ADR LAW & POLICY UPDATE

Federal Cases

Florida Federal Court Rejects Unconscionability Challenge and Upholds Arbitration Agreement
La Torre v. BFS Retail and Commercial Operations, LLC, No. 08-22046-CIV-SEITZ, 2008 WL 5156301 (S.D. Fla. Dec. 08, 2008)
12/8/2008

Granting a motion to compel arbitration in an employment dispute, a Florida federal court rejected an unconscionability challenge to a class action waiver provision because the Eleventh Circuit has repeatedly held such provisions in arbitration agreements are enforceable.

In La Torre v. BFS Retail and Commercial Operations, LLC, No. 08-22046-CIV-SEITZ, 2008 WL 5156301 (S.D. Fla. Dec. 08, 2008), BFRC hired Romero to work as a mechanic. The parties' employment contract contained a broad arbitration agreement... Full Story

New York Federal Court Upholds FORUM Arbitration Award
Legant v. Chase Bank USA, N.A., No. 06-CV-1271, 2008 WL 5105314 (N.D.N.Y. Dec. 01, 2008)
12/1/2008

Upholding an National Arbitration Forum (FORUM) arbitration award in a dispute where a credit card issuer sought to collect an unpaid debt, a New York federal court granted the credit card issuer's summary judgment motion finding it did not violate the Truth in Lending Act (TILA).

In Legant v. Chase Bank USA, N.A., No. 06-CV-1271, 2008 WL 5105314 (N.D.N.Y. Dec. 01, 2008), Legant obtained a credit card from Chase and the parties' contract contained an arbitration agreement. Legant stopped making payments and attempted to avoid repaying the debt by following advice from a company that claimed it could eliminate Legant's credit card debt if Legant sent form letters stating that the account contained billing errors. Legant sent various form letters to Chase... Full Story

Oregon Federal Court Confirms Arbitration Award Finding Sufficient Evidence Change-In-Terms Notice was Actually Mailed to Cardholder
Tuers v. Chase Manhattan Bank USA, No. Civ. 07-6120-TC, 2008 WL 5045946 (D. Or. Nov. 24, 2008)
11/24/2008

Upholding a magistrate judge's ruling confirming an arbitration award, an Oregon federal court held that continued use of a credit card after the credit card issuer mailed a notice amending the arbitration agreement constituted acceptance of the changed terms.

In Tuers v. Chase Manhattan Bank USA, No. Civ. 07-6120-TC, 2008 WL 5045946 (D. Or. Nov. 24, 2008), Tuers received a credit card in 1998 from Chase's predecessor. The Cardmember Agreement contained an arbitration agreement. In 2003, Tuers received an amended Cardmember Agreement containing a modified arbitration agreement. In 2006, Tuers stopped making payments on the account. Chase responded by filing an arbitration claim with the National Arbitration Forum, and the arbitrator awarded Chase $12,480.37... Full Story

Pennsylvania Federal Court Affirms Constitutionality of Court-Annexed Arbitration of Federal Flood Insurance Claims
Wright v. Allstate Ins. Co., No. 08-3593, 2008 WL 5191678 (E.D.Pa. Dec. 10, 2008)
12/10/2008

Rejecting a motion to remove a case from court-annexed arbitration, a Pennsylvania federal court held that arbitration of federal flood insurance claims does not violate the Constitution's Appropriations Clause despite Congress granting original jurisdiction to federal district courts to hear these claims.

In Wright v. Allstate Ins. Co., No. 08-3593, 2008 WL 5191678 (E.D.Pa. Dec. 10, 2008), a claim arose under the Standard Floor Insurance Policy (SFIP) and the National Flood Insurance Act of 1968 ("the Act"). Because the claim was for less than $150,000, the district court ordered the claim to proceed to arbitration pursuant to Local Civil Rule 53.2... Full Story

Arbitrator's Contractual Authority to Assign Costs to Assure the Enforceability of Agreement Renders It Valid and Enforceable
Switzer v. Credit Acceptance Corp., Civ. A. No. 5:08CV00071, 2008 WL 5047796 (W.D. Va. Nov. 25, 2008)
11/25/2008

A West Virginia federal district court has held that an arbitration agreement between a financing company and a customer is valid and enforceable because it required the company to bear all costs necessary "to assure the enforceability" of the agreement.

In Switzer v. Credit Acceptance Corp., Civ. A. No. 5:08CV00071, 2008 WL 5047796 (W.D. Va. Nov. 25, 2008), Switzer purchased a car from a dealership. The purchase was financed by Credit Acceptance. A broadly-worded arbitration agreement appeared in the purchase contract. After a dispute arose over certain loan payments, Switzer sued Credit Acceptance for violations of the Fair Debt Collection Practices Act ("FDCPA"). Credit Acceptance moved to compel arbitration of the claims... Full Story

State Cases

Georgia Appellate Court Refuses to Hear Appeal of Confirmation Order With Counterclaim Still Pending
Yates v. CACV of Colorado, LLC, No. A08A2288, 2008 WL 5076354 (Ga. Ct. App. Dec 3, 2008)
12/3/2008

Outside the narrow statutory exceptions for claims resolved through summary judgment or those certified for review, a Georgia appellate court may not review an order confirming an arbitration award when the disappointed party's counterclaim is still pending in the trial court, according to a Georgia appellate court.

