Federal Cases
Federal Court Vacates Award that Imposed Class Arbitration on Parties Who Never Agreed to It
Stolt-Nielsen SA v. Animalfeeds International Corp., No. 06 Civ. 420(JSR), 2006 WL 1750093 (S.D.N.Y. June 26, 2006)
6/26/2006
An arbitration panel showed “manifest disregard of the law” by concluding that an arbitration agreement silent on the question of class arbitration permitted the procedure, according to the Southern District of New York. The court held that class arbitration is permissible only if the parties contracted for or mutually agreed to it.
In Stolt-Nielsen SA v. Animalfeeds International Corp., No. 06 Civ. 420(JSR), 2006 WL 1750093 (S.D.N.Y. June 26, 2006), Animalfeeds International (“AI”) sued Stolt-Nielsen (“Stolt”), alleging that antitrust violations had forced AI to overpay Stolt for shipping. The matter was referred to arbitration pursuant to the shipping agreement. AI demanded class arbitration on behalf of others who had purchased comparable services from Stolt, but Stolt argued that it never agreed to class arbitration. The arbitrators determined that the arbitration clause, though silent on the issue, permitted class arbitration... Full Story
No Second Chance for Party Who Sat on Evidence of Alleged Arbitrator Bias and Proceeded with Arbitration
Van Pelt v. UBS Financial Services, No. 3:05CV477, 2006 WL 1698861 (W.D.N.C. June 14, 2006)
6/14/2006
The Western District of North Carolina held that a party waived its right to challenge an arbitration award on the ground of “evident partiality,” where the party had access to the alleged evidence of bias before the hearing but raised the issue only after it received an adverse decision.
In Van Pelt v. UBS Financial Services, No. 3:05CV477, 2006 WL 1698861 (W.D.N.C. June 14, 2006), Van Pelt initiated arbitration against UBS, his former employer. The NASD appointed an arbitration panel... Full Story
Second Circuit Does Not Allow Exception For Pro Se Litigant to Miss Deadline for Filing Motion to Vacate
Hakala v. J.P. Morgan Securities, Inc., No. 05-3140, 2006WL 1788962 (2nd Cir. June 21, 2006)
6/21/2006
The Second Circuit Court of Appeals held that a motion to vacate an arbitration award was untimely because the pro se litigant filed the motion after the filing deadline.
In Hakala v. J.P. Morgan Securities, Inc., No. 05-3140, 2006WL 1788962 (2nd Cir. June 21, 2006), Hakala, a pro se litigant, mailed his motion to vacate to the clerk of court on the last possible filing date, but the clerk did not receive or file the moving papers until the following day. The district court ruled that Hakala’s petition was untimely... Full Story
Organization’s Members, Not The Organization, Must Compel Arbitration Holds Fourth Circuit
Davis Vision, Inc. v. Maryland Optometric Association, No. 061003, 2006 WL 1791389 (4th Cir. June 29, 2006)
6/29/2006
According to the Fourth Circuit Court of Appeals, an organization which had been given permission to represent its members in arbitration was not protected by collateral estoppel from the opponent’s motion for summary judgment based on the organization’s status as a nonsignatory.
In Davis Vision, Inc. v. Maryland Optometric Association, No. 061003, 2006 WL 1791389 (4th Cir. June 29, 2006), Maryland Optometric Association (“MOA”) brought an antitrust action against Davis Vision, Inc. (“Davis”). The district court found that MOA lacked standing to represent its members, because several of the members had signed arbitration agreements with Davis. However, the court commented that MOA could represent its members in arbitration. MOA did not sign any of the arbitration agreements... Full Story
Colorado Federal Court Refers Waiver of Arbitration Rights Issue To Arbitrator
RMES Communications, Inc. v. Qwest Business Government Services, Inc., No. 05-cv-02185-LTB-MJW, 2006 WL 1183173 (D. Colo. May 2, 2006)
5/2/2006
When conduct that may constitute a waiver of the right to arbitrate occurs outside of the judicial process, whether a party has waived its right to arbitrate is an issue for the arbitrator – not the court – to decide, a Colorado federal court held.
