Federal Cases
Third Circuit: Arbitration Clause Does Not Apply to Dispute Arising After Expiration of Underlying Contract
Bogen Communications, Inc. v. Tri-Signal Integration, Inc., No. 06-1987, 2007 WL 1109237 (3d Cir. Apr. 13, 2007)
4/13/2007
The Third Circuit Court of Appeals has ruled that an arbitration clause did not require arbitration where the dispute arose nearly three years after the underlying contract had expired and the parties thereafter continued their business relationship without a written contract.
In Bogen Communications, Inc. v. Tri-Signal Integration, Inc., No. 06-1987, 2007 WL 1109237 (3d Cir. Apr. 13, 2007), Tri-Signal Integration, Inc. (TSI) had signed a sound system distribution contract with manufacturer Bogen Communications, Inc. (Bogen). However, the contract – which included an agreement to arbitrate – expired and was not renewed... Full Story
Georgia Court: Payments on Credit Card Sufficient Evidence of Assent to Cardholder Agreement
Athon v. Direct Merchants Bank, No. 5:06-CV-1 (CAR), 2007 WL 1100477 (M.D. Ga. April 11, 2007)
4/11/2007
Under Georgia law, a party may assent to terms of a contract, including an arbitration clause in a credit card agreement, by conduct such as making monthly payments on the account, a federal court in Georgia held.
In Athon v. Direct Merchants Bank, No. 5:06-CV-1 (CAR), 2007 WL 1100477 (M.D. Ga. April 11, 2007), Athon brought claims against Direct Merchants Bank (DMB), alleging violations of the Fair Debt Collection Practices Act... Full Story
Federal Court in Louisiana Stays Litigation Pursuant to Mediation Agreement
Composite Mat Solutions, L.L.C. v. Big Red Events, Inc., No. 06-9602, 2007 WL 782191 (E.D. La. Mar. 12, 2007)
3/12/2007
Rejecting a motion to dismiss as a premature claim made prior to fulfilling the terms of a mediation agreement, a federal court in Louisiana stayed litigation to afford the parties an opportunity to submit their claims to non-binding mediation.
In Composite Mat Solutions, L.L.C. v. Big Red Events, Inc., No. 06-9602, 2007 WL 782191 (E.D. La. Mar. 12, 2007), Composite Mat Solutions (CMS) sought payment on an open account of sums allegedly due under a sales distributor agreement with Big Red Events (BRE). CMS argued that mediation would be useless because BRE refused to pay... Full Story
Question of Possible Attorney Disqualification Not Within Scope of Arbitration Agreement
Munich Reinsurance America, Inc. v. ACE Property & Casualty Insurance Co., No. M-82 (HB), 2007 WL 1056707 (S.D.N.Y. April 10, 2007)
4/10/2007
A federal court in New York held that the question of whether to disqualify an attorney representing a party in dispute subject to arbitration is properly before a state court because such issue does not fall within the scope of the arbitration agreement.
In Munich Reinsurance America, Inc. v. ACE Property & Casualty Insurance Co., No. M-82 (HB), 2007 WL 1056707 (S.D.N.Y. April 10, 2007), Munich was involved in a dispute concerning ACE's alleged underpayment of invoices. Both parties agreed that under the terms of their contract, the billing matter should be resolved through arbitration... Full Story
Federal Court in New York Enforces Employee's Arbitration Agreement on Disability Claim
Spencer-Franklin v. Citigroup/Citibank N.A., No. 06 Civ. 3475(GBD), 2007 WL 1052451 (S.D.N.Y. April 05, 2007)
4/5/2007
Affirming the "strong federal policy favoring arbitration," a policy "often and emphatically applied" by courts in the Second Circuit, a Federal District Court in the Southern District of New York has ordered enforcement of an employment contract arbitration agreement.
In Spencer-Franklin v. Citigroup/Citibank N.A., No. 06 Civ. 3475(GBD), 2007 WL 1052451 (S.D.N.Y. April 05, 2007), Spencer-Franklin brought suit against her employer, Citibank, N.A., for alleged violations of the Americans with Disabilities Act. Citibank moved to compel arbitration as agreed upon in Spencer-Franklin's employment contract... Full Story
Applying National Gypsum Test, Federal Bankruptcy Court in Texas Exercises Discretion to Deny Enforcement of Otherwise Valid Arbitration Agreement
In re Martinez, No. 06-3669, 2007 WL 1080148 (Bankr. S.D. Tex. April 03, 2007)
4/3/2007
A Federal Bankruptcy Court in Texas refused to enforce an otherwise valid arbitration agreement because the claims arose solely from the Bankruptcy Code and enforcement of the agreement would conflict with the purposes of the Code.
