Federal Cases
Language Barrier Does Not Bar Enforcement of Employee's Arbitration Agreement
Morales v. Sun Constructors, Inc., No. 07-3806, 2008 WL 3974059 (3d Cir. Aug. 28, 2008)
8/28/2008 12:00:00 AM
The Third Circuit Court of Appeals upheld an arbitration agreement written in English against a Spanish-speaking employee who claimed that the agreement was unenforceable because he did not understand the English language.
In Morales v. Sun Constructors, Inc., No. 07-3806, 2008 WL 3974059 (3d Cir. Aug. 28, 2008), Sun Constructors ("Sun") hired Morales, a Spanish-speaking welder, after Morales passed a written exam in English. Sun asked Jose Hodge, a bilingual applicant, to help Morales understand the employment contract. The contract was written in English, and over half of the contract consisted of an arbitration agreement. Morales signed the contract... Full Story
Bankruptcy Case Must Be Stayed Pending Appeal of Order Denying Motion to Compel Arbitration
In re Wirecomm Wireless, Inc., No. 2:07-cv-02451-MCE, 2008 WL 3056491 (E.D. Cal. Aug. 1, 2008)
8/1/2008 12:00:00 AM
A federal court in California stayed a bankruptcy case pending an appeal of the bankruptcy court's order denying a motion to compel arbitration.
In In re Wirecomm Wireless, Inc., No. 2:07-cv-02451-MCE, 2008 WL 3056491 (E.D. Cal. Aug. 1, 2008), New Cingular Wireless Services (NCWS) and Wirecomm entered into arbitration regarding a dispute about unpaid commissions and residuals. Four days before the arbitration hearing, Wirecomm filed for bankruptcy, and the bankruptcy trustee removed the claims from arbitration to bankruptcy court... Full Story
Armendariz Not Applicable Where Arbitration Agreement Not Mandatory for Employment
Swarbrick v. Umpqua Bank, No. 2:08-cv-00532-MCE-DAD, 2008 WL 3166016 (E.D. Cal. Aug. 5, 2008)
8/5/2008 12:00:00 AM
A federal court in California held that the Armendariz cost-allocation requirements do not apply where the arbitration agreement is not a mandatory condition of employment.
In Swarbrick v. Umpqua Bank, No. 2:08-cv-00532-MCE-DAD, 2008 WL 3166016 (E.D. Cal. Aug. 5, 2008), Stephen Swarbrick, Cesar Lopez and Elizabeth Festejo (collectively, Employees) were employees of Western Sierra bank who negotiated employment contracts that included arbitration agreements. Shortly after Western Sierra merged with Umpqua, Lopez requested arbitration regarding a dispute over compensation... Full Story
AAA Staff Member's Negative Public Position Regarding Trial Attorneys is Not Evidence of Bias Held by Any Individual AAA Arbitrator
Siglain v. Trader Publishing Co., No. C 08-2108 JL, 2008 WL 3286974 (N.D. Cal. Aug. 6, 2008)
8/6/2008 12:00:00 AM
The expression of a negative public opinion regarding trial attorneys by a staff member at an arbitration administrator does not demonstrate that the administrator's assigned arbitrator will be biased in any particular proceeding, according to a federal district court in California.
In Siglain v. Trader Publishing Co., No. C 08-2108 JL, 2008 WL 3286974 (N.D. Cal. Aug. 6, 2008), Siglain was employed by Best Image. Trader purchased Best Image, and offered to retain all of Best Image's employees. As a condition of employment, Trader required employees to sign an arbitration agreement. Siglain signed the agreement with Trader... Full Story
Federal Court in Colorado Relies on Fifth Circuit Precedent in Ruling That USERRA Claims Are Arbitrable
Ernest v. Lockheed Martin Corp., No. Civ. A. 07-cv-02038-WYD-KLM, 2008 WL 2958964 (D. Colo. July 29, 2008)
7/29/2008 12:00:00 AM
A federal district court in Colorado found that an employee's legitimate signature on an arbitration agreement created an enforceable arbitration agreement, and agreed with Fifth Circuit precedent holding that Uniformed Services Employment and Reemployment Rights Act ("USERRA") claims are arbitrable.
