Federal Cases
D.C. Court of Appeals: Trial Court May Remand Matter to Arbitrator for Clarification But Not for Rehearing
Williams v. Richey, No. 03-CV-1099, 2008 WL 2199211 (D.C. May 29, 2008)
5/29/2008 12:00:00 AM
The District of Columbia Court of Appeals has held that remanding a matter for arbitral clarification is proper, but remanding for an arbitral rehearing on the issues is improper.
In Williams v. Richey, No. 03-CV-1099, 2008 WL 2199211 (D.C. May 29, 2008), Williams and Richey agreed to dissolve a general partnership. The dissolution required that asset distribution would be resolved through arbitration. The arbitrator ultimately issued an award, requiring adjustments to each party's "capital accounts" as the basis for the distribution amounts... Full Story
Bankruptcy Court Orders Arbitration Because It Would Not Conflict with the Bankruptcy Code
In re Shores of Panama, Inc., No. 08-50066-LMK, 2008 WL 2156340 (Bankr. N.D. Fla. May 22, 2008)
5/22/2008 12:00:00 AM
After weighing the competing bankruptcy and arbitration policy considerations, a Florida bankruptcy court ordered arbitration of a development dispute because arbitration of the dispute would not inherently conflict with the underlying purposes of the Bankruptcy Code.
In In re Shores of Panama, Inc., No. 08-50066-LMK, 2008 WL 2156340 (Bankr. N.D. Fla. May 22, 2008), the Debtor developed the Shores of Panama condominium project and hired Jordan Residential (Jordan) as the general contractor. The parties' contract contained an agreement to arbitrate. A dispute arose between the Debtor and Jordan, and Jordan demanded arbitration. However, Jordan's claim was automatically stayed when the Debtor filed its voluntary Chapter 11 petition. In response, Jordan filed a motion seeking relief from the automatic stay... Full Story
Court Holds Arbitrators Did Not Manifestly Disregard Law in Light of Hall Street v. Mattel
Halliburton Energy Services, Inc. v. NL Industries, Nos. H-05-4160 & H-06-3504, 2008 WL 906037 (S.D. Tex. Mar. 31, 2008)
3/31/2008 12:00:00 AM
A federal district court in Texas held that Hall Street Associates, L.L.C. v. Mattel, Inc., 128 S.Ct. 1396 (2008) did not expressly decide whether the "manifest disregard" standard is a ground for vacatur separate from the statutory grounds for vacatur under the Federal Arbitration Act (FAA) or a way of summarizing multiple statutory grounds. Consequently, the Court analyzed the arbitration award both ways and upheld the award.
In Halliburton Energy Services, Inc. v. NL Industries, Nos. H-05-4160 & H-06-3504, 2008 WL 906037 (S.D. Tex. Mar. 31, 2008), an extensive, bifurcated arbitration resulted in an award in favor of Tremont. Tremont moved to confirm the award, but Halliburton moved to vacate, arguing that the arbitrators manifestly disregarded the law... Full Story
Ohio Federal Court Confirms Partial Final Award Denying Class Certification
Haro v. NCR Corp., No. 3:04-CV-328, 2008 WL 2323785 (S.D. Ohio June 3, 2008)
6/3/2008 12:00:00 AM
A federal district court in Ohio has confirmed a partial final award denying class certification of state employment law claims, finding no statutory grounds to vacate or modify the award.
In Haro v. NCR Corp., No. 3:04-CV-328, 2008 WL 2323785 (S.D. Ohio June 3, 2008), Haro brought several state and federal statutory claims against former employer NCR. NCR moved to compel arbitration of the claims in accordance with an arbitration agreement signed at the start of Haro's employment. The trial court granted the motion to compel... Full Story
State Cases
Arbitration Rules Provided Legal Basis for Attorney Fees Award By Authorizing Arbitrator to Grant Any "Just and Equitable" Relief
Providian Bancorp Services v. Thomas, No. 08-07-00246-CV, 2008 WL 2058524 (Tex. Ct. App. May 15, 2008)
5/15/2008 12:00:00 AM
Where the rules of arbitration authorize the arbitrator to grant any "just and equitable" relief, the arbitrator may award attorney fees without any other contractual or statutory basis for the award, according to the Texas Court of Appeals. In light of the Court's holding, if parties select arbitration rules that permit any "just and equitable" relief, they are effectively opting out of the American Rule, which provides that parties are responsible for their own attorney fees in the absence of any contractual or statutory basis for shifting such fees.
In Providian Bancorp Services v. Thomas, No. 08-07-00246-CV, 2008 WL 2058524 (Tex. Ct. App. May 15, 2008), Thomas sued Providian, her former employer, for discrimination and assault and battery. Providian moved to compel arbitration pursuant to an arbitration agreement between the parties... Full Story
Incorporation of Arbitration Agreement Requires Clear and Unequivocal Reference
Woods v. Southern California Permanente Medical Group, No. B198987, 2008 WL 2210092 (Cal. Ct. App. May 29, 2008)
5/29/2008 12:00:00 AM
A California Court held that a physician did not consent to an arbitration agreement because he did not sign the agreement, and the arbitration agreement was not incorporated by reference because there was no clear and unequivocal reference to the agreement.
