Justia Contracts Opinion Summaries

The Supreme Judicial Court affirmed the order of the trial judge granting the motion for judgment on the pleadings filed by the New England Police Benevolent Association, Inc., Local 192 (NEPBA), denying the city of Chelsea's motion for judgment on the pleadings, and confirming the underlying arbitration award in this labor dispute, holding that the trial court did not err in confirming the arbitration award.After NEPBA replaced another union as the exclusive bargaining representative for the emergency dispatchers in the city, NEPBA sought to arbitrate a grievance regarding an emergency dispatcher's termination following the change in union representation. While the NEPBA and city bargained to a new contract, employees had been working under the city's prior collective bargaining agreement (CBA) with the former union. Because the CBA contained an arbitration provision, the arbitrator ruled that the dispute was arbitrable. The superior court confirmed the decision. The Supreme Judicial Court affirmed, holding that the dispute was arbitrable. View "City of Chelsea v. New England Police Benevolent Ass'n, Local 192" on Justia Law

Plaintiffs, owners of Samsung SmartTVs, filed a putative class action in 2017, alleging that the SmartTVs used automatic tracking software to collect personally identifying information about them, such as the videos or streaming services they watch, and transmit that data to third-parties, who allegedly used the information to display targeted advertisements. When setting up their SmartTVs, plaintiffs had to agree to Terms and Conditions to access the Internet-enabled services. On some SmartTVs, the Terms and Conditions contained an arbitration provision. In 2018, the plaintiffs disclosed the Model Numbers for the named plaintiffs' SmartTVs, which enabled Samsung to determine whether they agreed to Terms containing an arbitration clause.The district court dismissed all except for the Wiretap Act claims. In 2020, Samsung notified the court that it would move to compel individual arbitration, arguing that it did not waive its right to arbitrate because “the prerequisites of waiver— extensive discovery and prejudice—are lacking.” The Third Circuit affirmed the denial of the motion. Samsung waived its right to arbitrate and compelling arbitration would cause the plaintiffs to suffer significant prejudice. Samsung’s actions evinced a preference for litigation over arbitration. Samsung continuously sought and agreed to stays in discovery and pursued successful motions to dismiss on the merits. It assented to all pre-trial orders and participated in numerous court conferences. View "White v. Samsung Electronics America Inc." on Justia Law

Martinique Properties, LLC filed a complaint against Certain Underwriters at Lloyd’s, London (Underwriters), seeking to vacate an arbitration award. The district court dismissed the complaint for failure to state a claim for vacatur. Martinique Properties appealed. Martinique Properties argues that the appraisal award must be vacated because the appraisers “used figures and measurements which are contrary to the actual conditions of the Property” and failed to “consider certain buildings” and certain portions of a damaged roof when determining the appraisal award. These alleged errors, Martinique Properties argues, show that the appraisers were either “guilty of misconduct” or “so imperfectly executed” their powers that “a mutual, final, and definite award . . . was not made,” two of the four grounds for vacating an award under the FAA.   The Eighth Circuit affirmed. The court found that Martinique Properties has alleged only factual errors that challenge the merits of the appraisal award, and the court has no authority to reconsider the merits of an arbitration award, even when the parties allege that the award rests on factual errors. Accordingly, the appraisers’ use of certain figures and measurements in calculating the amount of loss here, and their alleged failure to consider particular buildings and portions of roof damage, even if incorrect, are not sufficient for vacatur under the FAA. View "Martinique Properties, LLC v. Certain Underwriters at Lloyd's of London" on Justia Law

