Justia Arbitration & Mediation Opinion Summaries

ItalFlavors filed suit against Caffe Vergnano, blaming the failure of an Italian cafe venture on Caffe Vergnano's failure to offer support. The parties had entered into an agreement, the Commercial Contract, which appears to be a franchise agreement setting forth the rights and responsibilities of the parties. The second agreement is the Hold Harmless Agreement. Caffe Vergnano filed a petition to compel arbitration and the district granted the petition. The court concluded that the declaration in the Hold Harmless Agreement signed contemporaneously with the Commercial Contract proves that the latter was a mere sham to help Hector Rabellino obtain a visa. Therefore, the court concluded that the Commercial Contract was not a contract and is thus unenforceable. Because the court found that the document the parties described as the Commercial Contract was a sham, the arbitration clause is no more enforceable than any other provision in that document. Accordingly, the court reversed the judgment. View "Casa del Caffe Vergnano v. ItalFlavors, LLC" on Justia Law

After Pauline Tillman Wagner and Ida Roberson died in Mississippi nursing homes run by Golden Living Southaven and Golding Living Center Batesville, Wagner's son (Sammy Gross) and Roberson's daughter (Shirley Cotton) filed suit against the nursing homes. After removal to federal court, the district court subsequently denied Southaven and Batesville's motion to compel arbitration based on arbitration agreements that the adult children had signed for their mothers when admitting them to the homes. The court held that the Mississippi Supreme Court would not adopt the district court’s formal device requirement and would instead permit parties to establish the existence of an agency relationship with other types of evidence. The court concluded that Gross's sworn testimony is competent evidence on the question of Gross’s agency and its scope. Because the existence and scope of an actual agency relationship is a question of fact the district court did not reach, the court could not decide the actual agency issue as a matter of law. Therefore, the court remanded for the district court for a factual finding on this issue in the first instance. Likewise, the same situation applies to Cotton, and the court remanded for the district court for a factual finding on this issue in the first instance. The court rejected defendant's estoppel argument. Finally, the court concluded that Batesville's apparent authority argument fails because it failed to put forth evidence of detrimental reliance; the district court properly rejected Batesville's ratification theory based on insufficient evidence; and the court declined to address the forum issue. Accordingly, the court vacated and remanded. View "Gross v. GGNSC Southaven, LLC" on Justia Law

Ryan Cunningham, Ronald LeGrand and four other individuals signed an operating agreement of Mountain Country Partners, LLC. Cunningham instituted a civil action seeking injunctive relief for the purpose of gaining operating control of the company. The case was stayed pending arbitration pursuant to the mandatory arbitration clause contained in the operating agreement. Legrand and Mountain Country filed five counterclaims against Cunningham. After a hearing, the arbitrator denied Cunningham’s claim and awarded relief against him based on Defendants’ counterclaims. The arbitrator ordered Cunningham to pay Mountain Country $113,717 in damages, as well as attorney’s fees and costs. Cunningham filed a motion to vacate the arbitration award, arguing that the arbitrator manifestly disregarded the law of West Virginia, improperly considered hearsay evidence, and refused to reopen the proceedings for rebuttal evidence. The circuit court denied Cunningham’s motion and confirmed the arbitration award. The Supreme Court affirmed, holding that Cunningham failed to identify any valid basis for setting aside the arbitration award. View "Cunningham v. LeGrand" on Justia Law

Appellees, former residents of certain nursing homes and special administrators, guardians, or attorneys-in-fact of former residents, filed a class action complaint against Appellants, GGNSC Holdings, LLC and related entities and employees. GGNSC moved to compel arbitration of claims asserted by five particular residents who, at the time of their admission into nursing homes, entered into arbitration agreements. The circuit court ultimately denied arbitration, finding that three of the five arbitration agreements were invalid because they were signed by individuals who lacked authority to agree to arbitrate and that the remaining two agreements were not enforceable to compel arbitration based on the defenses of impossibility of performance and unconscionability. The Supreme Court reversed, holding that the circuit court erred by refusing to enforce the valid arbitration agreements based on the defenses of impossibility of performance and unconscionability. Remanded for the entry of an order compelling arbitration. View "GGNSC Holdings, LLC v. Lamb" on Justia Law

Plaintiffs and Defendant, members of an accounting firm (Firm), were parties to a stockholder agreement (Agreement) that contained an arbitration clause. The parties’ agreement to arbitrate was governed by the Massachusetts Uniform Arbitration Act for Commercial Disputes. When Plaintiffs voted to require the withdrawal of Defendant as a director and stockholder in the Firm, Defendant opened his own accounting firm. The nature and terms of Defendant’s withdrawal from the Firm and his subsequent competition with the Firm were the bases of a dispute between the parties. The dispute was submitted to binding arbitration. The arbitrator issued a final award awarding the Firm $1.7 million plus interest. The superior court confirmed the arbitration award. Defendant appealed, arguing (1) the arbitrator fundamentally misinterpreted the agreement, and (2) he was entitled to have a court consider the merits of his claim because, in the arbitration clause of the agreement, the parties specifically provided for judicial review of an award to determine if there was flagrant error by the arbitrator. The Supreme Judicial Court affirmed the motion judge’s confirmation award, holding (1) the grounds of judicial review in this case were limited to those delineated in Mass. Gen. Laws ch. 215, 12 and 13; and (2) Defendant’s claim was not reviewable by the Court. View "Katz, Nannis & Solomon, P.C. v. Levine" on Justia Law