In In re Martinez, No. 06-3669, 2007 WL 1080148 (Bankr. S.D. Tex. April 03, 2007), Martinez (Debtor) brought suit against Beneficial Texas, Inc. (Lender), after Debtor inherited an estate under lien to Lender from his grandmother. The grandmother had signed a broadly worded Arbitration Rider with the Lender... Full Story
Applying Grigson Test, Court Allows Non-Signatory to Compel Arbitration
JPMorgan Chase Bank, N.A. v. Oklahoma Oncology & Hematology, P.C., Civil Action No. H-06-0645 (S.D. Tex. Feb. 26, 2007)
2/26/2007
A federal court in Texas allowed a non-signatory to compel arbitration of a dispute because the signatory's claims relied on the contract containing the arbitration clause.
In JPMorgan Chase Bank, N.A. v. Oklahoma Oncology & Hematology, P.C., Civil Action No. H-06-0645 (S.D. Tex. Feb. 26, 2007), AOR Management Company of Oklahoma (AOR-OK) entered into agreements with Cancer Care Associates (CCA). A dispute arose regarding interest in funds received through CCA, and AOR-OK initiated arbitration proceedings in conjunction with its parent company, U.S. Oncology, Inc. (USON)... Full Story
Eleventh Circuit: Federal Courts Have Jurisdiction Over a Petition to Compel Arbitration If Underlying Dispute Presents Federal Question
Community State Bank v. Strong, No. 04-02608-CV-WSD-1, 2007 WL 1225343 (11th Cir. Apr. 27, 2007)
4/27/2007
The Eleventh Circuit Court of Appeals held that a federal district court had subject matter jurisdiction over a petition to compel arbitration because even though the claimant deliberately excluded federal claims from his state court lawsuit, the underlying allegations could have served as the basis for a federal RICO action.
In Community State Bank v. Strong, No. 04-02608-CV-WSD-1, 2007 WL 1225343 (11th Cir. Apr. 27, 2007), Strong sued Georgia Cash America and its affiliates (collectively, Cash America) in state court, alleging that Cash America had extended him a "payday" loan at terms that were usurious under Georgia law... Full Story
Court Can Delve into Merits of Arbitrable Dispute When Party Seeking Arbitration Requests Ruling on the Merits
Berenson v. National Financial Services LLC, No. 06-1112, 2007 WL 1228788 (1st Cir. Apr. 27, 2007)
4/27/2007
In dismissing an interlocutory appeal for lack of jurisdiction, the First Circuit Court of Appeals held that a district court did not effectively deny a party's motion to compel arbitration by issuing a written opinion explaining its ruling on the party's earlier motion for summary judgment. As the Court explained, the merits of an arbitrable dispute are generally off limits to a court, but this principle did not apply in this case because the party seeking arbitration requested a ruling on the merits.
In Berenson v. National Financial Services LLC, No. 06-1112, 2007 WL 1228788 (1st Cir. Apr. 27, 2007), the Berensons frequently transferred funds between two accounts using an electronic bill payment service offered by National Financial Services and Fidelity Brokerage Services (collectively, Fidelity)... Full Story
State Cases
Claim of Duress Raised a Question for the Arbitrator, Not the Court, Because Alleged Duress Related to the Contract As a Whole
In re RLS Legal Solutions, LLC, No. 05-0290, 2007 WL 1162795 (Tex. Apr. 20, 2007)
4/20/2007
In a case arising from an employment dispute, the Texas Supreme Court held that the employee's allegation of economic duress raised a question for the arbitrator rather than the court because the alleged duress related to the entire contract and not specifically to the arbitration clause.
In In re RLS Legal Solutions, LLC, No. 05-0290, 2007 WL 1162795 (Tex. Apr. 20, 2007), Maida worked for RLS Legal Solutions (RLS) as a sales representative. During her employment, Maida was asked to sign an employment agreement that contained various terms, including a new compensation structure, an arbitration clause, and a non-compete agreement... Full Story
Court Refuses to Enforce Arbitration Agreement Because AHLA Arbitration Rules Elevated the Claimant's Evidentiary Burden
Place at Vero Beach, Inc. v. Hanson, No. 4D06-21, 2007 WL 1202242 (Fla. Dist. Ct. App. Apr. 25, 2007)
4/25/2007
The Florida District Court of Appeal upheld a lower court order denying a nursing home's motion to compel arbitration because the designated arbitration rules imposed a greater evidentiary burden on the claimant than was required by the applicable statute.
In Place at Vero Beach, Inc. v. Hanson, No. 4D06-21, 2007 WL 1202242 (Fla. Dist. Ct. App. Apr. 25, 2007), Patricia Hanson sued The Place at Vero Beach (the Place), a nursing home, on behalf of a resident who died during his residency at the Place. The Place filed a motion to compel arbitration pursuant to an arbitration agreement that designated the American Health Lawyers Association (AHLA) as the arbitration administrator... Full Story
Alabama Supreme Court Reads Contract Language Narrowly; Holds That Dispute Is Beyond the Scope of an Arbitration Agreement
The Dunes of GP, L.L.C. v. Bradford, No. 1051501, 2007 WL 1098545 (Ala. April 13, 2007)
4/13/2007
The Supreme Court of Alabama, stating that it must give all contract terms "meaningful operation," gave a narrow reading to a pre-construction contract arbitration clause and refused to order arbitration in a dispute over earnest money.