In RMES Communications, Inc. v. Qwest Business Government Services, Inc., No. 05-cv-02185-LTB-MJW, 2006 WL 1183173 (D. Colo. May 2, 2006), Qwest sought to compel arbitration of claims brought by RMES because the parties’ agreement included an arbitration clause. RMES argued that Qwest waived its right to arbitrate by participating in a city investigation of RMES’s complaint... Full Story
Single Arbitration Clause Controls Arbitration of Disputes Arising Out of Supplementary Contracts
Aliron International, Inc. v. Cherokee Nation Industries, Inc., No. 05-151 (GK), 2006 WL 1793295 (D.D.C. June 28, 2006)
6/28/2006
Under Oklahoma law, an arbitration clause in one contract can apply to disputes arising out of supplementary contracts, the United States District Court for the District of Columbia held.
In Aliron International, Inc. v. Cherokee Nation Industries, Inc., No. 05-151 (GK), 2006 WL 1793295 (D.D.C. June 28, 2006), Cherokee entered into a Subcontract with Aliron to perform a contract that Cherokee had with the United States Army.
The parties later entered into a Support Agreement to “make it possible for [Cherokee] to access [Aliron’s] employees for the performance of the [Subcontract].” Full Story
Florida Courts Can Issue Injunctions Even When Parties Have An Arbitration Agreement
Wine Not, International v. 2Atec, LLC, No. 8:06CV117T23, 2006 WL 1766508 (M.D. Fla. June 26, 2006)
6/26/2006
According to a Florida federal court, a court’s authority to enter a preliminary injunction is not nullified because of the existence of an arbitration agreement.
In Wine Not, International v. 2Atec, LLC, No. 8:06CV117T23, 2006 WL 1766508 (M.D. Fla. June 26, 2006), 2Atec entered into a franchise agreement with Wine Not. The agreement contained an arbitration clause.
When 2Atec continued to use Wine Not’s trademark in commerce and advertising... Full Story
Kansas Federal Court Rules That FMLA Claims are Arbitrable Under Broad Arbitration Clause
Moncrief v. Terminix International Co., No. 06-1047-JTM, 2006 WL 1764080 (D. Kan. June 27, 2006)
6/27/2006
Claims based on federal employment statutes are arbitratable when the parties’ employment contract contains a broad arbitration clause encompassing all disputes between the parties, the United States District Court for the District of Kansas held.
In Moncrief v. Terminix International Co., No. 06-1047-JTM, 2006 WL 1764080 (D. Kan. June 27, 2006), Moncrief brought a Family and Medical Leave Act (“FMLA”) claim against Terminix, her former employer. Moncrief was terminated for “excessive absenteeism.”
Citing an employment contract between the parties that required arbitration of all disputes, Terminix sought... Full Story
Sister of Nursing Home Patient Did Not Bind Patient to Nursing Home Agreement
Mariner Health Care, Inc. v. Ferguson, No. 4:04CV245-D-B, 2006 WL 1851250 (N.D. Miss. June 30, 2006)
6/30/2006
A district court in the Northern District of Mississippi denied a nursing home’s motion to compel arbitration of a deceased patient’s claims because the family member signing the agreement lacked authority to act as the patient’s agent.
In Mariner Health Care, Inc. v. Ferguson, No. 4:04CV245-D-B, 2006 WL 1851250 (N.D. Miss. June 30, 2006), Ferguson’s family brought a wrongful death action against Mariner after Ferguson died while residing in a nursing home affiliated with Mariner.
Mariner moved to... Full Story
Nevada Federal Court Affirms Highly Deferential Standard of Review for Arbitration Awards
Balter v. RBC Dain Rausher, Inc., No. 2:05CV1080PMPPAL, 2006 WL 1168889 (D. Nev. May 1, 2006)
5/1/2006
According to a federal district court in Nevada, an arbitration award in favor of an investor is enforceable under the highly deferential standard of review even if a party disputes some of the panel’s procedural decisions.
In Balter v. RBC Dain Rausher, Inc., No. 2:05CV1080PMPPAL, 2006 WL 1168889 (D. Nev. May 1, 2006), Balter, a widow with investments serving as her main source of income, filed a demand for arbitration with RBC, who had maintained her brokerage account. According to Balter, RBC had misused her money by investing it in high-risk stocks... Full Story
Second Circuit Accepts Appeal of Subpoena Order and Holds That FAA Does Not Authorize Nationwide Service of Process
Dynegy Midstream Services v. Trammochem, No. 05-3544-CV, 2006 WL 1612722 (2nd Cir. June 13, 2006)
6/13/2006
The Second Circuit Court of Appeals held that Section 7 of the Federal Arbitration Act (“FAA”) does not authorize nationwide service of process, noting that “not even the strong federal policy favoring arbitration can lead to jurisdiction over a non-party without some basis in federal law.”
