Justia Contracts Opinion Summaries

OneMain, a non-bank finance company, loaned Zirpoli $6,200.08, to be repaid at a rate of 26.91% (total $11,364.35). The loan was issued under the Consumer Discount Company Act (CDCA), a consumer protection statute, which creates an exception to Pennsylvania’s usury law. The loan is governed by a disclosure statement, a security agreement, and an arbitration agreement. Later, OneMain sold delinquent accounts to Midland, including Zirpoli’s loan. Midland sued Zirpoli but later dismissed the suit and undertook collection efforts.Zirpoli filed a class action, alleging that Midland’s collection activities constituted an unlawful attempt to collect the loan because Midland does not have a CDCA license and never obtained nor requested approval from the Department of Banking. Midland was, therefore, not lawfully permitted to purchase the loan. Midland moved to compel arbitration. The court denied the motion, focusing on the validity of the assignment from OneMain and Midland. The Third Circuit vacated. The ultimate illegality of a contract does not automatically negate the parties’ agreement that an arbitrator should resolve disputes arising from the contract. The parties to the loan clearly agreed to arbitrate the issue of arbitrability. The arbitration agreement provides that an arbitrator shall resolve the arbitrability of defenses to enforcement, including alleged violations of state usury laws. View "Zirpoli v. Midland Funding LLC" on Justia Law

In an action brought by the State of Hawaii challenging the U.S. Department of the Army’s changes to the operation of its dining facilities at Schofield Barracks and Wheeler Army Airfield in Honolulu, Hawaii, the Ninth Circuit reversed the district court’s conclusion that the Randolph-Shepard Act (“RSA”) did not apply to Dining Facility Attendant (“DFA”) contracts, and affirmed the district court’s conclusion that the RSA advance review provision applied to the reclassification of a Schofield Barracks contract.   The panel held that the district court applied an incorrect standard of review to the RSA arbitration panel’s construction of 20 U.S.C. Section 107(a) when it deferred heavily to the arbitration panel’s interpretation. Because the RSA did not delegate interpretive authority to the arbitration panel, the panel reviewed de novo. The panel held that the term “operate” was ambiguous in Section 107(a).   The panel held further that the statutory structure of the RSA supported a broad interpretation in favor of increased opportunities for blind vendors, and the implementing regulations swept even more broadly and counseled strongly in favor of applying the RSA to DFA contracts. The panel affirmed the district court’s conclusion that the RSA advance review requirement applied to the Army’s reclassification of Schofield Barracks’ dining facilities. View "STATE OF HAWAII V. USEDU" on Justia Law

The Supreme Court quashed the decision of the court of appeal issuing a writ of prohibition to prevent the circuit court from exercising jurisdiction over certain claims, holding that the court of appeal erred in issuing the writ.Plaintiff brought this lawsuit against an insurance company and the law firm representing the company in the underlying suit Plaintiff brought against the insurer, arguing that Defendants violated confidentiality requirements applicable to a mediation. After the circuit court denied Defendants' motions to dismiss Defendants petitioned the Third District relief. The Third District granted a writ of prohibition, concluding that the circuit court had exceeded its jurisdiction by entertaining Defendants' collateral estoppel affirmative defense. The Supreme Court quashed the decision below, holding that the writ of prohibition was used in an improper manner here. View "Mintz Truppman, P.A. v. Cozen O'Connor, PLC" on Justia Law

