Justia Arbitration & Mediation Opinion Summaries

The Multiemployer Pension Plan Amendments Act of 1980 imposes liability on employers who withdraw—partially or completely—from multiemployer pension funds. After a complete withdrawal, GCIU-Employer Retirement Fund’s (GCIU) actuary calculated MNG Enterprise’s (MNG) withdrawal liability using an interest rate published by the Pension Benefit Guaranty Corporation. On MNG’s challenge, an arbitrator found (1) that MNG could not be assessed partial withdrawal liability following a complete withdrawal, (2) that it had shown the interest rate used was not the best estimate of the plan’s experience, and (3) that GCIU properly included the newspapers’ contribution histories. The district court affirmed the arbitrator’s award, vacating and correcting only a typographical error on the interest rate.   The Ninth Circuit affirmed in part and vacated in part the district court’s order affirming, except for a typographical error, an arbitrator’s award regarding the withdrawal liability. The panel held that the MPPAA directs the plan actuary to determine withdrawal liability based on “actuarial assumptions and methods which, in the aggregate, are reasonable (taking into account the experience of the plan and reasonable expectations) and which, in combination, offer the actuary’s best estimate of anticipated experience under the plan.” The panel held that the GCIU actuary’s use of the PBGC rate, without considering the “experience of the plan and reasonable expectations,” did not satisfy the “best estimate” standard. View "GCIU-EMPLOYER RETIREMENT FUND, ET AL V. MNG ENTERPRISES, INC." on Justia Law

The Supreme Court quashed the decision of the court of appeal issuing a writ of prohibition to prevent the circuit court from exercising jurisdiction over certain claims, holding that the court of appeal erred in issuing the writ.Plaintiff brought this lawsuit against an insurance company and the law firm representing the company in the underlying suit Plaintiff brought against the insurer, arguing that Defendants violated confidentiality requirements applicable to a mediation. After the circuit court denied Defendants' motions to dismiss Defendants petitioned the Third District relief. The Third District granted a writ of prohibition, concluding that the circuit court had exceeded its jurisdiction by entertaining Defendants' collateral estoppel affirmative defense. The Supreme Court quashed the decision below, holding that the writ of prohibition was used in an improper manner here. View "Mintz Truppman, P.A. v. Cozen O'Connor, PLC" on Justia Law

TIG Insurance Company (“TIG”) appeals from a judgment and order of the district court. TIG asserts that Judge Ramos erred in ordering it to arbitrate a coverage dispute with ExxonMobil Oil Corporation (“Exxon”). Even if it was required to arbitrate, TIG contends that Judge Ramos erred in awarding Exxon prejudgment interest when confirming the arbitral award. After entering judgment, and after TIG had appealed, the district court clerk notified the parties that it was brought to Judge Ramos’s attention that he owned stock in Exxon when he presided over the case. Nothing in the record suggests that Judge Ramos was aware of his conflict at the time he rendered his decisions, and the parties do not suggest otherwise. TIG moved in the district court to vacate the judgment. The case was reassigned to a different judge, who denied the motion to vacate. TIG appealed from that denial as well.The Second Circuit affirmed the district court’s denial of Appellant’s motion to vacate and the district court’s order compelling arbitration, reversed in part its decision granting Exxon’s request for prejudgment interest, and remanded to the district court for further proceedings. The court explained that vacatur was not required because this case presents only questions of law, and a non-conflicted district judge reviewed the case de novo. As to the merits, the court held that the district court did not err in compelling arbitration because the parties were subject to a binding arbitration agreement, but that the district court erred in ordering TIG to pay pre-arbitral-award interest. View "ExxonMobil Oil Corporation v. TIG Insurance Company" on Justia Law

