Justia Arbitration & Mediation Opinion Summaries

The case involves a real estate dispute where plaintiffs, represented by Kenneth J. Catanzarite, alleged they were defrauded into exchanging their interests in an apartment complex for interests in a limited liability company. The dispute was ordered into arbitration at the plaintiffs' request, and the arbitrator ruled in favor of the defendant, Plantations at Haywood, LLC. Plantations then petitioned the court to confirm the arbitration award.The Superior Court of Orange County confirmed the arbitration award and granted Plantations' motion for sanctions against Catanzarite under Code of Civil Procedure section 128.7, imposing $37,000 in sanctions. The court found that Catanzarite's opposition to the petition was frivolous and factually unsupported. Catanzarite appealed the sanctions, arguing he was statutorily allowed to file an opposition and contest the arbitrator's award.The California Court of Appeal, Fourth Appellate District, Division Three, reviewed the case. The court held that Catanzarite's arguments were without merit and unsupported by existing law or any nonfrivolous extension of existing law. The court found no abuse of discretion in the trial court's sanction award against Catanzarite. Additionally, the court granted Plantations' motion for sanctions on appeal, finding the appeal to be frivolous and without merit. The case was remanded to the trial court to determine the appropriate amount of sanctions to be awarded, with the option for Catanzarite to stipulate to the amount requested by Plantations. The order was affirmed, and Plantations was entitled to its costs on appeal. View "Plantations at Haywood 1, LLC v. Plantations at Haywood, LLC" on Justia Law

Justo Malo Sanchez filed a legal malpractice complaint against Consumer Defense Law Group (CDLG), Tony Cara, Peter Nisson, and Nonprofit Alliance of Consumer Advocates (collectively Defendants). Sanchez alleged that the Defendants committed legal malpractice, resulting in the loss of his house. The retainer agreement he signed included an arbitration clause, which he argued was procedurally and substantively unconscionable due to his inability to understand English and his financial inability to afford arbitration fees.The Superior Court of Orange County initially tentatively denied the Defendants' motion to compel arbitration but later granted it. Sanchez then filed a petition for extraordinary relief, arguing that the arbitration agreement was unconscionable and that he could not afford the arbitration fees.The California Court of Appeal, Fourth Appellate District, Division Three, reviewed the case. The court found substantial procedural unconscionability due to the adhesive nature of the contract, Sanchez's limited English proficiency, and the lack of a Spanish translation or explanation of the arbitration clause. The court also found substantive unconscionability because Sanchez, who was indigent and had been granted a court fee waiver, could not afford the $2,000 arbitration filing fee and additional costs estimated between $25,000 and $30,000.The court concluded that the arbitration agreement was unenforceable due to unconscionability. Additionally, under the precedent set by Roldan v. Callahan & Blaine, the court held that Sanchez could be excused from paying the arbitration fees due to his inability to afford them. The court granted Sanchez's petition, directing the superior court to vacate its order compelling arbitration and to enter an order denying the motion to compel arbitration. View "Sanchez v. Superior Court" on Justia Law

In July 2020, the plaintiff used Uber's app to request a ride. Upon being dropped off in the middle of a roadway, she was struck by another vehicle and sustained injuries. She filed a personal injury lawsuit against Uber in November 2020, serving the complaint via the New York Secretary of State. Uber did not respond within the required 30 days, allegedly due to mail processing delays caused by the COVID-19 pandemic.In January 2021, Uber updated its terms of use, including an arbitration agreement, and notified users via email. The plaintiff received and opened this email. When she next logged into the Uber app, she was presented with a pop-up screen requiring her to agree to the updated terms to continue using the service. She checked a box and clicked "Confirm," thereby agreeing to the terms, which included a clause delegating the authority to resolve disputes about the agreement's applicability and enforceability to an arbitrator.The plaintiff moved for a default judgment in March 2021, and Uber responded by asserting that she had agreed to arbitrate her claims. Uber then sent a Notice of Intent to Arbitrate. The plaintiff moved to stay Uber's arbitration demand, arguing that the arbitration agreement was unconscionable and violated ethical rules. Uber cross-moved to compel arbitration.The Supreme Court granted Uber's motion to compel arbitration, finding that the plaintiff was on inquiry notice of the arbitration agreement and had assented to it. The Appellate Division affirmed, stating that the plaintiff's challenges to the agreement's validity must be decided by an arbitrator due to the delegation provision.The New York Court of Appeals affirmed the Appellate Division's decision, holding that the clickwrap process used by Uber resulted in a valid agreement to arbitrate. The court also held that the delegation provision was valid and that the plaintiff's challenges to the arbitration agreement's enforceability should be resolved by an arbitrator. The court found no abuse of discretion in the lower court's decision not to sanction Uber for the alleged ethical violation. View "Wu v. Uber Tech., Inc." on Justia Law

