Justia Arbitration & Mediation Opinion Summaries

Articles Posted in Kentucky Supreme Court
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The Supreme Court affirmed the decision of the court of appealsaffirming the judgment of the trial court denying a motion to compel arbitration in this insurance dispute, holding that the trial court did not err in denying the motion to compel.Grace McGaughey, the trustee of a trust, entered into a contract with Money Concepts Capital Corporation and Legacy Consulting Group, LLC to purchase a variable annuity with Jackson National Life Insurance Company. The contract contained an arbitration agreement. Following McGaughey's death, the executrix of her estate sued Money Concepts, Legacy Conultants, and Jackson, alleging several common law and statutory claims. Money Concepts and Legacy Consulting moved to compel arbitration, which the trial court denied. The court of appeals affirmed. The Supreme Court affirmed, holding that McGaughey's investment was insurance, and therefore, the arbitration provision was unenforceable under Ky. Rev. Stat. 417.050(2). View "Legacy Consulting Group, LLC" on Justia Law

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The Supreme Court reversed the decision of the court of appeals vacating an arbitration award and affirmed the circuit court's denial of the motion to vacate the arbitrator's award, holding that the court of appeals exceeded the statutory basis for vacating the award.After she purchased a home, Plaintiff initiated an arbitration proceeding against Defendants, the seller of the home as well as two real estate agents, seeking to recover damages or to rescind the purchase contract. The arbitrator concluded that Plaintiff could not, as a matter of law, prevail on her breach of contract and rescission claims. Plaintiff filed a petition seeking to vacate the arbitration decision pursuant to the provisions of Ky. Rev. Stat. 417.160. The circuit court denied the petition. The court of appeals reversed and remanded for a new arbitration. The Supreme Court reversed, holding that the arbitrator did not exceed his powers. View "Booth v. K&D Builders, Inc." on Justia Law

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The Supreme Court affirmed in part and reversed in part the judgment of the circuit court compelling Plaintiff to arbitrate his claims of wrongful death and negligence against Signature HealthCARE of East Louisville, holding that arbitration was required on all claims.To secure his father's admittance into Signature, a long-term care facility, Plaintiff signed an arbitration agreement as his father's authorized representative. After his father died, Plaintiff brought a negligence and wrongful death claim against Signature. Signature filed a motion to compel arbitration. The trial court denied the motion. The court of appeals reversed in part, holding that Plaintiff's wrongful death claim was arbitrable because he signed the arbitration agreement in his individual capacity. The Supreme Court affirmed in part and reversed in part, holding that both Plaintiff's individual claims and that claims he brought as the representative of his father's estate were subject to arbitration. View "LP Louisville East, LLC v. Patton" on Justia Law

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In this action brought against a long-term care facility by Kenneth, as administrator of Estate of Tommy Patton, the Supreme Court reversed in part the court of appeals' decision concluding that an arbitration agreement was enforceable as to Kenneth's individual wrongful death claim but that the agreement was not enforceable as to the Estate's claims, holding that the agreement was valid as to both claims.Kenneth signed an arbitration agreement at the time his father, Tommy, was admitted to Signature HealthCARE of East Louisville's long-term care facility. Tommy later suffered a fall and died a few weeks later. Kenneth brought sued Signature, alleging negligence and wrongful death. Signature filed a motion to compel arbitration. The trial court denied the motion in its entirety. The court of appeals reversed in part, concluding that the arbitration agreement was not enforceable against the Estate but that Kenneth's wrongful death claim was arbitrable because he executed the arbitration agreement in his individual capacity. The Supreme Court reversed in part, holding that both the Estate's and Kenneth's individual claims were subject to arbitration because the arbitration agreement was valid and enforceable as to the Estate claim and as to Kenneth's individual wrongful death claim. View "LP Louisville East, LLC v. Patton" on Justia Law

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In this lawsuit between AllyAlign Health, Inc. and Signature Advantage, LLC the Supreme Court granted AllyAlign's motion for an order to compel arbitration of all claims, holding that a carve-out provision in the parties' contract for certain claims to be decided by a court did not negate the mandate of the Commercial Arbitration Rules and Arbitration Procedures of the American Arbitration Association (AAA's Rules) that the initial arbitrability of claims is to be determined by the arbitrator, not the courts.AllyAlign contracted with Signature Advantage for AllyAlign's services. The contract contained an arbitration provision incorporating the AAA's Rules. Signature Advantage later sued AllyAlign for breach of contract and other claims. AllyAlign moved to compel arbitration on all the claims based on the AAA's Rules that delegate to the arbitrator the initial decision about the arbitrability of claims arising between the parties. In response, Signature Advantage argued that the language of the carve-out provision exempted equitable claims from arbitration. The trial court granted in part the motion to compel arbitration but denied the motion for the claims it found to demand equitable relief. The Supreme Court compelled arbitration of all claims, holding that the trial court's order declining to refer all the claims of the complaint was erroneous. View "AllyAlign Health, Inc. v. Signature Advantage, LLC" on Justia Law