Crozer owns healthcare companies that operate as wholly owned subsidiaries: Prospect, employs professionals working at hospitals; CCMC, is a hospital and hired Abdurahman as an emergency medical resident. Abdurahman signed new-hire paperwork, including an at-will employment agreement with Crozer and an arbitration agreement with Prospect. Several weeks later, Abdurahman signed a residency agreement with CCMC. Dr. Jacobs was an employee of Prospect, working as CCMC’s Director of Toxicology and supervised Abdurahman. Abdurahman alleged that Jacobs sexually harassed her; Jacobs claimed the opposite and informed CCMC Human Resources that Abdurahman had assaulted her. The dispute escalated until Abdurahman was fired.Abdurahman filed a complaint with the Pennsylvania Human Relations Commission and the EEOC, alleging defamation and discrimination under Title VII, Title IX, 42 U.S.C. 1981, and the Pennsylvania Human Relations Act. She subsequently filed suit against CCMC and Jacobs. The district court denied a motion to compel arbitration. The Third Circuit affirmed. Abdurahman signed an arbitration agreement with Prospect, not CCMC. That agreement cannot stretch to govern Abdurahman’s employment with CCMC. The court noted that the corporations are sophisticated entities that drafted the forms. View "Abdurahman v. Prospect CCMC LLC" on Justia Law

Plaintiff designated his nephew as his health care agent and attorney-in-fact using an advance health care directive and power of attorney for health care decisions form developed by the California Medical Association (the Advance Directive). After the execution of the Advance Directive, Plaintiff was admitted to a skilled nursing facility. Nineteen days later, his nephew executed an admission agreement and a separate arbitration agreement purportedly on Plaintiff’s behalf as his “Legal Representative/Agent”. The sole issue on appeal is whether the nephew was authorized to sign the arbitration agreement on Plaintiff’s behalf.   In answering the relevant question on appeal, the Second Appellate District held that an agent’s authority to make “health care decisions” on a principal’s behalf does not include the authority to execute optional arbitration agreements. Accordingly, the court affirmed the trial court’s order denying the motion to compel arbitration. The court explained that its conclusion that the execution of an arbitration agreement is not a “health care decision” finds support in the regulatory history of the recently enacted federal regulatory scheme prohibiting nursing facilities participating in Medicare or Medicaid programs from requiring a resident (or his representative) to sign an arbitration agreement as a condition of admission. Specifically, in the Centers for Medicare & Medicaid Services’ (i.e., the agency’s) responses to public comments published in the Federal Register. These comments and responses demonstrate that practically speaking, arbitration agreements are not executed as part of the health care decision-making process, but rather are entered into only after the agent chooses a nursing facility based on the limited options available and other factors unrelated to arbitration. View "Logan v. Country Oaks Partners" on Justia Law

R&C, run by two employees, entered an agreement to haul equipment for American Wind. The agreement’s arbitration clause provides: any claim, dispute or controversy including, but not limited to the interpretation of any federal statutory or regulatory provisions purported to be encompassed by this Agreement; or the enforcement of any statutory rights emanating or relating to this Agreement shall be resolved on an individual basis (and not as part of a class action) exclusively between Contractor and Carrier by final and binding arbitration.R&C alleges that American Wind failed to make agreed-upon detention payments, resulting in a cash shortfall, forcing R&C to sell its trucks. R&C continued to haul equipment for American Wind but on behalf of the trucks’ new owner. R&C filed suit, alleging breach of contract and contending that the arbitration clause was unenforceable because R&C is a transportation worker operating under a contract of employment, exempt from the Federal Arbitration Act (FAA). R&C also argued that the arbitration provision was unconscionable. After R&C refused to arbitrate, the case was dismissed for failure to prosecute. The Third Circuit affirmed, noting that R&C had not sought interlocutory review of the order compelling arbitration, as permitted by the FAA. The interlocutory order was not part of the final order, so the court concluded it lacked jurisdiction to review it. View "R & C Oilfield Services LLC v. American Wind Transport Group, LLC" on Justia Law

