Justia Arbitration & Mediation Opinion Summaries

The Supreme Court affirmed the order of the district court staying proceedings and compelling Investors to submit all asserted claims against FSC Securities Corp. (FSC) and Rocky Mountain Financial Advisors, LLC and Eric Roshoven (collectively, RMF) to arbitration.On the recommendation of RMF brokers and advisors, Investors purchased securities in Invizeon Corporation through FSC. After Invizeon failed, Investors sued FSC and RMF, alleging that FSC failed adequately to supervise its registered RMF representatives and that RMF wrongfully induced Investors to invest in Invizeon on various grounds. FSC and RMF moved to stay proceedings and compel arbitration before the Financial Industry Regulatory Authority (FINRA). After a hearing, the district court issued an order compelling Investors to submit their claims to arbitration as provided in FSC customer agreement forms. The Supreme Court affirmed, holding that the district court (1) did not err in concluding that Investors knowingly, voluntarily, and intelligently assented to the terms of the standard-form arbitration agreements and validly waived their Montana constitutional rights to full legal redress and jury trial; (2) correctly concluded that the standard-form FSC arbitration agreements were not unconscionable; and (3) correctly compelled Investors to submit their claims against FSC and RMF to arbitration. View "Lenz v. FSC Securities Corp." on Justia Law

The Supreme Court affirmed the order of the district court compelling arbitration and its judgment confirming the arbitration award.A few months after beginning work for Home Savings of America (HSOA), Plaintiff signed an employment agreement containing a provision that required the parties to submit any disputes to binding arbitration. After HSOA terminated Plaintiff’s employment, Plaintiff sued HSOA, its CEO and Board chair Dirk Adams, and Home Savings Bancorp (HSBC), which owned all of HSOA’s stock, alleging breach of contract, wrongful discharge, and fraud. The district court ordered the parties to proceed to binding arbitration. The arbitrator issued an award in favor of HSBC and Adams. The district court confirmed the award. The Supreme Court affirmed both orders, holding (1) the parties had a valid agreement to arbitrate, and therefore, the district court properly referred Plaintiff’s claims to arbitration; and (2) the district court did not abuse its discretion in confirming the arbitration award because the court had jurisdiction to hear Plaintiff’s motion to vacate the arbitration award, and the arbitrator did not manifestly disregard the law. View "Tedesco v. Home Savings Bancorp, Inc." on Justia Law

Facing more than $40,000 in unsecured debt that she owed to Discover Bank and other banks, Susan Ossello enrolled in a debt reduction program and signed a contract with Global Client Solutions. Ossello subsequently stopped making payments on her credit card debt, and Discover Bank brought a collection action against her. Ossello filed a third-party complaint against Global, alleging that Global used deceptive and fraudulent representations to solicit her participation in an illegal debt settlement plan. Global filed a motion to compel arbitration and to dismiss the third-party complaint for lack of jurisdiction. The district court concluded that the arbitration clause in Global’s contract was unconscionable and not unenforceable and therefore denied Global’s motion to dismiss and to compel arbitration. The Supreme Court affirmed, holding that the district court did not err in (1) reserving to itself the determination of arbitrability, and (2) declaring that the arbitration provision was unconscionable and therefore not enforceable against Ossello. View "Discover Bank v. Ossello" on Justia Law

After Employee failed to ask a shopper for a loyalty card per Employer's policy, Employee was fired. Employee brought a wrongful discharge claim against Employer under Montana's Wrongful Discharge From Employment Act (WDEA). Employee accepted Employer's offer to arbitrate the dispute because she said Mont. Code Ann. 39-915 would force her to pay Employer's attorney fees if she declined the offer and later lost at trial. Employee then successfully moved to amend her complaint to add destruction of evidence and declaratory judgment claims, alleging, inter alia, that section 39-2-915 was unconstitutional. The district court subsequently dismissed Employee's amended complaint, concluding that it had lost jurisdiction over Employee's claim once she accepted the offer to arbitrate. The court also ruled that 39-2-915 was constitutional. The Supreme Court (1) affirmed the dismissal of Employee's amended complaint, as the court lost its ability to consider Employee's claim once she agreed to arbitration; and (2) set aside the district court's determination of Employee's constitutional claim, as the court lost its authority to act further once Employee agreed to arbitrate. View "Ensey v. Mini Mart, Inc." on Justia Law

Plaintiffs commenced a lawsuit against several power companies alleging that the Colstrip power facility, which bordered land owned by Plaintiffs, contaminated groundwater under their property. The parties proceeded with mediation after three years of litigation. The mediation ended with the transmission of a memorandum of understanding (MOU) to the parties' counsel. After some of Plaintiffs expressed reservations about accepting the settlement, the power companies filed a motion to enforce the settlement agreement, arguing that the MOU was a written and signed settlement agreement. After a hearing, the district court granted the motion to enforce the settlement agreement, finding that the MOU was a binding, enforceable settlement agreement. The Supreme Court affirmed, holding that the district court (1) did not err by finding the MOU was an enforceable settlement agreement; (2) did not err by allowing parol evidence to change an option to purchase into a right of first refusal; and (3) erred in admitting evidence protected by the mediation confidentiality statute, but the error was harmless. View "Kluver v. PPL Mont., LLC" on Justia Law

