Justia Arbitration & Mediation Opinion Summaries

A police union and the City of Norwalk were parties to a collective bargaining agreement (CBA) governing the terms and conditions of employment for certain city police officers. The CBA provided that disputes over its interpretation will be resolved through arbitration. The Board of Police Commissioners determined that Stephen Couture, a police sergeant employed by the Norwalk Police Department, had violated departmental rules and that his employment should be terminated. Couture ultimately initiated an arbitration proceeding with the State Board of Mediation and Arbitration, and a majority of the arbitration board found that Couture had been terminated for just cause. The trial court vacated the arbitration award on the ground that the City had disciplined Couture twice for the same misconduct in manifest disregard of the law. The Supreme Court reversed, holding that the arbitration board’s decision was not in manifest disregard of the law, and therefore, the trial court improperly vacated the award of the arbitration board. View "Norwalk Police Union, Local 1727 v. City of Norwalk" on Justia Law

Glen and Danielle Rollins divorced in December 2013, and they agreed at that time to submit to binding arbitration of their respective claims to certain furniture and furnishings in the marital home. The arbitrator rendered an award in July 2014, and Glen promptly moved for judicial confirmation. While his motion was pending, in August 2014, the trial court ordered Danielle to account for some of the furniture and furnishings that the arbitrator had awarded to Glen that he could not find. Dissatisfied with her accounting, Glen filed a motion to hold Danielle in contempt of the August 2014 order. In April 2015, the trial court found Danielle was in willful contempt of the August 2014 order in at least one respect, and it entered an initial contempt order that directed Danielle to show cause why she ought not be incarcerated for her contempt. Danielle appealed the initial contempt order, both by filing an application for discretionary review with the Supreme Court, and by filing a notice of direct appeal. In May 2015, the Supreme Court denied the application for discretionary review. The direct appeal was not docketed until November 2015. In December 2015, the Supreme Court dismissed the direct appeal, explaining that any appeal of the initial contempt order had to come by application, and noting that it already had denied an application for discretionary review. In the meantime, the trial court held a final hearing on the motion for contempt and entered a final order on November 24, 2015, finding Danielle in contempt of the August 2014 order in additional respects, directing her to immediately surrender any property awarded to Glen, ordering her to pay Glen for any such property that had gone missing or was damaged, and ordering her to pay fines for 34 separate instances of contempt. The trial court also awarded Glen attorney fees. Danielle then applied for discretionary review of the final contempt order, and the Supreme Court granted her application. Danielle argued that the trial court was without jurisdiction to enter a final contempt order while her direct appeal from the initial contempt order still was pending with the Supreme Court. The Supreme agreed, reversed and remanded for further proceedings. View "Rollins v. Rollins" on Justia Law

This appeal concerned a dispute between employees represented by a Union and their successor employer. The parties agreed to arbitrate this dispute regarding change in the terms of pension provision in a collective bargaining agreement. The district court refused to compel arbitration on the grounds that ERISA preempted the Union’s claims, and this, in turn, presented an issue of arbitrability properly decided by a judge, not an arbitrator. The First Circuit vacated the order of the district court and remanded with instructions to grant the Union’s motion to compel arbitration, holding that the issue of ERISA preemption in this case was not an issue of arbitrability but, rather, one that was squarely for the arbitrator to decide. View "Prime Healthcare Services - Landmark LLC v. United Nurses & Allied Professionals, Local 5067" on Justia Law

Plaintiff filed a class action against C.H. Robinson, alleging misclassification claims regarding overtime pay requirements. On appeal, C.H. Robinson challenged the district court's denial of its motion to compel arbitration. The court rejected plaintiff's argument that the Incentive Bonus Agreement at issue was procedurally and substantively unconscionable. In regards to procedural unconscionability, the court concluded that, under California law, the degree of procedural unconscionability of such an adhesion agreement is low. In regard to substantive unconscionability, the court concluded that any argument that the judicial carve-out was not substantively unconscionable has been waived; the waiver of representative claims was not substantively unconscionable where the unenforceability of the waiver of a Private Attorneys General Act (PAGA), Cal. Labor Code 2698-2699.5, representative action does not make this provision substantively unconscionable; and the venue provision, confidentiality provision, sanctions provision, unilateral modification provision, and discovery limitations are not substantively unconscionable. Therefore, the court concluded that the dispute resolution provision is valid and enforceable once the judicial carve-out clause is extirpated and the waiver of representative claims is limited to non-PAGA claims, and the district court erred in holding otherwise. The court reversed and remanded. View "Poublon v. C.H. Robinson Co." on Justia Law

