Federal Cases
Arbitrator's Express Authority Derived From Agreement's Reconsideration Clause Cannot Be Restricted by Court's Application of Functus Officio Doctrine
Veliz v. Cintas Corp., No. 07-15009, 2008 WL 1696949 (9th Cir. Apr. 8, 2008)
4/8/2008
A court cannot restrict an arbitrator's authority to reconsider a prior decision under the doctrine of functus officio if the parties to the dispute included a clause in their arbitration agreement expressly permitting an arbitrator to reconsider a prior decision, according to the Ninth Circuit Court of Appeals.
In Veliz v. Cintas Corp., No. 07-15009, 2008 WL 1696949 (9th Cir. Apr. 8, 2008), Veliz and Cintas proceeded to arbitration. The arbitrator issued an award, but the district court remanded the award for clarification, holding that the arbitrator had improperly redetermined an issue previously decided while issuing the award. Under the doctrine of functus officio, held the district court, the arbitrator could not reconsider one of the elements of the award. The arbitrator clearly stated that he wished to reconsider this element, but nevertheless complied with the district court's order... Full Story
Michigan Federal Court: Morrison Factors and "Knowing and Voluntary" Standard Inapplicable To Consumer Credit Arbitration Agreements
Novak v. JP Morgan Chase Bank, NA, No. 06-14862, 2008 WL 907380 (E.D. Mich. Mar. 31, 2008)
3/31/2008
A federal district court in Michigan has compelled arbitration of a cardholder dispute, holding that the Sixth Circuit's "knowing and voluntary waiver" analysis in Morrison v. Circuit City Stores is not applicable in the context of consumer credit disputes.
In Novak v. JP Morgan Chase Bank, NA, No. 06-14862, 2008 WL 907380 (E.D. Mich. Mar. 31, 2008), Novak brought an action against Chase for alleged violations of the Electronic Fund Transfer Act, conversion, and negligence. Chase subsequently moved to compel arbitration and abate the action... Full Story
Nursing Home Patient's Non-Agent's Signature on Arbitration Agreement Insufficient
Robbins ex rel. Leonard v. Beverly Enterprises, Inc., No. 3:07CV047-B-A, 2008 WL 907465 (D. Miss. March 31, 2008)
3/31/2008
A district court in Mississippi determined that an arbitration agreement between a patient and nursing home was not valid because the person that signed the agreement was not the patient's actual or apparent agent.
In Robbins ex rel. Leonard v. Beverly Enterprises, Inc., No. 3:07CV047-B-A, 2008 WL 907465 (D. Miss. March 31, 2008), Dedric Robbins was admitted to Beverly Enterprises nursing home facility for a temporary stay to receive physical therapy. Robbins ultimately died during his stay at Beverly... Full Story
General Allegations of Unconscionability Without Supporting Evidence Not Enough to Avoid Arbitration
Schmitt v. SSC Statesville Brian Center Operating Co. LLC, No. 3:07CV321, 2008 WL 1745870 (W.D.N.C. Apr. 11, 2008)
4/11/2008
A North Carolina federal court has held that a former employee's general allegations of unconscionability, unsupported by specific factual assertions, are insufficient to avoid an obligation to arbitrate.
In Schmitt v. SSC Statesville Brian Center Operating Co. LLC, No. 3:07CV321, 2008 WL 1745870 (W.D.N.C. Apr. 11, 2008), former employee Schmitt brought claims of wrongful termination and defamation against nursing home SSC. After removing the case to federal court, SSC moved to compel arbitration and stay the action, maintaining that Schmitt's claims were within the scope of a valid arbitration agreement she consented to while employed with SSC... Full Story
State Cases
California Court Finds That Parties Cannot Contract for Heightened Judicial Review of Arbitration Awards
Grubb & Ellis Co. v. Herzog, No. B197092, 2008 WL 944150 (Cal. Ct. App. Apr. 9, 2008)
4/9/2008
In affirming confirmation of an arbitration award, a California Court of Appeal held that parties to an arbitration agreement cannot contract for heightened judicial review. The Court reached its decision based on California caselaw holding that parties to an arbitration agreement cannot create contractual grounds for vacatur. Accordingly, the Court’s decision leaves open the possibility that under California law, parties may guard against arbitrator error through the operation of the statutory grounds for vacatur.