In Ernest v. Lockheed Martin Corp., No. Civ. A. 07-cv-02038-WYD-KLM, 2008 WL 2958964 (D. Colo. July 29, 2008), Ernest filed suit against Lockheed Martin when they failed to rehire him upon his return from Iraq. Lockheed Martin moved to compel arbitration based on an arbitration agreement signed by Ernest... Full Story
FINRA Arbitration Rules Do Not Prohibit a Party from Seeking Prejudgment Remedy in Court in Aid of Arbitration
Arnold Chase Family, LLC v. UBS AG, No. 3:08cv00581 (MRK), 2008 WL 3089484 (D. Conn. Aug. 4, 2008)
8/4/2008 12:00:00 AM
A federal court in Connecticut held that Financial Industry Regulatory Authority (FINRA) rules do not prohibit parties to customer arbitrations from seeking to attach an adverse party's assets in court while the arbitration is pending.
In Arnold Chase Family, LLC v. UBS AG, No. 3:08cv00581 (MRK), 2008 WL 3089484 (D. Conn. Aug. 4, 2008), the Arnold Chase Family (Arnold) commenced a FINRA arbitration against UBS. At about the same time, Arnold filed an action in court seeking to attach UBS assets to secure any arbitration award that Arnold might receive... Full Story
Arbitrator Need Only Provide Reasons for Award to Specificity of Detail Required in Parties' Agreement
Remote Solution Co., Ltd. v. FGH Liquidating Corp, Civ. No. 06-004-SLR, 2008 WL 2944659 (D. Del. Jul. 31, 2008)
7/31/2008 12:00:00 AM
A federal court in Delaware denied a motion to vacate an arbitration award, rejecting an argument that the arbitrator "failed to make findings of fact and provide reasons for his decision on liability" in accordance with the parties' agreement, with respect to the arbitrator's "tentative ruling" on liability.
In Remote Solution Co., Ltd. v. FGH Liquidating Corp, Civ. No. 06-004-SLR, 2008 WL 2944659 (D. Del. Jul. 31, 2008), FGH Liquidating Corp. (Contec), a seller of universal remote control units that operated by storing codes from remotes to other appliances, purchased code entry methods from suppliers... Full Story
Federal Court Rejects Unconscionability Challenge Arbitration Agreement in Penthouse Purchase Contract
Olle v. 5401 W. Ave. Residential, LLC, No. Civ. A. 07-2056, 2008 WL 2986478 (D. D.C. Aug. 6, 2008)
8/6/2008 12:00:00 AM
In enforcing the arbitration agreement in a purchase agreement for a luxury penthouse, a federal district court in the District of Columbia applied Prima Paint and rejected an unconscionability challenge to the agreement.
In Olle v. 5401 W. Ave. Residential, LLC, No. Civ. A. 07-2056, 2008 WL 2986478 (D. D.C. Aug. 6, 2008), Laura and Peter Olle contracted to purchase a luxury penthouse sight unseen, stipulating they would be able to remodel the unit to suit their needs. Once they visited, they discovered that they would be unable to do so. After attempting to rescind the purchase contract and recover their deposit, the Olles filed suit against Residential... Full Story
Court Rejects Unconscionability Challenge and Sends Residential Mortgage Dispute to Arbitration
Price v. Taylor, No. 3:08CV420, 2008 WL 3200624 (N.D. Ohio Aug. 6, 2008)
8/6/2008 12:00:00 AM
A federal court in Ohio rejected a homeowner's arguments that an arbitration agreement accompanying her note and mortgage was unconscionable and compelled arbitration of the dispute.