In Woods v. Southern California Permanente Medical Group, No. B198987, 2008 WL 2210092 (Cal. Ct. App. May 29, 2008), Woods was a member of the Southern California Permanente Medical Group (Medical Group), a partnership of physicians. Medical Group's partnership agreement stated that the "Rules and Regulations . . . will govern the conduct of the business of the partnership," and "establish working conditions." The Rules and Regulations (R & Rs) contained an arbitration agreement... Full Story
Use of the Word "Shall" in Attorney Fee Provision Deprived Arbitrator of Discretion to Deny Fees
Magenis v. Reh, No. 07CA1313, 2008 WL 2205100 (Colo. Ct. App. May 29, 2008)
5/29/2008 12:00:00 AM
The Colorado Court of Appeals has held that an arbitrator has no discretion to completely refuse to award attorneys' fees to a prevailing party when the agreement expressly states that such fees "shall" be awarded.
In Magenis v. Reh, No. 07CA1313, 2008 WL 2205100 (Colo. Ct. App. May 29, 2008), Magenis and Reh were members of a limited liability company. A dispute arose regarding membership, and arbitration followed pursuant to a pre-dispute agreement. The agreement included a clause that the arbitrator "shall award fees and expenses (including reasonable attorneys' fees) to the prevailing party."... Full Story
Florida Court Finds No Nexus Between Dispute and Arbitration Agreement
Health First, Inc. v. Hynes, No. 5D07-3370, 2008 WL 2309014 (Fla. Dist. Ct. App. June 6, 2008)
6/6/2008 12:00:00 AM
A Florida appellate court affirmed a denial of a motion to compel arbitration in a dispute between a physician and a hospital operator because there was no nexus between the physician's allegations against the hospital operator and the parties' contract containing an arbitration agreement.
In Health First, Inc. v. Hynes, No. 5D07-3370, 2008 WL 2309014 (Fla. Dist. Ct. App. June 6, 2008), Hynes, a physician, entered into a "participating group agreement" with a clinic. The agreement contained an arbitration clause. Hynes later sued Health First (Health) for a variety of claims, including monopoly, deceptive and unfair trade practices, and tortious interference with business relations. Health moved to compel arbitration... Full Story
Insured Waived Right to Arbitrate by Conducting Substantial Discovery
Byers v. Pharmacists Mutual Insurance Co., No. A07-1565, 2008 WL 2344801 (Minn. Ct. App. June 10, 2008)
6/10/2008 12:00:00 AM
A Minnesota appellate court determined that because parties in an insurance dispute had proceeded to litigation and conducted substantial discovery, the parties had waived their right to arbitrate.
In Byers v. Pharmacists Mutual Insurance Co., No. A07-1565, 2008 WL 2344801 (Minn. Ct. App. June 10, 2008), while driving his employer's vehicle, Byers was struck by another motorist and injured. Byers brought suit against his employer's insurer, Pharmacists Mutual, seeking underinsured motorist benefits arising from the accident. Thereafter, Byers made a formal written demand for arbitration pursuant to the an arbitration provision in the insurance policy... Full Story
Repeated Failure to Attend Court-Ordered Mediation Justifies Dismissal of Claims with Prejudice
Williams v. RPA Development Corp., No. 07AP-881, 2008 WL 2308822 (Ohio Ct. App. June 5, 2008)
6/5/2008 12:00:00 AM
After a petitioner's second failure to attend court-ordered mediation, an Ohio appellate court affirmed a trial court's judgment dismissing the petitioner's claims with prejudice where notice had been given that such a result would occur in the event of a second absence.
In Williams v. RPA Development Corp., No. 07AP-881, 2008 WL 2308822 (Ohio Ct. App. June 5, 2008), Denise Williams alleged claims of fraud, unjust enrichment, and intentional infliction of emotional distress against RPA in connection with a real estate transaction. The trial court ordered mediation of the dispute before a magistrate... Full Story
Where Facts Are Undisputed, Court May Determine Whether Condition Precedent to Arbitration Was Met
Grand Texas Homes, Inc. v. Hill, No. 2-07-352-CV, 2008 WL 2168147 (Tex. Ct. App. May 22, 2008)
5/22/2008 12:00:00 AM
A Texas appellate court affirmed the denial of a motion to compel arbitration upon finding that a condition precedent to arbitration – specifically, a requirement to file a demand for arbitration within 100 days of notice of the claim – was not met and that it was proper for the court to make this determination rather than the arbitrator because the facts in question were not in dispute.