Plaintiff suffered a stroke on August 18, 2009. He was hospitalized at St. John’s Regional Medical Center for two weeks, followed by a month in St. John’s inpatient rehabilitation facility. He entered Oxnard Manor, a skilled nursing facility, on October 3. Four days later, on October 7, Plaintiff signed an arbitration agreement. It stated that he gave up his right to a jury or court trial, and required arbitration of claims arising from services provided by Oxnard Manor, including claims of medical malpractice, elder abuse, and other torts. Plaintiff remained a resident at Oxnard Manor until his death nine years later, individually and as Plaintiff’s successors in interest, sued Oxnard Manor for elder abuse/neglect, wrongful death, statutory violations/breach of resident rights, and negligent infliction of emotional distress. Oxnard Manor filed a petition to compel arbitration. Both sides relied on medical records to demonstrate whether Plaintiff had the mental capacity to consent to the arbitration agreement.   The Second Appellate District affirmed. The court explained that evidence here that Plaintiff scored below the level necessary to “solve complex problems such as managing a checking account” supports the conclusion that he was unable to manage his financial affairs. But regardless of whether the presumption of Civil Code section 39, subdivision (b) applied, substantial evidence established that Plaintiff lacked the capacity to enter an arbitration agreement. View "Algo-Heyres v. Oxnard Manor" on Justia Law

Skillz provides a mobile platform that hosts games in which players compete for cash prizes. To participate in paid-entry competitions, a user must save the player account; after entering a date of birth, the user must tap a box with the word “Next.” Below the “Next” box is the advisory statement: “By tapping ‘Next,’ I agree to the Terms of Service and the Privacy Policy.” A hyperlink, if tapped, takes the user to Skillz’s terms of service. Gostev saved a Skillz player account in 2019. The Terms of Service then had 15 pages.Gostev sued Skillz, alleging that its games constituted illegal gambling, predatory and unlawful practices, and violated the Unfair Competition Law and the Consumers Legal Remedies Act, Gostev alleged the arbitration agreement was unenforceable. Skillz argued that Gostev’s challenges to the enforceability of the arbitration provision had to be submitted to an arbitrator.The court of appeal affirmed a finding that the arbitration agreement was procedurally and substantively unconscionable. The court noted provisions that a plaintiff’s damages are limited, the arbitration must occur in San Francisco, a plaintiff only has one year to bring his claim, the parties must split the arbitration fees and costs, and the defendant can obtain equitable relief without posting a bond or security. Unconscionability ”permeates the agreement such that severance is unavailable,” View "Gostev v. Skillz Platform, Inc." on Justia Law

Plaintiff signed an arbitration contract with an employer called Intelex Enterprises, LLC. While working for Intelex, Plaintiff also worked for other firms (Other Firms). These Other Firms were legally separate from Intelex but functionally related to it. The Other Firms did not contract for arbitration with Plaintiff. After termination, Plaintiff sued the Other Firms but not Intelex: Intelex has never been a party to the case. The Other Firms moved to compel arbitration based on Plaintiff’s agreement with Intelex. The trial court denied the Other Firms’ motion to enforce a contract they had not signed.   The Second Appellate District affirmed. The court held that the Other Firms cannot equitably estop Defendant because they do not show she is trying to profit from some unfair action. They have no proof of agency. And they are not third-party beneficiaries of Intelex’s contract. The court explained that the Other Firms point to six places in the record they say show agency, but these materials do not measure up. The citation to Plaintiff’s complaint spotlights text that omits Intelex and cannot show agency. A different citation is to their attorney’s declaration recounting irrelevant procedural history. Other citations refer to Plaintiff’s admission that she worked for both Intelex and the Other Firms. This admission does not establish agency. View "Hernandez v. Meridian Management Services, LLC" on Justia Law

In this dispute over an arbitration clause within a contract, the Supreme Court held that the minor children who joined Plaintiffs, their parents, in bringing this action seeking damages for construction defects in their home may be compelled to arbitrate along with their parents on the basis of direct-benefits estoppel.Plaintiffs, Tony and Michelle Ha, signed a purchase agreement with Taylor Woodrow Communities-League City, Ltd. to build a home in Texas. The agreement included an arbitration provision. The Has sued both Taylor Woodrow Communities-League City, Ltd. and Taylor Morrison of Texas, Inc., for negligent construction and other claims, alleging the home developed significant mold problems due to construction defects. Plaintiffs' second amended petition named both Tony and Michelle and their three children. Taylor Morrison moved to compel arbitration, but the trial court denied the motion as it pertained to Michelle and the children. The court of appeals affirmed. The Supreme Court reversed, holding that when a family unit resides in a home and files suit for factually intertwined construction-defect claims concerning the home, a nonsignatory spouse and minor children have accepted direct benefits under the signatory spouse’s purchase agreement such that they may be compelled to arbitrate through direct-benefits estoppel. View "Taylor Morrison of Texas, Inc. v. Ha" on Justia Law

