Justia Arbitration & Mediation Opinion Summaries

The chapter filed suit against defendant and the housing corporation for constructive fraud, breach of fiduciary duty, unjust enrichment, negligent misrepresentation, and others.The Court of Appeal reversed the trial court's denial of the housing corporation's motion to compel arbitration and held that the chapter must arbitrate its claims against the housing corporation. In this case, the international fraternity is an overarching and governing international organization, and the local chapter of this fraternity is merely a subordinate fraternal component of the international fraternity. Furthermore, the international fraternity and the housing corporation wanted arbitration, and thus this was in effect a stipulation for arbitration. Therefore, the chapter lacked legal power to disregard the instruction from the international fraternity. The court also held that the housing corporation has not waived its right to arbitrate. View "Gamma Eta Chapter of Pi Kappa Alpha v. Helvey" on Justia Law

After the condominium association sued the developer alleging construction defects, the association began arbitration without obtaining a vote of its members. However, the association's governing documents required arbitration of such disputes and a vote of at least 51 percent of the association's membership prior to beginning arbitration. The members later overwhelmingly voted to pursue the arbitration, but the arbitrator dismissed the arbitration for lack of a membership vote prior to its commencement.The Court of Appeal reversed the trial court's confirmation of the award and entry of judgment for the developer. The court disagreed with Branches Neighborhood Corp. v. CalAtlantic Group, Inc. (2018) 26 Cal.App.5th 743, which held that unless the association has obtained approval by a vote of at least 51 percent of its members prior to beginning arbitration, it has forever forfeited its right to pursue its claims in any forum in spite of an overwhelming ratifying vote. The court stated that this interpretation directly violates the public policy expressed in Code of Civil Procedure section 1286.2, subdivision (a)(4).In this case, the court held that the language of section 7.01B of the covenants, conditions, and restrictions (CC&R's) violates explicit legislative expressions of public policy. Furthermore, the Legislature has also determined that provisions such as section 7.01B are unconscionable. The court stated that Senate Bill No. 326 bars the use of provisions such as section 7.01B as a defense for developers against claims of condominium associations. View "Dos Vientos v. CalAtlantic Group, Inc." on Justia Law

The issue this case presented for the Court of Appeal's review centered on whether a binding arbitration clause in an insurance policy issued by plaintiff Philadelphia Indemnity Ins. Co., applied to a third party, defendant SMG Holdings, Inc. The policy had been issued to Future Farmers of America, which was holding an event inside the Fresno Convention Center. Future Farmers had licensed the use of the convention center from its property manager, SMG. As part of the license, Future Farmers agreed to obtain coverage for itself and to name SMG as an additional insured. Thereafter, Future Farmers obtained a policy from Philadelphia Indemnity, which provided coverage for “managers, landlords, or lessors of premises” as well as for any organization “as required by contract.” The policy also contained an arbitration clause for coverage disputes. During the Future Farmers event, an attendee was injured in the convention center parking lot. When the injured man sued SMG, which also managed the parking lot, SMG tendered its defense to Philadelphia under the policy. Philadelphia refused, believing SMG was not covered under the policy for an injury occurring in the parking lot. After two years, Philadelphia petitioned the trial court to compel arbitration against SMG. The trial court denied the petition, concluding no evidence was presented that the parties to the policy intended to benefit SMG, and Philadelphia was equitably estopped from claiming SMG was required to arbitrate the dispute. Philadelphia contended: (1) the trial court erred in determining SMG was neither a third party beneficiary of the policy, nor equitably estopped from avoiding the policy’s arbitration clause; (2) alternatively, the court erred in finding Philadelphia estopped from compelling SMG to arbitrate; and (3) the coverage dispute was encompassed by the arbitration clause and arbitration should be ordered. The Court of Appeal agreed SMG could be compelled to arbitrate. Judgment was reversed, the trial court's order vacated, and the trial court directed to order arbitration of the coverage dispute. View "Philadelphia Indemnity Ins. Co. v. SMG Holdings, Inc." on Justia Law

Facebook employee Bigger sued Facebook alleging violations of the Fair Labor Standards Act (FLSA), 29 U.S.C. 201, overtime-pay requirements, on behalf of herself and all similarly situated employees. The district court authorized notice of the action to be sent to the entire group of employees. Facebook argued the authorization was improper because many of the proposed recipients had entered arbitration agreements precluding them from joining the action.The Seventh Circuit remanded, stating that, in authorizing notice, the court must avoid even the appearance of endorsing the action’s merits. A court may not authorize notice to individuals whom the court has been shown entered mutual arbitration agreements waiving their right to join the action and must give the defendant an opportunity to make that showing. When a defendant opposing the issuance of notice alleges that proposed recipients entered such arbitration agreements, the court must determine whether a plaintiff contests the defendant’s assertions about the existence of valid arbitration agreements. If no plaintiff contests those assertions, then the court may not authorize notice to the employees whom the defendant alleges entered valid arbitration agreements. If a plaintiff contests the defendant’s assertions, then— before authorizing notice to the alleged “arbitration employees”—the court must permit the parties to submit additional evidence on the agreements’ existence and validity. View "Bigger v. Facebook, Inc." on Justia Law

