Justia Contracts Opinion Summaries

Plaintiffs created accounts on justanswer.com and paid to ask questions. According to JustAnswer's Terms of Service, paying for answers automatically enrolled plaintiffs in a recurring monthly subscription. Plaintiffs alleged that JustAnswer violated the Electronic Funds Transfer Act and various state consumer protection laws by enrolling them in the subscription service without their consent and making cancellation difficult. JustAnswer sought to compel arbitration based on a provision in its Terms of Service, asserting that plaintiffs were put on inquiry notice of those terms and agreed to arbitrate any claims arising from their use of the site.The United States District Court for the Northern District of California denied JustAnswer's motion to compel arbitration. The court held that plaintiffs did not receive sufficient notice of JustAnswer's Terms of Service containing the arbitration clause, and thus no contract was formed. The court found that the payment pages and other advisals presented to plaintiffs were not sufficiently conspicuous to put them on inquiry notice of the terms, and the advisals did not explicitly inform users that clicking a button would constitute assent to the terms.The United States Court of Appeals for the Ninth Circuit affirmed the district court's order. The Ninth Circuit concluded that no contracts were formed between plaintiffs and JustAnswer under an inquiry theory of notice. The court held that the website did not provide reasonably conspicuous notice of the terms, and the advisals did not unambiguously manifest the plaintiffs' assent to those terms. Therefore, plaintiffs were not bound by the arbitration provision in JustAnswer's Terms of Service, and the motion to compel arbitration was denied. View "GODUN V. JUSTANSWER LLC" on Justia Law

Maria Wilson purchased an insurance policy from Union National Fire Insurance Company (UNFIC) through agent Robin Wilson. The policy covered personal property at 2170A Tillman Chapel Road, which included a house and a travel trailer. Maria, who is illiterate, relied on Robin's verbal description of the policy. After a fire destroyed the house and her personal property, Maria filed a claim, which was denied by UNFIC, citing that she did not live in the house, a purported requirement for coverage.Maria sued UNFIC, Kemper Corporate Services, Robin Wilson, and others in the Circuit Court of Claiborne County, Mississippi, alleging breach of contract, negligence, fraud, and other claims. The defendants removed the case to federal court, asserting diversity jurisdiction and claiming that the non-diverse defendants were improperly joined. The district court agreed, denied Maria's motion to remand, and compelled arbitration based on the policy's arbitration clause. The arbitrator ruled in favor of the defendants, and the district court confirmed the arbitration award.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court held that the district court erred in denying Maria's motion to remand because non-diverse defendant Robin Wilson was properly joined. The court found that the insurance policy did not clearly require Maria to live in the house for her personal property to be covered, thus her negligence claim against Robin Wilson was viable. Consequently, the Fifth Circuit reversed the district court's denial of the motion to remand, vacated the order compelling arbitration and the confirmation of the arbitration award, and remanded the case to the district court with instructions to remand it to state court. View "Wilson v. Kemper Corporate Services" on Justia Law

Overhead Door Company of Indianapolis contracted with Blue Giant Equipment Corporation, a Canadian company, for the purchase of multiple dock levelers. After installation, Overhead experienced issues with the levelers and sued Blue Giant in federal court under diversity jurisdiction for breach of contract and warranty. Blue Giant moved to dismiss, citing a provision in its standard terms requiring arbitration in Ontario, Canada. The district court denied the motion, concluding that the standard terms were not incorporated into the parties' contract.The United States District Court for the Southern District of Indiana reviewed the case and denied Blue Giant's motion to dismiss. The court found that the mere reference to standard terms on a website was insufficient to incorporate those terms into the contract between Overhead and Blue Giant. Blue Giant appealed the decision.The United States Court of Appeals for the Seventh Circuit reviewed the case and reversed the district court's decision. The appellate court held that Blue Giant's reference to its Terms and Conditions on its website was sufficient to incorporate those terms into the contract. The court noted that the reference was conspicuous and provided Overhead with reasonable opportunity to take notice of the terms. The court concluded that the parties were obligated to resolve their dispute through arbitration in Ontario, Canada, as specified in the incorporated terms. The case was reversed and remanded for further proceedings consistent with this opinion. View "Garage Door Systems, LLC v Blue Giant Equipment Corp." on Justia Law