The Supreme Court reversed the judgment of the district court denying Wind River Rehabilitation and Wellness's motion to compel arbitration in this action alleging medical malpractice, holding that the district court erred in denying the motion to compel arbitration.Plaintiff, the wrongful death representative of Loy Forshee, filed this action against Wind River, where Forshee lived when he fell and broke his hip, alleging medical malpractice. Wind River moved to compel arbitration under the parties' arbitration agreement. The district court denied the motion, concluding that Wind River waived his right to arbitration by waiting fourteen months to compel arbitration. The Supreme Court reversed, holding that the record did not support a conclusion that Wind River waived its right to arbitrate. View "Empres at Riverton, LLC v. Osborne" on Justia Law

Innovative Images, LLC sued its former attorney James Summerville, Summerville Moore, P.C., and The Summerville Firm, LLC (collectively, the “Summerville Defendants”) for legal malpractice. In response, the Summerville Defendants moved to dismiss the suit and to compel arbitration in accordance with the parties’ engagement agreement, which included a clause mandating arbitration for any dispute arising under the agreement. The trial court denied the motion, ruling that the arbitration clause was “unconscionable” and thus unenforceable because it had been entered into in violation of Rule 1.4 (b) of the Georgia Rules of Professional Conduct (“GRPC”) for attorneys found in Georgia Bar Rule 4-102 (d). The Court of Appeals reversed, holding that the arbitration clause was not void as against public policy or unconscionable. The Georgia Supreme Court concluded after review that regardless of whether the Summerville Defendants violated GRPC Rule 1.4 (b) by entering into the mandatory arbitration clause in the engagement agreement without first apprising Innovative of the advantages and disadvantages of arbitration, the clause was not void as against public policy because Innovative did not argue, and no court has held, that such an arbitration clause could never lawfully be included in an attorney-client contract. For similar reasons, the Supreme Court held the arbitration clause was not substantively unconscionable, and on the limited record before it, Innovative did not show the clause was procedurally unconscionable. Accordingly, the Court affirmed the appellate court's judgment. View "Innovative Images, LLC v. Summerville et al." on Justia Law

In November 2007, Marten performed surgery on Doe’s face and neck. In June 2008, Doe sent Marten a letter stating she was considering suing him and demanded that he preserve her documents, files, and photos. In November, Doe’s attorney served Marten with a written demand for arbitration pursuant to a Physician-Patient Arbitration Agreement. In January 2009 Marten’s counsel responded, identifying an arbitrator, without questioning the origin of the agreement or disputing that Marten had signed it. The applicable one-year statute of limitations ran in March 2009. (Code Civ. Proc.340.5) In May 2009, Merten subpoenaed and obtained the records of Dr. Daniel, whom Doe earlier consulted. Located within Daniel’s records was a signed arbitration agreement. Nearly three years later, Marten’s counsel first confronted Doe with the arbitration agreement and refused to continue with the arbitration.Doe sued for medical malpractice and medical battery. The court overruled dismissal motions, finding triable issues as to whether equitable tolling or equitable estoppel disallowed the statute of limitations defense. The court imposed sanctions after hearing evidence that Marten destroyed electronically stored information. After the close of evidence, the trial court dismissed the medical battery claim. On the malpractice claim, the jury awarded over $6.3 million in damages. The court then found the malpractice claim time-barred. The court of appeal reversed in part. The medical malpractice claim was not time-barred because Merten’s conduct actually and reasonably induced Doe to refrain from filing a timely action. View "Doe v. Marten" on Justia Law