Blue Cross and Blue Shield of Montana (BCBS) signed an employment agreement with Plaintiff containing a clause to compel arbitration for any disputes regarding the employment agreement. After Plaintiff's employment was terminated, Plaintiff brought an action against BCBS claiming that BCBS violated the Wrongful Discharge from Employment Act (WDEA). Plaintiff, however, could bring a WDEA claim only if she did not have a written contract of employment for a specific term. The district court compelled arbitration to allow the arbitrator to determine in the first instance whether Plaintiff had a term employment contract. The Supreme Court affirmed the district court's order to compel arbitration, holding that because the instant dispute implicated the terms or provisions of the employment agreement, the district court correctly determined that an arbitrator should decide, in the first instance, whether Plaintiff was an at-will employee or whether she had a term contract. View "Marsden v. Blue Cross & Blue Shield of Mont., Inc." on Justia Law

Plaintiffs filed suit seeking a judicial resolution of an LLC in which both Plaintiffs and Defendants held ownership interests. The district court ordered judicial dissolution and appointment of a receiver after finding that the managing member of the LLC, one of the defendants, had never operated the LLC in conformity with the operating agreement and had acted in a manner that was unduly prejudicial to Plaintiffs. The Supreme Court affirmed, holding (1) there were substantial undisputed facts to support the district court's order for dissolution under Mont. Code Ann. 35-8-902(1), and the district court properly applied the statute; and (2) the district court properly denied Defendants' motion to amend their answer to add counterclaims because Defendants were required to arbitrate such claims under the operating agreement. View "Gordon v. Kuzara" on Justia Law

Joseph Graziano, an owner of property in the Stock Farm subdivision and a member of the Stock Farm Homeowners Association, filed a complaint against the Association and Stock Farm LLC (SFLLC), asserting several claims, including negligence, breach of fiduciary duties, defamation, and constructive fraud. The Association and SFLLC moved to stay the proceedings and compel arbitration pursuant to a provision of Stock Farm's Covenants, Conditions, and Restrictions (CCRs). The district court granted the motion, finding the CCRs were an enforceable agreement to arbitrate all the claims in Graziano's complaint. On review, the Supreme Court affirmed in part and reversed in part, holding (1) the district court did not err in finding the CCRs were not a contract of adhesion and were within Graziano's reasonable expectations, and thus were enforceable; (2) the district court erred in finding Graziano's claim of breach of fiduciary duty was not a personal injury claim exempt from arbitration under Mont. Code Ann. 27-5-114(2)(a); and (3) all of Graziano's remaining claims were subject to the valid and enforceable arbitration provision and must be arbitrated pursuant to the CCRs. Remanded. View "Graziano v. Stock Farm Homeowners Ass'n., Inc." on Justia Law

In the fall of 2008 William Hartford, a high school science teacher, was fired after his Montana teaching certificate expired by his inadvertence in failing to renew it. Hartford sought to file a grievance, alleging that he had been terminated without just cause in violation of a collective bargaining agreement (CBA) entered into between Kalispell School District (District) and the Kalispell Education Association (KEA). The district superintendent, and later the board of trustees, denied Hartford's request, claiming the matter did not constitute a valid grievance under the CBA on grounds that Hartford was not a member of the bargaining unit at any point during his employment in the fall of 2008 and that he was not a "teacher" as defined under Montana law during his employment in the fall of 2008. Hartford and the KEA filed a petition in the district court to compel arbitration as provided in the CBA. The district court granted summary judgment in favor of Hartford and the KEA and ordered the matter submitted to arbitration. The Supreme Court affirmed, concluding that the questions raised by the matter were properly submitted to arbitration.

Appellant, a Montana limited partnership which owned an electrical generating plant in Rosebud County, appealed the district court's order denying its motion to vacate the arbitration award ("Final Award") in its dispute with appellee, a Delaware corporation and a regulated public utility conducting business in Montana. At issue was whether the district court abused its discretion when if failed to vacate, modify, or correct the arbitration award. The court held that the district court did not abuse its discretion in denying appellant's motion where Montana's Uniform Arbitration Act, 27-5-311 MCA, did not permit a court to vacate an arbitration award in part; where Montana law was clear that a non-breaching party was still required to prove its damages; where the district court correctly noted in its order confirming the Final Award that the legal precedent on which appellant relied for its request to modify or correct the Final Award applied only to motions to vacate an award; and where the district court correctly determined that it lacked the authority to vacate the Final Award.