This case arose out of a 2007 Memorandum of Understanding Regarding Job Opportunities (the Jobs MOU) signed by the Union and Peabody as part of a wider collective bargaining agreement. At issue on appeal is when and under what circumstances should the court review a labor arbitrator's decision. The court held that judicial involvement in the labor dispute in this case was premature where, under the complete arbitration rule, the arbitrator should have been given the opportunity to resolve both the liability and remedial phases of the dispute between the companies and the Union before it moved to federal court. Accordingly, the court vacated the district court's order confirming the arbitrator's decision on the merits and directed that court to return the dispute to the arbitrator to allow him to rule on the remedial issues and otherwise complete the arbitration task. View "Peabody Holding Co. v. United Mine Workers of America" on Justia Law

Plaintiff filed suit against his former employer, Watch House, alleging that he was discharged in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e et seq., and Chapter 21 of the Texas Labor Code. The district court granted Watch House's motion to compel arbitration and dismissed plaintiff's suit without prejudice. The court concluded that the three-part test in Lizalde v. Vista Quality Markets remains an accurate statement of Texas law and applied Lizalde to the language of Watch House's Arbitration Plan at issue. The court agreed with plaintiff that the Plan is illusory because it fails to include an In re Halliburton-type savings clause that requires advance notice of termination. In this case, the Plan provides that Watch House may make unilateral changes to the Plan, purportedly including termination, and that such a change “shall be immediately effective upon notice to” employees. Watch House’s retention of this unilateral power to terminate the Plan without advance notice renders the Plan illusory under a plain reading of Lizalde, which is supported by recent decisions from Texas intermediate courts. Consequently, plaintiff is not bound by the Plan and Watch House may not compel arbitration. The court reversed and remanded for further proceedings. View "Nelson v. Watch House Int'l, LLC" on Justia Law

Facing more than $40,000 in unsecured debt that she owed to Discover Bank and other banks, Susan Ossello enrolled in a debt reduction program and signed a contract with Global Client Solutions. Ossello subsequently stopped making payments on her credit card debt, and Discover Bank brought a collection action against her. Ossello filed a third-party complaint against Global, alleging that Global used deceptive and fraudulent representations to solicit her participation in an illegal debt settlement plan. Global filed a motion to compel arbitration and to dismiss the third-party complaint for lack of jurisdiction. The district court concluded that the arbitration clause in Global’s contract was unconscionable and not unenforceable and therefore denied Global’s motion to dismiss and to compel arbitration. The Supreme Court affirmed, holding that the district court did not err in (1) reserving to itself the determination of arbitrability, and (2) declaring that the arbitration provision was unconscionable and therefore not enforceable against Ossello. View "Discover Bank v. Ossello" on Justia Law

PNC Bank, National Association, and Sonja Moore-Dennis separately appealed a Circuit Court order denying their motion to compel arbitration as to Joseph Franklin's claims against them. Franklin had three bank accounts with the predecessor bank to PNC Bank, RBC Bank (USA), before RBC Bank merged with PNC Bank. Shortly before the merger, PNC Bank, in January 2012, allegedly mailed a welcome letter and a PNC Bank Account Agreement. The account agreement did not contain an arbitration provision. Tamara Franklin, Franklin's niece came to to visit one day. Tamara noticed a document that she thought was a bank statement from PNC Bank. After looking at the document, Tamara was concerned that Franklin owed money to PNC Bank. Franklin said he did not owe PNC Bank any money but that Tamara could call his financial advisor, Sonja Moore-Dennis, if she had any concerns. Franklin alleged that Moore-Dennis was a PNC Bank agent or employee at this time; PNC Bank denies that it had ever employed Moore-Dennis. After investigating the matter, Franklin and Tamara came to the conclusion that Moore-Dennis had been stealing funds from Franklin's accounts. Additionally, it appeared to Franklin and Tamara that Moore-Dennis had created an online banking profile for Franklin but had set up the profile so that account notifications were sent to her e-mail address. Franklin, who is elderly, did not have Internet access or an e-mail address and did not know how to use online banking. Franklin sued PNC Bank and Moore-Dennis alleging fraud, suppression, breach of fiduciary duty, and various forms of negligence and wantonness. PNC Bank moved to compel arbitration, raising the terms of the account agreement as grounds for its motion. The Alabama Supreme Court affirmed the circuit court’s order, finding that the Bank and Moore-Dennis failed to prove that Franklin received the account agreement or accessed a specific web page that contained the arbitration provision as described in the account agreement. View "Moore-Dennis v. Franklin" on Justia Law

Kindred Nursing Centers East, LLC, d/b/a 0791-Kindred Transitional Care and Rehabilitation-Whitesburg Gardens ("Whitesburg Gardens"), owned and operated a long-term care and rehabilitation facility. Whitesburg Gardens was sued by Lorene Jones, and appealed an order denying its motion to compel arbitration of Jones's claims. The Supreme Court reversed and remanded: Jones was mentally competent when she was admitted to and during her stay at the facility. Because precedent held that competent residents of nursing homes could be bound by arbitration agreements executed by their representatives, the Court held that Jones was so bound. Moreover, in view of the evidence indicating that Jones passively permitted her daughter Yvonne Barbour to act on her behalf in signing the admission forms and the lack of evidence indicating that Jones ever objected to Barbour's signing those forms, the Court held that Barbour had the apparent authority to bind Jones at the time Barbour signed the admission documents. Under these circumstances, Whitesburg Gardens proved the existence of a valid contract calling for arbitration. The trial court erred in denying the motion to compel arbitration. View "Kindred Nursing Centers East, LLC. v. Jones" on Justia Law