Plaintiffs purchased liability insurance for packages shipped through UPS before December 30, 2013. The price of that insurance was set by a contract that stated that there is no additional charge for the first $100 of coverage whether or not a shipper purchases additional declared value coverage. When Plaintiffs shipped their packages, they were charged $0.85 for each hundred-dollar increment, including the first. Plaintiffs sued UPS on behalf of a proposed class. UPS argued that the controlling phrase was “total value declared” and that “total” value necessarily includes the first $100. In moving for dismissal, UPS stated that it “reserves its right to move to compel arbitration and does not by this motion in any way waive this contractual right.” UPS referenced an arbitration clause found in an amended contract that became effective December 30, 2013, after the shipments at issue were mailed. The Sixth Circuit reversed the dismissal of the suit, relying on the complaint’s allegations that UPS routinely credits customers who complain about the overcharge and “acknowledges the validity of Solo’s reading of the contractual provision.” On remand, UPS raised the obligation to arbitrate as its first affirmative defense. After discovery, UPS moved to compel arbitration. The district court denied the motion on the basis of waiver. The Sixth Circuit affirmed. The Amended UPS Agreement did not retroactively apply to the transactions at issue and, in any event, UPS waived its right to arbitrate. View "Solo v. United Parcel Service Co." on Justia Law

The First Circuit affirmed the decision of the district court denying Appellant's motion to vacate an arbitrator's award, holding that Appellant's attack on the merits of the arbitral award was unavailing.IBC Advanced Alloys Corp. purchased a Beralcast Corporation from Gerald Hoolahan and Gary Mattheson in exchange for cash and shares in the IBC. When Hoolahan decided to sell his shares in the company one year later, he was blocked. Hoolahan later discovered that Mattheson hadn't been similarly blocked when he placed his shares on the market. Hoolahan initiated an arbitration against IBC. During a subsequent hearing it was discovered that IBC had harbored ill-will against Hoolahan, causing it to block Hoolahan's attempt to sell. The arbitrator awarded Hoolahan damages in the amount he would have received if he had sold his shares at the same rate Mattheson received. After IBC unsuccessfully requested that the arbitrator modify the award IBC asked the district court to vacate the award. The district court denied relief. The First Circuit affirmed, holding that IBC did not make a showing that the arbitrator acted in manifest disregard of the law when deciding the award. View "Hoolahan v. IBC Advanced Alloys Corp." on Justia Law

The Fifth Circuit affirmed the district court's confirmation of an arbitrator's award under the Federal Arbitration Act (FAA). Bechtel and its former employee entered arbitration on the employee's claims of disability discrimination, failure to accommodate, and retaliation.The court held that the district court correctly concluded it had jurisdiction to entertain the motions submitted by both parties. On the merits, the court held that Bechtel's first argument, that the arbitrator exceeded his authority by misapplying Fifth Circuit law, misunderstands the limited review of arbitration awards under the FAA. The court was also correct in denying vacatur based on Bechtel's claim that the arbitration rules agreed to by the parties required the arbitrator to follow the Federal Rules of Civil Procedure, which, according to Bechtel, did not authorize the arbitrator to reconsider its interim award that only granted $500 in nominal damages. The court explained that Bechtel's argument ignores the fact that the employee dispute resolution program also contains a provision stating that either party may file a motion for reconsideration with the arbitrator. View "Quezada v. Bechtel OG & C Construction Services, Inc." on Justia Law

The Supreme Court affirmed the order of the circuit court overruling Dollar Tree's motion to compel arbitration and stay proceedings on a former employee's claim of disability discrimination, holding that the order was supported by substantial evidence, was not against the weight of the evidence, and correctly applied the law.After Plaintiff, Dollar Tree's former employee, brought this complaint Dollar Tree filed a motion to compel arbitration and stay proceedings under an arbitration agreement in the employment contract. The parties, however, disputed whether there was assent to the arbitration agreement. The circuit court denied the motion to compel arbitration after hearing testimony but did not make any findings. The Supreme Court affirmed, holding that there was no clear and unmistakable evidence of the existence of assent to a delegation provision, and therefore, the circuit court could not delegate the matter to an arbitrator whose existence depended upon the agreement. View "Theroff v. Dollar Tree Stores, Inc." on Justia Law

On remand from the district court, the Fourth Circuit vacated the district court's grant of summary judgment to debtor in an action arising from the nonpayment of a promissory note. The court held that the district court did not give proper weight to the evidence before it; the evidence construed most favorable to the party opposing summary judgment, the Foundation, was that debtor waited until after the entry of final judgment to assert an arbitration defense; and neither debtor nor the district court has pointed to a single case in which a party waited until after the entry of final judgment to raise the right to arbitration without defaulting that right. Rather, the court held that, in such circumstances, courts have typically found default of the right to arbitrate, even in cases involving domestic judgments. In this case, given the dueling deposition testimony, the court held that a genuine issue of material fact remains as to whether debtor asserted his right to arbitrate during proceedings in the Iraqi trial court. View "Iraq Middle Market Development Foundation v. Mohammad Harmoosh" on Justia Law

The Fifth Circuit affirmed the district court's confirmation of an arbitral award over the objection that the arbitrator had exceeded his authority. In the final award, the arbitrator found that CSC breached the Exceed Agreement and concluded that Kemper was entitled to damages. The magistrate judge recommended that the award be confirmed and the district court adopted the magistrate judge's report and recommendations.The court held that the final award was subject to a very deferential review where the arbitrator did not exceed the scope of his contractual authority by classifying and awarding damages to Kemper. The court also held that the arbitrator did arguably construe the parties' contract, and the arbitral award must stand. View "Kemper Corporate Services, Inc. v. Computer Sciences Corp." on Justia Law