Justia Arbitration & Mediation Opinion Summaries

Articles Posted in Trusts & Estates
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Monschke, acting as personal representative for the estate of her mother, the decedent, filed suit for wrongful death and elder abuse against Timber Ridge Assisted Living, which petitioned to compel arbitration on the ground plaintiff, on behalf of decedent, had signed an agreement with an arbitration clause before enrolling decedent in the facility. The trial court denied the petition, finding the wrongful death claim had been brought on behalf of decedent’s surviving children, and the children were not parties to the arbitration agreement. The trial court also declined to submit the elder abuse claim to arbitration because of the possibility of conflicting rulings. The court of appeal affirmed. While a personal representative’s interests may not directly align with the interests of any particular heir, the personal representative’s duty is to stand in the position of the heirs, not the decedent. View "Monschke v. Timber Ridge Assisted Living, LLC" on Justia Law

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Singer-songwriters John Whitehead and Gene McFadden were “an integral part of the 1970s Philadelphia music scene. In 2002, Pullman approached them about purchasing their song catalogue. The parties signed a contract but never finalized the sale. Pullman claims he discovered tax liens while conducting due diligence and that the matter was never resolved. Whitehead and McFadden passed away in 2004 and 2006, respectively. Pullman became embroiled in disputes with their estates over ownership of the song catalogue. The parties eventually agreed to arbitration. Pullman, unhappy with the ruling, unsuccessfully moved to vacate the arbitration award on the ground that the panel had committed legal errors that made it impossible for him to present a winning case by applying the Dead Man’s Statute, which disqualifies parties interested in litigation from testifying about personal transactions or communications with deceased or mentally ill persons.” The Third Circuit affirmed, stating that the arbitrators did not misapply the law, but that legal error alone is not a sufficient basis to vacate the results of an arbitration in any case. View "Whitehead v. Pullman Group LLC" on Justia Law

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In 2011, Mr. Nichols was admitted to the Richmond, Kentucky, Kenwood Nursing & Rehabilitation Center. He signed an agreement that states that it applies to “any and all disputes arising out of or in any way relating to this Agreement” including “wrongful death.” It is governed by “The Kentucky Uniform Arbitration Act. . . . If for any reason there is a finding that Kentucky law cannot support the enforcement of this Agreement, then the Parties agree to resolve their disputes by arbitration . . . pursuant to the [FAA].” It binds Nichols and all persons with claims through or on behalf of him. After Nichols dies, his estate sued, asserting wrongful death and other state law claims. The district court declined to compel arbitration of the wrongful-death claim, but stayed the case until arbitration of the other claims was complete. The Sixth Circuit affirmed, relying on state law precedent, not preempted by the Federal Arbitration Act, that a wrongful-death claim is “independent” of any claims held by a decedent and constitutes a “distinct interest in a property right that belongs only to the statutorily-designated beneficiaries.” Decedents have no “cognizable legal rights” in that claim. View "Richmond Health Facilities v. Nichols" on Justia Law

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The decedent resided in Appellants’ long-term skilled nursing care facility between March and August, 2010. Due to the alleged abuse and neglect inflicted upon her throughout her stay, Decedent suffered a multitude of injuries and illnesses that eventually resulted in her death. Appellee filed suit claiming Appellants knowingly sacrificed the quality of care given to their residents. Relevant to this appeal, Appellants filed preliminary objections seeking to enforce an arbitration agreement which Appellee signed, along with general admission paperwork upon Decedent’s admission to the facility. Appellants appealed the Superior Court’s decision affirming, in relevant part, the trial court’s order overruling Appellants’ preliminary objections seeking to compel arbitration and reserving for trial the underlying negligence action filed by Appellee, daughter of the decedent, and executrix of Decedent’s estate. Finding no reversible error, the Supreme Court affirmed the Superior Court and remanded this case to the trial court for further proceedings. View "Wert v. Manorcare of Carlisle" on Justia Law

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The litigation resulting in these consolidated appeals stemmed from disputes within the Cohen family. Maurice placed his assets the “Maurice Trust,” and after he died, the trust assets were passed to trust (“the QTIP Trust”), and to a charitable organization (“Fund”). After Maurice’s wife died, the remaining assets of the QTIP Trust rolled over to the Fund. Later, half of the Fund’s assets were given to a new charity, the C-S Foundation (“C-S”). The Fund’s successor, the FPE Foundation (“FPE”) filed this federal case against the Cohens’ two children, one of their spouses, and the advisor to the co-trustees of the QTIP Trust. FPE filed this federal case against members of the Cohen family, alleging that certain Defendants exceeded their powers as co-trustees of the QTIP trust and that the co-trustees’ advisor breached his fiduciary duty to that trust. C-S intervened and counterclaimed against FPE. Defendants filed a motion to dismiss and to compel arbitration, relying on an arbitration clause contained in the Maurice Trust. The district court allowed the motion. The First Circuit affirmed, holding (1) Defendants did not waive their right to arbitration, and thus, dismissal was appropriate; and (2) C-S’s counterclaim was subject to the arbitration clause in the Maurice Trust. View "FPE Found. v. Cohen" on Justia Law