In Dynegy Midstream Services v. Trammochem, No. 05-3544-CV, 2006 WL 1612722 (2nd Cir. June 13, 2006), arbitrators in New York issued a subpoena directing Dynegy Midstream Services (“DMS”) to produce documents and electronic data. DMS was not a party to the arbitration and had no contacts with New York. The subpoena was served on the company’s registered agent in Houston. When DMS failed to comply with the subpoena, the Southern District of New York ordered DMS to comply... Full Story
Federal Court Enjoins Unauthorized ADR Companies From Conducting Alleged Sham Arbitrations
Chase Bank USA, N.A. v. Dispute Resolution Arbitration Group, No. 2:05 CV 1208, 2006 WL 1663823 (D. Nev. June 9, 2006)
6/9/2006
A United States district court in Nevada issued an injunction against several companies to prohibit them from conducting arbitrations between Chase Bank and its customers. The Court found that the bank was likely to prevail on its claim that the companies committed intentional interference with contract by conducting sham arbitrations without Chase’s consent.
In Chase Bank USA, N.A. v. Dispute Resolution Arbitration Group, No. 2:05 CV 1208, 2006 WL 1663823 (D. Nev. June 9, 2006), Chase Bank brought suit against Mark Swanson and four arbitration companies owned or controlled by him for intentionally interfering with Chase’s contractual relations with its credit card holders. Chase’s credit card agreements contain... Full Story
Trivial Business Relations Insufficient to Demonstrate Arbitrator Partiality
In re Equimed, Inc., No. 05-1815, 2006 WL 1865011 (E.D. Pa. June 30, 2006)
6/30/2006
A federal court in Pennsylvania refused to vacate an arbitration award for evident partiality because the arbitrator’s business relationships with the party’s counsel and expert witness were remote and trivial.
In In re Equimed, Inc., No. 05-1815, 2006 WL 1865011 (E.D. Pa. June 30, 2006), Equimed and its auditor, Ernst & Young (“E&Y”), submitted an auditing dispute to arbitration. E&Y’s chosen arbitrator, Durham, indicated in his resume that he had worked as general counsel for PECO Energy Company (“PECO”)... Full Story
Eighth Circuit Enforces Arbitration Agreement in Employment Dispute
Berkley v. Dillard’s, Inc., No. 05-3523, 2006 WL 1626969 (8th Cir. June 14, 2006)
6/14/2006
The Eighth Circuit Court of Appeals supported an agreement to arbitrate in an employment dispute where an employee refused to sign an acknowledgment form. The Court found that she accepted the agreement through her continued employment.
In Berkley v. Dillard’s, Inc., No. 05-3523, 2006 WL 1626969 (8th Cir. June 14, 2006), Berkley filed complaints with the EEOC and the Missouri Commission on Human Rights (“MCHR”), alleging racial harassment by her coworkers at Dillard’s. Less than a month later, Dillard’s... Full Story
Arbitrator Must Decide Whether Party Revoked Contract
Gonzalez v. The Ales Group, USA, No. 06 Civ. 2207(DLC), 2006 WL 1867387 (S.D.N.Y. July 6, 2006)
7/6/2006
A federal court in the Southern District of New York held that an arbitrator must decide whether a party revoked a settlement agreement that provided for arbitration of any disputes arising under the agreement.
In Gonzalez v. The Ales Group, USA, No. 06 Civ. 2207(DLC), 2006 WL 1867387 (S.D.N.Y. July 6, 2006), Gonzalez alleged that Ales terminated her employment in retaliation for complaints about sexual harassment.
On the day following her termination... Full Story
Party Lost Right to Arbitrate by Assigning Underlying Agreement
Rotello v. Clayton Homes of Delaware, Inc., No. 3:03-CV-573, 2005 WL 3987375 (E.D. Tenn. Nov. 29, 2005)
11/29/2005
A federal court in the Eastern District of Tennessee ruled that a party no longer had a right to arbitrate after assigning the underlying agreement to a third party.