After disputes arose between a general contractor and two of its subcontractors, an arbitrator awarded the subcontractors money for the labor and material they had provided the general contractor along with associated costs, attorneys' fees, interest, and other sums. The general contractor declared bankruptcy before paying up, and the surety company that issued a bond guaranteeing the subcontractors would be paid tendered amounts representing only the part of the awards that compensated for labor and material (and some interest). But the subcontractors (or in one case, the subcontractor's assignee) wanted the whole of the awards and sued in federal court to get it.   The district court sided with the surety and granted it summary judgment. The Eighth Circuit reversed and remanded the district court’s decision granting summary judgment to the surety. The court held that the bond at issue obligates the surety to pay not only for labor and material but also for other related items to which Plaintiffs’ subcontracts entitle them (or their assignees). The court explained that the bond provided that if the subcontractors were not paid in full, which is the case here, they were entitled to sums "justly due," which included costs, attorneys' fees and interest. View "Owners Insurance Company v. Fidelity & Deposit Company" on Justia Law

Plaintiff Crystal Point Condominium Association, Inc. obtained default judgments against two entities for construction defect claims. Kinsale Insurance Company was alleged to have insured those entities, under the Direct Action Statute, N.J.S.A. 17:28-2. The relevant policies both contained an arbitration agreement providing in part that “[a]ll disputes over coverage or any rights afforded under this Policy . . . shall be submitted to binding Arbitration.” Crystal Point filed a declaratory judgment action against Kinsale, alleging that it was entitled to recover the amounts owed by the entities under the insurance policies issued by Kinsale. Kinsale asserted that Crystal Point’s claims were subject to binding arbitration in accordance with the insurance policies. Kinsale argued that the Direct Action Statute did not apply because Crystal Point had not demonstrated that neither entity was insolvent or bankrupt. In the alternative, Kinsale contended that even if the statute were to apply, it would not preclude enforcement of the arbitration provisions in the policies. The trial court granted Kinsale’s motion to compel arbitration, viewing the Direct Action Statute to be inapplicable because there was no evidence in the record that either insured was insolvent or bankrupt. An appellate court reversed the trial court’s judgment, finding the evidence that the writs of execution were unsatisfied met the Direct Action Statute’s requirement that the claimant present proof of the insured’s insolvency or bankruptcy and determining that the Direct Action Statute authorized Crystal Point’s claims against Kinsale. The appellate court concluded the arbitration clause in Kinsale’s insurance policies did not warrant the arbitration of Crystal Point’s claims, so it reinstated the complaint and remanded for further proceedings. The New Jersey Supreme Court determined Crystal Point could assert direct claims against Kinsale pursuant to the Direct Action Statute in the setting of this case. Based on the plain language of N.J.S.A. 17:28-2, however, Crystal Point’s claims against Kinsale were derivative claims, and were thus subject to the terms of the insurance policies at issue, including the provision in each policy mandating binding arbitration of disputes between Kinsale and its insureds. Crystal Point’s claims against Kinsale were therefore subject to arbitration. View "Crystal Point Condominium Association, Inc. v. Kinsale Insurance Company " on Justia Law

SUNZ Insurance Company (“SUNZ”) appealed from the denial of its motion to dismiss or, in the alternative, to compel arbitration of the crossclaims filed in a complex insurance dispute. SUNZ argued the district court lacked subject matter jurisdiction over the crossclaims between non-diverse parties in the underlying interpleader action and otherwise erred by denying arbitration.   The Eighth Circuit reversed and remanded the district court’s denial of Defendant’s motion to compel arbitration of the crossclaims. The court explained arbitration agreements are generally favored under federal law. Further, a court may not rule on the potential merits of the underlying claim that is assigned by contract to an arbitrator, even if it appears to be frivolous.Here, the Program Agreement sets forth the terms and conditions of the Policy and contains the disputed statements pertaining to collateral, costs, and fees. The Policy cannot be read without the Program Agreement, which explicitly controls the administration of the Policy and only becomes binding and enforceable after its execution. While the other party’s crossclaim alleges that SUNZ breached the Policy, it is the Program Agreement that drives the question of liability. And, under the Program Agreement, both parties agreed to submit to arbitration any disagreement regarding its terms. This is a challenge to the contract’s validity that, under Buckeye, shall be considered by an arbitrator, not a court. Thus, the district court erred when it denied SUNZ’s alternative motion to compel arbitration. View "SUNZ Insurance Company v. Butler American Holdings Inc." on Justia Law