TIG Insurance Company (“TIG”) appeals from a judgment and order of the district court. TIG asserts that Judge Ramos erred in ordering it to arbitrate a coverage dispute with ExxonMobil Oil Corporation (“Exxon”). Even if it was required to arbitrate, TIG contends that Judge Ramos erred in awarding Exxon prejudgment interest when confirming the arbitral award. After entering judgment, and after TIG had appealed, the district court clerk notified the parties that it was brought to Judge Ramos’s attention that he owned stock in Exxon when he presided over the case. Nothing in the record suggests that Judge Ramos was aware of his conflict at the time he rendered his decisions, and the parties do not suggest otherwise. TIG moved in the district court to vacate the judgment. The case was reassigned to a different judge, who denied the motion to vacate. TIG appealed from that denial as well.The Second Circuit affirmed the district court’s denial of Appellant’s motion to vacate and the district court’s order compelling arbitration, reversed in part its decision granting Exxon’s request for prejudgment interest, and remanded to the district court for further proceedings. The court explained that vacatur was not required because this case presents only questions of law, and a non-conflicted district judge reviewed the case de novo. As to the merits, the court held that the district court did not err in compelling arbitration because the parties were subject to a binding arbitration agreement, but that the district court erred in ordering TIG to pay pre-arbitral-award interest. View "ExxonMobil Oil Corporation v. TIG Insurance Company" on Justia Law

Bernstein and France are certified agents, registered with the NFL Players Association to represent NFL players in contract negotiations. Bernstein also owns Clarity, which represents professional athletes in matters such as marketing and endorsement contracts. Golladay signed a standard representation agreement with Bernstein in 2016, before Golladay’s rookie season with the Detroit Lions, and signed a separate agreement with Clarity for representation in endorsement and marketing deals. In January 2019, Golladay terminated both agreements. three days after participating in an autograph-signing event that Bernstein had played no role in arranging. Golladay immediately signed with France.Bernstein believed France was behind the signing event and filed a grievance against France pursuant to the NFLPA dispute resolution provisions. The matter went to arbitration. In pre-hearing discovery, France denied possessing any documents pertaining to the event and denied any involvement in the event. France’s lies were not uncovered until after the arbitration was decided in his favor.The Third Circuit reversed the district court’s confirmation of the arbitration award because France’s fraud procured it. The Federal Arbitration Act, 9 U.S.C. 10, permits an award to be vacated under narrow circumstances, including “where an award was procured by corruption, fraud, or undue means.” France’s fraud was not discoverable through reasonable diligence and was material to the case. View "France v. Bernstein" on Justia Law

The Sixth Circuit vacated the judgment of the district court vacating an arbitration award to the extent that it applied to Greenhouse Holdings, LLC (Greenhouse), holding that it was disputed whether Greenhouse consented to arbitrate, and therefore, the evidence should be weighed by the district court in the first instance.At issue was whether an arbitrator has the authority to bind someone who hasn't signed the underlying arbitration agreement to an arbitration award. A Union filed a grievance against "Clearview Glass," alleging that it violated the parties' collective bargaining agreement. An arbitrator concluded that Greenhouse was bound by an in violation of the CBA. The district court vacated the award to the extent it applied to Greenhouse because it was unclear whether Greenhouse ever assented to the CBA. The Sixth Circuit vacated the judgment, holding that remand was required for the district court to first decide whether Greenhouse consented to arbitrate the threshold arbitrability question. View "Greenhouse Holdings, LLC v. International Union of Painters" on Justia Law

The First Circuit affirmed the judgment of the district court dismissing this case against Allscripts Healthcare Solutions, Inc. (AHS) on personal jurisdiction grounds but vacated the dismissal as to Allscripts Healthcare, LLC (Allscripts), holding that the district court improperly granted the motion to dismiss as to Allscripts.Dr. Juan M. Rodriguez-Rivera (Rodriguez) brought this action against AHS and Allscripts in Puerto Rico federal court after his electronic patient records from his medical practice were destroyed. AHS and Allscripts filed a motion to dismiss. The district court granted the motion, finding that the disputes should be arbitrated, that it lacked jurisdiction over both AHS and Allscripts, and that Rodriguez's complaint failed to state a claim as a matter of law. The First Circuit affirmed in part and vacated in part, holding (1) the district court improperly granted the motion to dismiss for lack of personal jurisdiction with respect to Allscripts; (2) whether a valid arbitration existed was a factual matter to be resolved by the district court; and (3) the district court erred in concluding that Rodriguez's complaint failed to state a claim against Allscripts. View "Rodriguez-Rivera v. Allscripts HC Sol., Inc." on Justia Law