In Rotello v. Clayton Homes of Delaware, Inc., No. 3:03-CV-573, 2005 WL 3987375 (E.D. Tenn. Nov. 29, 2005), Rotello bought a manufactured home from Clayton. In connection with that transaction, Clayton and Rotello entered into both a purchase agreement and a security agreement. The security agreement, which included an arbitration clause, was later assigned to Vanderbilt Mortgage & Finance (“Vanderbilt”)... Full Story
Court Says Ex-NFL Player Should Arbitrate Dispute Over Career Ending Injuries
Redmon v. Society and Corp. of Lloyds, No. 3:05-CV-387-WKW, 2006 WL 1635435 (M.D. Ala. Jun 15, 2006)
6/15/2006
In Redmon v. Society and Corp. of Lloyds, No. 3:05-CV-387-WKW, 2006 WL 1635435 (M.D. Ala. Jun 15, 2006), Redmon, a former player with the Atlanta Falcons, took out disability insurance policies with Petersen International and Certain Underwriters in the event his career ended due to injury. The policies excluded injuries to his left knee, and included a mandatory arbitration clause.
When Redmon’s career ended in 2001... Full Story
Convention Grants Broad Federal Court Jurisdiction To Cases That “Relate To” an Arbitration Agreement
Acosta v. Master Maintenance & Const., Inc., No. 05-30126, 2006 WL 1549959 (5th Cir. June 8, 2006)
6/8/2006
The Fifth Circuit Court of Appeals reinforced an expansive definition of cases that “relate to” arbitration agreements, allowing removal of such cases to federal court under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards Act (“Convention”).
In Acosta v. Master Maintenance & Const., Inc., No. 05-30126, 2006 WL 1549959 (5th Cir. June 8, 2006), Acosta brought a tort action in state court against a corporation insured by two foreign insurance companies. Acosta named the insurance companies as additional defendants because Louisiana statute allows for plaintiffs to bring a direct action against insurers of tortfeasors... Full Story
State Cases
Reality TV Producer Must Litigate Because Its Promise to Arbitrate Was Not Mutual
Higgins v. Superior Court, No. B187818, 2006 WL 1740931 (Cal. Ct. App. June 27, 2006)
6/27/2006
A California state appeals court would not enforce an arbitration agreement because the parties’ obligation to arbitrate was not mutual.
In Higgins v. Superior Court, No. B187818, 2006 WL 1740931 (Cal. Ct. App. June 27, 2006), five siblings in the Higgins family participated in the reality TV program “Extreme Makeover: Home Edition.” The siblings, who ranged in age from 14 to 21, moved in with acquaintances from church after their parents died. Playing off of the Higgins’ loss of their parents, the producers of the program decided to create an episode in which the home the siblings were living in was completely renovated.
Two weeks before filming, the producers sent the participants an agreement... Full Story
California Court Says Intended Beneficiaries, But Not Incidental Ones, Can Invoke Agreement to Arbitrate
Cross v. Maric College, No. B184529, 2006 WL 1769779 (Cal. Ct. App. June 29, 2006)
6/29/2006
The California Court of Appeal determined that a third party who was an “intended” beneficiary of a contract could invoke an arbitration provision contained in the contract. However a third party who was merely an “incidental” beneficiary of the agreement could not do so.
In Cross v. Maric College, No. B184529, 2006 WL 1769779 (Cal. Ct. App. June 29, 2006), twenty-two former students at Maric College commenced a putative class action alleging that Maric had wrongly claimed its radiation technology program was accredited.
Maric moved to compel arbitration pursuant to both the students’ enrollment agreements... Full Story
Upholding Freedom of Contract, Louisiana Court Stays Litigation in Favor of Arbitration, But Limits Remedies As Parties Intended
Ellis Construction, Inc. v. Vieux Carre Resort Properties, L.L.C., No. 2005-CA-1109, 2006 WL 1752565 (La. Ct. App. June 7, 2006)
6/7/2006
The Louisiana Court of Appeal affirmed a stay of the seizure and sale of collateral real estate, finding that a creditor’s statutory right to relief through litigation had been modified by the parties’ arbitration agreement.