In this dispute over an arbitration clause within a contract, the Supreme Court held that the minor children who joined Plaintiffs, their parents, in bringing this action seeking damages for construction defects in their home may be compelled to arbitrate along with their parents on the basis of direct-benefits estoppel.Plaintiffs, Jack and Erin Skufca, signed a purchase agreement with Taylor Woodrow Communities-League City, Ltd. to build a home in Texas. The agreement included an arbitration provision. Plaintiffs sued both Taylor Woodrow Communities-League City, Ltd. and Taylor Morrison of Texas, Inc., for construction defects and fraud, alleging that less than a year after they moved in, the home developed mold issues that caused their minor children to be ill. The petition listed Jack and Erin as plaintiffs individually, as well as Erin as next friend of the couple's children. Taylor Morrison moved to compel arbitration, but the trial court denied the motion as it pertained to the children. The court of appeals affirmed. The Supreme Court reversed, holding that the minor children sued based on the contract and were subject to its terms, including the arbitration clause. View "Taylor Morrison of Texas, Inc. v. Skufca" on Justia Law

Plaintiff sued Sisyphian for (1) failure to pay minimum wage, (2) failure to pay overtime wages, (3) failure to pay wages for missed meal periods, (4) failure to pay wages for missed rest breaks, (5) waiting time penalties (6) failure to provide accurate wage statements and (7) unfair competition. In reliance on the arbitration clause in the Entertainment Agreement, the trial court granted Sisyphian’s motion to compel arbitration of Plaintiff’s claims. The arbitrator concluded that Plaintiff’s complaint contained a viable prayer for attorney fees for the claims on which she prevailed. Plaintiff filed a petition to confirm the final arbitration award. Following the entry of judgment for Plaintiff in the amount of $105,109.75, Sisyphian appealed. Sisyphian argued that the trial court erred in confirming the final arbitration award because, in reconsidering its initial attorney fees order, the arbitrator exceeded his powers   The Second Appellate District affirmed. The court explained that because Plaintiff’s petition to confirm was procedurally proper because no party sought dismissal of Plaintiff’s petition, and because Sisyphian’s filings seeking to vacate or correct the arbitration award were not timely filed, the trial court, in this case, was obligated to confirm the final arbitration award. Further, because Sisyphian forfeited its right to seek to vacate or correct the final arbitration award before the trial court, the court may not consider its arguments to do so on appeal. View "Darby v. Sisyphian, LLC" on Justia Law

Plaintiff purchased a set of tires from Walmart.com, which included a Terms of Use with an arbitration provision. Plaintiff had the tires shipped to and installed at a Walmart Auto Center, and while waiting for the tires to be installed, he purchased the lifetime balancing and rotation Service Agreement. Plaintiff received tire services once in 2019 but was later denied service on several occasions in 2020 at multiple Walmart Auto Centers. Plaintiff brought a putative class action alleging breach of contract and breach of the duty of good faith and fair dealing. Walmart sought to compel individual arbitration of its dispute with Plaintiff pursuant to the arbitration provisions of the Terms of Use. The district court found that the plain meaning of the Terms of Use precluded the applicability of the arbitration provision to in-store purchases.   The Ninth Circuit affirmed the district court’s denial of Walmart Inc.’s motion to compel arbitration and agreed with the district court that Plaintiff contested the existence, not the scope, of an arbitration agreement that would encompass this dispute. As the party seeking to compel arbitration, Walmart bore the burden of proving the existence of an agreement to arbitrate by a preponderance of the evidence. The panel held that substantial evidence supported that the two contracts between Plaintiff and Walmart were separate, independent agreements. The two contracts—though they involved the same parties and the same tires—were separate and not interrelated. Therefore, the arbitration agreement in the first did not encompass disputes arising from the second. View "KEVIN JOHNSON V. WALMART INC." on Justia Law