Justia Arbitration & Mediation Opinion Summaries

In 2012, a fire destroyed three buildings and related equipment that were owned by Jackson Hop, LLC, and were used to dry hops, to process and bale hops, and to store hop bales. The buildings were insured by Farm Bureau Mutual Insurance Company of Idaho for the actual cash value of the buildings and equipment, not to exceed the policy limit. Farm Bureau’s appraisers determined that the actual cash value of the buildings was $295,000 and the value of the equipment was $85,909. Farm Bureau paid Jackson Hop $380,909. Jackson Hop disagreed with that figure, and it hired its own appraiser, who concluded that the actual cash value of the buildings and equipment totaled $1,410,000. Farm Bureau retained another appraiser to review the report of Jackson Hop’s appraiser, and that appraiser concluded that the value of $1,410,000 was unrealistically high. Jackson Hop filed this action to recover the balance of what it contended was owing under the insurance policy, plus prejudgment interest. The parties agreed to submit the matter to arbitration as provided in the policy. During that process, Jackson Hop presented additional opinions regarding the actual cash values, ranging from $800,000 to $1,167,000 for the buildings and $379,108 to $399,000 for the equipment. Farm Bureau’s experts revised their opinions upward, although only from $295,000 to $333,239 for the buildings and from $85,909 to $133,000 for the equipment. Before completion of the arbitration, Farm Bureau paid an additional sum of $85,330. Arbitrators determined that the actual cash value of the buildings and the equipment was $740,000 and $315,000, respectively, for a total of $1,055,000. Within seven days of the arbitrators’ decision, Farm Bureau paid Jackson Hop $588,761, which was the amount of the arbitrators’ award less the prior payments. Jackson Hop filed a motion asking the district court to confirm the arbitrators’ award and to award Jackson Hop prejudgment interest, court costs, and attorney fees. Farm Bureau filed an objection to the request for court costs, attorney fees, and prejudgment interest. The court awarded Jackson Hop attorney fees, but denied the request for court costs because the parties’ arbitration agreement stated that both parties would pay their own costs, and the court denied the request for prejudgment interest because the amount of damages was unliquidated and unascertainable by a mathematical process until the arbitrators’ award. Jackson Hop then appealed. Finding no reversible error in the trial court's judgment, the Supreme Court affirmed. View "Jackson Hop v. Farm Bureau Insurance" on Justia Law

AVR, an Israeli corporation, and Interton, a Minnesota corporation, produce hearing aid technology, and entered into an Agreement, giving Interton a 20 percent interest in AVR. During negotiations, they discussed integrating AVR's DFC technology into Interton's products, and Interton's purchase of AVR's W.C. components. The Agreement incorporated terms indicating that the Agreement would be governed by the laws of the State of Israel and that “Any dispute between the parties relating to (or arising out of) the provisions of this Agreement … will be referred exclusively to the decision of a single arbitrator … bound by Israeli substantive law.” AVR commenced arbitration in Israel. Interton participated, but believed that disputes concerning DFC and W.C. were separate and not subject to arbitration. The Israeli Supreme Court rejected Interton's objection to the scope of arbitration, citing the "relating to (or arising out of)" language. An Israeli arbitrator awarded AVR $2,675,000 on its DFC and W.C. claims, plus fees and expenses. After the award became final in Israel, in accordance with the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 9 U.S.C. 201, AVR successfully petitioned the district court for recognition and enforcement in the US. The Eighth Circuit affirmed. The Convention does not allow Interton to relitigate the scope of arbitration in an American court. View "AVR Commc'ns, Ltd. v. Am. Hearing Sys., Inc." on Justia Law

