Federal Cases
Individual Investor Recoups Losses at Arbitration
MetLife Securities, Inc. v. Bedford, No. 02 Civ. 3018(JES), 2006 WL 2871978 (S.D.N.Y. Oct. 4, 2006)
10/4/2006
A federal district court in New York confirmed an arbitration award over objection that the award exhibited manifest disregard of the law because no one apprised the arbitrators of the governing legal principle.
In MetLife Securities, Inc. v. Bedford, No. 02 Civ. 3018(JES), 2006 WL 2871978 (S.D.N.Y. Oct. 4, 2006), Bedford made failed investments on the advice of an employee of Metropolitan Life Insurance Company (MetLife Insurance).
To recover his money, Bedford initiated arbitration before the NASD, seeking payment from the employee and from MetLife Securities, Inc. (MetLife Securities), which is a subsidiary of MetLife Insurance. The arbitrators awarded Bedford $84,718.42 on his claims against MetLife Securities... Full Story
Missouri Federal Court Holds That Prior Litigation Does Not Constitute Waiver of Arbitration Unless Same Issues and Facts Addressed
Morrow v. Soeder, No. 4:06CV1243-DJS, 2006 WL 2855024 (E.D. Mo. Oct. 03, 2006)
10/3/2006
A Missouri federal court held that prior litigation by a party does not necessarily constitute waiver of arbitration, unless the same facts and legal issues were addressed.
In Morrow v. Soeder, No. 4:06CV1243-DJS, 2006 WL 2855024 (E.D. Mo. Oct. 03, 2006), Walter Morrow and Pamela Taylor, borrowers and parties to separate loan agreements found to be in default in previous state court litigation, brought suit against attorney John H. Soeder, III and Sher & Shabsin, P.C. (Soeder and Sher & Shabsin), alleging that they violated the Fair Debt Collection Practices Act (FDCPA) by filing the claims on behalf of Title Lenders, Inc. (Title Lenders)... Full Story
New Jersey Federal Court Affirms International Forum Selection Clause in Employment Arbitration Agreement
Elli v. Genmab, Inc., No. 06-1240, 2006 WL 2927622 (D.N.J. Oct. 12, 2006)
10/12/2006
According to a New Jersey federal court, an international forum selection clause is enforceable where the parties are sophisticated business people and enforcing the clause would not be gravely inconvenient.
In Elli v. Genmab, Inc., No. 06-1240, 2006 WL 2927622 (D.N.J. Oct. 12, 2006), Elli sued his former employer, Genmab, for breach of contract and tortious interference. Genmab moved to compel arbitration according to the terms of the employment contract... Full Story
Arbitrators Cannot “Manifestly Disregard” Law They Are Not Presumed to Know
MetLife Securities, Inc. v. Bedford, No. 02 Civ. 3018(JES), 2006 WL 2871978 (S.D. N.Y. Oct. 4, 2006)
10/4/2006
In MetLife Securities, Inc. v. Bedford, No. 02 Civ. 3018(JES), 2006 WL 2871978(S.D. N.Y. Oct. 4, 2006), a United States District Court in New York held that an arbitrator did not “manifestly disregard” corporate law principles, since the complaining party never brought the applicable law to the arbitration panel’s attention.
The Bedfords loaned $7,500 to Gismondi, an employee of Metropolitan Life Insurance Company (MetLife), and also made significant investments in a local health club upon Gismondi’s advice. After the investments failed and Gismondi refused to return the loaned money, the Bedfords initiated arbitration through the National Association of Securities Dealers (NASD). The arbitration proceeding resulted in an award favoring the Bedfords, and holding Gismondi and MetLife Securities, Inc. (MSI), a MetLife subsidiary, jointly and severally liable for damages... Full Story
Federal Court Lacks Jurisdiction to Hear Motion to Vacate Arbitrator’s Order
Gertrude M. Meyer Revocable Trust v. Edward D. Jones & Co., No. 06C0491, 2006 WL 2861097 (E.D. Wis. Oct. 5, 2006)
10/5/2006
In dismissing a petition to vacate an arbitration award, a federal district court in Wisconsin applied the rule that the Federal Arbitration Act (FAA) does not provide federal question jurisdiction.