In The Dunes of GP, L.L.C. v. Bradford, No. 1051501, 2007 WL 1098545 (Ala. April 13, 2007), Bradford contracted with The Dunes to build a condominium and paid $31,500 in earnest money. When the deal never closed, Bradford sued The Dunes, seeking specific performance and/or return of the earnest money... Full Story
Failure to Appeal Final, Collateral Order Waives Post-Arbitration Challenge to Arbitration Costs
Ritchey v. Continental Ins. Co., No. H028576, 2007 WL 460975 (Cal. Ct. App. Feb. 13, 2007)
2/13/2007
The failure of a party to appeal a final, collateral court order regarding the allocation of arbitration costs prevents that party from raising that issue on appeal of a subsequent judgment, according to a state court in California.
In Ritchey v. Continental Ins. Co., No. H028576, 2007 WL 460975 (Cal. Ct. App. Feb. 13, 2007), Ritchey attempted to appeal an order denying his petition to vacate an arbitration award in a dispute with Continental Insurance, his uninsured motorist insurance carrier... Full Story
Hawaii Appellate Court Finds No Theory to Support Enforcing Arbitration Agreement Against Non-Signatory in Real Estate Deal
Sher v. Cella, No. 27715, 2007 WL 1064163 (Haw. Ct. App. April 11, 2007)
4/11/2007
A Hawaii appellate court held that a broker who did not sign a property acquisition agreement was not bound by the arbitration provision it contained, and that no other applicable legal theory could compel binding arbitration.
In Sher v. Cella, No. 27715, 2007 WL 1064163 (Haw. Ct. App. April 11, 2007), Sher had purchased a $7.5 million oceanfront home from a seller represented by real estate broker Cella. When Sher subsequently discovered problems with the property, he invoked the arbitration provision in the property acquisition agreement that was signed by Sher and the sellers, but not by Cella... Full Story
New Jersey Appellate Court: Dispute Between Insurance Companies Not Within Scope of Arbitration Agreement Where One Company Validly Denied Coverage
AAA Mid-Atlantic Insurance Co. of New Jersey v. State Farm Indemnity Co, No. MID-L-5431-05, 2007 WL 763227 (N.J. Super. Ct. App. Div. Mar. 15, 2007)
3/15/2007
In a dispute between two insurance companies that signed a limited arbitration agreement, a state court in New Jersey held that because one company validly denied coverage, the other company was not entitled to arbitration of its claim.
In AAA Mid-Atlantic Insurance Co. of New Jersey v. State Farm Indemnity Co, No. MID-L-5431-05, 2007 WL 763227 (N.J. Super. Ct. App. Div. Mar. 15, 2007), a vehicle insured by AAA Mid-Atlantic injured a pedestrian who was insured by State Farm. State Farm paid personal injury protection (PIP) benefits to the insured pedestrian, but sought arbitration to recover reimbursement of these benefits from AAA Mid-Atlantic... Full Story
ADR Legislation & Regulation
LEGISLATION
CO H 1307
SPONSOR: Gallegos [D]
TITLE: Seed Act
INTRODUCED: 02/16/2007
ENACTED: 04/26/2007
DISPOSITION: Enacted
LOCATION: Signed by Governor
Commentary:
Amends law regarding seed arbitration in the State of Colorado.
CO H 1331
SPONSOR: Carroll M [D]
TITLE: Michael Skolnik Medical Transparency Act
INTRODUCED: 03/05/2007
LAST AMEND: 04/16/2007
DISPOSITION: Pending
LOCATION: SENATE
Commentary:
Medical Transparency Act: Requires applicants to State Board of Medical Examiners to provide information about malpractice judgments against them, including arbitration hearings (court/mediation).
FL S 1936
IDENTICAL: FL H 311
AUTHOR: Safety and Security Council Cmt
TITLE: Probate
INTRODUCED: 03/06/2007
LAST AMEND: 03/28/2007
DISPOSITION: To Governor
LOCATION: To Enrollment
Commentary:
Permits clauses in wills, other than the validity of all or part of the will, to be subject to arbitration.