Plaintiff sued her employer, Life Insurance Company of North America, and several related individuals (collectively, Employer) for discrimination, harassment and wrongful termination. In response, Employer moved to compel arbitration based on a 2014 arbitration agreement. However, Employer did not present a copy of the agreement. Instead, Employer presented an auto-generated acknowledgment indicating Plaintiff read and consented to the terms of the agreement.The trial court denied Employer's motion to compel arbitration, finding that Employer did not establish an agreement to arbitrate and, even if an agreement existed, it was both procedurally and substantively unconscionable.The Second Appellate District affirmed. The trial court had the authority to review the "gateway" issue of arbitrability because Plaintiff claimed to have never seen or agreed to the arbitration agreement. Further, the fact that Employer's system created an auto-generated acknowledgment that Plaintiff consented to the agreement did not overcome Plaintiff's claim that she was not presented with the agreement and never would have agreed to it. View "Trinity v. Life Ins. Co. of North America" on Justia Law

Robinson submitted an “uninsured driver” claim to State Farm for injuries sustained in an accident involving her car and an unidentified vehicle. Coverage was available only if the two cars came into contact. (Ins. Code 11580.2(b)(1).) In arbitration, State Farm propounded requests for admissions that there was either no contact between the two cars or that no damage resulted from any contact. Robinson failed to respond by the due date. After finding that Robinson had not “substantially complied” with Code of Civil Procedure sections 2033.220 or 2015.5, the court deemed the requests admitted and awarded sanctions. Robinson unsuccessfully moved to withdraw or amend the deemed admissions, citing inadvertence. The arbitrator entered an award in favor of State Farm, relying on the established admissions.The trial court confirmed the award. The court of appeal affirmed. In typical arbitration proceedings, discovery disputes are resolved by the arbitrator but in uninsured-motorist arbitration proceedings, discovery disputes are resolved by a trial court. Trial court discovery orders in these proceedings are not reviewable on appeal from a judgment confirming the arbitration award. A party’s recourse to challenge an allegedly improper discovery ruling in an uninsured-motorist arbitration proceeding is through a timely petition for a writ of mandamus. View "State Farm Mutual Automobile Insurance Co. v. Robinson" on Justia Law

The Supreme Court affirmed the judgment of the trial court granting Insured's application to compel appraisal with regard to a dispute as to the extent of Insurer's replacement obligation under Con. Gen. Stat. 38a-316e(a) (matching statute), holding that there was no error.At issue was whether a dispute as to the extent of an insurer's obligation under the matching statute to replace items or items in a covered loss for real property with "material of like kind and quality so as to conform to a reasonably uniform appearance" was a question properly relegated to the appraisal arbitral process or a question of coverage to be resolved by the court in the first instance. The trial court granted Insured's application to compel arbitration in this case. The Supreme Court affirmed, holding that the parties' dispute fell within the scope of the insurance policy's appraisal clause. View "Klass v. Liberty Mutual Insurance Co." on Justia Law

The Supreme Court accepted certified questions from the United States Court of Appeals for the Ninth Circuit in this arbitration dispute, holding that direct benefits estoppel cannot be invoked in a garnishment action to bind the judgment creditor to the terms of the contract because applying the doctrine in this context would contravene Arizona's statutory garnishment scheme.Specifically, the Court answered that in a garnishment action by a judgment creditor against the judgment debtor's insurer claiming that coverage is owed under an insurance policy where the judgment creditor is not proceeding on an assignment of rights, the insurer cannot invoke the doctrine of direct benefits estoppel to bind the judgment creditor to the terms of the insurance contract. View "Benson v. Casa De Capri Enterprises, LLC" on Justia Law