In Gertrude M. Meyer Revocable Trust v. Edward D. Jones & Co., No. 06C0491, 2006 WL 2861097 (E.D. Wis. Oct. 5, 2006), Edward D. Jones & Co. sold stock for the Gertrude M. Meyer Revocable Trust, which subsequently initiated arbitration before the NASD, claiming a loss of $23,436... Full Story
Federal Court Requires that Arbitration Agreements Mutually Apply to All Parties and Claims to Be Enforceable
Batory v. Sears, Roebuck and Co., No. CV 02-2026-PHX-EHC, 2006 WL 2946506 (D. Ariz. Oct. 12, 2006)
10/12/2006
A federal district court in Arizona denied an employer’s motion to compel arbitration because the arbitration agreement applied only to employee claims and not to claims brought by the employer.
In Batory v. Sears, Roebuck and Co., No. CV 02-2026-PHX-EHC, 2006 WL 2946506 (D. Ariz. Oct. 12, 2006), Batory sued Sears, her former employer, for wrongful termination. Sears filed a motion to compel arbitration based on its dispute resolution program (DRP).
The district court granted the motion. Batory appealed that ruling, and the Ninth Circuit remanded the case to the district court (the Court) to determine whether certain provisions of the DRP were unconscionable... Full Story
Seventh Circuit Holds That Arbitrator Should Determine Preclusive Effect of Parallel State Court Decision
Zurich American Insurance Co. v. Watts Industries, Inc., No. 06-1415, 2006 WL 1101484 (7th Cir. Oct. 20, 2006)
10/20/2006
According to the Seventh Circuit Court of Appeals, the preclusive effect of a parallel state court decision must be determined by the arbitrator when a valid arbitration agreement exists.
In Zurich American Insurance Co. v. Watts Industries, Inc., No. 06-1415, 2006 WL 1101484 (7th Cir. Oct. 20, 2006), Watts sued Zurich for breach of contract when Zurich refused to cover its insurance claims. Jones, a subsidiary of Watts, also brought an action against Zurich for related claims. None of the insurance contracts executed by Watts and Jones contained arbitration provisions, but Watts signed deductible contracts which did... Full Story
Litigation of Non-Arbitrable Claims Does Not Constitute Waiver of Right to Arbitrate
Kennedy v. Homecomings Fin. Network, No. 06-2289, 2006 WL 2983019 (E.D. La. Oct. 17, 2006)
10/17/2006
In Kennedy v. Homecomings Fin. Network, No. 06-2289, 2006 WL 2983019 (E.D. La. Oct. 17, 2006), the United States District Court for the Eastern District of Louisiana compelled arbitration of Kennedy’s “illegal financial practices” claims, despite the fact that the parties had already participated in judicial foreclosure proceedings.
Kennedy entered into a mortgage loan with Homecomings, and the agreement contained an arbitration provision. However, “foreclosure proceedings” were specifically excluded from arbitration. Homecomings initiated foreclosure proceedings against Kennedy in both 2001 and 2004. Subsequently, Kennedy sued Homecomings for alleged RICO violations, unfair debt collection practices, and other illegal financial dealings. In response, Homecomings moved to compel arbitration of Kennedy’s claims... Full Story
Arbitrator Must Decide Whether Patent Licensee Can Intervene in Licensor’s Patent Infringement Suit
Amgen, Inc. v. F. Hoffman-LaRoche, LTD, No. 05-12237-WGY, 2006 WL 2987949 (D. Mass. Oct. 20, 2006)
10/20/2006
According to a Massachusetts federal court, an arbitrator is the proper authority to determine whether a patent licensee has a right to intervene if there is a dispute between its licensor and a third party regarding the intervention terms of the license agreement.