FL H 7205
SIMILAR: FL H 1457, FL S 2488
AUTHOR: Economic Expansion and Infra Council Cmt
TITLE: Recreational Vehicle Manufacturers and Distributors
INTRODUCED: 04/23/2007
LAST AMEND: 04/25/2007
DISPOSITION: To Governor
LOCATION: To Enrollment
Commentary:
An act relating to recreational vehicle manufacturers, distributors,
dealers, and importers; forbids a manufacturer or distributor from "coerce(ing) or attempt(ing) to coerce a dealer to...(e)nter into an agreement that requires the dealer to submit its disputes to binding arbitration or otherwise waive rights or responsibilities provided under ss. 320.3201 320.3211. HOWEVER provides extensive support for mediation.
FL HEEI 12
AUTHOR: Economic Expansion and Infra Council Cmt
TITLE: Recreational Vehicle Manufacturers
PREFILED: 04/19/2007
DISPOSITION: Pending
LOCATION: HOUSE
Commentary:
A bill regulating recreational vehicle manufacturers, distributors, dealers, and importers. As it relates to arbitration, the bill states that "a manufacturer or distributor may not coerce or attempt to coerce a dealer to... enter into an agreement that requires the dealer to submit its disputes to binding arbitration or otherwise waive rights or responsibilities provided under ss. 320.3201 320.3211." The bill also provides a detailed scheme for the mandatory mediation of recreational vehicle disputes.
FL S 978
SIMILAR: FL H 1351
AUTHOR: Aronberg [D]
TITLE: Court Ordered Nonbinding Arbitration
PREFILED: 01/26/2007
INTRODUCED: 03/06/2007
LAST AMEND: 04/25/2007
DISPOSITION: Pending
LOCATION: HOUSE
Commentary: Amends rules relating to court-ordered non-binding arbitration.
HI S 1654
AUTHOR: Espero [D]
TITLE: Condominium Management Dispute Resolution
INTRODUCED: 01/24/2007
LAST AMEND: 04/04/2007
DISPOSITION: To Governor
LOCATION: Eligible for Governor
Commentary: Establishes requirements for condominium management dispute resolution; extends statute that was previously repealed relating to condominium management dispute resolution.
HI S 1704
AUTHOR: Menor [D]
TITLE: Condominium Laws
INTRODUCED: 01/24/2007
LAST AMEND: 04/26/2007
DISPOSITION: To Governor
LOCATION: Eligible for Governor
Commentary:
Relates to condominiums; bill mandates use of " the rules adopted by the commission and chapter 658A; provided that the Condominium Property Regime Rules on Arbitration of Disputes of the American Arbitration Association shall be used until the commission adopts its rules.
MT H 467
AUTHOR: Peterson K [R]
TITLE: Medical Legal Panel Laws
INTRODUCED: 01/26/2007
LAST AMEND: 03/28/2007
ENACTED: 04/26/2007
DISPOSITION: Enacted
LOCATION: Signed by Governor
Commentary:
Revising Montana Medical Legal Panel Act. Section 2. Section 27 6 105 provides for the panel's reviewability of all malpractice claims except: "those claims subject to a valid arbitration agreement allowed by law or upon which suit has been filed prior to April 19, 1977."
NY A 7591
SPONSOR: Bradley [D]
TITLE: Managed Care Contracts
INTRODUCED: 04/20/2007
DISPOSITION: Pending
LOCATION: Assembly Insurance Committee
Commentary:
AN ACT to amend the insurance law, in relation to the rights of health care providers under managed care contracts. As it relates to arbitration, the bill would create an independent dispute resolution review board authorized to hear and resolve insurer and health care provider billing disputes brought by either the insured or the health care provider. The program would be funded by a case administration fee to be paid by the losing party.
NY A 7826
SPONSOR: Bing [D]
TITLE: Uniform Arbitration Act
INTRODUCED: 04/26/2007
DISPOSITION: Pending
LOCATION: Assembly Judiciary Committee
Commentary:
While the text of this bill has not been released, the bill summary indicates that this bill will seek to introduce an unamended version of the Revised Uniform Arbitration Act.
NY S 5385
SPONSOR: Little [R]
TITLE: Provides Recourse For Homeowners Statewide, In Man
INTRODUCED: 04/25/2007
DISPOSITION: Pending
LOCATION: Senate Housing, Construction, and Community Development Committee
Commentary:
This bill would create a court alternative dispute resolution service to handle disputes over manufactured home park rent increases.
OH H 186
SPONSOR: Skindell [D]
TITLE: Ohio Health Care Plan
INTRODUCED: 04/25/2007
DISPOSITION: Pending
LOCATION: House Rules and Reference Committee
Commentary:
This bill would establish and operate the Ohio Health Care Plan, and provide universal health care coverage to all Ohio residents. As it relates to dispute resolution, the bill charges regional health advisory committees to oversee the management of consumer and provider complaints originating in their respective regions and to hold a hearing on all such complaints. The regional health advisory committees shall offer assistance to resolve consumer and provider disputes and shall seek the agreement of all parties to the dispute to submit the dispute to negotiation or binding arbitration.
REGULATION
No new regulations.
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