Federal Cases
Bankruptcy Court Orders Arbitration of Truth-in-Lending Claim
Rozell v. CitiFinancial Auto Corp., No. 06-81483 JAC13, 2006 WL 3531284 (Bankr. N.D. Ala. Dec. 7, 2006)
12/7/2006
A federal bankruptcy court in Alabama ordered arbitration of a debtor’s claim that one of his creditors violated the Truth in Lending Act (TILA). In its ruling, the Court rejected the notion that a bankruptcy court may refuse to enforce an arbitration agreement simply because the underlying dispute is a core bankruptcy proceeding.
In Rozell v. CitiFinancial Auto Corp., No. 06-81483 JAC13, 2006 WL 3531284 (Bankr. N.D. Ala. Dec. 7, 2006), Rozell and CitiFinancial entered into an arbitration agreement in connection with the financing and sale of a pickup truck.
Three years later, Rozell filed for bankruptcy. As part of the bankruptcy proceeding, CitiFinancial filed a claim for the unpaid balance on the pickup truck. Rozell then filed a complaint against CitiFinancial, seeking monetary damages under TILA... Full Story
Mediated Settlement Terms Gave Party Enforceable Seven-Day Right of Revocation
McNamara v. Tourneau, Inc., No. 05 CIV. 7804(DC), 2006 WL 3498565 (S.D.N.Y. Dec. 05, 2006)
12/5/2006
In denying a motion to enforce a settlement agreement reached in an employment dispute, a federal court in New York found that the settlement agreement gave the employee a seven-day right of revocation.
In McNamara v. Tourneau, Inc., No. 05 CIV. 7804(DC), 2006 WL 3498565 (S.D.N.Y. Dec. 05, 2006), McNamara sued Tourneau, his former employer, for an alleged violation of the Americans with Disabilities Act.
With McNamara proceeding pro se, the Court assigned him pro bono counsel to enable his participation in the Court’s mediation program. Following the mediation session, McNamara and Tourneau reached an agreement that was memorialized in a stipulation (the Stipulation) briefly describing six principal terms, including “Standard 21 day language.” Both parties signed the Stipulation... Full Story
FAA Does Not Provide a Federal Question "Hook" for Subject Matter Jurisdiction
Austin v. MBNA America, Civil Action No. 3:06cv1071-MHT, 2006 WL 3496655 (M.D. Ala. Dec. 4, 2006)
12/4/2006
A United States District Court in Alabama affirmed the long-held principle that the Federal Arbitration Act (FAA) does not confer federal question jurisdiction in and of itself.
In Austin v. MBNA America, Civil Action No. 3:06cv1071-MHT, 2006 WL 3496655 (M.D. Ala. Dec. 4, 2006), Austin made his second attempt in two months to confirm an arbitration award in federal court. As it did with Austin's first complaint, the Court dismissed the motion for lack of subject matter jurisdiction... Full Story
Court Rejects Challenge to Student Health Insurance Arbitration Agreement
Fredrickson v. Regents of University of California, No. C 06-03335 JSW, 2006 WL 3499243 (N.D. Cal. Dec. 4, 2006)
12/4/2006
A federal district court in California ordered arbitration of a University of California student's claim that he was wrongly denied benefits under a Student Health Insurance Plan (SHIP).
In Fredrickson v. Regents of University of California, No. C 06-03335 JSW, 2006 WL 3499243 (N.D. Cal. Dec. 4, 2006), Fredrickson, a male to female transsexual, filed suit, alleging that the university and her health insurance company violated her rights by denying coverage for "[p]rocedures or treatments to change characteristics of the body to those of the opposite sex"... Full Story
Uncertainty of Right to Arbitrate Does Not Preclude Finding of Waiver
Triplecheck, Inc. v. Creole Yacht Charters Ltd., No. 05-21182-CIV, 2006 WL 3507971 (S.D. Fla. Dec. 5, 2006)
12/5/2006
A federal district court in Florida held that a party waived its right to arbitrate by participating in discovery and representing to the Court that it wished to proceed with litigation before filing a motion to compel arbitration. In so ruling, the Court rejected the moving party's argument that the uncertainty of its right to arbitrate necessitated the delay.