The Foundation agreed to lend $2 million pursuant to a loan agreement to Al-Harmoosh for a company headquartered in Iraq. After Mohammed Harmoosh, a managing partner of the company, refused to pay the loan, the Foundation filed suit for breach of contract in Maryland. Harmoosh moved to dismiss based on an arbitration clause in the loan agreement. The district court dismissed the Foundation's complaint. The Foundation later filed another suit against Harmoosh to collect on the promissory note, this time in the Court of First Instance for Commercial Disputes in Baghdad. After the Foundation and Harmoosh litigated their dispute to final judgment in Iraq, the Foundation filed suit in the District of Maryland, seeking recognition of the Iraqi judgment under the Maryland Uniform Foreign Money-Judgments Recognition Act, Md. Code Ann., Cts. & Jud. Proc. 10-701 et seq. The Foundation also alleged that Harmoosh fraudulently conveyed some of his assets both before and after the Iraqi judgment was rendered. The district court granted summary judgment to Harmoosh on the Maryland Recognition Act claim, and granted Harmoosh's motion to compel arbitration. The court held that judicial proceedings in a foreign court are not "contrary to" an arbitration clause for the purpose of the Maryland Recognition Act if the parties choose to forego their rights to arbitrate by paricipating in those proceedings. The court also concluded that the Foundation raised genuine issues of material fact that preclude a summary judgment holding that Harmoosh preserved his arbitration rights. Accordingly, the court vacated and remanded. View "Iraq Middle Market Development v. Harmoosh" on Justia Law

This case stems from the collapse of Allen Stanford's Ponzi scheme. The court concluded that the Receiver cannot be compelled to arbitrate its claims against any of the defendants; the court did not reach the Receiver's argument that these particular arbitration agreements at issue are additionally unenforceable because they were instruments of the fraud inasmuch as the privacy they provided facilitated the fraud and because the Stanford entities were coerced into accepting them by Stanford as part of his Ponzi scheme; the court also did not reach the Receiver's similar but broader policy argument that the underlying purpose of the federal equity receivership statutes is at odds with the Federal Arbitration Act's, 9 U.S.C. 1 et seq., mandate in favor of arbitration; and the court rejected arguments raised by some of the defendants that the district court’s order exceeded the scope of the court's mandate in Alguire III. The court explained that, because the Receiver properly brings his Texas Uniform Fraudulent Transfer Act, Tex. Bus. & Comm. Code 24.009, claims on behalf of the Stanford International Bank, which did not consent to arbitration with any of the defendant employees, other than Luis Giusti, it cannot be compelled to arbitrate with those defendants. Moreover, because Giusti waived his right to arbitration, the Receiver cannot be compelled to arbitrate its claims against him either. Accordingly, the court affirmed the judgment. View "Janvey v. Alguire" on Justia Law

Plaintiff filed a putative class action against Wet Seal, alleging that the company violated the Labor and Business and Professions Codes, Industrial Welfare Commission Wage Order No. 7, and Title 8 of the California Code of Regulations. Plaintiff's claim also included a representative claim under the Private Attorneys General Act (PAGA), Lab. Code, § 2699. On appeal, Wet Seal challenges the denial of its motion to compel arbitration, and the grant of plaintiff's motion to compel discovery responses. The court concluded that Wet Seal's motion to compel arbitration was properly denied where the trial court declared the entire arbitration agreement was void and unenforceable based on its determination that the PAGA waiver was invalid, and applied the arbitration agreement's nonseverability provision. Wet Seal also asserts that the trial court should not have reached the merits of the discovery motion while its motion to compel arbitration was undetermined. The court concluded that there is no requirement for a trial court to issue a tentative ruling, or to announce its final ruling before taking a matter under submission. Because there is no basis to treat the appeal from the nonappealable order as a petition for writ of mandate, the court dismissed this portion of the appeal. The court affirmed in all other respects. View "Montano v. Wet Seal Retail, Inc." on Justia Law