In Grubb & Ellis Co. v. Herzog, No. B197092, 2008 WL 944150 (Cal. Ct. App. Apr. 9, 2008), Herzog, a real estate salesperson, worked as an independent contractor for Grubb & Ellis, a real estate broker. The parties’ contract included an arbitration agreement providing that “[t]he arbitrator(s) must apply applicable law.”... Full Story
Statutory Language and Arbitration Rules Place Burden on Aggrieved Party to Initiate Proceedings
Chris Myers Pontiac-GMC, Inc. v. Perot, No. 1061090, 2008 WL 1759112 (Ala. Apr. 18, 2008)
4/18/2008
The non-aggrieved party does not waive the right to arbitrate when the aggrieved party fails to initiate arbitration proceedings as required by the parties' agreement and its controlling rules, according to the Alabama Supreme Court.
In Chris Myers Pontiac-GMC, Inc. v. Perot, No. 1061090, 2008 WL 1759112 (Ala. Apr. 18, 2008), Perot purchased a van from Chris Myers Pontiac-GMC (Myers). The purchase contract contained an arbitration agreement. Later, Perot had a recurring problem with the van and returned it to Myers for service on several occasions. Myers was allegedly unable to fix the problem, and Perot sued Myers for negligence, breach of warranty, and statutory violations... Full Story
Incapacitated Person's Estate Can Be Bound to Arbitrate Claims Through Acts of Its Guardian Without Violating Arkansas Code or Offending Public Policy
Carmody v. Raymond James Financial Services, Inc., No. 07-909, 2008 WL 886141 (Ark. Apr. 3, 2008)
4/3/2008
The guardian of an incapacitated person's estate may bind the estate to arbitrate its claims without violating the Arkansas Code or offending the public policy of the state, according to the Arkansas Supreme Court.
In Carmody v. Raymond James Financial Services, Inc., No. 07-909, 2008 WL 886141 (Ark. Apr. 3, 2008), Betts invested funds from Coan's Estate as guardian of the person and the estate. Betts invested the funds with Raymond James, executing a new account contract that contained an arbitration agreement. When Coan died, Carmody and Savers, along with Betts, were appointed co-administrators of Coan's Estate... Full Story
Non-Signatory Waived Jurisdictional Objections by Participating in Arbitration
Liu v. Pham, No. C055054, 2008 WL 933553 (Cal. Ct. App. April 8, 2008)
4/8/2008
In affirming confirmation of an arbitration award, a California appellate court determined that a non-signatory to the arbitration agreement waived any objection to arbitral jurisdiction by participating in the arbitration proceedings.
In Liu v. Pham, No. C055054, 2008 WL 933553 (Cal. Ct. App. April 8, 2008), LeAnne Pham (LeAnne) entered into an agreement with Liu to purchase his business, One Touch Wireless. Liu loaned LeAnne a portion of the purchase money, which was to be repaid according to the terms of a promissory note and purchase agreement. An agreement to arbitrate was also contained in the purchase agreement... Full Story
Invoking California Rules Within Arbitration Agreement Gives Court Authority to Decide Issue of Waiver
Warburton v. Superior Court, No. D051619, 2008 WL 1735379 (Cal. Ct. App. Apr. 16, 2008)
4/16/2008
Once parties invoke California rules of arbitration by reference within their agreement, a court has jurisdiction to consider issues of waiver before parties are compelled to arbitration, according to a California Court of Appeal.
In Warburton v. Superior Court, No. D051619, 2008 WL 1735379 (Cal. Ct. App. Apr. 16, 2008), Warburton purchased a home from Zinner through agents Vuytowecz and Priority One. The purchase contract contained an arbitration agreement and provided that arbitration would be conducted in accordance with Title 9 of part III of the California Code of Civil Procedure... Full Story
California Court Remands Class Waiver Case with Instructions to Apply Gentry Test
McLeod v. Ralphs Grocery Co., Nos. B187844, B187854, 2008 WL 921155
4/7/2008
Following a remand from the California Supreme Court, the California Court of Appeal vacated its prior decision refusing to enforce a class waiver in a dispute over wages and remanded the case to the trial court with instructions to apply the multi-factor test set forth in Gentry.
