Justia Arbitration & Mediation Opinion Summaries

When Richmont Holdings, Inc. bought the assets of Superior Recharge Systems, LLC the parties signed an asset Purchase Agreement that contained an arbitration provision. Superior Discharge’s part-owner, Jon Blake, signed an employment contract to continue as general manager of the business. The contract contained a covenant not to compete but not an arbitration provision. After Blake’s employment was terminated, Superior Recharge and Blake (together, Blake) sued Richmont in Denton County for fraud and breach of contract. Richmont then sued Blake individually in Dallas County to enforce the covenant not to compete. The Dallas County suit was subsequently abated. Nineteen months after being sued, Richmont moved to compel arbitration, asserting that Blake’s claims arose out of the Asset Purchase Agreement. The trial court denied the motion, and the court of appeals affirmed. The Supreme Court reversed. On remand, the court of appeals concluded that Richmont had waived arbitration by substantially invoking the judicial process. The Supreme Court reversed, holding that the circumstances of this case did not approach a substantial invocation of the judicial process. Remanded. View "Richmont Holdings, Inc. v. Superior Recharge Sys., LLC" on Justia Law

Plaintiffs sought declaratory and injunctive relief against defendants in this action. But the complaint explicitly acknowledged it was “ancillary to” contemplated private arbitration of disputes arising out of the parties’ contractual relationship. The trial court denied plaintiffs’ motion for a preliminary injunction and the parties stipulated to stay the action “pending arbitration.” Plaintiffs voluntarily dismissed this action (purportedly without prejudice) after the claims were submitted to an arbitrator for final resolution and the arbitrator had issued an interim award in favor of defendants. The interim arbitral award was made final without substantive revision, except for adding plaintiff’s attorney fees and costs incurred in the arbitration. The trial court denied defendants’ motion to vacate the dismissal, reasoning that the arbitration and this case were separate proceedings and that plaintiffs had dismissed this action before trial commenced. After its review, the Court of Appeal disagreed with this reasoning and reversed: this lawsuit was based on the same causes of action submitted to the arbitrator; it differed only in the remedies sought. Once the hearing on the merits of the parties’ dispute commenced at the arbitration, it was too late for plaintiffs to dismiss this action without prejudice and thereby avoid an attempt by defendants to recover attorney fees as the prevailing party in this action. View "Mesa Shopping Center-East v. O Hill" on Justia Law

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

Goldman appealed from the denial of its motion to compel arbitration of a suit brought against it by NCUA. The court concluded that NCUA successfully repudiated the Cash Account Agreement (CAA), including the arbitration provision. The court rejected Goldman's arguments that NCUA's repudiation of the CAA in this case should not be understood to encompass repudiation of the arbitration clause contained in the overall agreement where 12 U.S.C. 1787(c)'s grant of authority to NCUA in its role as liquidating agent to repudiate contracts includes authority to repudiate arbitration agreements. In this case, NCUA's lack of awareness of the CAA, and its consequent delay in repudiating it, cannot be deemed unreasonable. Once Goldman brought the CAA to NCUA's attention, NCUA repudiated the contract within nine days. The court rejected Goldman's challenge to the timeliness of the repudiation given NCUA's excusable unawareness of the CAA until Goldman disclosed it. Accordingly, the court affirmed the district court's order denying arbitration. View "National Credit Union Admin. Bd v. Goldman, Sachs & Co." on Justia Law

Gilda filed for dissolution of marriage. She and former husband, Murray, agreed to resolve property and support issues through mediation, during which they purportedly exchanged financial disclosure declarations mandated by the Family Code. They executed a marital settlement agreement, which was incorporated into a stipulated judgment. Shortly after entry of judgment, Gilda learned that Murray recently sold a company he founded during the marriage. In the settlement agreement, Gilda relinquished her community share of the company for $10 million. Murray received approximately $75 million from the sale. Gilda sought to set aside the judgment on grounds of fraud and duress and served discovery on Murray requesting the financial disclosure declarations that were exchanged prior to entry of judgment. Murray refused to produce the declarations, asserting they were covered by the mediation confidentiality statutes, insofar as they constituted writings that were prepared for the purpose of, in the course of, or pursuant to, mediation. (Evid. Code, 1119(b).) The trial court a motion to compel on mediation confidentiality grounds. The court of appeal vacated, noting the Family Code’s stated public policy to promote “full and accurate disclosure of all assets and liabilities” in dissolution proceedings View "Lappe v. Superior Court" on Justia Law

