governing the purchase, and all containing different sets of terms. Furthermore, the prior course of dealing between the parties did not convince the court that plaintiff was on inquiry notice of the arbitration provision. View "Starke v. SquareTrade, Inc." on Justia Law

At issue was the circuit court’s role in determining the proper forum of dispute resolution when a subsequent contract, if enforceable, does not contain an arbitration clause that is present in an initial contract.The Supreme Court reversed the decision of the court of appeals reversing the non-final order of the circuit court denying a motion to compel arbitration pursuant to the initial agreement in this case, as well as the circuit court’s granting of a motion for declaratory judgment that the subsequent agreement was a valid contract, holding that, if valid, the subsequent agreement released certain parties from the agreement to arbitrate contained in the initial agreement, and the cause must be remanded to determine whether the subsequent agreement was a valid contract.The circuit court concluded that even though the initial agreement required arbitration, it was superseded by the subsequent agreement, which did not require the parties to submit to arbitration. The court of appeals concluded that arbitration was required pursuant to the initial agreement. The Supreme Court reversed, holding that, under the circumstances of this case, the determination of arbitrability must be decided by the circuit court rather than an arbitrator and that genuine issues of material fact existed as to whether the subsequent agreement was a valid contract. View "Midwest Neurosciences Associates, LLC v. Great Lakes Neurosurgical Associates, LLC" on Justia Law

The Supreme Court reversed the order of the circuit court denying Appellants’ motion to compel arbitration pursuant to Mo. Rev. Stat. 435.440.1, holding that the circuit court erred in refusing to compel arbitration on the basis that the arbitration agreement signed by the parties contained a delegation provision mandating that the arbitrator had exclusive authority to decide threshold questions of arbitrability, holding that the delegation provision was valid and enforceable.Appellant asserted in the circuit court that both the delegation provision and the agreement as a whole lacked mutual obligations and that there was no consideration for either the agreement or the delegation provision. The circuit court agreed with Appellants. The Supreme Court did not, holding that the delegation provision was a mutual promise to arbitrate any threshold questions of arbitrability which may arise, and therefore, the delegation clause was bilateral in nature, and consideration was present. View "Soars v. Easter Seals Midwest" on Justia Law

The Supreme Court affirmed the judgment of the district court granting Defendants’ motion to compel arbitration and dismiss the case, holding that the district court did not erroneously compel arbitration.Plaintiff entered into a construction contract that contained an arbitration agreement. Plaintiff later filed a complaint against Defendants, asserting claims for breach of contract, negligence, and other torts. Defendants filed a motion to compel arbitration and dismiss. The Supreme Court granted the motion to compel arbitration and dismissed the action. The Supreme Court affirmed, holding that the district court did not err (1) in concluding that the arbitration agreement required arbitration of matters within its scope rather than merely authorizing it as a matter of discretion upon timely demand; (2) in failing to conclude that Defendants equitably waived the right to arbitrate; (3) in compelling arbitration without consideration of Plaintiff’s proposed declaratory judgment claim challenging the validity of the arbitration agreement; (4) in concluding that Plaintiff’s asserted non-contract claims were subject to arbitration; and (5) in failing to conclude that, as a non-party to the agreement, one defendant lacked standing to enforce the arbitration agreement. View "Peeler v. Rocky Mountain Log Homes Canada, Inc." on Justia Law

Wakaya Perfection, LLC and its principals sued Youngevity International Corp. and its principals in Utah state court. The Youngevity parties responded by bringing their own suit against the Wakaya parties in a California federal district court, then removing the Utah case to federal court. These steps resulted in concurrent federal cases sharing at least some claims and issues. The California litigation progressed; and in November 2017, the federal district court in Utah ordered dismissal. The issues presented for the Tenth Circuit's review centered on whether: (1) the federal district court should have abstained from exercising jurisdiction under the Colorado River Water Conservation District v. United States, 424 U.S. 800 (1976) test; and (2) and arbitrator would have needed to decide the arbitrability of Wakaya's claims. The Tenth Circuit reversed on both grounds: the federal trial court applied the wrong abstention test and erroneously ruled that an arbitrator should have decided whether Wakaya's claims were arbitrable. View "Wakaya Perfection, LLC v. Youngevity International" on Justia Law

The First Circuit affirmed the district judge’s order sending Appellant’s case to arbitration, holding that the arbitration agreement between the parties was enforceable and did not fail for lack of consideration or unconscionability.Appellant and his employer entered into an agreement outlining the terms for Appellant’s continued at-will employment, which included an arbitration agreement. After Appellant was fired, Appellant filed this federal court lawsuit against Appellees alleging that his discharged violated several federal and state laws. Appellees moved to dismiss the complaint and compel arbitration. In response, Appellant argued that the arbitration agreement was unenforceable for lack of consideration and that the agreement was unconscionable and thus, unenforceable. The district court granted Appellees’ motion, concluding that a valid and enforceable arbitration agreement existed between the parties. The First Circuit affirmed, holding that both Appellant’s consideration and unconscionability arguments failed. View "Britto v. Prospect CharterCare SJHSRI, LLC" on Justia Law

The First Circuit reversed the decision of the district court denying Defendants’ motion to dismiss Plaintiff’s complaint and compel arbitration based on the parties’ signed arbitration agreement, holding that, contrary to the conclusion of the district court, Defendants’ offer of continued at-will employment was valid consideration for the agreement.Plaintiff’s complaint alleged that Defendants fired him in violation of the Family Medical Leave Act and the Rhode Island Parental and Family Medical Leave Act. Defendants filed a motion to dismiss the case and compel arbitration. The district court denied the motion, concluding that the agreement failed for lack of consideration. The First Circuit reversed, holding (1) the agreement was supported by adequate consideration; and (2) Plaintiff’s motion to supplement the record is denied. The Court remanded the case with instructions to grant Defendants’ motion to dismiss and compel arbitration. View "Conduragis v. Prospect CharterCARE, LLC" on Justia Law

The Supreme Court vacated the decision of the court of appeals reversing the judgment of the district court that concluded that a fee agreement between the parties was not void and thus ordering arbitration, holding that the district court erred by directing entry of final judgment rather than staying the proceedings, and therefore, there was no proper final judgment from which to take an appeal.Plaintiffs sued Defendants after learning that Defendants had provided brokerage services to Plaintiffs without the requisite state license. Specifically, Plaintiffs alleged that the fee agreement obligating Defendants to pay for the services provided was void as against public policy. Defendants, in turn, moved to compel arbitration pursuant to the terms of the fee agreement and to dismiss or to stay the underlying proceedings. The district court ordered arbitration and dismissed the case, concluding that the fee agreement was not void. The court of appeals reversed, determining that the fee agreement was void. The Supreme Court vacated the court of appeals’ decision, holding that the district court erred by dismissing the case instead of staying proceedings and that the court of appeals erred when it concluded that it had jurisdiction over the merits of this case. View "Woischke v. Stursberg & Fine, Inc." on Justia Law