In Ellis Construction, Inc. v. Vieux Carre Resort Properties, L.L.C., No. 2005-CA-1109, 2006 WL 1752565 (La. Ct. App. June 7, 2006), Vieux Carre hired Ellis to build condos pursuant to an agreement containing an arbitration clause. Two years later, Vieux Carre executed a mortgage in Ellis’ favor to secure its payments. After a dispute arose, Ellis exercised its statutory right to obtain a court order for seizure and sale of the condos without a trial. Vieux Carre sought to stay the seizure and sale, arguing that the dispute should be arbitrated. The trial court granted the stay and ordered the parties to arbitration. Full Story
Alabama Supreme Court Holds That Limited and Non-Prejudicial Litigation Efforts Do Not Waive Right to Arbitrate
Zedot Construction, Inc. v. Red Sullivan's Conditioned Air Services, Inc., No. 1041944, 2006 WL 1793754 (Ala. Jun 30, 2006)
6/30/2006
In its second opinion this year relating to waiver, the Alabama Supreme Court has held that a party does not waive its contractual right to arbitration by filing a motion to dismiss and an answer that raises arbitration as an affirmative defense.
In Zedot Construction, Inc. v. Red Sullivan's Conditioned Air Services, Inc., No. 1041944, 2006 WL 1793754 (Ala. Jun 30, 2006), Red Sullivan’s Conditioned Air Service (“CAS”) sued Zedot Construction for breach of contract in connection with a construction project. Zedot filed a motion to dismiss, claiming CAS’s claim was barred by a two-year statute of limitations. The motion was treated as a motion for summary judgment, because Zedot supported the motion with an affidavit. After the motion was denied, Zedot answered the complaint, raising arbitration as an affirmative defense.
When Zedot later filed a motion to compel arbitration... Full Story
Actively Litigating For Six Months - Instead of Arbitrating - Waives Right to Arbitration, Says Alabama Supreme Court
Ocwen Loan Servicing, LLC v. Washington, No. 1041631, 2006 WL 672845 (Ala. March 17, 2006)
3/17/2006
A party to an arbitration agreement waived its right to arbitration by actively participating in litigation for six months before filing a motion to compel, the Alabama Supreme Court has held.
In Ocwen Loan Servicing, LLC v. Washington, No. 1041631, 2006 WL 672845 (Ala. March 17, 2006), Washington sued Ocwen Loan Servicing (“Ocwen”) in connection with the servicing of her mortgage loan. The loan agreement contained an arbitration clause. Ocwen removed the case to federal court and filed an answer that did not assert the right to arbitration. Over the next four months, Ocwen filed a variety of motions and briefs in the action, including a request that the case be transferred to pending multidistrict litigation and a related motion to stay. As a result of Washington’s motion, the case was eventually remanded back to state court... Full Story
California Court Sanctions Movie Distributor for Attempting to Avoid Arbitration
Unity Pictures Corp. v. Universal City Studios, Inc., No. B179350, 2006 WL 1828336 (Cal. Ct. App. July 5, 2006) (unpublished)
7/5/2006
The California Court of Appeal sanctioned a motion picture distributor for filing a frivolous appeal in an unremitting attempt to withdraw from an ongoing arbitration.
In Unity Pictures Corp. v. Universal City Studios, Inc., No. B179350, 2006 WL 1828336 (Cal. Ct. App. July 5, 2006) (unpublished), Unity and Universal entered a settlement agreement to resolve disputes arising from a distribution agreement. The parties excluded certain disputes from the mutual release, agreeing to resolve them through “binding non-appealable arbitration.”
Four years after initiating arbitration, Unity sued Universal seeking to rescind the arbitration provision of the settlement agreement on the grounds that Universal... Full Story
Court Holds Health Care Arbitration Agreement Fair and Enforceable
Owens v. National Health Corp., No. M2005-01272-COA-R3-CV, 2006 WL 1865009 (Tenn. Ct. App. June 30, 2006)
6/30/2006
The Tennessee Court of Appeals held that a power of attorney for health care decisions provided an attorney-in-fact with authority to agree that the principal would arbitrate disputes with a nursing home and that arbitration is a fair forum for the resolution of such disputes.
In Owens v. National Health Corp., No. M2005-01272-COA-R3-CV, 2006 WL 1865009 (Tenn. Ct. App. June 30, 2006), King signed a durable power of attorney naming Daniel as her attorney-in-fact for health care decisions. The power of attorney authorized Daniel to execute “any waiver, release or other document which may be necessary in order to implement the health care decisions” made on King’s behalf.