In Price v. Taylor, No. 3:08CV420, 2008 WL 3200624 (N.D. Ohio Aug. 6, 2008), Price bought a home. After filing for bankruptcy because her loan payments ballooned, Price refinanced her house with Intervale Mortgage Corporation (Intervale). An arbitration agreement accompanied Price's loan with Intervale... Full Story
Federal Rules May be Used as Gap-Filler to Procure Evidence from Witness Outside 100-Mile Radius
Fazio v. Lehman Brothers, Inc., No. 1:02CV157, 2004 WL 5613816 (N.D. Ohio June 21, 2004)
6/21/2008 12:00:00 AM
A federal court in Ohio held that parties living outside a 100-mile radius of the arbitral seat may not be compelled to attend the hearing under the auspices of the Federal Arbitration Act (FAA); in cases where this "gap" is not provided for by the parties, the Federal Rules of Civil Procedure (Federal Rules) may be used as a gap-filler to procure evidence.
In Fazio v. Lehman Brothers, Inc., No. 1:02CV157, 2004 WL 5613816 (N.D. Ohio June 21, 2004), Fazio filed a motion to enforce a subpoena requiring people to appear as witnesses in an arbitration with Lehman Brothers. Lehman Brothers and several of the people ordered to appear filed motions to quash. The arbitration panel denied the motions... Full Story
State Cases
California Law Allows Parties to Contract for Heightened Judicial Review of Arbitration Awards
Cable Connection, Inc. v. DIRECTV, Inc., No. S147767, 2008 WL 3891556 (Cal. Aug. 25, 2008)
8/25/2008 12:00:00 AM
The California Supreme Court has ruled that California law allows parties to an arbitration agreement to contract for heightened judicial review of arbitration awards regardless of whether heightened review is available under the Federal Arbitration Act (FAA). The Court's ruling does not raise any preemption concerns because it upholds the terms of the arbitration agreement and thus advances the purpose of the FAA.
In Cable Connection, Inc. v. DIRECTV, Inc., No. S147767, 2008 WL 3891556 (Cal. Aug. 25, 2008), several DIRECTV dealers (the Dealers) filed a demand for class arbitration, alleging that DIRECTV had withheld commissions and assessed improper charges. The Dealers filed their demand with the American Arbitration Association (AAA) in accordance with the parties' arbitration agreement... Full Story
Agents Acting on Behalf of Signatory Corporations Are "Parties" to an Arbitration Agreement Under California Law
RN Solution, Inc. v. Catholic Healthcare West, No. A118077, 2008 WL 3568504, (Cal. Ct. App. Aug. 15, 2008)
8/15/2008 12:00:00 AM
The California Court of Appeal has held that individual agents acting on behalf of corporate signatories to an arbitration agreement do not fall within the definition of third parties that would allow a trial court to order litigation of otherwise arbitrable claims under the California Code of Civil Procedure.
In RN Solution, Inc. v. Catholic Healthcare West, No. A118077, 2008 WL 3568504, (Cal. Ct. App. Aug. 15, 2008), RN Solution ("RNS") and Catholic Healthcare West ("CHW") entered into a nurse recruitment contract. Woo, as CEO at RNS, and Roberston, as a Vice President at CHW, were signatories to the contract. The contract contained a broadly-worded arbitration agreement... Full Story
California Court of Appeal Holds Trial Court's Arbitrability Determination Violates Express Terms of Parties' Agreement and Incorporated Rules
Lippert v. TJR Industries, Inc., No. B199977, 2008 WL 2908713 (Cal. Ct. App. July 30, 2008)
7/30/2008 12:00:00 AM
A California Court of Appeal reversed a trial court's decision to resolve questions of arbitrability, noting that the parties' agreement expressly reserved that authority to the arbitrator and incorporated arbitration rules requiring the arbitrator to decide those issues.