Billy Ford worked as a full-time security guard for Parkwest Casino Lotus from September 2018 to December 2021. Upon hiring, Ford signed an arbitration agreement that excluded claims for workers' compensation, unemployment compensation, certain administrative complaints, ERISA claims, and "representative claims under [PAGA]." In February 2022, Ford filed a complaint against Parkwest under PAGA, alleging Labor Code violations, including mandatory off-the-clock health screenings and inaccurate wage statements. Parkwest moved to compel arbitration of Ford's individual PAGA claims and to dismiss the representative PAGA claims, citing Viking River Cruises, Inc. v. Moriana.The Superior Court of Sacramento County denied Parkwest's motion to compel arbitration, finding that the arbitration agreement specifically excluded all PAGA claims. Parkwest appealed, arguing that the agreement was ambiguous regarding the exclusion of individual PAGA claims and that such ambiguity should be resolved in favor of arbitration.The Court of Appeal of the State of California, Third Appellate District, reviewed the case. The court concluded that the arbitration agreement unambiguously excluded all PAGA claims, including individual claims. The court reasoned that the language of the agreement and the circumstances under which it was executed indicated that the parties intended to exclude all PAGA claims from arbitration. The court affirmed the trial court's order denying Parkwest's motion to compel arbitration. View "Ford v. The Silver F" on Justia Law

Three West Virginia residents, dissatisfied with their cable and internet service provided by Suddenlink, sued Cebridge Acquisition, LLC, Cequel III Communications I, LLC, Cequel III Communications II, LLC, and Altice USA, Inc. They alleged that Suddenlink failed to provide reliable services and sought damages for negligence, unjust enrichment, and breach of contract. Suddenlink moved to compel arbitration based on the arbitration agreement in its 2021 Residential Services Agreement (RSA). The district court denied the motions, concluding that a 2017 arbitration agreement controlled, was unconscionable, and could not be enforced.The United States District Court for the Southern District of West Virginia found the 2017 arbitration agreement procedurally and substantively unconscionable, citing the unequal bargaining power between the parties, the adhesive nature of the contract, and the complexity of the terms. The court also noted that the 2017 agreement lacked an opt-out provision and included terms that were overly harsh and lacked mutuality. Consequently, the district court denied Suddenlink’s motions to compel arbitration in all three cases.The United States Court of Appeals for the Fourth Circuit reviewed the case and determined that the 2021 arbitration agreement, not the 2017 version, governed the disputes. The court found that the 2021 agreement was valid and enforceable, as it satisfied all elements of contract formation, including mutual assent and valuable consideration. The court also concluded that the 2021 arbitration agreement was not procedurally or substantively unconscionable. The court reversed the district court’s judgments and remanded the cases with instructions to compel arbitration. View "Meadows v. Cebridge Acquisition, LLC" on Justia Law

Trista Carter entered into a contract with Johnny Mack Morrow and Martha Morrow to purchase a house and 245 acres for $1,600,000. The contract included provisions for earnest money and an arbitration clause. The sale did not close, and the Morrows sued Carter for breach of contract and sought damages, including the earnest money. They also named Crye-Leike, Inc., the company holding the earnest money, as a defendant.The Franklin Circuit Court reviewed the case and denied Carter's motion to compel arbitration. The court found that the arbitration clause did not apply to disputes arising under paragraphs 11 and 12 of the contract, which included the earnest money dispute. Carter filed a motion to alter, amend, or vacate the judgment, arguing that the breach-of-contract claim was not solely an interpleader action regarding the earnest money. The trial court denied Carter's postjudgment motions by operation of law.The Supreme Court of Alabama reviewed the case and held that the arbitration agreement in the contract specifically excluded disputes related to the earnest money, as outlined in paragraph 12. Therefore, the trial court properly denied the motion to compel arbitration for the interpleader claim. However, the court found that the breach-of-contract claim, which sought damages beyond the earnest money, was subject to arbitration under the contract's arbitration clause. The Supreme Court of Alabama affirmed the trial court's decision regarding the interpleader claim but reversed the decision regarding the breach-of-contract claim and remanded the case for further proceedings consistent with its opinion. View "Carter v. Morrow" on Justia Law

Piedmont Comprehensive Pain Management Group, LLC ("Piedmont") provides pain-management care and had a business arrangement with DocRx Dispensing, Inc. ("DRD") for billing and collection services. DRD collected payments from insurance companies for medications dispensed by Piedmont and kept a portion as compensation. In 2022, Piedmont sued DRD and other related entities and individuals, alleging breach of contract, unjust enrichment, and various tort-based claims, accusing them of improperly depriving Piedmont of funds owed for dispensing medications.The Mobile Circuit Court initially granted the defendants' motion to compel arbitration based on an April 2017 agreement between Piedmont and DRD, which included an arbitration clause. The court stayed the action pending arbitration. During arbitration, the defendants produced a later August 2017 agreement, which also contained an arbitration clause and was signed by both parties. Piedmont then requested the trial court to lift the stay, arguing that the defendants could not insist on arbitration while denying the existence of the April 2017 agreement. The trial court lifted the stay, and the defendants appealed.The Supreme Court of Alabama reviewed the case de novo. The court held that claims based on the August 2017 agreement, which was signed by both parties, must be arbitrated. The court also noted that the trial court's initial order compelling arbitration of claims based on the April 2017 agreement was a final judgment, and Piedmont's failure to appeal within the required time frame meant the trial court had no jurisdiction to set aside that order. Consequently, the Supreme Court of Alabama reversed the trial court's order lifting the stay and remanded the case for further proceedings consistent with its opinion. View "DocRx, Inc. v. Piedmont Comprehensive Pain Management Group, LLC" on Justia Law