In Amgen, Inc. v. F. Hoffman-LaRoche, LTD, No. 05-12237-WGY, 2006 WL 2987949 (D. Mass. Oct. 20, 2006), Amgen sued Hoffman for patent infringement. Ortho Biotech Products, L.P. filed a motion to intervene on the side of Amgen because it had signed an exclusive license agreement with Amgen to sell the products at issue. Amgen opposed Ortho’s intervention... Full Story
State Cases
Florida Supreme Court Affirms Arbitrator’s Authority to Decide Timeliness Defenses
O’Keefe Architects, Inc. v. CED Construction Partners, Ltd., No. SC05-1417, 2006 WL 2971783 (Fla. Oct. 19, 2006)
10/19/2006
In construing an arbitration agreement that expressly precluded arbitration demands for time-barred claims, the Florida Supreme Court held that under the Florida Arbitration Code, the statute of limitations is a procedural question for the arbitrator and not a question of arbitrability for the court.
In O’Keefe Architects, Inc. v. CED Construction Partners, Ltd., No. SC05-1417, 2006 WL 2971783 (Fla. Oct. 19, 2006), CED was the general contractor on two housing projects designed by O’Keefe. Both contracts contained an identical arbitration clause requiring arbitration of “[c]laims, disputes or other matters . . . arising out of or relating to” the contract. The arbitration clause further provided: “In no event shall the demand for arbitration be made after the date when institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statutes of limitations"... Full Story
New York Appellate Court Holds That Arbitration Agreement Controls Location of Hearing
In re Arbitration Between MBNA America Bank and Cucinotta, 2006 WL 2972959 (N.Y. App. Div. Oct. 19, 2006)
10/19/2006
The Appellate Division of the New York Supreme Court held that a party challenging an arbitration award could not argue improper venue when the award was issued following a document hearing selected by the parties.
In In re Arbitration Between MBNA America Bank and Cucinotta, 2006 WL 2972959 (N.Y. App. Div. Oct. 19, 2006), MBNA issued a credit card to Cucinotta. The credit card agreement contained an arbitration clause with the following venue provision: “Any arbitration hearing at which you appear will take place within the federal judicial district that includes your billing address at the time the Claim is filed"... Full Story
Broad Arbitration Clause Covering Future Timber Disputes Remains in Force Years After Harvest
Pickle v. Rayonier Forest Resources, L.P., No. A06A1196, 2006 WL 2873642 (Ga. Ct. App. Oct. 11, 2006)
10/11/2006
The Georgia Court of Appeals held that an arbitration clause in a timber contract remained in force more than two years after harvesting of the timber was over.
In Pickle v. Rayonier Forest Resources, L.P., No. A06A1196, 2006 WL 2873642 (Ga. Ct. App. Oct. 11, 2006), Pickle and Rayonier entered into a contract giving Pickle the right to harvest timber from Rayonier’s property until March 27, 2003. The contract contained an arbitration clause that applied to “[a]ny disputes arising under” the contract.
In May 2005, more than two years after the harvesting period, Rayonier sent Pickle an arbitration demand letter alleging that Pickle harvested and sold timber without paying for it. Three months later, Rayonier filed a motion to compel arbitration... Full Story
Alabama Supreme Court Holds that Arbitration Agreement Applies to Malicious Prosecution Claim
Edwards Motors, Inc. v. Hudgins, No. 1051023, 2006 WL 2988690 (Ala. Oct. 20, 2006)
10/20/2006
The Alabama Supreme Court relied on its own recent precedent in holding that an arbitration agreement applied to a malicious prosecution claim against an automobile dealership.
In Edwards Motors, Inc. v. Hudgins, No. 1051023, 2006 WL 2988690 (Ala. Oct. 20, 2006), Hudgins agreed to buy a motor vehicle from Edwards on an installment plan. As part of the transaction, Hudgins and Edwards entered into an arbitration agreement that covered “any dispute arising out of or relating to or concerning all of the contract(s) and agreements entered into by the parties"... Full Story
Idaho Supreme Court Upholds State Law Requiring Express Provision in Arbitration Agreement to Award Attorney Fees
Barbee v. WMA Securities, Inc., No. 30131/31298, 2006 WL 2795613 (Idaho Sept. 29, 2006)
9/29/2006
According to the Idaho Supreme Court, a party may be precluded from recovering statutorily authorized attorney fees if the arbitration agreement does not expressly provide for the same.