In Yates v. CACV of Colorado, LLC, No. A08A2288, 2008 WL 5076354 (Ga. Ct. App. Dec 3, 2008), an arbitrator issued an award in favor of CACV regarding a credit card default by Yates. When CACV sought confirmation of the award at the trial court, Yates answered with a counterclaim arising under the Fair Debt Collections Practices Act ("FDCPA"). The trial court granted the motion to confirm, but made no ruling on the counterclaim. Yates appealed the confirmation order... Full Story

No Evidence of Fraud in Procurement of Award, Montana Supreme Court Affirms Confirmation
MBNA Am. Bank v. Tramelli, No. DA 07-0387, 2008 WL 4840903 (Mont. Nov. 10, 2008)
11/10/2008

The Montana Supreme Court has affirmed confirmation of an arbitration award, noting nothing in the record to support the opposing party's allegation of fraud in the procurement of the award.

In MBNA Am. Bank v. Tramelli, No. DA 07-0387, 2008 WL 4840903 (Mont. Nov. 10, 2008), Tramelli defaulted on a credit card account with MBNA. Pursuant to the parties' arbitration agreement contained in an amendment to the credit contract, MBNA filed a demand for arbitration to recover the debt. Tramelli did not respond to the claim or the notice of arbitration, and the arbitrator entered an award in MBNA's favor... Full Story

New Jersey Appellate Court Upholds Vacatur of PIP Arbitration Award
Allstate Ins. Co. v. Saddlebrook Surgicenter, No. A-2801-07T1, 2008 WL 5083500 (N.J. Super Ct. App. Div. Dec. 04, 2008)
12/4/2008

Affirming a trial court ruling vacating an arbitration award in a No-Fault PIP dispute between an automobile insurer and a healthcare provider, a New Jersey appellate court held that an unlicensed provider is not entitled to payment for PIP services.

In Allstate Ins. Co. v. Saddlebrook Surgicenter, No. A-2801-07T1, 2008 WL 5083500 (N.J. Super Ct. App. Div. Dec. 04, 2008), the Department of Health & Human Services (DOHHS) notified Saddlebrook that was required by state statute to have a license. After granting several extensions to allow Saddlebrook to comply with the licensing requirement, DOHHS inspected Saddlebrook's facility on June 27, 2005. On June 28, 2005, DOHHS ordered Saddlebrook to close its facility, after finding numerous deficiencies during the inspection... Full Story

Ohio Appellate Court Holds Employment Arbitration Agreement Unenforceable when only Employer may Alter it
Redmond v. Big Sandy Furniture, Inc., No. 08CA12, 2008 WL 4966549 (Ohio Ct. App. Nov. 19, 2008)
11/19/2008

Reversing a trial court order granting a motion to compel arbitration of an employment dispute, an Ohio appellate court held an arbitration agreement illusory and therefore unenforceable because it permitted the employer to modify it or terminate it unilaterally without conferring the same rights to the employee.

In Redmond v. Big Sandy Furniture, Inc., No. 08CA12, 2008 WL 4966549 (Ohio Ct. App. Nov. 19, 2008) Redmond sued her former supervisor Chinn and former employer Big Sandy for, among other things, sexual harassment. Chinn and Big Sandy moved to compel arbitration by asserting that Big Sandy's Dispute Resolution Plan (Plan) contained an arbitration agreement requiring the parties to arbitrate disputes. Redmond opposed the motions, arguing that the arbitration agreement was unenforceable because it was illusory and lacked mutuality of obligation, as Big Sandy could modify or terminate the agreement at will. The trial court granted the motion and Redmond appealed... Full Story

Tennessee Law Imposes Heightened Arbitration Notice Requirement for Contracts Involving Private Residences Holds Tennessee Appellate Court
Wells v. Tennessee Homesafe Inspections, LLC, No. M200800224COAR3CV, 2008 WL 5234724 (Tenn. Ct. App. Dec. 15, 2008)
12/15/2008

Affirming a trial court's denial of a motion to compel arbitration in a dispute between a homeowner and a home inspection company, a Tennessee appellate court held that an arbitration agreement was unenforceable because both parties did not sign or initial it as Tennessee law requires.

In Wells v. Tennessee Homesafe Inspections, LLC, No. M200800224COAR3CV, 2008 WL 5234724 (Tenn. Ct. App. Dec. 15, 2008), Wells hired Tennessee Homesafe Inspection (THSI) to inspect a house she planned to buy. The parties' contract contained an arbitration agreement, which Wells signed, but THSI did not sign... Full Story

ADR Legislation & Regulation

LEGISLATION

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REGULATIONS

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