Justia Arbitration & Mediation Opinion Summaries

Defendant Junior's Pizza, Inc. appealed a superior court decision that confirmed an arbitration award and awarded attorney's fees to Plaintiff UniFirst Corporation. The Superior Court held that Junior's waived its right to object to arbitration by failing to challenge the award within thirty days of receiving notice. In June 2009, pursuant to the arbitration clause in the parties' contracts, UniFirst filed a demand for final and binding arbitration. Junior's declined to submit to arbitration, stating that it would reconsider if UniFirst produced a valid agreement. UniFirst subsequently provided copies of the contract provision to both Junior's and the arbitrator. In July 2009, the arbitrator notified the parties that UniFirst had met all filing requirements and arbitration would proceed absent a court order staying the matter. Junior's never sought a court order staying arbitration. UniFirst did not seek a court order compelling Junior's to participate. Notice of the arbitration hearing was provided to both parties, and the hearing took place. Junior's did not participate. UniFirst was awarded damages and attorney's fees, and Junior's was ordered to reimburse UniFirst in administrative fees associated with conducting the arbitration. The next day, the arbitrator notified Junior's of the award by email and certified mail. On appeal to the Supreme Court, Junior's argued (1) it did not waive its right to object to the arbitration award, (2) UniFirst was required to petition to compel arbitration prior to engaging in arbitration without Junior’s participation, and (3) the arbitration was not conducted in strict accordance with the terms of the contracts. Finding no error, the Supreme Court affirmed the arbitration award. View "UniFirst Corp. v. Junior's Pizza, Inc." on Justia Law

Wachovia appealed from the district court's refusal to vacate an arbitration award entered against it after it sued several former employees on what the arbitrators determined were frivolous claims. Wachovia argued that the arbitrators violated section 10(a)(3) of the Federal Arbitration Act (FAA), 9 U.S.C. 10(a)(3), and "manifestly disregarded" the law when they awarded attorneys' fees and costs under the South Carolina Frivolous Civil Proceedings Act (FCPA), S.C. Code Ann. 15-36-10. The court held that arbitrators have broad discretion to set applicable procedure and the court would not overturn an award for violating section 10(a)(3)'s protection against "any other misbehavior by which the rights of any party have been prejudiced" where the arbitrators attempted to address the one party's unhappiness with the fairness of the hearing and that party refused to take advantage of the opportunity provided. The court could not hold that the arbitrators manifestly disregarded the law when they awarded the attorneys' fees and costs where, in this case, the court found whether the arbitrators erred by not applying the FCPA's procedural requirements was a question that was itself not clearly defined and was subject to debate. Accordingly, the judgment was affirmed. View "Wachovia Securities, LLC v. Brand, II" on Justia Law

Debtor, a former company officer, allegedly attempted to obtain one million dollars by falsely claiming an ownership interest in the company and threatening public exposure of alleged illegal activity. After the debtor lost an arbitration proceeding, he then filed for bankruptcy. At issue was whether the company's attorneys' fees for the arbitration represented a nondischargeable debt under 11 U.S.C. 523(a)(4) or (a)(6). The court reversed and remanded the summary judgment rendered against creditors because the debt may have arisen for willful and malicious injury and may therefore be excepted from discharge by section 523(a)(6). View "Rapid Settlements Ltd, et al. v. Shcolnik" on Justia Law

The Town of Little Compton filed a complaint against the town firefighters union, contending that the union, or its representative, had engaged in the unauthorized practice of law when the union allowed its nonlawyer business agent to represent it at a labor arbitration hearing. The Unauthorized Practice of Law Committee concluded that the union representative's action constituted a technical violation of the statute governing the unauthorized practice of law. Mindful that this type of lay representation of unions in labor arbitrations is a common practice, the Committee petitioned the Supreme Court on how to proceed. The Supreme Court held that, although the conduct involved in this case may have been the practice of law pursuant to the statute, because of the long-standing involvement of nonlawyer union employees at public grievance arbitrations, the Court would not limit this involvement at this time. View "In re Town of Little Compton" on Justia Law

The Moras sued Pauline Cosper for damages arising from a car accident. After mandatory arbitration, the arbitrator entered an award in favor of the Moras. The next day, Cosper filed a notice of appeal seeking a trial de novo and a list of witnesses and exhibits. Approximately two months later, Cosper filed a supplemental witness list designating an expert and disclosing her report. The superior court struck the supplemental disclosures as untimely, noting that Cosper had not attempted to show good cause for the later disclosure under Ariz. R. Civ. P. 77. The court of appeals granted relief, holding that Rule 77 permits supplemental disclosure within eighty days after the filing of an appeal from compulsory arbitration without requiring that parties show good cause. The Supreme Court vacated the court of appeals and affirmed the superior court, holding that Rule 77(g)(1) requires that those appealing from arbitration awards simultaneously with the filing of the appeal file a list of witnesses and exhibits intended to be used at trial, and this list can only be supplemented for good cause under Rule 77(g)(4). View "Cosper v. Superior Court" on Justia Law

In 2006, plaintiff was a citizen of California and agreed to relocate to Illinois to work for defendant. When he quit about five months after moving, his family was still in California. He filed suit in state court, seeking relocation benefits the company allegedly promised. The company, which has its principal place of business in California removed to federal court, asserting that plaintiff was a citizen of Massachusetts. Plaintiff had a home in Massachusetts when the case was removed, was registered to vote there, and had a Massachusetts driver's license. The district court ordered arbitration under one of the contracts between the parties. The Seventh Circuit affirmed dismissal and denied sanctions. Relocation benefits are "employment related" and subject to arbitration under the agreement. The court noted that the company also failed to follow the rules. The company "should be able to tell the difference between residence and domicile, and should not have any difficulty complying with Rule 38."View "Heinen v. Northrop Grumman Corp." on Justia Law