In Triplecheck, Inc. v. Creole Yacht Charters Ltd., No. 05-21182-CIV, 2006 WL 3507971 (S.D. Fla. Dec. 5, 2006), Triplecheck filed a motion to compel arbitration more than a year after bringing suit. In fact, Triplecheck had already served interrogatories and requests for production, taken four depositions, completed pre-trial mediation, and attended a scheduling conference. Given those circumstances, the Court found that Triplecheck waived its right to arbitrate and denied the motion to compel... Full Story
Court Refuses to Intervene After AAA Rejects Demand for Class Arbitration
E&M Motels, Inc. v. Super 8 Motels, Inc., slip copy, No. CIV 05-234 MJD/RLE, 2006 WL 3610816 (D. Minn. Dec. 11, 2006)
12/11/2006
A Minnesota federal court denied a party's request to "clarify" an order compelling arbitration after the AAA denied a request for class arbitration, finding that it did not have jurisdiction.
In E&M Motels, Inc. v. Super 8 Motels, Inc., slip copy, No. CIV 05-234 MJD/RLE, 2006 WL 3610816 (D. Minn. Dec. 11, 2006), E&M Motels' suit was removed to federal court and Super 8 moved to compel arbitration. The Court granted its motion... Full Story
Exception for Employer's Equitable Claims Did Not Render Arbitration Agreement Unenforceable for Lack of Mutuality
Captain D's, LLC v. McClenathan, No. Civ. A. 2:06-0261, 2006 WL 3409757 (S.D.W. Va. Nov. 27, 2006)
11/27/2006
So long as there as there is a valid agreement to arbitrate with mutuality of obligation, an arbitration contract that excepts an employer's equitable claims is "not so inherently unfair and one-sided as to render the arbitration agreement unenforceable on unconscionability grounds," according to a federal district court in West Virginia.
In Captain D's, LLC v. McClenathan, No. Civ. A. 2:06-0261, 2006 WL 3409757 (S.D.W. Va. Nov. 27, 2006), McClenathan sued his former employer, Captain D's, for alleged age discrimination. Captain D's filed a petition to compel arbitration based on an Employee Dispute Resolution Plan (EDR Plan)... Full Story
State Cases
Under California Law, Direct Expression of Binding Intent Is Necessary to Exempt Settlement Agreement from Mediation Confidentiality
Fair v. Bakhtiari, No. S129220, 2006 WL 3630768 (Cal. Dec. 14, 2006)
12/14/2006
In construing a statutory exception to mediation confidentiality, the California Supreme Court held that a memorandum detailing the terms of a mediated settlement agreement did not fall within the exception because the inclusion of an arbitration provision did not satisfy the requirement that the settlement agreement include words of binding effect. As the Court explained, the exception requires a direct expression of binding intent.
In Fair v. Bakhtiari, No. S129220, 2006 WL 3630768 (Cal. Dec. 14, 2006), Fair sued Bakhtiari and several others, alleging that they cheated him in their business dealings... Full Story
California Appellate Court Holds Res Judicata Applies Only to Claims Addressed in Arbitration
Desai v. J. Dreyfuss & Associates, No. B182667, 2006 WL 3438606 (Cal. App.2d Nov. 30, 2006)
11/30/2006
A California Appellate Court has held that res judicata does not apply to claims that were not arbitrated.
In Desai v. J. Dreyfuss & Associates, No. B182667, 2006 WL 3438606 (Cal. App.2d Nov. 30, 2006), Narendra and Bela Desai employed Dreyfuss to rebuild the structures on their property after a 1994 earthquake. The Desais brought suit against Dreyfuss for a variety of claims associated with the construction project. Dreyfuss moved to compel arbitration and stay litigation. Its motion was granted... Full Story
Uninsured Motorist Claim Decided in Arbitration Does Not Bar Subsequent Claim of Vexatious Delay
Smith v. State Farm Ins. Companies, Inc., No. 1-06-0519, 2006 WL 3421400 (Ill. App. 1 Dist. Nov. 28, 2006)
11/28/2006
An Illinois Appellate Court held that an uninsured motorist claim decided in arbitration does not bar a subsequent claim for the insurance company's alleged willful and vexatious delay.
In Smith v. State Farm Ins. Companies, Inc., No. 1-06-0519, 2006 WL 3421400 (Ill. App. 1 Dist. Nov. 28, 2006), Mary Alice Smith was seriously injured in a hit and run accident. She had a $100,000 uninsured motorist policy with State Farm. The policy included an arbitration agreement. State Farm offered to settle for $13,000. Smith refused and retained an attorney, who demanded arbitration and subsequently sent State Farm information regarding evidence of Smith's injury from the accident... Full Story
Credit Card Agreement Satisfies Requirement of Written Agreement to Arbitrate
MBNA America Bank, N.A. v. Brink, No. 06-0540, 2006 WL 3436320 (Iowa Ct. App. Nov. 30, 2006)
11/30/2006
The Iowa Court of Appeals held that a trial court erred in denying a motion to confirm an arbitration award because the trial court reasoned that there was no proof of an agreement to arbitrate even though the moving party had submitted a credit card agreement containing an arbitration provision.
