Justia Arbitration & Mediation Opinion Summaries

Respondent, who owned a ranch, sued Petitioner, which produced natural gas on the ranch, for underpayment of royalties and underproduction of its lease. The parties resolved their dispute with two agreements that contained an arbitration provision. Respondent later sued Petitioner for environmental contamination and improper disposal of hazardous materials on the ranch. Before arbitration commenced, Respondent asked the Railroad Commission (RRC) to investigate contamination of the ranch by Petitioner. Meanwhile, an arbitration panel awarded Respondent $15 million for actual damages and $500,000 for exemplary damages. At issue on appeal was whether the RRC had exclusive or primary jurisdiction over Respondent’s claims, precluding the arbitration, and whether the arbitration award should be vacated for the evident partiality of a neutral arbitrator or because the arbitrators exceeded their powers. The Supreme Court answered in the negative, holding (1) because Respondent’s claims were inherently judicial, the doctrine of primary jurisdiction did not apply, and vacatur was not warranted for failure to abate the arbitration hearing; and (2) the arbitrators did not exceed their authority. View "Forest Oil Corp. v. El Rucio Land & Cattle Co." on Justia Law

Kiva Lodge Condominium Owners' Association, Inc. ("Kiva Lodge") was an Alabama nonprofit corporation formed for the purpose of administering and maintaining the Kiva Dunes Clubhouse and Condominium ("Kiva Dunes") located in Gulf Shores. In 2009, Kiva Lodge contracted with Hudak & Dawson Construction Co., Inc. ("Hudak") to be the general contractor for the remediation of deficiencies in Kiva Dunes buildings that were allowing water to enter the buildings. Hudak subcontracted the stucco and/or sealant portion of the work to Don Colvin d/b/a Colvin Plastering ("Colvin"). The Hanover Insurance Company ("Hanover"), as surety for Hudak, issued to Kiva Lodge a performance bond ensuring and/or securing the full performance of Hudak's contractual obligations. In September 2012, Kiva Lodge informed Hudak and Colvin of leaks and bubbling in the stucco exterior of the buildings at Kiva Dunes caused by water intrusion. Kiva Lodge alleged that Hudak and Colvin failed to determine and/or disclose the course of the problems and the proper scope of repairs necessary. It also alleged that Hanover breached the terms of its performance bond by failing to promptly remedy the default, complete the work within the scope of the contract in accordance with the terms and conditions, or arrange for payment of an alternative contractor to complete the work. Hanover filed a motion to dismiss Kiva Lodge's claims against Hanover on the ground that, under its performance bond, its claims were time-barred, falling outside of a two-year statute of limitations. In 2015, the circuit court heard arguments concerning Kiva Lodge's motion to compel arbitration, eventually granting the stay and ordering the parties to arbitration. The court also denied Hanover's motion to dismiss. Hudak, Colvin, and Hanover timely appealed the circuit court's order. After review, the Supreme Court found no reversible error in the trial court's order and affirmed. View "Hanover Insurance Co. v. Kiva Lodge Condominium Owners' Association, Inc." on Justia Law

The South Carolina Supreme Court granted certiorari to review a Court of Appeals' decision affirming a circuit court order denying petitioner's John Wieland Homes and Neighborhoods of the Carolinas, Inc.'s ("JWH") motion to compel arbitration. JWH sold lots and "spec" homes on a sixty-five acre residential subdivision. In 2007, respondents ("the Parsons") executed a purchase agreement to buy a home built and sold by JWH ("the Property"). In 2008, the Parsons discovered PVC pipes and a metal lined concrete box buried on their Property. The PVC pipes and box contained "black sludge," which tested positive as a hazardous substance. JWH entered a cleanup contract with the South Carolina Department of Health and Environmental Control. JWH completed and paid for the cleanup per the cleanup contract. The Parsons claim they were unaware the Property was previously an industrial site and contained hazardous substances. In 2011, the Parsons filed the present lawsuit alleging JWH breached the purchase agreement by failing to disclose defects with the Property, selling property that was contaminated, and selling property with known underground pipes. The Parsons further alleged breach of contract, breach of implied warranties, unfair trade practices, negligent misrepresentation, negligence and gross negligence, and fraud. JWH moved to compel arbitration and dismiss the complaint. The motion asserted that all of the Parsons' claims arose out of the purchase agreement, and the Parsons clearly agreed that all such disputes would be decided by arbitration. The circuit court denied the motion and found the arbitration clause was unenforceable. The Court of Appeals affirmed the circuit court's finding that the scope of the arbitration clause was restricted to Warranty claims and declined to address the circuit court's application of the outrageous torts exception doctrine. The Supreme Court disagreed with the appellate court's conclusion and reversed. View "Parsons v. John Wieland Homes" on Justia Law

Defendants-appellants Thomas and Lynn Hazelbaker owned a condominium in the Rancho Mirage Country Club development. Defendants made improvements to an exterior patio, which plaintiff-respondent Rancho Mirage Country Club Homeowners Association contended were in violation of the applicable covenants, conditions and restrictions (CC&Rs). The parties mediated the dispute pursuant to the Davis-Stirling Common Interest Development Act, the results of which were memorialized in a written agreement. Subsequently, the Association filed this suit alleging that defendants had failed to comply with their obligations under the mediation agreement to modify the property in certain ways. While the lawsuit was pending, defendants made modifications to the patio to the satisfaction of the Association. Nevertheless, the parties could not reach agreement regarding attorney fees, which the Association asserted it was entitled to receive as the prevailing party. The Association filed a motion for attorney fees and costs, seeking an award of $31,970 in attorney fees and $572 in costs. The trial court granted the motion in part, awarding the Association $18,991 in attorney fees and $572 in costs. Defendants argued on appeal that the trial court’s award, as well as its subsequent denial of a motion to reconsider the issue, was erroneous in various respects. Finding no reversible error, the Court of Appeal affirmed the trial court's award. View "Rancho Mirage Country Club HOA v. Hazelbaker" on Justia Law

