Justia Arbitration & Mediation Opinion Summaries

At issue in this case was whether federal law preempts Neb. Rev. Stat. 25-2602.01(f)(4), which generally prohibits mandatory arbitration clauses in insurance contracts. Here, Allied Professionals Insurance Company (APIC), which is registered with the Nebraska Department of Insurance as a foreign risk retention group, issued a professional liability insurance policy to Dr. Brett Speece that included a provision requiring binding arbitration. After Speece filed an action seeking a declaration that APIC was obligated to provide coverage for his defense in a Medicaid proceeding, APIC filed a motion to compel arbitration. The district court overruled the motion, concluding that the arbitration clause in the policy was not valid and enforceable pursuant to section 25-2602.01, and that neither the Federal Arbitration Act (FAA) nor the Liability Risk Retention Act of 1986 (LRRA) preempted the state statute. The Supreme Court reversed the district court’s order overruling APIC’s motion to compel arbitration, holding (1) the FAA does not preempt section 25-2602.01(f)(4), but the LRRA does preempt application of the Nebraska statute to foreign risk retention groups; and (2) therefore, the district court erred when it determined that section 25-2602.01(f)(4) prohibited enforcement of the arbitration clause in the parties’ insurance contract in this case. View "Speece v. Allied Prof’ls Ins. Co." on Justia Law

Plaintiff and Defendant, his employer, signed a written employment agreement detailing the terms of Plaintiff’s relationship with Defendant. Plaintiff later ceased working for Defendant, believing he had been fired. Defendant, however, believed that Plaintiff had resigned. Plaintiff’s termination became the subject of binding arbitration. The arbitration panel concluded that Plaintiff had been terminated for reasons other than cause and ordered Defendant to reinstate Plaintiff “to the position he held prior to his wrongful termination.” The Supreme Court reversed, holding (1) specific performance is not an available remedy for breach of an employment contract unless it is explicitly provided for in the contract or by an applicable statute; and (2) the arbitration panel in this case exceeded its authority by holding otherwise, as the contract clearly did not entitle Plaintiff to reinstatement. Remanded. View "Cedar Fair, L.P. v. Falfas" on Justia Law

In 2011, Hilltop hired Huffman and others to review the files of mortgage loans originated by PNC Bank to determine whether lawful procedures were followed during foreclosure and other proceedings. Until the end of their employment in January 2013, they regularly worked more than 40 hours per week, but were not compensated at the overtime rate because Hilltop classified them as independent contractors. Each employment relationship was governed by a now-expired contract, including an arbitration clause and a survival clause. The clauses listed in the survival clause correspond to ones detailing services essential to the job, the term of employment, compensation, termination, and confidentiality; it did not list the arbitration clause. The workers filed a purported class action. The district court denied Hilltop’s motion to dismiss and compel arbitration. The Sixth Circuit reversed, rejecting an argument that omission of the arbitration clause from the survival clause constituted a “clear implication” that the parties intended the arbitration clause to expire with the agreement. Sixth Circuit precedent indicates that the parties must proceed in arbitration on an individual basis.View "Huffman v. Hilltop Cos., LLC" on Justia Law

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