In Grand Texas Homes, Inc. v. Hill, No. 2-07-352-CV, 2008 WL 2168147 (Tex. Ct. App. May 22, 2008), Shirley and Julius Hill (the Hills) signed a contract to buy a new home from Grand Homes, but were notified by the lending bank six months after initial approval that they no longer qualified for the loan. In September 2006, Grand Homes refused to refund the $5,000 deposit and the $118,000 paid for the home and sold the house to someone else... Full Story
Non-Signatory Heirs Must Arbitrate Survival Action Claims But Not Wrongful Death Claims
In re Jindal Saw Ltd., No. 01-07-01068-CV, 2008 WL 2186086 (Tex. Ct. App. May 22, 2008)
5/22/2008 12:00:00 AM
A Texas appellate court held that non-signatory heirs to an arbitration agreement must arbitrate survival action claims, such as negligence claims, because the signatory agreed to arbitrate such claims; however, non-signatory heirs are not required to arbitrate wrongful death claims because those claims are personal to the non-signatories.
In In re Jindal Saw Ltd., No. 01-07-01068-CV, 2008 WL 2186086 (Tex. Ct. App. May 22, 2008), Carlos Lara agreed to a benefit plan with his employer, Jindal Saw, and it included an arbitration agreement that bound his "heirs, beneficiaries and assigns." Carlos died because of an accident at work, and his wife, Yvonne, sued Jindal Saw for negligence and wrongful death... Full Story
ADR Legislation & Regulation
LEGISLATION
AK H 357
AUTHOR: Labor and Commerce Cmt
TITLE: Claims Against Real Estate Licensees
DISPOSITION: Enacted
LOCATION: Chaptered
Commentary: Requires errors and omissions insurance for real estate licensees; renames the real estate surety fund as the real estate recovery fund and relating to that fund; redefines the procedures and criteria used by the Real Estate Commission to make an award from the fund to a person suffering a loss caused by certain misconduct of real estate licensees; requires a real estate licensee to maintain an office in the state. Specifies that an arbitration award can also be a valid precondition to seeking recovery from the fund.
CA A 523
AUTHOR: De La Torre [D]
TITLE: Alcoholic Beverage Licenses: Self Service Checkouts
DISPOSITION: Pending
LOCATION: Senate Rules Committee
Commentary: Provides for procedures when a contractor files a change order pursuant to an existing contract. The bill provides for specific procedures allowing and in some cases mandating arbitration between the Regents of the University of California and contractors. The bill also provides for specific aspects of the arbitration process, based on the amount of money in dispute.
CA A 567
AUTHOR: Saldana [D]
TITLE: Common Interest Development: Bureau
DISPOSITION: Pending
LOCATION: Senate Appropriations Committee
Commentary: Legislature intends to create an ombudsperson position to provide a neutral, non-judicial forum for resolution of common interest development disputes.
FL S 1012
COMPARE: FL H 405
AUTHOR: Appropriations General Government Cmt
TITLE: Health Insurance
DISPOSITION: Enacted
LOCATION: Chaptered
Commentary: Relates to health insurance claims payments; amendments include: in regard to a "Leasing, 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 H 3331
COMPANION: HI S 2889
AUTHOR: Brower [D]
TITLE: Condominium Management Disputes
DISPOSITION: Enacted
LOCATION: Chaptered
Commentary: Amends statutes regarding condominiums. Specifies matters that are subject to mediation; permits unsatisfied parties to mediation to pursue arbitration after 30 days; relates to condominiums.
OH H 323
SPONSOR: Gibbs [R]
TITLE: Partition Fences
DISPOSITION: Enacted
LOCATION: Signed by Governor
Commentary: Revises the Fences law. The bill outlines the arbitration procedure beginning with the requirement of a written request for arbitration and notice and ending with emphasizing the finality of the arbitrator's decision. Notably, the arbitrator's written decision must be given to both parties, with one copy to be certified and filed with the applicable county recorder.
OH H 562
SPONSOR: Hottinger [R]
TITLE: Operation of State Programs
DISPOSITION: Enacted
LOCATION: Chaptered
Commentary: Amendments regarding the operation of state programs. As it relates to ADR, recent amendments include: "[t]he contract for attest services with an independent accountant employed pursuant to this section or section 115.56 of the Revised Code may include binding arbitration provisions, provisions of Chapter 2711 of the Revised Code, or any other alternative dispute resolution procedures to be followed in the event a dispute remains between the state or public office and the independent accountant concerning the terms of the contract..."
PA H 2112
PN: 4116
AUTHOR: Costa [D]
TITLE: Emergency Mutual Aid
DISPOSITION: Pending
LOCATION: SENATE
Commentary: Amends the Health and Safety Code. June 26 amendments include a provision calling for arbitration of disputes regarding reimbursement by the AAA.
RI S 2446
AUTHOR: Walaska [D]
TITLE: Insurance
DISPOSITION: Enacted
LOCATION: Chaptered
Commentary: Creates the Market Conduct Surveillance Act in order to establish a framework for insurance market conduct actions. Includes a requirement that there be written protocol to: "[e]stablish and utilize a dispute resolution or arbitration mechanism to resolve conflicts with insurers regarding examination costs and fees."
REGULATIONS
No new regulations.
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