Three weeks later, Daniel admitted King to a nursing home... Full Story
California Court Promotes Arbitration by Applying Requirements of Equitable Estoppel for Non-Signatory in an Action Involving Intertwined Causes of Action
Turtle Ridge Media Group, Inc. v. Pacific Bell Directory, No. B180324, 2006 WL 1688188 (Cal. Ct. App. June 21, 2006)
6/21/2006
The California Court of Appeal held that a nonsignatory need not show detrimental reliance to enforce an arbitration agreement under the doctrine of equitable estoppel, as long as the causes of action at issue are intertwined with the contract containing the agreement.
In Turtle Ridge Media Group, Inc. v. Pacific Bell Directory, No. B180324, 2006 WL 1688188 (Cal. Ct. App. June 21, 2006), Turtle Ridge and Clientlogic joined forces to win a contract for phonebook delivery from SBC Smart Yellow Pages. SBC awarded the contract to Clientlogic and expressly authorized Clientlogic to subcontract work to Turtle Ridge. The subcontract between Clientlogic and Turtle Ridge provided for mandatory arbitration... Full Story
Party Waived Right to Compel Arbitration in California by Actively Participating in Discovery
Wilson v. Gladych, No. G036174, 2006 WL 1746103 (Cal. Ct. App. June 27, 2006)
6/27/2006
According to the California Court of Appeal, a party waives the right to compel arbitration by actively participating in extensive discovery that would not have been available in the arbitration forum.
In Wilson v. Gladych, No. G036174, 2006 WL 1746103 (Cal. Ct. App. June 27, 2006), Wilson brought an action against Gladych for multiple claims, including conversion, breach of fiduciary duty, and legal malpractice. Gladych eventually moved to compel arbitration, but not before filing answers which did not raise arbitration as an affirmative defense and participating in discovery and a case management conference... Full Story
Connecticut Court Holds Mediation as a Condition Precedent Does Not Remove Court’s Subject Matter Jurisdiction
Cafarelli v. Colon-Collazo, No. CV055000279S, 2006 WL 1828608 (Conn. Super. Ct. June 20, 2006)
6/20/2006
According to a Connecticut Superior Court, the failure of parties to participate in mediation, established as a condition precedent to court action, does not deprive the court of subject matter jurisdiction.
In Cafarelli v. Colon-Collazo, No. CV055000279S, 2006 WL 1828608 (Conn. Super. Ct. June 20, 2006), Caferelli brought an action against Collazo and Diversified Residential Services, LLC (“Diversified”) after slipping on a patch of ice at a worksite owned by Collazo and managed by Diversified. Collozo brought a cross-claim against Diversified for indemnification. Diversified argued that the claims... Full Story
Florida Appellate Court Finds No Statutory Basis for Order Vacating Arbitration Award
Marr v. Webb, No. 3D05-2206, 2006 WL 1196455 (Fla. Dist. Ct. App. May 3, 2006)
5/3/2006
A Florida District Court of Appeal quashed a trial court decision vacating an arbitration award because there was no statutory basis for vacating the award.
In Marr v. Webb, No. 3D05-2206, 2006 WL 1196455 (Fla. Dist. Ct. App. May 3, 2006), Marr and Webb entered into a contract whereby Webb would build houses on Marr’s land and the parties would split the profits. The contract included an arbitration provision.
The parties submitted a dispute... Full Story
Arbitration Award Enforceable Against Surety Who Was Not Party to the Arbitration
LaCour’s Drapery Co., Inc. v. Brunt Construction, Inc., No. 2005 CA 1352, 2006 WL 1751899 (La. Ct. App. June 28, 2006)
6/28/2006
A Louisiana appellate court held that an arbitration award against a general contractor is enforceable against the contractor’s surety even if the surety did not participate in the arbitration.
In LaCour’s Drapery Co., Inc. v. Brunt Construction, Inc., No. 2005 CA 1352, 2006 WL 1751899 (La. Ct. App. June 28, 2006), an arbitrator awarded damages to LaCour. Following arbitration, LaCourt added Brunt’s surety, F&D... Full Story
Louisiana Court Enforces Arbitration Agreement Where Parties’ Dealings Showed Consent
Vishal Hospitality, LLC v. Choice Hotels International, Inc., No. 2004CA0568R, 2006 WL 1751889 (La. Ct. App. June 28, 2006)
6/28/2006
According to a Louisiana appellate court, an arbitration agreement is not a contract of adhesion if it is contained in a larger, negotiated contract.