In Lippert v. TJR Industries, Inc., No. B199977, 2008 WL 2908713 (Cal. Ct. App. July 30, 2008), TJR and PiperEve executed a consulting contract. The contract contained an arbitration agreement encompassing all disputes and claims arising out of or relating to the contract. The agreement incorporated the Judicial Arbitration and Mediation Services (JAMS) rules. A continuation of the contract was signed one year later... Full Story
Kentucky Uniform Arbitration Act Constitutional as Applied to Fraud Claims
Dutschke v. Jim Russell Realtors, Inc., No. 2007-CA-001146-MR, 2008 WL 2942093, (Ky. Ct. App. Aug. 1, 2008)
8/1/2008 12:00:00 AM
In upholding the confirmation of an arbitral award issued in regard to a fraud claim, a Kentucky appellate court rejected several state constitutional arguments against enforcement of the underlying arbitration agreement.
In Dutschke v. Jim Russell Realtors, Inc., No. 2007-CA-001146-MR, 2008 WL 2942093, (Ky. Ct. App. Aug. 1, 2008), Sharon and Kenneth Dutschke purchased a home from Fred Faust through Jim Russell Realtors (Russell). After closing, the Dutschkes experienced many problems with the home. They filed suit alleging fraudulent inducement in the contract... Full Story
Under Massachusetts Law, Parties May Seek Confirmation of Arbitration Award in Any State Court of Competent Jurisdiction
Abraham-Copley Square, LP v. Badaoui, No. 07-P-1278, 2008 WL 3115279 (Mass. App. Ct. Aug. 8, 2008)
8/8/2008 12:00:00 AM
An appellate court in Massachusetts held that under state law, parties may seek confirmation of an arbitration award in any court of competent jurisdiction within Massachusetts.
In Abraham-Copley Square, LP v. Badaoui, No. 07-P-1278, 2008 WL 3115279 (Mass. App. Ct. Aug. 8, 2008), Abraham-Copley Square (ACS) leased commercial space to Charles Badaoui, and the lease contained an arbitration agreement... Full Story
Mississippi Court Upholds Nursing Home Arbitration Agreement Despite AAA Policy Against Pre-Dispute Health Care Arbitration Agreements
Covenant Health & Rehabilitation of Picayune, LP v. Estate of Moulds ex rel. Braddock, No. 2007-CA-01250-COA, 2008 WL 3843820 (Miss. Ct. App. Aug. 19, 2008)
8/19/2008 12:00:00 AM
A Mississippi appellate court held that a decedent's son had statutory authority as a health care surrogate to agree to arbitration on his mother's behalf and that the American Arbitration Association (AAA) policy requiring a post-dispute agreement was not a bar to enforcement because of an alternate provision for arbitrator selection.
In Covenant Health & Rehabilitation of Picayune, LP v. Estate of Moulds ex rel. Braddock, No. 2007-CA-01250-COA, 2008 WL 3843820 (Miss. Ct. App. Aug. 19, 2008), Minnie Moulds was a resident of Covenant. Upon her death, James Braddock filed suit against Covenant alleging wrongful death. Covenant moved to compel arbitration based on an arbitration agreement in the admission contract signed by Braddock on Moulds' behalf. The trial court denied the motion... Full Story
Non-Signatory Receiving No Direct Benefit Not Required to Arbitrate
Truck Insurance Exchange v. Palmer J. Swanson, Inc., 124 Nev. 59 (Nev. 2008)
7/31/2008 12:00:00 AM
The Supreme Court of Nevada reaffirmed that a third-party non-signatory is not required to arbitrate a dispute under an arbitration agreement and determined that such a non-signatory is not bound to arbitrate under exceptions to the general rule where they did not directly benefit from the written agreement containing the arbitration agreement and where they did not act with unclean hands in a way connected with their refusal to arbitrate.