Mark Lovil, the manager of R.K. Metals, LLC, signed a commercial lease with E&E, Co. Inc. in 2015 in his representative capacity. The lease did not include a personal guaranty or arbitration clause. R.K. Metals became delinquent in rent payments, leading E&E to require a new lease in 2018, which included both a personal guaranty and an arbitration clause. Lovil signed the new lease as president of R.K. Metals, but R.K. Metals claimed they were unaware of the new clauses until the final version was delivered.R.K. Metals filed a complaint in the Lee County Circuit Court in May 2020, seeking declaratory relief and asserting breach-of-contract claims. The circuit court found the lease enforceable and ordered arbitration. E&E sought to include Lovil personally in the arbitration, leading to a determination of his status as guarantor. The circuit court granted E&E’s Motion for Summary Judgment, finding Lovil personally liable as guarantor and a necessary party to arbitration.The Supreme Court of Mississippi reviewed the case de novo. The court held that Lovil’s signature on the lease, despite his corporate designation, bound him personally as guarantor due to the clear language of the guaranty clause. The court also found that Lovil, as personal guarantor, was bound by the arbitration clause. The court applied the doctrine of equitable estoppel, noting Lovil’s close legal relationship with R.K. Metals, and concluded that he must participate in arbitration.The Supreme Court of Mississippi affirmed the circuit court’s judgment, holding that Lovil is personally bound as guarantor and compelled to participate in arbitration. View "R.K. Metals, LLC v. E & E Co., Inc." on Justia Law

Nicole Lampo was hired by Amedisys Holding, LLC as a physical therapist. A month after her hiring, Amedisys sent an email to all employees introducing an arbitration program. The email required employees to acknowledge the arbitration materials and provided an opt-out option within 30 days. Lampo acknowledged the email but did not opt out. She continued working for Amedisys until her termination in March 2018, after which she filed a lawsuit against Amedisys and her former supervisor for wrongful discharge, tortious interference, and defamation. Amedisys moved to compel arbitration based on the arbitration agreement.The Circuit Court of Georgetown County denied Amedisys's motion to compel arbitration, concluding that Lampo's failure to opt out did not constitute acceptance of the arbitration agreement. The Court of Appeals reversed this decision, finding that Lampo had accepted the arbitration agreement as a matter of law by not opting out and continuing to work.The Supreme Court of South Carolina reviewed the case and reversed the Court of Appeals' decision. The Supreme Court held that Lampo did not accept Amedisys's offer to form an arbitration agreement by merely failing to opt out and continuing to work. The court emphasized that silence and inaction do not constitute acceptance of an offer unless specific circumstances indicate a manifestation of assent, which were not present in this case. The court concluded that there was no evidence of Lampo's intent to be bound by the arbitration agreement, and thus, no valid arbitration agreement was formed. The case was remanded for further proceedings consistent with this opinion. View "Lampo v. Amedisys Holding, LLC" on Justia Law

Jason and Kacie Highsmith hired Shelter, LLC to manage a home renovation project and later contracted with Design Gaps, Inc. to design and install cabinets and closets. The contracts required arbitration for disputes but did not specify completion dates. Design Gaps failed to meet multiple promised deadlines, leading the Highsmiths to terminate the contracts and hire another company. The Highsmiths shared Design Gaps' copyrighted drawings with the new contractor. They then filed for arbitration, alleging breach of contract and other claims, while Design Gaps counterclaimed for various issues, including copyright infringement.The arbitrator held a three-day hearing, during which the Highsmiths presented multiple witnesses, while Design Gaps only presented David Glover. The arbitrator found in favor of the Highsmiths, awarding them damages and attorney’s fees, and denied Design Gaps' counterclaims, including the copyright claim, citing fair use and lack of evidence for copyright registration.Design Gaps petitioned the United States District Court for the District of South Carolina to vacate the arbitration award, arguing the arbitrator disregarded the law and failed to issue a reasoned award. The district court denied the petition and confirmed the arbitration award, also granting the Highsmiths' motion for attorney’s fees.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court dismissed the appeal, citing lack of federal jurisdiction based on the precedent set in Friedler v. Stifel, Nicolaus, & Co., which held that federal courts do not have jurisdiction over motions to vacate arbitration awards unless there is an independent basis for federal jurisdiction beyond the Federal Arbitration Act. The court concluded that the petition did not meet this requirement. View "Design Gaps, Inc. v. Shelter, LLC" on Justia Law