Alpine repairs automotive glass and, under Minnesota law, receives from insured vehicle owners the right to seek payment from insurance companies for repairs performed. Alpine and several insurers had disputes regarding the amounts paid for 482 separate claims. Minnesota law mandates arbitration of these disputes. The district court determined many claims were barred by a two-year statute of limitations included in some of the insurance policies; 248 claims either were not governed by the two-year statute of limitations or were timely. The court consolidated these claims for one arbitration and ordered arbitration. Alpine appealed the consolidation order. The Eighth Circuit dismissed for lack of jurisdiction, finding that the consolidation order was not an appealable final judgment. The parties pursued arbitration of one claim in which Alpine sought reimbursement for an alleged underpayment of $398.77. Arbitration resulted in a ruling in favor of the insurance company. ​The district court confirmed the award. The Eighth Circuit again dismissed an appeal for lack of jurisdiction View "Alpine Glass, Inc. v. Country Mut. Ins. Co." on Justia Law

Appleberry worked for the U.S. Citizenship and Immigration Services, under a collective bargaining agreement. Deeming her performance unsatisfactory, the agency placed her on a “performance improvement plan” and then found that she failed to improve. Eventually, relying on that failure, the agency fired her. When Appleberry brought her removal to arbitration, as authorized (but not required) by the collective bargaining agreement, the arbitrator concluded that she could not challenge the key bases for the removal, i.e., the agency determinations that she should be placed on the performance-improvement plan and that she failed under the plan; that the collective bargaining agreement, pursuant to 5 U.S.C. 7121, prescribed the exclusive process, including time limits, for challenging those determinations; but that Appleberry had abandoned that process after initiating it through filing grievances, allowing the time for completing challenges to run. The arbitrator barred reconsideration of “issues that were raised in [her] earlier grievances, or that could have been raised but were not.” The Federal Circuit affirmed, rejecting an argument that the arbitrator should not have barred consideration of the performance-improvement-plan issues raised in her earlier, uncompleted grievances; the arbitrator properly enforced the grievance process designated as “exclusive” in the collective bargaining agreement. View "Appleberry v. Dep't of Homeland Sec." on Justia Law

The parties’ dispute involved various “credit repair” services provided to plaintiff consumers, for which some of the disclosure requirements of the Credit Repair Organizations Act (CROA, or the Act), 15 U.S.C. 1679 et seq., were not met. At issue was the district court's denial of a motion to vacate certain aspects of an arbitration award. The court held that the arbitrator did not manifestly disregard the law by determining that plaintiffs failed to prove actual damages under the Act; the court rejected plaintiffs’ various arguments regarding their request for additional attorneys’ fees and costs; and the arbitrator did not exceed the scope of his contractually delegated authority under section 10(a)(4) of the Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq. Accordingly, the court affirmed the judgment. View "Jones v. Dancel" on Justia Law

Donald Olson and Aimee Moore met in 1995. Between 1995 and 2004 they had business and personal relationships. The business relationship began with Donald training Aimee to fly helicopters in exchange for Aimee’s work for Donald and his businesses. Eventually Aimee managed Donald’s businesses, and they agreed that she would receive a share of business profits. Aimee and Donald disputed the nature of their personal relationship: Aimee characterizes the relationship as a cohabative domestic partnership; Donald asserts the relationship was not a domestic partnership. Aimee terminated the personal relationship in July 2004. In December 2004 Aimee and Donald signed an agreement “related to the deferred compensation owed Aimee . . . for work performed during the period January 1996 through 2004.” In November 2005, after negotiating for more than a year, Aimee and Donald signed a final settlement agreement to end their business relationship. Aimee initiated arbitration against Donald, but not his businesses, in January 2012. Aimee alleged that Donald breached the agreement they had regarding her deferred compensation and certain aspects of managing the business. The matter was submitted to arbitration. The arbitrator ultimately agreed with Donald and his businesses, concluding that the parties’ personal relationship was not a domestic partnership and finding that Donald and the businesses had not materially breached the settlement agreement. The arbitrator ruled in Donald’s and the businesses’ favor and awarded them reasonable prevailing party costs and attorney’s fees. Aimee appealed the arbitrator's decision to the superior court, which affirmed the arbitrator's decision. She appealed to the Supreme Court, who in applying the deferential standards of review, affirmed the superior court's decision confirming the arbitration award. View "Moore v. Olson" on Justia Law