In McLeod v. Ralphs Grocery Co., Nos. B187844, B187854, 2008 WL 921155
(Cal. Ct. App. Apr. 7, 2008), McLeod and other employees of Ralphs Grocery filed two class actions alleging violations of the California law governing the right to overtime pay. In response, Ralphs Grocery filed a motion to compel arbitration pursuant to the employees' arbitration agreements, all of which contained a class action waiver... Full Story
ADR Legislation & Regulation
LEGISLATION
CA A 1867
AUTHOR: Keene [R]
TITLE: Real Estate Appraisers
DISPOSITION: Passed Assembly on 5/1/08
LOCATION: Senate Business, Professions & Economic Development Committee
Commentary: Amendments to the Business and Professions Code that "[a]ny waiver by a member, including, but not limited to, an agreement to arbitrate a claim, that is required as a condition of submitting a proposal or doing business with a public agency shall be presumed involuntary, unconscionable, against public policy, and unenforceable."
FL S 1012
COMPARE: FL H 405
AUTHOR: Appropriations General Government Cmt
TITLE: Health Insurance
DISPOSITION: To Governor
LOCATION: To Enrollment
Commentary: Relates to health insurance claims payments; amendments include: in regard to "[l]easing, renting, or granting access to a preferred provider or exclusive provider...(7) A health care contract may provide for arbitration of disputes arising under this section."
HI S 2542
AUTHOR: Ige [D]
TITLE: Primary Care for Uninsured
DISPOSITION: Pending
LOCATION: Conference Committee
Commentary: Amends an act to ensure continued community based primary care for the uninsured, underinsured or Medicaid recipients by helping the community health center system to remain financially viable and stable in the face of the increasing needs of these populations; relates to public health. While a 3/14/08 amendment removed any mention of arbitration, a 4/25/08 amendment added it back in to apply to disputes between "any federally qualified health center or rural health clinic" and the "department" which was not defined in the bill.
KY H 552 BR: 1343
SPONSOR: Thompson T [D]
TITLE: Mortgages and Homeowner Information
DISPOSITION: Enacted
LOCATION: Chaptered
Commentary: Relates to mortgages; establishes the Homeownership Protection Center. As it relates to ADR, the bill provides: "A lender shall not make a high cost home loan subject to a mandatory arbitration clause that is oppressive, unfair, unconscionable, or substantially in derogation of the rights of consumers. Arbitration clauses that comply with the standards set forth in the Statement of Principles of the National Consumer Dispute Advisory Committee of the American Arbitration Association in effect on June 24, 2003, shall be presumed not to violate this subsection."
NY A 10817
SPONSOR: Towns [D]
TITLE: Lender and Mortgage Loan Servicers
DISPOSITION: Pending
LOCATION: Assembly Banks Committee
Commentary: Relates to "high cost or non conventional" home loans, as defined in the existing statute. The statute, which currently prohibits oppressive or unfair arbitration clauses, would be amended to additionally make any arbitration clause in related "distressed property consultant" contracts void at the option of the homeowner.
OK S 1839
AUTHOR: Corn [D]
TITLE: Uniform Arbitration Act
DISPOSITION: To Governor
LOCATION: To Governor
Commentary: Amends the Uniform Arbitration Act to read that it shall not apply to collective bargaining agreements and contracts which reference insurance, except for those contracts between insurance companies.
TN H 1421 SAME AS: TN S 1933
AUTHOR: McDaniel [R]
TITLE: Competitive Cable and Video Services Act
DISPOSITION: To Governor
LOCATION: Eligible for Governor
Commentary: Allows for mediation between state issued certificate of franchise authority and its customer.
REGULATIONS
NM 4991 2008
AGENCY: Workers' Compensation Administration
TITLE: Delivery of Benefits
Commentary: The workers' compensation administration is initiating a pilot program where the eligibility of any UEF claims filed on or after April 1, 2008, will be determined at mediation pursuant to NMSA 1978, Section 52-5-5. The district courts will administer the program during this pilot program.
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