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In 2011, 74-year-old Garnell Wilcoxon lived alone. He suffered a stroke, awoke on the floor of his bedroom covered in sweat, feeling sore and with no memory of how he got there. Wilcoxon was admitted to the Troy Regional Medical Center for analysis and treatment for approximately one year before he died. Following Wilcoxon's death, Brenda McFarland, one of Wilcoxon's daughters, filed a complaint as the personal representative for Wilcoxon's estate, asserting claims for : (1) medical malpractice; (2) negligence; (3) breach of contract; (4) negligent hiring, training, supervision, and retention; and (5) loss of consortium. In its answer, Troy Health asserted, in part, that McFarland's claims were barred from being litigated in a court of law "by virtue of an arbitration agreement entered into between plaintiff and defendant." Troy Health then moved to compel arbitration, asserting that forms signed by one of Wilcoxon's other daughters, acting as his attorney-in-fact, contained a valid and enforceable arbitration clause. McFarland argued that "Wilcoxon did not have the mental capacity to enter into the contract with [Troy Health,] and he did not have the mental capacity to give legal authority to enter into contracts on his behalf with" relatives who initially helped admit him to Troy Health facilities when he first fell ill. According to McFarland, "[t]he medical records document that Wilcoxon was habitually and/or permanently incompetent." Therefore, McFarland argued, both a 2011 arbitration agreement and a 2012 arbitration agreement were invalid. The circuit court denied Troy Health's motion to compel arbitration. The Supreme Court reversed, finding that McFarland failed to prove that Wilcoxon was mentally incompetent when he executed a 2012 durable power of attorney naming his other daughter as his attorney-in-fact, and also failed to demonstrate that Wilcoxon was "permanently incompetent" before that date, and because there was no other issue concerning the validity of the 2012 arbitration agreement. View "Troy Health and Rehabilitation Center v. McFarland" on Justia Law

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Bell sued attorney Ruben and his firm, alleging that they negligently and fraudulently mismanaged her trust, causing a loss of $34 million. Before arbitration, Ruben filed for Chapter 7 bankruptcy. Bell filed an adversary complaint opposing discharge of Ruben’s fraud-based debt to her, 11 U.S.C. 523(a)(2)(A), (4). The bankruptcy judge granted Ruben a discharge of his other debts, but not of that fraud debt. Ruben’s liability insurance did not cover fraud. Bell settled her negligence claims against Ruben and all claims against the other defendants in arbitration. The arbitration panel ruled, with respect to the fraud claim, that “damages proven to be attributable to the actions of [Ruben] have been compensated,” but ordered Ruben to pay administrative fees and expenses of the American Arbitration Association (AAA) totaling $21,200.00 and that compensation and expenses of the arbitrators, advanced by Bell, totaling $150,304.54 would be borne by Ruben. AAA rules, which governed the arbitration, provide that expenses of arbitration “shall be borne equally” unless the parties agree otherwise or the arbitrator assesses expenses against specified parties. Ruben refused to pay. The bankruptcy judge entered summary judgment in favor of Ruben. The district court reversed, in favor of Bell. The Seventh Circuit affirmed. View "Ruben v. Bell" on Justia Law

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The McTaggarts filed suit against the former trustee and trust advisor of their family trust, alleging improper handling of their trust funds. The former trustee and trust advisor moved to dismiss the case or have the case stayed pending arbitration, based on an arbitration provision in a wealth-management agreement between the former trustee and trust advisor. The trial court found that, because the McTaggarts did not sign the agreement containing the arbitration provision and because the agreement specifically excluded nonsignatories, including third-party beneficiaries, the arbitration provision was not binding on the McTaggarts. The former trustee and trust advisor appealed. Finding no error, the Supreme Court affirmed. View "Pinnacle Trust Company, L.L.C., EFP Advisors, Inc. v. McTaggart" on Justia Law

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The trial judge denied the appellants' motion to compel arbitration on the ground that there was no binding arbitration agreement. The trial judge ruled that Tamera Nelson did not have authority to sign an arbitration agreement on behalf of her grandmother, Arda Lee Churchill (who was a resident of the Grace Living Center-Chikasha until her death), so no valid arbitration agreement existed. The Supreme Court agreed with the trial court that no valid arbitration agreement existed because Tamera Nelson was not authorized to make health care decisions for her grandmother under the circumstances. The Health Care Power of Attorney required that Arda Lee Churchill's physician certify that she was not capable of making her own health care decisions and no such certification was made. View "Johnson v. Convalescent Center of Grady, LLC" on Justia Law

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In 2006, Lincoln T. Griswold purchased an $8.4 million life insurance policy. Griswold established a Trust for the sole and exclusive purpose of owning the policy and named Griswold LLP as the Trust’s sole beneficiary. In 2008, the Trust sold its policy to Coventry First LLC. The written purchase agreement contained an arbitration clause. After learning that the policy was sold for an allegedly inflated price that included undisclosed kickbacks to the broker, Griswold sued. Coventry moved to dismiss the case for lack of standing or, in the alternative, to compel arbitration. The district court denied the motion, concluding that both Griswold and the LLP had standing and that the arbitration clause was unenforceable as to the plaintiffs, who were non-signatories. Coventry appealed. The Third Circuit (1) concluded that it lacked appellate jurisdiction to review the district court’s denial of Coventry’s motion to dismiss; and (2) affirmed the district court’s denial of the motion to compel arbitration against the plaintiffs, as they never consented to the purchase agreement. View "Griswold v. Coventry First LLC" on Justia Law