Former employees brought a putative class action against their former employer, NMG, alleging violations of the California Labor Code, and NMG moved to compel arbitration under its mandatory arbitration program for employment-related disputes. NMG submitted evidence that, at the time of plaintiff’s employment (2007-2009), it distributed to each new employee a copy of its “Mandatory Arbitration Agreement,” brochures explaining the arbitration program, and an employee handbook that included a brief description of the program The trial court initially ordered arbitration of all claims except a claim under the Labor Code Private Attorneys General Act of 2004 (PAGA) Lab. Code, 2698, but later reconsidered and denied the motion, concluding the arbitration agreement at issue was illusory. The court of appeal affirmed, rejecting arguments that the court lacked jurisdiction to reconsider its initial order; an arbitrator, rather than a court, must determine any challenges to the enforceability of the arbitration agreement; and the arbitration agreement is enforceable and encompasses all claims, including his PAGA claim. The court found multiple unconscionable aspects to the NMG Arbitration Agreement. View "Pinela v. Neiman Marcus Group, Inc." on Justia Law

After the County of Kaua’i and Kaua’i Police Department filled five police sergeant positions through internal promotions, the State of Hawaii Organization of Police Officers (SHOPO) challenged, through the grievance procedures of the collective bargaining agreement (CBA) governing the parties, the non-promotions of three police officers. The parties were unable to resolve the grievances, and the matter was submitted to arbitration. The arbitrator found that the promotions were subjective, arbitrary, and capricious in violation of the CBA and awarded the three officers promotions and back pay. The circuit court vacated the arbitrator’s remedy, concluding that it was beyond the scope of the arbitrator’s authority to award promotions. The intermediate court of appeals (ICA) vacated in part the circuit court’s orders and remanded to the circuit court for confirmation of the arbitrator’s decision in its entirety, concluding that the arbitrator did not exceed his authority in awarding promotions and that the circuit court erred in finding otherwise. The Supreme Court affirmed, holding that the arbitrator acted within the scope of his authority under the CBA. View "In re Grievance Arbitration Between State of Haw. Org. of Police Officers" on Justia Law

Plaintiffs, former employees of Chase, filed a putative class action alleging violations of state and federal overtime laws. The district court denied Chase's motion to compel arbitration. The court affirmed, concluding that the arbitration clause in the employment contracts cover only claims or controversies “required to be arbitrated by the FINRA Rules.” The court agreed with the district court's ruling that it thus incorporated the arbitrability restrictions of the FINRA Code of Arbitration Procedure for Industry Disputes (FINRA Rules) and the district court's application of the current version of FINRA Rule 13204, which prohibits arbitration of claims brought as putative class or collective actions. View "Lloyd v. J.P. Morgan Chase" on Justia Law

Southeast Construction, L.L.C. ("SEC"), appealed a circuit court order that found WAR Construction, Inc., had provided SEC with certain releases as previously ordered by the circuit court and that SEC was accordingly now required to pay the outstanding $263,939 remaining on a $373,939 judgment previously entered on a February 16, 2011, arbitration award obtained by WAR against SEC, along with interest accruing from February 16, 2011. After review, the Supreme Court affirmed that judgment to the extent it held that WAR provided all required releases and that SEC was obligated to fulfill the judgment entered on the arbitration award. However, the Court reversed the judgment inasmuch as it held that SEC is required to pay interest on the award as calculated from February 16, 2011. On remand, the circuit court was instructed to calculate interest on the principal at the rate set forth in the arbitration award accruing from September 8, 2014. View "Southeast Construction L.L.C. v. WAR Construction, Inc." on Justia Law