Justia Arbitration & Mediation Opinion Summaries

Plaintiff-respondent Network Capital Funding Corporation filed a declaratory relief action alleging its arbitration agreement with defendant-appellant Erik Papke required Papke to arbitrate his wage and hour claims on an individual basis rather than the classwide basis he sought in his pending arbitration proceeding. According to Papke, the broad language in the parties’ arbitration agreement required the arbitrator, not the court, to decide whether the agreement authorized class arbitration. The trial court denied Papke’s petition, concluding it must decide whether the arbitration agreement authorized class arbitration, and in doing so found this particular agreement did not allow class arbitration. Papke appealed. After review, the Court of Appeal agreed with the trial court: "[d]eciding whether the parties’ arbitration agreement authorizes class arbitration does not simply determine what arbitration procedures the parties agreed to use, but rather whose claims the parties agreed to arbitrate. Supreme Court precedent requires courts to decide whose claims are covered by an arbitration agreement unless the parties clearly and unmistakably agree to have the arbitrator decide that question. Because Papke’s and Network Capital’s arbitration agreement does not clearly and unmistakably designate the arbitrator to determine whether the agreement authorizes class arbitration, we conclude the trial court properly decided that question." Furthermore, the Court concluded the trial court properly determined Papke’s and Network Capital’s arbitration agreement did not authorize class arbitration. View "Network Capital Funding Corp. v. Papke" on Justia Law

Flintkote was a major supplier of asbestos-based products and was covered by insurance policies from London insurance firms, including Aviva, one of the world’s largest insurers. It became apparent that claims under these policies would result in protracted disputes regarding the scope of coverage. In 1985, Flintkote and several insurers, but not Aviva, entered into the Wellington Agreement, which required that coverage disputes be resolved through ADR consisting of open mediation, binding arbitration, and an expedited appellate process; that the insurers make payments to Flintkote; and that Flintkote reimburse with interest, if it also received those same payments from another insurer. In 1989, Flintkote and Aviva entered into a separate agreement, similar to the Wellington Agreement, including as to reimbursement for claims also paid by other insurers. The1989 Agreement explicitly reserves each party’s right to resolve disputes through litigation. Flintkote filed for bankruptcy in 2004. In 2006, invoking the Wellington Agreement, Flintkote initiated coverage-related mediation with the insurers. Aviva, although not obligated to participate, opted to join. During mediation, Flintkote reached settlements with some insurers, but not with Aviva. In 2012, Aviva and the remaining other insurers sought reimbursement or off-set with respect to prior payments and interest under the Wellington Agreement. Flintkote took no action. Aviva, acting separately, moved to lift the automatic bankruptcy stay. Before the Bankruptcy Court ruled on Aviva’s motion, Flintkote moved to compel arbitration pursuant the Federal Arbitration Act. The district court granted Flintkote’s motion to compel arbitration, concluding that Aviva was equitably estopped from avoiding arbitration by virtue of its participation in the lengthy mediation process. The Third Circuit reversed. View "Flintkote Co v. Aviva PLC" on Justia Law

After Sining Mao left his employment with Seagate Technology, LLC, Mao joined Seagate’s competitor, Western Digital Corporation. Seagate subsequently commenced a district court action alleging that Mao stole Seagate’s trade secrets and confidential information and provided it to Western Digital. Western Digital invoked an arbitration clause in Mao’s employment agreement with Seagate. Before the arbitration hearing, Seagate brought a motion for sanctions against Western Digital and Mao (Appellants) based on alleged fabrication of evidence. An arbitrator issued an award against Appellants in an amount exceeding $500 million. The district court vacated the award in part, but the court of appeals reinstated the award. On appeal, Appellants argued that the arbitrator’s exceeded his authority by issuing punitive sanctions and prejudiced Appellants by refusing to hear evidence material to the controversy. The Supreme Court affirmed the court of appeals’ decision reinstating and confirming the arbitration award in full, holding that the arbitrator did not exceed his authority or refuse to hear material evidence as required for vacatur. View "Seagate Tech., LLC v. W. Digital Corp." on Justia Law

Plaintiff CB Richard Ellis, Inc. (CBRE), pursuant to a 2004 listing agreement, sought a commission after the 2005 sale of 38 acres of land in Murrieta. Arbitration proceedings between CBRE and the seller, Jefferson 38, LLC resulted in a confirmed arbitral award in CBRE’s favor, but no monetary satisfaction for CBRE because Jefferson had no assets by the time of the arbitral award and judgment. The issue this case presented to the Court of Appeal centered on CBRE’s attempt to recover damages from Jefferson’s individual members. A jury trial resulted in a $354,000 judgment in favor of CBRE. Both defendants and CBRE appealed the judgment, citing alleged errors pertaining to jury instructions, the admissibility of evidence, juror misconduct, attorney fees, and prejudgment interest. Upon review, the Court of Appeal rejected the parties’ contentions, except with regard to CBRE’s entitlement to attorney fees. View "CB Richard Ellis v. Terra Nostra Consultants" on Justia Law

