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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.
When Apollo attempted to demand arbitration pursuant to an arbitration agreement in the students’ enrollment forms, the students resisted. Apollo then offered a new arbitration agreement, which allowed the parties to negotiate to choose the arbitrator (instead of simply allowing Apollo to choose the arbitrator) and provided that Apollo would pay all the costs of arbitration (instead of requiring the students to share in the arbitration costs).
After the students agreed to the terms of the new arbitration agreement, the dispute was submitted to an arbitrator. However, the arbitrator dismissed the students’ claims because the claims were not filed within the one-year statute of limitations provided in the original arbitration agreement.
The students argued that the arbitrator erred in dismissing their claims because the new arbitration agreement did not provide for any statute of limitations, and by signing the new agreement, the parties rescinded the original arbitration agreement. Therefore, the students claimed, the arbitrator exceeded his authority in dismissing their claims.
However, the Court disagreed and refused to vacate the arbitrator’s decision to dismiss the students’ claims. The parties agreed to submit issues of contract interpretation to the arbitrator, and the arbitrator did not exceed his authority or apply the law incorrectly in determining that the second arbitration agreement did not rescind the original arbitration agreement.
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