In MBNA America Bank, N.A. v. Brink, No. 06-0540, 2006 WL 3436320 (Iowa Ct. App. Nov. 30, 2006), MBNA America Bank, N.A. (MBNA) obtained an arbitration award against Brink for an unpaid balance on her credit card. The trial court denied MBNA's motion to confirm the award on the ground that there was no written agreement to arbitrate... Full Story
North Carolina Court Upholds Agreement to Arbitrate Assisted Living Disputes
Raper v. Oliver House, LLC, No. COA06-236, 2006 WL 3487256 (N.C. Ct. App. Dec. 5, 2006)
12/5/2006
In upholding an arbitration clause in an assisted living agreement, the North Carolina Court of Appeals reversed the trial court's ruling that the arbitration agreement was unconscionable.
In Raper v. Oliver House, LLC, No. COA06-236, 2006 WL 3487256 (N.C. Ct. App. Dec. 5, 2006), Raper, as administrator of a decedent's estate, sued Oliver House, an assisted living facility, for negligence, wrongful death, and punitive damages. In response, Oliver House filed a motion to compel arbitration. The trial court found the arbitration agreement unconscionable and denied the motion... Full Story
To Compel Arbitration, General Contractors Must Incorporate Arbitration Agreements into Subcontractor Agreements
Barto v. Ben D. Imhoff, Inc., No. 06CA0025, 2006 WL 3544659 (Ohio App.9d. Dec. 11, 2006)
12/11/2006
An Ohio Appellate Court held that when a general contractor forgets to incorporate the arbitration clause from the master agreement into its subcontracts, it will not be allowed to compel the arbitration of disputes with its subcontractors.
In Barto v. Ben D. Imhoff, Inc., No. 06CA0025, 2006 WL 3544659 (Ohio App.9d. Dec. 11, 2006), Maibach Ford and Imhoff entered into a general construction agreement for construction of a new car dealership. The agreement contained an arbitration agreement. Maibach Ford and Al Barto entered into a subcontractor agreement for painting the dealership. Their agreement did not contain an arbitration agreement. Maibach Ford then informed Barto that it did not need its services... Full Story
No Waiver to Arbitrate Found Despite Motion for Dismissal and Conducting of Discovery in Court Proceeding
LJA Engineering and Surveying, Inc. v. Richfield Investment Corp., No. 09-06-348 CV, 09-06-398 CV, 2006 WL 3626929 (Tex. App.-Beaumont Dec 14, 2006)
12/14/2006
A Texas Appellate Court held that a party did not waive its right to arbitrate in spite of moving for dismissal and conducting discovery in a court proceeding.
In LJA Engineering and Surveying, Inc. v. Richfield Investment Corp., No. 09-06-348 CV, 09-06-398 CV, 2006 WL 3626929 (Tex. App.-Beaumont Dec 14, 2006), Richfield hired LJA to do engineering work for residential development of property. The contract between the parties contained an arbitration agreement. Richfield brought suit for various claims. LJA moved to compel arbitration. Richfield did not dispute that a valid arbitration agreement existed; but argued that the judicial process was substantially invoked... Full Story
ADR Legislation & Regulation
FEDERAL LEGISLATION
No new federal legislation.
STATE LEGISLATION
Montana H76 (Prefiled 12/15/2006)
Subjects: Mediation, Human Rights
This bill would add mediation as a method available to resolve human rights disputes filed with the Department of Labor and Industry.
Montana SB 108 (Prefiled 12/18/2006)
Subjects: Mediation, Workers’ Compensation
Revises workers' compensation laws; concerns independent contractors; concerns medical fees; relates to impaired insurers. Modifies the current mediation process, and makes it mandatory at the request of either party as a step in the resolution of workers’ compensation disputes.
Montana D559 (Pre-introduction 12/18/2006)
Subjects: Arbitration, Nurse Licensure
Directs the governor to enter into a nurse licensure compact with other states to allow licensed nurses to exercise a multistate licensure privilege in other states that have also adopted the compact. Allows for a panel of 3 arbitrators to settle disputes.
REGULATIONS
No new regulations.
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