The Louisiana Supreme Court granted review in this case to determine whether the Louisiana Commissioner of Insurance was bound by an arbitration clause in an agreement between a health insurance cooperative and a third-party contractor. The Louisiana Health Cooperative, Inc. (“LAHC”), a health insurance cooperative created in 2011 pursuant to the Patient Protection and Affordable Care Act, entered an agreement with Milliman, Inc. for actuarial and other services. By July 2015, the LAHC was out of business and allegedly insolvent. The Insurance Commissioner sought a permanent order of rehabilitation relative to LAHC. The district court entered an order confirming the Commissioner as rehabilitator and vesting him with authority to enforce contract performance by any party who had contracted with the LAHC. The Commissioner then sued multiple defendants in district court, asserting claims against Milliman for professional negligence, breach of contract, and negligent misrepresentation. According to that suit, the acts or omissions of Milliman caused or contributed to the LAHC’s insolvency. Milliman responded by filing a declinatory exception of lack of subject matter jurisdiction, arguing the Commissioner must arbitrate his claims pursuant to an arbitration clause in the agreement between the LAHC and Milliman. The Supreme Court concluded, however, the Commissioner was not bound by the arbitration agreement and accordingly could not be compelled to arbitrate its claims against Millman. The Court reversed the appellate court's judgment holding to the contrary, and remanded the case for further proceedings. View "Donelon v. Shilling" on Justia Law

Plaintiff Warner Wiggins appeals a circuit court's order compelling him to arbitrate his claims against Warren Averett, LLC. Warren Averett was an accounting firm. Eastern Shore Children's Clinic, P.C. ("Eastern Shore"), a pediatric medical practice, was a client of Warren Averett. In September 2010, while Wiggins, who was a medical doctor, was a shareholder and employee of Eastern Shore, Warren Averett and Eastern Shore entered an agreement pursuant to which Warren Averett was to provide accounting services to Eastern Shore ("the contract"). The contract contained an arbitration clause. Thereafter, Wiggins and Warren Averett became involved in a billing dispute related to the preparation of Wiggins's personal income-tax returns. In 2017, Wiggins filed a single-count complaint alleging "accounting malpractice" against Warren Averett. Warren Averett filed an answer to Wiggins's complaint, asserting, among other things, that Wiggins's claims were based on the contract and were thus subject to the arbitration clause. A majority of the Alabama Supreme Court concluded the determination of whether Wiggins' claims were covered under the terms of the arbitration clause was delegated to an arbitrator to decide. Therefore, it affirmed the trial court's order. View "Warner W. Wiggins v. Warren Averett, LLC" on Justia Law

The First Circuit affirmed the judgment of the district court determining that Appellant was barred from relitigating his argument that Plaintiffs should be compelled to arbitrate various tort claims, holding that the district court did not err in denying Appellant’s motion to compel arbitration.At issue in this procedurally complicated case was whether Appellant’s association with a certain law firm required that Plaintiffs’ various tort claims, including their claims of legal malpractice, be submitted to arbitration. After adopting a magistrate judge’s report and recommendation and applying principles of collateral estoppel derived from Rhode Island law, the district court denied Appellant’s motion to compel. The First Circuit affirmed, holding that Appellant waived any claim of error regarding the magistrate judge’s analysis under Rhode Island collateral estoppel law. View "Patton v. Johnson" on Justia Law

Maine attorneys must obtain a client’s informed consent regarding the scope and effect of any contractual provision that prospectively requires the client to submit malpractice claims against those attorneys to arbitration.The Supreme Judicial Court affirmed the judgment of the superior court denying Bernstein, Shur, Sawyer & Nelson, P.A.’s (Bernstein) motion to compel arbitration in a legal malpractice claim filed against it. The superior court concluded that Bernstein failed to obtain informed consent from Susan Snow, its client, to submit malpractice claims to arbitration and that federal law does not preempt a rule requiring attorneys to obtain such informed consent from their clients. The Supreme Judicial Court affirmed, holding that the superior court did not err in concluding that (1) Bernstein’s failure to obtain informed consent from Snow regarding an arbitration provision rendered that provision unenforceable as contrary to public policy; and (2) the Federal Arbitration Act does not preempt a requirement that attorneys obtain informed consent from their clients before contracting to submit disputes to arbitration. View "Snow v. Bernstein, Shur, Sawyer & Nelson, P.A." on Justia Law