Lacie Smith worked for Express Check Advance of Mississippi, LLC. A condition in her employment papers was that she agreed to submit “any employment-related dispute” to arbitration. Later, in response to her termination, Smith sued Express Check in circuit court. The trial judge compelled arbitration and Smith appealed. Finding no reversible error, the Supreme Court affirmed. View "Smith v. Express Check Advance of Mississippi, LLC" on Justia Law

Plaintiff filed suit against CashCall, which then sought to compel arbitration based on the parties' loan agreement. The district court refused to compel arbitration and CashCall appealed. The court held CashCall to the terms of the integral forum selection provision included in plaintiff's loan agreement. Because the selected forum - the Cheyenne River Sioux Tribal Nation - is unavailable, a substitute arbitrator under 9 U.S.C. 5 cannot be appointed under the terms of the contract. Accordingly, the court affirmed the district court's order deciding not to compel arbitration. View "Inetianbor v. Cashcall, Inc., et al." on Justia Law

The Lexington school district superintendent dismissed Mark Zagaeski, a Lexington high school teacher, from his position for conduct unbecoming a teacher. Zagaeski timely filed an appeal from the school district’s dismissal decision, which resulted in arbitration proceedings. The arbitrator (1) concluded that the school district carried its burden to show facts amounting to conduct unbecoming a teacher but that Zagaeski’s conduct only “nominally” constituted a basis for dismissal; and (2) reinstated Zagaeski as a teacher on the basis of “the best interests of the pupils.” The superior court confirmed the arbitrator’s award. The Supreme Judicial Court reversed the decision of the superior court judge and vacated the arbitration award, holding that, under the facts of this case, the arbitrator exceeded the scope of his authority by awarding Zagaeski's reinstatement. View "Sch. Comm. of Lexington v. Zagaeski" on Justia Law

After the Company prevailed in a 2000 arbitration in France against the Congo, the Company sought to collect the arbitral award with little success. The Company obtained a judgment in 2009 from a court in England enforcing the arbitral award. The Company then sued in the United States to enforce the foreign judgment under state law. The court held that the limitations period in the Federal Arbitration Act (FAA), 9 U.S.C. 207, does not preempt the longer limitations period in the D.C. Recognition Act, D.C. 15-639, and the court reversed the dismissal of the complaint. The court remanded the case for the district court to determine whether the English Judgment is enforceable under the D.C. Recognition Act.View "Commissions Import Export S.A. v. Republic of the Congo, et al." on Justia Law

In this contract dispute between a home health care agency, Visiting Nurse Association of Florida, Inc. (VNA), and a hospital, Jupiter Medical Center, Inc. (JMC), an arbitration panel granted VNA damages. JMC filed a motion to vacate the arbitration award, alleging that the arbitration panel construed the contract containing an arbitration provision to be an unlawful agreement. The circuit court dismissed the motion to vacate and granted the motion to enforce the award. The Fourth District Court of Appeal reversed, holding that a court must determine whether a contract is legal prior to enforcing an arbitral award based on the contract. The Supreme Court quashed the Fourth District’s decision, holding (1) the claim that an arbitration panel construed a contract containing an arbitration provision to be an unlawful agreement is an insufficient basis to vacate an arbitrator’s decision pursuant to the Federal Arbitration Act or the Florida Arbitration Code; and (2) the arbitration panel did not exceed its powers in this case. View "Visiting Nurse Ass’n of Fla., Inc. v. Jupiter Med. Ctr., Inc." on Justia Law

Plaintiff briefly had a checking account with Union Planters Bank and had signed a signature card binding her to arbitration. Union Planters merged with Regions Bank. Years after closing her account, plaintiff was injured in an automobile accident. The lawyer she retained allegedly embezzled plaintiff's portion of the settlement and she sued Trustmark Bank, where the lawyer maintained his accounts, for negligence and conversion. Regions moved to compel arbitration based on the arbitration agreement. Because the events leading to plaintiff's claim - a car accident, a settlement, and embezzlement of the funds through an account that a third party held with the bank - have nothing to do with her checking account opened years earlier for only a brief time, the notion that her claim falls within the scope of the arbitration agreement is "wholly groundless." Accordingly, the court affirmed the district court's denial of the motion to compel arbitration.View "Douglas v. Trustmark National Bank" on Justia Law