Robert King signed an arbitration agreement at the time of his initial appointment with Dr. Michael Bryant, who was to perform a bilateral inguinal hernia repair on King. In the course of the surgery, Bryant injured King’s distal abdominal aorta, resulting in complications. King and his wife, Jo Ann O’Neal (together, Plaintiffs) filed a complaint against Bryant and Village Surgical Associations, P.A. (collectively, Defendants). Defendants filed a motion to stay and enforce the arbitration agreement. The trial court denied Defendants’ motion to enforce the arbitration agreement, concluding that the agreement was too indefinite to be enforced. The court of appeals reversed. On remand, the trial court again declined to enforce the arbitration agreement, concluding that it was the product of constructive fraud and was unconscionable and, therefore, was unenforceable. The court of appeals affirmed on unconscionability grounds. The Supreme Court affirmed as modified, holding that the arbitration agreement was unenforceable on breach of fiduciary duty, as opposed to unconscionability, grounds. View "King v. Bryant" on Justia Law

University Toyota and University Chevrolet Buick GMC (collectively referred to as "the University dealerships") appealed a circuit court order allowing Beverly Hardeman and Vivian Roberts to pursue their claims against the University dealerships in arbitration proceedings. conducted by the American Arbitration Association ("the AAA") instead of the Better Business Bureau of North Alabama ("the BBB"), the entity identified in the controlling arbitration agreements. In conjunction with their purchases of new vehicles from the University dealerships’ predecessor, Jim Bishop, Hardeman and Roberts purchased service contracts entitling them to no-cost oil changes for as long as they owned their respective vehicles. When the Jim Bishop dealerships were sold and rebranded as the University dealerships, initially the University dealerships honored the no-cost oil-change service contracts sold by the Jim Bishop dealerships. However, they eventually stopped providing no-cost oil changes to customers who held those contracts. On October 29, 2015, Hardeman and Roberts filed a demand for arbitration with the BBB, the dispute-resolution entity identified in arbitration agreements they had executed when they purchased their vehicles, on behalf of themselves and all similarly situated individuals, based on the University dealerships' refusal to honor the service contracts. Because a trial court can compel arbitration only in a manner consistent with the terms of the applicable arbitration agreement, the Supreme Court reversed the trial court's order compelling arbitration and remanded the case for the entry of a new order compelling Hardeman and Roberts to arbitrate their claims against the University dealerships before the BBB if they chose to pursue those claims. View "University Toyota v. Hardeman" on Justia Law

Appellants sought arbitration with BBVA Securities of Puerto Rico, Inc. and one of its securities brokers, asserting several claims under both federal and Puerto Rico law. An arbitration panel issued an award denying Appellants’ claims. Appellants then filed a complaint in the Puerto Rico Court of First Instance requesting that the court vacate or modify the arbitration award, seeking relief under the Puerto Rico Arbitration Act. Defendants removed the case to the U.S. District Court of the District of Puerto Rico, arguing that the district court had federal question jurisdiction and also had supplemental jurisdiction over the state law claims. Appellants moved to remand the case to Puerto Rico state court for lack of jurisdiction. The district court denied the motion after applying the look-through approach and determining that the underlying statement of claim alleged federal claims. The district court subsequently confirmed the award. The First Circuit affirmed, holding (1) the look-through approach was the correct test in this case; (2) federal jurisdiction existed; and (3) the district court did not err in refusing to vacate the award and in confirming it. View "Ortiz-Espinosa v. BBVA Securities of Puerto Rico, Inc." on Justia Law