Justia Arbitration & Mediation Opinion Summaries

Appellee, Peter Rosenow, brought a class-action complaint individually and on behalf of similarly situated persons against Appellants, Alltel Corporation and Alltel Communications, Inc. (collectively, Alltel), alleging violations of the Arkansas Deceptive Trade Practices Act and unjust enrichment arising from Alltel’s imposition of an early termination fee on its cellular-phone customers. Alltel filed a motion seeking to compel arbitration based on an arbitration clause contained in its “Terms and Conditions.” The circuit court denied the motion, concluding that Alltel’s arbitration provision lacked mutuality. The Supreme Court affirmed, holding that the circuit court did not err in finding that a lack of mutuality rendered the instant arbitration agreement invalid. View "Alltel Corp. v. Rosenow" on Justia Law

The parties in this case were two members of a Delaware LLC that was created to hold a subsidiary operating a wind farm on the island of Maui in Hawaii. Defendant filed an arbitration demand in Hawaii based on its understanding of the operative LLC agreement. In response, Plaintiff filed suit in the Court of Chancery seeking to enjoin the Hawaii arbitration. After the initiation of this litigation, Defendant filed a motion to compel arbitration in Hawaii. Defendant argued that the Court of Chancery should dismiss this litigation in favor of the pending Hawaii action. The Court of Chancery concluded that the parties agreed in the LLC agreement that both arbitration and questions of arbitrability shall be undertaken in a Hawaii court, and therefore, this action must be stayed or dismissed in favor of Defendant’s action currently pending in Hawaii. View "Kahuku Holdings, LLC v. MNA Kahuku, LLC" on Justia Law

The Hillsborough County Nursing Home appealed the New Hampshire Public Employee Labor Relations Board's (PELRB) decision finding that the County committed an unfair labor practice by refusing to participate in the arbitration of employment grievances filed by AFSCME, Local 2715. The union represented certain nursing home employees. The Supreme Court concluded after review that because a procedural challenge to arbitrability is a matter to be determined by the arbitrator in the first instance, the PELRB did not err in refusing to make a threshold determination as to the procedural arbitrability of the grievances in this case. Here, the County did not argue that the grievances at issue were not substantively arbitrable. Rather, its position was that the Union was procedurally defaulted because it failed to follow the CBA's grievance procedure. "[P]rocedural arbitrability issues are to be decided by the arbitrator; the assertion of such issues affords no basis for refusing to participate in arbitration. Accordingly, we hold that the PELRB did not err in determining that the County committed an unfair labor practice by refusing to arbitrate the grievances." View "Appeal of Hillsborough County Nursing Home" on Justia Law

James Taylor sued Chase Bank for failure to comply with the Uniform Commercial Code in regard to a check that had been returned for insufficient funds. The trial court concluded that there was an arbitration agreement between the parties and referred the case to arbitration. The arbitrator later granted Chase’s motion to dismiss the claim because of Taylor’s delay in filing the arbitration claim. Thereafter, the trial court set aside its earlier order finding that an arbitration agreement existed and its referral of the case to arbitration and denied Chase’s motion to confirm the arbitration award. Chase took an interlocutory appeal of the order denying its motion to confirm the arbitration order, arguing that the trial court was bound to confirm the arbitrator’s decision. The court of appeals affirmed the trial court. The Supreme Court affirmed, holding that the trial court had the authority to set aside the order compelling arbitration after the arbitrator had rendered a dispositive order because the matter was not final and there was insufficient proof of the existence of a valid arbitration agreement.View "JPMorgan Chase Bank, N.A. v. Bluegrass Powerboats" on Justia Law

In 1997, the Village of Derby Center and the City of Newport entered into a contract whereby the Village would supply 10,000 gallons of water per day to the City. The City claimed that the contract did not authorize the Village to adopt a new rate schedule in 2006 that included a ready-to-serve fee on top of actual water usage charges. The Village counterclaimed, alleging that the City connected customers who were not authorized under the contract, and that the City’s water use was chronically underreported due to equipment malfunction. After a trial, the superior court ruled for the City on its contract claim, holding that the ready-to-serve fee was not authorized by either contract or statute. As to the Village’s counterclaims, the court found that there was insufficient evidence to support the unauthorized-connection claim, and referred the water-usage-reconstruction claim to mediation. The Village appealed on all counts. The Supreme Court found: the plain language of the agreement authorized the use of a ready-to-serve fee to support the Village’s maintenance of its facilities. "The court erred in concluding otherwise." With respect to the Village's counterclaims, the Supreme Court found that the trial court indicated that it was clear, based on the billing periods showing a reading of zero usage by the City, that there were some erroneous readings, but it referred the Village’s claims to mediation without further resolution. After the City brought suit, the Village filed a motion to allow its counterclaim as to the underreported usage, which the trial court granted. The trial court’s decision to refer the Village’s counterclaim to mediation in its order, after it had already granted the Village’s motion to allow the counterclaim at trial, served only to create greater delay and expense to the parties, thus undermining the purpose of the alternative dispute resolution clause. "Even if the trial court would ordinarily have discretion over whether to send a counterclaim to mediation, under these circumstances the trial court could not properly rescind its decision, relied on by the parties, to allow the counterclaim after the trial had already taken place. Therefore, we remand the Village’s counterclaim for resolution by the trial court." View "City of Newport v. Village of Derby Center" on Justia Law