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The Supreme Court affirmed the decision of the court of appeals affirming the trial court’s order denying Employer’s motion to compel enforcement of the arbitration agreement between the parties in this case, holding that the arbitration agreement between Employer and Employee was unenforceable as a matter of law.Employer conditioned Employee’s continued employment on her agreement to arbitrate any dispute that may arise between them. The Supreme Court held that the arbitration agreement was unenforceable as a matter of state statutory law because (1) Ky. Rev. Stat. 336.700(2) prohibits employers from conditioning employment on an existing employee’s or prospective employee’s agreement to “waive, arbitrate, or otherwise diminish any existing or future claim, right, or benefit to which the employee or person seeking employment would otherwise be entitled”; and (2) the Federal Arbitration Act does not mandate a contrary holding because it does not preempt section 336.700(2) in this case. View "Northern Kentucky Area Development District v. Snyder" on Justia Law

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The Supreme Court affirmed the judgment of the court of appeals granting a Ky. R. Civ. P. 65.09 motion filed by Respondent to compel arbitration, holding that the arbitration agreement between the parties was enforceable.The circuit court in this case issued an order invalidating the arbitration clause contained in the parties’ employment contract. Thereafter, Respondent a motion seeking interlocutory relief to compel arbitration. The court of appeals determined that even where the contract expressly allows Respondent to seek provisional injunctive remedies in a court pending arbitration but did not specifically provide the same right to Movant, the lack of reciprocal access to the courts for injunctive relief did not invalidate the arbitration agreement. The Supreme Court affirmed, holding that the arbitration agreement did not lack mutuality, was supported by adequate consideration, and was not unconscionable. View "Grimes v. GHSW Enterprises, LLC" on Justia Law

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This matter was before the Kentucky Supreme Court on remand pursuant to the opinion of the United States Supreme Court in Kindred Nursing Centers Ltd. Partnership v. Clark, 137 S. Ct. 1421 (2017). The United States Supreme Court held that the “clear statement rule” - which provides that an attorney-in-fact does not have the authority to bind his principal to a pre-dispute arbitration agreement unless that authority is clearly stated in a power-of-attorney (POA) document - impinged upon the supremacy of the Federal Arbitration Act. Because the Kentucky Supreme Court’s ruling in the associated case of Kindred Nursing Centers Ltd. Partnership v. Wellner also rested upon alternative grounds, the United States Supreme Court remanded that case for the Kentucky Supreme Court to determine whether the alternate grounds for its holding with respect to the Wellner POA was “wholly independent” of the clear statement rule. On remand, the Supreme Court held that its interpretation that the Wellner POA did not authorize attorney-in-fact Beverly Wellner to execute Kindred’s pre-dispute arbitration agreement was wholly independent of, and not impermissibly tainted by, the clear statement rule decried by the United States Supreme Court. View "Kindred Nursing Center Limited Partnership v. Wellner" on Justia Law

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Kentucky Shakespeare Festival, Inc. (KSF) and Brantley Dunaway entered into an employment agreement. Two years later, KSF terminated Dunaway’s employment. When KSF informed Dunaway that he was not entitled to a bonus for the 2013 fiscal year, Dunaway filed an action for breach of contract. Nearly one year later, KSF filed a motion for partial summary judgment and declaratory relief, arguing that KSF’s determination that Dunaway was not entitled to a bonus was a binding “arbitration award” issued by an independent accounting firm. The circuit court denied relief, concluding that the employment agreement did not contain an agreement to forgo litigation and arbitrate any bonus dispute. The court of appeals affirmed. The Supreme Court affirmed, holding that no arbitration agreement existed between KSF and Dunaway, and because no arbitration proceeding occurred, there was no arbitration award to be confirmed. View "Kentucky Shakespeare Festival, Inc. v. Dunaway" on Justia Law

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Each of these three consolidated cases originated with the filing of an action in the circuit court asserting claims against nursing home facilities for personal injuries suffered by a nursing home resident, violations of Ky. Rev. Stat. 216.510 et seq., and for wrongful death of the resident. At the time of each resident’s admission to the nursing home, the resident’s attorney-in-fact executed a written document providing that disputes arising out of the relationship between the resident and the nursing home would be submitted to arbitration. When each case was commenced, the defendant nursing home moved the circuit court to compel the parties to submit the claims to a formal arbitration proceeding. The circuit court denied the motion in each case, concluding that the respective power-of-attorney instruments did not authorize the resident’s attorney-in-fact to waive the resident’s right to access to the courts. The Supreme Court affirmed, holding (1) without a clear and convincing manifestation of the principal’s intention to do so, delegation to an agent of the authority to waive a trial by jury is not authorized, and the principal’s assent to the waiver is not validly obtained; and (2) the arbitration agreements in these cases were never validly formed. View "Extendicare Homes, Inc. v. Whisman" on Justia Law