In Vishal Hospitality, LLC v. Choice Hotels International, Inc., No. 2004CA0568R, 2006 WL 1751889 (La. Ct. App. June 28, 2006), Choice filed a demand for arbitration with Vishal regarding violations of Vishal’s franchise agreement with Choice to run a Quality Inn. Vishal petitioned the court for injunctive relief... Full Story
Adding Prejudgment Interest Doesn’t Modify Arbitration Award
Lovin v. Byrd, No. COA05-1326, 2006 WL 1815978 (N.C. App. July 5, 2006)
7/5/2006
Adding prejudgment interest to an arbitration award does not constitute modification of the award when the parties agreed to include prejudgment interest in the award and the arbitrator left the amount of interest to be determined by counsel for the parties and a judge, a North Carolina appellate court held.
In Lovin v. Byrd, No. COA05-1326, 2006 WL 1815978 (N.C. App. July 5, 2006), an arbitrator awarded compensatory damages to Lovin after a car accident. In the award, the arbitrator stated... Full Story
Party Expressly Waived Its Right to Arbitration By Filing Motions Indicating Intent to Litigate Dispute
In re Citigroup Global Markets, Inc., No. 05-05-01430-CV, 2006 WL 1753076 (Tex. Ct. App. June 28, 2006)
6/28/2006
Removing a case to federal court, standing alone, does not constitute a waiver of the right to arbitration, but when a party repeatedly states its desire to resolve the dispute in a judicial forum, the party expressly waives its right to arbitration, the Texas Court of Appeals held.
In In re Citigroup Global Markets, Inc., No. 05-05-01430-CV, 2006 WL 1753076 (Tex. Ct. App. June 28, 2006), Nickels sued Citigroup alleging negligence in connection with a Citigroup report that led the Nickels to make a substantial investment in WorldCom... Full Story
Texas Supreme Court Supports Employment Arbitration Agreement
In re Dallas Peterbilt, Ltd., No. 05-0706, 2006 WL 1651694 (Tex. June 16, 2006)
6/16/2006
The Texas Supreme Court enforced an employment arbitration agreement because a document summarizing the agreement “unequivocally” provided employees with notice.
In In re Dallas Peterbilt, Ltd., No. 05-0706, 2006 WL 1651694 (Tex. June 16, 2006), a former employee sued Peterbilt, asserting claims related to his termination, and the company sought to compel arbitration. At the beginning of his employment... Full Story
Texas Supreme Court: The FAA Only Preempts Contrary State Law, Not Consonant State Law
In re D. Wilson Const. Co., No. 05-0326, 2006 WL 1792021 (Tex. June 30, 2006)
6/30/2006
The Texas Supreme Court held that the applicability of the Federal Arbitration Act (“FAA”) does not preclude an interlocutory appeal under the Texas Arbitration Act because “the FAA only preempts contrary state law, not consonant state law.”
In In re D. Wilson Const. Co., No. 05-0326, 2006 WL 1792021 (Tex. June 30, 2006), Stotler Construction Company (“Stotler”) and the Brownsville Independent School District (“BISD”) entered into a contract for the construction of two schools. The construction contract ... Full Story
Texas Supreme Court: Order Staying a Case for Arbitration Is Not Appealable
In re Palacios, No. 05-0038, 2006 WL 1791683 (Tex. June 30, 2006)
6/30/2006
In order to align state procedure with federal procedure, the Texas Supreme Court held that an order staying a case for arbitration is generally not appealable.
In In re Palacios, No. 05-0038, 2006 WL 1791683 (Tex. June 30, 2006), Palacios sued a mortgage company after a failed attempt to buy a duplex. When the mortgage company moved to compel arbitration, Palacios denied signing the arbitration agreement. The trial court granted the motion and stayed further proceedings pending arbitration.
Palacios sought review by mandamus. In Freis v. Canales... Full Story
ADR Legislation & Regulation
LEGISLATION
Delaware HB531 (Introduced 06/27/2006) Signed by Governor 07/06/2006
Subjects: Manufactured Homes, Mediation
Entitled, the Delaware Manufactured Housing Alternative Dispute Resolution (ADR) Act, this bill proposes amending Title 25 of the Delaware Code to include a new section on resolving disputes between manufactured home community owners and tenants. According to the bill, if the Governor's Advisory Council on Manufactured Housing (Advisory Council) determines that a dispute between a community owner and a tenant or group of tenants should be mediated, the Advisory Council will refer the dispute to mandatory, nonbinding mediation.