In Truck Insurance Exchange v. Palmer J. Swanson, Inc., 124 Nev. 59 (Nev. 2008), Farmers Insurance Exchange and Palmer J. Swanson entered into a contract whereby Swanson would provide legal services in California. Later, the parties orally agreed to extend the legal services into Nevada but never reduced the agreement to writing... Full Story
Tennessee Health Care Decisions Act Does Not Apply Retroactively
Ricketts v. Christian Care Center of Cheatham County, Inc., No. M2007-02036-COA-R9-CV, 2008 WL 3833660 (Tenn. Ct. App. Aug. 15, 2008)
8/15/2008 12:00:00 AM
A Tennessee appellate court held that the Tennessee Health Care Decisions Act does not apply retroactively, thereby invalidating an arbitration agreement signed by the daughter of a nursing home resident prior to its enactment.
In Ricketts v. Christian Care Center of Cheatham County, Inc., No. M2007-02036-COA-R9-CV, 2008 WL 3833660 (Tenn. Ct. App. Aug. 15, 2008), Virginia Ricketts's mother, Mary Williamson, was a resident at Christian Care Center. After Williamson had already been admitted to the nursing home, Ricketts was asked to sign a new admission contract, including an arbitration agreement, to readmit Williamson under new management. Ricketts signed as Williamson's representative... Full Story
Texas Appellate Court Rejects Speculative Unconscionability Challenge Brought Before Arbitrator Appointment or Cost Assessment
Lawson v. Archer, Nos. 14-07-00324-CV, 14-07-00429-CV, 2008 WL 2986390 (Tex. App. July 31, 2008)
7/31/2008 12:00:00 AM
A Texas appellate court has held that bias and prohibitive cost challenges to the enforcement of an arbitration agreement fail when brought before any arbitrators are appointed or any costs are incurred.
In Lawson v. Archer, Nos. 14-07-00324-CV, 14-07-00429-CV, 2008 WL 2986390 (Tex. App. July 31, 2008), home purchaser Archer hired home inspector Lawson. The parties entered into a contract for the inspection service. The contract contained limitations on damages and a provision shortening the time in which to bring claims. Also, in a separate section, the contract contained a broadly-worded arbitration agreement... Full Story
ADR Legislation & Regulation
LEGISLATION
CA A 1867
AUTHOR: Keene [R]
TITLE: Real Estate Appraisers
DISPOSITION: To Governor
LOCATION: Enrolled
Commentary: Amendments to the Business and Professions Code that "Any 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."
CA A 1945
AUTHOR: De La Torre [D]
TITLE: Individual Health Care Coverage
DISPOSITION: To Governor
LOCATION: To enrollment
Commentary: This bill was amended on August 18, 2008 to establish in the Department of Managed Health Care and the Department of Insurance an independent review process for the review of health plans' and health insurers' decisions to cancel or rescind health care service plan contracts and health insurance policies. This bill would require every health care service plan to prominently display in every plan member handbook or relevant informational brochure, in every plan contract, on enrollee evidence of coverage forms, on copies of plan procedures for resolving grievances, information concerning the right of an enrollee or subscriber to an automatic independent review in cases where the health care service plan has decided to cancel or rescind the enrollee's or subscriber's health care service plan contract, pursuant to Section 1389.8. The independent review organizations shall be not for profit and shall be independent of any health care service plan doing business in this state.
CA A 2220
AUTHOR: Jones [D]
TITLE: Emergency Room Physician Contracts
DISPOSITION: To Governor
LOCATION: To enrollment
Commentary: This bill would state, "It is the intent of the Legislature to advance the efficient and equitable resolution of billing disputes between noncontracting hospitals and health care service plans." Amended on 4/22/08 to instead require that impediments in reaching acceptable contract terms for contracts between specified hospital based physicians or hospital based physician groups and health care service plans or their contracting payers be resolved through binding arbitration. An 8/12/08 amendment changed the mandatory arbitration requirement to a mandatory mediation requirement.