In this appeal stemming from a failed real estate investment, plaintiffs challenged the district court’s judgment confirming the arbitration award in favor of the Rainier parties involved in marketing the investment. The real estate transactions underlying this appeal have already been described in greater depth in Rainier DSC 1, L.L.C. v. Rainier Capital Management, L.P., 546 F. App’x 491, 492–93 (5th Cir. 2013). The court affirmed the district court's judgment confirming the arbitration award, concluding that plaintiffs have not identified any basis for vacating the arbitration award. View "Rainier DSC 1, LLC v. Rainier Capital Mgmt." on Justia Law

In this appeal stemming from a failed real estate investment, plaintiffs challenged the district court's judgments in favor of the non-arbitrating defendants. The real estate transactions underlying this appeal have already been described in greater depth in Rainier DSC 1, L.L.C. v. Rainier Capital Management, L.P., 546 F. App’x 491, 492–93 (5th Cir. 2013). The court affirmed the district court's grant of summary judgment, concluding that plaintiffs have not shown that the district court erred in not staying the litigation of the non-arbitrating parties during the arbitration or in granting summary judgment in favor of FSA and the physicians. View "Rainier DSC 1, LLC v. Rainier Capital Mgmt." on Justia Law

In August 2005, D.R. Horton, Inc. completed construction of the Smiths' home, and the Smiths closed on the property and received the deed. Thereafter, the Smiths experienced a myriad of problems with the home that resulted in severe water damage to the property. D.R. Horton attempted to repair the alleged construction defects on "numerous occasions" during the next five years, but was ultimately unsuccessful. In 2010, the Smiths filed a construction defect case against D.R. Horton and seven subcontractors. In response, D.R. Horton filed a motion to compel arbitration. The Smiths opposed the motion, arguing, inter alia, that the arbitration agreement was unconscionable and therefore unenforceable. The circuit court denied D.R. Horton's motion to compel arbitration, finding that the arbitration agreement was unconscionable. D.R. Horton appealed, but finding no error in the circuit court's decision, the South Carolina Supreme Court affirmed. View "Smith v. D.R. Horton, Inc" on Justia Law

Plaintiff signed a contract with Defendant for the construction of a house. The contract contained an arbitration clause. Plaintiff later brought suit against Defendant, claiming that there were defects in the house. Defendant filed a motion to dismiss and compel arbitration. The circuit court denied the motion, finding that the arbitration clause was unconscionable. Defendant appealed, arguing that the circuit court erred by ruling on questions of arbitrability despite the existence of a delegation provision in the arbitration agreement that vested the arbitrator with authority to determine issues of arbitrability relating to the dispute. The Supreme Court determined that the circuit court was within its rights not to enforce the delegation language because the language did not reflect the parties’ clear and unmistakable intention to delegate issues about the validity, revocability, or enforceability of the arbitration agreement to an arbitrator. The United States Supreme Court granted Defendant’s requested writ of certiorari, vacated the Supreme Court’s opinion, and remanded for further consideration in light of their decision in DIRECTV, Inc. v. Imburgia. The Supreme Court reversed the circuit court’s order, holding that because Plaintiffs never specifically challenged the delegation language before the circuit court or Supreme Court, Plaintiffs waived any right to challenge the delegation language. Remanded for arbitration. View "Schumacher Homes of Circleville v. Spencer" on Justia Law

26th Street Hospitality, LLP appealed a district court's order granting a motion to compel arbitration; order lifting a stay in the proceedings, confirming the arbitration award, and awarding post-judgment interest; and final judgment. The Partnership argued the district court erred in ordering arbitration because the court was required to determine the validity of the contract before arbitration could be ordered and not all of the claims and parties were subject to arbitration. Finding no reversible error in the district court's judgment, the Supreme Court affirmed. View "26th Street Hospitality v. Real Builders" on Justia Law

After a fire broke out at the Beacon Towers Condominium, the board of trustees for the Beacon Towers Condominium Trust, the unit owners’ organization for the condominium, assessed George Alex $62,995 for the two units that he owned. Alex commenced an arbitration action challenging the propriety of the trustees’ conduct regarding the fire damage repairs and the imposition of the assessment. The arbitration panel found in favor of Alex. Although the panel recognized that the arbitration agreement in the trust’s bylaw did not provide for an award of fees, the panel nonetheless awarded fees, reasoning that the American Arbitration Association allowed an award of fees where “substantially all of the defenses were wholly insubstantial, frivolous and not advanced in good faith.” The trust filed suit, claiming that the arbitrators’ award of attorney’s fees exceeded the scope of the parties’ arbitration agreement. A superior court judge vacated the award of attorney’s fees, concluding that such an award was not authorized by Mass. Gen. Laws ch. 231, 6F when ordered by an arbitrator because section 6F does not authorize an arbitrator to award attorney’s fees. The Supreme Judicial Court affirmed, holding that an arbitrator lacks the authority to award attorney’s fees under the circumstances of this case. View "Beacon Towers Condo. Trust v. Alex" on Justia Law