In Barbee v. WMA Securities, Inc., No. 30131/31298, 2006 WL 2795613 (Idaho Sept. 29, 2006), the Bentleys demanded arbitration with WMA, according to the terms of their investment contract. The arbitration agreement between the Bentleys and WMA did not include an express provision allowing parties to recover attorney fees. The arbitration panel issued an award in favor of the Bentleys, but did not award attorney fees... Full Story
When Parties Couldn’t Agree on a Mediator, Trial Court Should Have Appointed One
Gailey v. Triangle Billiards & Blues Club, Inc., No. COA06-327, 2006 WL 2946614 (N.C. Ct. App. Oct. 17, 2006)
10/17/2006
The North Carolina Court of Appeals held that the trial court abused its discretion in dismissing a case for failure to comply with a mediation order. Instead of dismissing the case, the court should have appointed a mediator.
In Gailey v. Triangle Billiards & Blues Club, Inc., No. COA06-327, 2006 WL 2946614 (N.C. Ct. App. Oct. 17, 2006), Gailey brought a personal injury lawsuit against Triangle Billiards. The trial court issued a mediation order. The order gave the parties 21 days to select a mediator or notify the court of their failure to agree on a mediator... Full Story
Court Sanctions Party for Attempting to Circumvent Statutory Deadline for Challenging Arbitration Award
Zars v. Davis, No. 04-05-00800-CV, 2006 WL 2955326 (Tex. Ct. App. Oct. 18, 2006)
10/18/2006
The Texas Court of Appeals held that a party could not circumvent the statutory deadline for challenging an arbitration award by styling his challenge as a counterclaim. Moreover, the Court affirmed sanctions against the party for attempting to circumvent the deadline.
In Zars v. Davis, No. 04-05-00800-CV, 2006 WL 2955326 (Tex. Ct. App. Oct. 18, 2006), Davis and Zars submitted a breach of contract dispute to arbitration. The arbitrator entered an award in favor of Davis... Full Story
Washington Court Upholds Arbitrator’s Decision to Treat Parties’ First Arbitration Agreement As Valid Over A Second Arbitration Agreement
Beroth v. Apollo College, Inc., No. 24664-1-III, 2006 WL 2975495 (Wash. Ct. App. Oct. 19, 2006)
10/19/2006
An arbitrator does not err in deciding that a second arbitration agreement between parties does not rescind the terms of the parties’ first arbitration agreement and dismissing the parties’ claims as violating the statute of limitations in the first arbitration agreement, a Washington appellate court held.
In Beroth v. Apollo College, Inc., No. 24664-1-III, 2006 WL 2975495 (Wash. Ct. App. Oct. 19, 2006), three former Apollo students brought suit against Apollo alleging violations of the Consumer Protection Act (CPA), various torts, and breach of contract... Full Story
More than Two Years of Litigation and a Motion for Summary Judgment Constitute Waiver of the Right to Arbitrate, a Florida Court Held
Inverrary Gardens Condominium I Association, Inc. v. Spender, No. 4D05-3810, 2006 WL 3018110 (Fla. Dist. Ct. App. Oct. 25, 2006)
10/25/2006
A party who files suit in court, files a motion for summary judgment, tells the trial court that she has waived the right to arbitrate, and litigates the action for over two and a half years has waived the right to arbitrate, a state court in Florida held.
In Inverrary Gardens Condominium I Association, Inc. v. Spender, No. 4D05-3810, 2006 WL 3018110 (Fla. Dist. Ct. App. Oct. 25, 2006), Spender brought a motion to compel arbitration of a breach of contract claim that she brought against Inverrary, her former employer... Full Story
ADR Legislation & Regulation
FEDERAL LEGISLATION
No new federal legislation.
STATE LEGISLATION
New Jersey AB 3471 (Introduced 10/19/2006)
Subjects: Consumer Contracts, Arbitration
This bill provides that a party to a consumer contract may not waive the right to introduce into evidence certain repeating patterns of negligence by any party to the consumer contract for consideration in arbitration proceedings. These patterns of negligence cannot be waived in arbitration if they are relevant to the consumer contract. Text of the bill
REGULATIONS
No new regulations.
© 2006 National Arbitration Forum - www.adrforum.com - Unsubscribe