CA A 2702
AUTHOR: Nunez [D]
TITLE: Maddy Emergency Medical Service Fund: Los Angeles
DISPOSITION: To Governor
LOCATION: Enrolled
Commentary: This bill would require distribution of a specified percentage of the balance in the Maddy Emergency Medical Service Fund pursuant to prescribed provisions in certain small and rural hospitals located in Los Angeles County that meet certain requirements. As it relates to ADR, the bill requires arbitration of disputes relating to claims for reimbursement.
CA S 981
AUTHOR: Perata [D]
TITLE: Health Care Coverage: Noncontracting Physician Claims
DISPOSITION: To Governor
LOCATION: To enrollment
Commentary: This bill would prohibit "balance billing" by non contracting physicians against patients. It also establishes an independent dispute resolution process by which non contracting physicians could seek review of such billing disputes over non contracted services. The bill requires that an independent dispute resolution organization administer the process, and that the organization would be "contracted with or appointed by the department."
CA S 1177
AUTHOR: Ridley Thomas [D]
TITLE: Court Fees
DISPOSITION: To Governor
LOCATION: To enrollment
Commentary: Existing law requires the Administrative Office of the Courts to make monthly distributions from superior court filing fees for the support of specified dispute resolution programs established by counties. Existing law authorizes a county receiving a distribution to increase the amount of that distribution and limits the amount to be distributed to no more than $8 per filing fee. This bill would instead limit the amount to be distributed to $13 per filing fee.
CA S 1387
AUTHOR: Padilla [D]
TITLE: Dental Coverage: Provider Overpayments
DISPOSITION: To Governor
LOCATION: Enrolled
Commentary: Forbids collection of a health care overpayment until a dispute resolution process has been exhausted.
NY A 9055
SAME AS: NY S 6101
SPONSOR: Destito [D]
TITLE: Small Brewers and Wholesaler Agreements
DISPOSITION: To Governor
LOCATION: To Governor
Commentary: Permits small brewers having five percent or less of a multi brand beer wholesaler's annual business to terminate an agreement with such wholesaler; requires payment of fair compensation unless the termination is for good cause. The bill further provides for an arbitration process, applying AAA rules, in the event of a disagreement over the FMV of compensation for termination. Provides for equal payment of fees and costs, but gives the arbitration panel the ability to award fees to the distributor in the case of a bad faith estimate of value on the brewer's behalf.
REGULATIONS
Maryland MD 11478 2008
AGENCY: Department of Labor, Licensing and Regulation/Commissioner of Financial Regulation
TITLE: Credit and Other Regulations
Commentary: This proposed regulation would require a regulated person that offers to make or procure a mortgage loan secured by residential real property to provide the borrower a disclosure that the mortgage loan includes a mandatory binding arbitration clause. The disclosure would read: "The mortgage loan you have applied for contains a mandatory binding arbitration provision. This means that, as to the matters covered by the arbitration provision, you are giving up your right to a jury or court trial if you have a dispute with the lender. Read your mortgage loan documents carefully to understand how mandatory binding arbitration will impact your rights to resolve disputes." Comments may be sent to Sarah Bloom Raskin, Commissioner of Financial Regulation, Division of Financial Regulation, 500 North Calvert Street, Suite 402, Baltimore, Maryland 21202, or call 410-767-0378, or email to bvictorine@dllr.state.md.us, or fax to 410-333-0475. Comments will be accepted through September 29, 2008. A public hearing has not been scheduled.
Texas TX 13450 2008
AGENCY: Securities Board
TITLE: Real Estate Programs
Commentary: Establishes new rules concerning administrative guidelines for registration of real estate programs. Prohibits enforcement of mandatory arbitration agreements between real estate program sponsors and participants, except in the case of a termination of a sponsor, which requires AAA arbitration of the dispute if the parties cannot settle the termination dispute.
© 2008 National Arbitration Forum -
www.adrforum.com - Unsubscribe