Delaware HB454 (Introduced 06/01/2006) Signed by Governor 07/06/2006
Subject: Mediation Deed Covenants
This bill requires the parties in disputes involving the enforcement of deed covenants or restrictions to participate in mandatory mediation within 60 days of the filing of the action in the Court of Chancery. A Master in Chancery, or such other person as may be appointed, will conduct the mediation proceedings, which are confidential and not of public record. Neither party is required to be represented by an attorney during mediation.
Illinois SB2475 (Introduced 01/18/2006) Signed by Governor 07/07/2006
Subjects: Arbitration, Mediation, Family Law, Attorney’s Fees
Final hearings for attorney's fees and costs against an attorney's own client, pursuant to a Petition for Setting Final Fees and Costs of either a counsel or a client, under the Illinois Marriage and Dissolution of Marriage Act shall first be submitted to mediation, arbitration, or any other court approved alternative dispute resolution procedure, with several exceptions contained in the statute.
Michigan HB4468 (Introduced 03/08/2005) Signed by Governor 07/12/2006
Subjects: Property Taxes, Arbitration
An Act to amend certain provision regarding property assessment and taxes. According to the amendments, a party who disagrees with the tax assessment of his or her property, may file a petition with the state tax commission. The state tax commission shall arbitrate the dispute based on the written petition, the written recommendations of the assessor, and the state tax commission staff.
New York SB8439 (Introduced 06/20/2006)
Subjects: Arbitration, Auto Insurance
Provides that with respect to a serious personal injury action still permissible under the no-fault insurance system, the award or decision of an arbitrator or master arbitrator rendered in a no-fault arbitration will not constitute a collateral estoppel of the issues arbitrated. A copy of the text of the bill can be found HERE.
North Carolina HB688 (Introduced 3/16/2005) Signed by Governor 07/10/2006
Subjects: Arbitration, Wastewater
Allows the North Carolina On-Site Wastewater Contractors and Inspectors Certification Board to establish a voluntary arbitration procedure to resolve complaints concerning a certified contractor or inspector or any work performed by a certified contractor or inspector relating to wastewater, or conflicts involving any certified contractor or inspector and the Division of Environmental Health of the Department or a local health department.
Rhode Island SB2731/HB7577 (Introduced 02/14/2006) Signed by Governor 06/30/2006
Subjects: Arbitration, Financial Institutions
Creates the Uniform Debt-Management Services Act. The purpose of the Act is to bring guidance and regulation to the consumer debt counseling industry, including rules for registration requirements, bond requirements, disclosure requirements (including a list of goods and services – and the charges for each – that the agency will provide to the consumer), and penalties for non-compliance. Debt management services are described as “services as an intermediary between an individual and one or more creditors of the individual for the purpose of obtaining concessions.” The definition contains exceptions for legal, accounting, and financial services providers. The Act also exempts several other types of businesses, notably chartered banks, as outlined in more detail in 19-14.8-3. The Act applies to both credit counseling services and debt settlement services. Credit counseling/debt settlement agreements may not: “(1) provide for application of the law of any jurisdiction other than the United States and this state; (2) except as permitted by Section 2 of the Federal Arbitration Act, 9 U.S.C. Section 2, as amended, contain a provision that modifies or limits otherwise available forums or procedural rights, including the right to trial by jury, that are generally available to the individual under law other than this chapter.” Effective March 30, 2007. A copy of the text of the bill can be found HERE.
Rhode Island SB2777 (Introduced 02/14/2006) Signed by Governor 06/30/2006
Subjects: Arbitration, Mortgage Foreclosure
This act allows a homeowner, who has contracted with a foreclosure consultant, to have the option of making the contractual arbitration provision void. "Foreclosure consultant" means any person who, directly or indirectly, makes any solicitation, representation, or offer to any owner to perform for compensation or who, for compensation, performs any service which the person in any manner represents will in any manner do any of eight services, all of which relate to assisting the owner in somehow avoiding or profiting from a foreclosure. The Act exempts lawyers, credit counselors, real estate brokers, accountants, agents of the homeowner, banks, lien holders, mortgage companies, and certain creditors. A copy of the text of the bill can be found HERE.
REGULATION
Oregon Reg 27696 (Proposed 05/31/2006)
Subjects: Department of Corrections, Mediation
Allows for the confidential mediation of workplace interpersonal disputes involving Department of Corrections' employees.
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