In 2005, Plaintiff Marlene Harris purchased a car from Defendant David Stanley Chevrolet. Her purchase agreement contained an arbitration provision that applied to any "controversy, claim or dispute between the Purchaser and the Dealer arising out of, or related to this sale or transaction, including but not limited to, any and all issues or disputes arising as a result of this sale or transaction whether said issues arise prior to, during or subsequent to the sale or attempted sale of a vehicle." A few days after executing the purchase agreement, Plaintiff entered into a GAP insurance contract sold to her by an employee of the dealership (acting as an agent of the insurance company). In 2009, the car was a total loss. The GAP insurance company refused to pay the total difference between the insurance proceeds and the amount owed on the car, and Plaintiff sued to compel the GAP coverage. Plaintiff maintained that the purchase of the vehicle and the purchase of the policy were separate transactions, and that the arbitration clause of the purchase contract was inapplicable to the underpayment of coverage (GAP coverage). She argued no claim was brought against the GAP insurance company which was related to the sale or financing of the vehicle, conceding the arbitration clause would have applied to claims related to the sale or financing issues. After reviewing the motions of the parties, the trial court denied Defendant's Motion to Compel arbitration without an evidentiary hearing. Upon review, the Supreme Court concluded that the two contracts involved two separate subjects, executed on different dates, and the arbitration clause in the purchase agreement did not mention or reference GAP insurance or any relationship between the two contracts. The trial court did not abuse its discretion in denying the evidentiary hearing and ruling that the arbitration clause did not apply as a matter of law.View "Harris v. David Stanley Chevrolet, Inc." on Justia Law

In an arbitration proceeding between Respondent SunOpta Grains and Foods Inc. (SunOpta) and Colorado Mills, LLC, an arbitrator, at SunOpta's request, issued subpoenas to petitioners SK Food International and Adams Vegetable Oil, Inc. SK Food and Adams were not parties to the underlying arbitration. Neither company was incorporated in Colorado, was registered as a foreign corporation in Colorado, or maintained a principal office in Colorado. The subpoenas, which requested business records, were served on SK Food and Adams at their places of business in California and North Dakota. When SK Food and Adams refused to comply with the arbitration subpoenas, SunOpta asked the district court to enforce them. The district court issued an order enforcing the subpoenas.In response, SK Food and Adams filed a petition for a rule to show cause, which the Supreme Court issued. The nonparties appealed the district court's order enforcing the subpoenas. The Supreme Court held that Colorado courts, as a matter of state sovereignty, have no authority to enforce civil subpoenas against out-of-state nonparties. Accordingly, the Court vacated the district court's enforcement order, and remanded case back to the district court for further proceedings. View "Colorado Mills, LLC v. SunOpta Grains and Foods Inc." on Justia Law

Plaintiff, the former in-house counsel for Toyota Motor Corp. (TMS), presented TMS with a claim asserting, inter alia, constructive wrongful discharge related to TMS's alleged unethical discovery practices. TMS and plaintiff settled the claims and entered into a Severance Agreement. TMS subsequently sued in state superior court seeking a temporary restraining order (TRO) and permanent injunctive relieve to prevent plaintiff from violating the attorney-client privilege and plaintiff filed a cross complaint for a TRO and a permanent injunction prohibiting TMS from interfering with his business practices and those of his consulting business. The court held that the Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq., governed the Severance Agreement; the FAA authorized limited review of the Final Award; and the arbitrator did not manifestly disregard the law governing the Severance Agreement where the arbitrator's writing was sufficient under the terms of the Severance Agreement and the arbitrator did not manifestly disregard California law in addressing plaintiff's affirmative defenses. The court also held that the district court did not err in denying plaintiff's contempt motion. Accordingly, the judgment was affirmed. View "Biller v. Toyota Motor Corp., et al." on Justia Law

This case involved the Randolph-Sheppard Vending Stand Act, 20 U.S.C. 107, which established a cooperative program between the federal government and the states to assist blind persons who wish to operate vending facilities on federal property. The California Department of Rehabilitation (DOR) and the U.S. Department of Education appealed from the district court's decision enforcing a 2008 arbitration award issued pursuant section 107d-1(a) of the Act. At issue was whether the 2008 arbitration panel exceeded its authority under the Act when it ruled that DOR had a statutory obligation to sue the General Services Administration (GSA) for its failure to comply with the 2000 Arbitration Award, and therefore was liable for damages in favor of a blind vendor when it failed to do so. Based on the plain language of the Act and other guides to statutory construction, the court concluded that the Act did not impose a statutory obligation on a state licensing agency to sue a federal agency for its failure to comply with a Randolph-Sheppard arbitration award. The 2008 arbitration panel therefore committed a legal error when it interpreted the Act as requiring DOR to bring an action against GSA, and that DOR's failure to do so made it liable for compensatory damages. Because DOR had no statutory obligation to sue GSA to enforce the 2000 Arbitration Award, the 2008 arbitration panel's ruling that DOR became liable for the damages against GSA by failing to bring such an enforcement action was "not in accordance with law" and must be set aside. View "Sauer v. U.S. Dept. of Education, etc." on Justia Law