Plaintiff-respondent Sharon McGill sued defendant-appellant Citibank, N.A. for unfair competition and false advertising in offering a credit insurance plan she purchased to protect her Citibank credit card account. She brought claims under California’s unfair competition law (UCL), false advertising law (FAL), and Consumer Legal Remedies Act (CLRA), seeking monetary damages, restitution, and injunctive relief to prevent Citibank from engaging in its allegedly unlawful and deceptive business practices. Citibank petitioned to compel McGill to arbitrate her claims based on an arbitration provision in her account agreement. The trial court granted the petition on McGill’s claims for monetary damages and restitution, but denied the petition on the injunctive relief claims. Citibank appealed. The Court of Appeal reversed and remanded the case for the trial court to order all of McGill’s claims to arbitration. View "McGill v. Citibank" on Justia Law

From 2002 to 2012, Defendant leased from Plaintiff business premises located in Portland. In 2012, Plaintiff filed a complaint alleging that Defendant had breached certain provisions in the written lease. Defendant counterclaimed, alleging that Plaintiff had failed to perform certain repairs required by the lease. The parties went to mediation on their dispute and reached a settlement agreement through that mediation. Defendant later moved to amend its original counterclaim to add a second count for breach of the settlement agreement. The superior court concluded that the counterclaim seeking to enforce the settlement was moot because Plaintiff signed an agreement reflecting all of the terms of the settlement reached through mediation. The Supreme Court affirmed, holding that because Plaintiff executed a general release that complied with the agreement reached through mediation, the superior court correctly determined that Defendant’s motion for summary judgment on its counterclaim seeking to enforce the settlement agreement was moot. View "2301 Congress Realty, LLC v. Wise Bus. Forms, Inc." on Justia Law

Nijjar hired Judge as a resident property manager. Nijjar terminated her employment. Judge filed claims for unpaid compensation, meal and rest period premiums, waiting time penalties, and wrongful termination. Under the Private Attorney General Act, Judge alleged similar claims on behalf of other employees. Judge also filed a class action, alleging similar claims on behalf of herself and class members. The trial court determined that the actions were related cases and designated the individual/PAGA action as the lead case, but denied Judge’s subsequent application to consolidate the cases. Based on an arbitration agreement that Judge had signed as an employee, the trial court granted a petition to compel arbitration and stay proceedings on the individual and PAGA claims. The court concluded that the Federal Arbitration Act governed the agreement and that Judge’s employment-related claims and individual PAGA claims were covered. The arbitrator issued a clause construction award, finding that the agreement permitted arbitration of class and representative claims. The trial court granted the defendants’ petition to vacate the n award. The court of appeal dismissed, stating that because the arbitrator has not ruled on any substantive issues, the order did not vacate a final arbitration award and is not appealable. View "Judge v. Nijjar Realty, Inc." on Justia Law

Wells Fargo Bank filed a declaratory and injunctive relief complaint. The defendant sent plaintiff a demand for mediation and arbitration pursuant to a dispute resolution provision in a February 27, 2008 servicing agreement between the parties. On October 9, 2013, plaintiff rejected defendant’s mediation and arbitration demand. On October 24, defendant moved to stay the action pending compliance with the arbitration demand. No petition or motion to compel arbitration was filed. No petition to compel compliance with the mediation provision of the parties’ servicing agreement was filed. The defendant stressed the stay motion was not a petition to compel arbitration. The district court denied the motion to stay. The court of appeal dismissed the appeal because the trial court’s denial of the stay motion unaccompanied by any motion or petition to compel arbitration or a pending arbitration is not an appealable order. View "Wells Fargo Bank, N.A. v. The Best Service Co." on Justia Law

A union initiated arbitration proceedings after a police officer with the town of Stratford was terminated for lying in connection with his employment. A three-member arbitration panel determined that the officer’s termination was excessive and ordered that the town reinstate the officer. The town filed an application to vacate the arbitration award, arguing that the award encouraged police officer dishonesty and thereby violated public policy against lying by law enforcement personnel. The trial court denied the application. The Appellate Court reversed, concluding that the arbitration award violated a clear public policy against intentional dishonesty by police officers in connection with their employment. The Supreme Court reversed, holding (1) there is a public policy against intentional police officer dishonesty in connection with his or her employment, but (2) in this case, the arbitration award reinstating the officer’s employment did not violate that public policy. Remanded. View "Stratford v. AFSCME, Council 15, Local 407" on Justia Law