Buyers, a married couple from Cuba who were only able to communicate in Spanish, purchased a vehicle from a Dealership. Two of the documents Buyers signed with regard to the purchase contained arbitration clauses, and all of the documents were written in English. Buyers subsequently sued the Dealership for fraud in the inducement and violation of the Florida Deceptive and Unfair Trade Practices Act. The Dealership moved to dismiss the complaint and/or compel arbitration. The trial court denied the motion, concluding that no valid agreement to arbitrate existed because the arbitration provisions were not agreed upon by the parties and that the provisions were unenforceable because they were procedurally and substantively unconscionable. The Third District Court of Appeal affirmed the trial court’s order denying enforcement of the agreement to arbitrate disputes but reversed the order insofar as it declined to enforce the arbitration on the reverse side of the retail installment contract with respect to Buyers’ claims for monetary relief. The Supreme Court quashed the decision of the Third District and remanded with instructions to reinstate the trial court’s judgment based on controlling precedent.View "Basulto v. Hialeah Auto." on Justia Law

A school librarian having professional teacher status was suspended for conduct deemed to be unbecoming a teacher. An arbitrator considered the merits of the suspension. Applying a “just cause” standard, the arbitrator overturned the suspension, concluding that the school district failed to meet its burden of proof. A superior court judge confirmed the arbitrator’s award. The Supreme Judicial Court affirmed, holding that the arbitrator did not exceed his authority by reviewing the merits of the librarian’s twenty-day suspension and concluding that the school district had not met its burden of proving the alleged just cause for the suspension. View "Superintendent-Dir. of Assabet Valley Reg’l Sch. Dist. v. Speicher" on Justia Law

Shirley Henry, as special administrator of the Estate of Lucill Betncourt, filed a complaint against a nursing-home facility (Woodland Hills) asserting, among other claims, negligence, medical malpractice, and violations of the Arkansas Long-Term Care Residents’ Act. Woodland Hills moved to dismiss and to compel arbitration of these claims, relying on arbitration clauses found in the admission agreements that Betncourt, Betncourt’s husband, and Henry signed when Betncourt entered the facility eight times in a four-year period. The circuit court denied Woodland Hills’ motion to dismiss and compel arbitration, concluding that mutuality of obligation was lacking. The Supreme Court affirmed, holding that the arbitration clause offended the law requiring mutuality of obligation and could not be enforced because Woodland Hills reserved the right to litigate billing or collection disputes and thus excluded from arbitration the only claim it might have against a resident. View "Reg'l Care of Jacksonville, LLC v. Henry" on Justia Law

Appellee, as special administrator of the estate of Rufus Owens and on behalf of the wrongful death beneficiaries of Owens, filed a lawsuit against Pine Hills Health and Rehabilitation, LLC and others for injuries Owens sustained during his care and treatment at Pine Hills. Appellants moved to dismiss the complaint and compel arbitration pursuant to an arbitration agreement. Appellee argued that the arbitration agreement was unenforceable because there was no evidence of mutual assent where the agreement was signed by Appellee as the "responsible party" but did not bear the signature of a representative of Pine Hills. The circuit court denied the motion to compel arbitration. The Supreme Court affirmed, holding that there was no objective evidence of mutual assent, and therefore, the arbitration agreement was unenforceable.View "Pine Hills Health & Rehab., LLC v. Matthews" on Justia Law

Steak n Shake owns and operates 415 restaurants and grants about 100 franchises for the operation of Steak n Shake restaurants by others. The operators of franchises in Missouri, Georgia, and Pennsylvania claim that since 1939, franchisees have set their own menu prices and participated in corporate pricing promotions at their option. After a corporate takeover in 2010, Steak n Shake enacted a new policy that requires them to adhere to company pricing on every menu item and to participate in all promotions. They also must purchase all products from a single distributor at a price negotiated by Steak n Shake. The policy had an adverse effect on revenues. The franchisees sought a declaratory judgment. About a month later, Steak n Shake adopted an arbitration policy requiring the franchisees to engage in nonbinding arbitration at Steak n Shake’s request and moved to stay the federal lawsuits. The district court refused to compel arbitration. Although each franchise agreement (except one) contained a clause in which Steak n Shake “reserve[d] the right to institute at any time a system of nonbinding arbitration or mediation,” the district court concluded that any agreement to arbitrate was illusory. The Seventh Circuit affirmed, agreeing that the arbitration clauses are illusory and unenforceable under Indiana law, and declining to address whether the disputes were within the scope of the arbitration agreements or whether nonbinding arbitration fits within the definition of arbitration under the Federal Arbitration Act. View "Druco Rests., Inc. v. Steak N Shake Enters., Inc." on Justia Law