Justia Contracts Opinion Summaries

When she began work, Campbell signed a contract with Keagle, the bar’s owner; it included an arbitration clause. After a dispute arose, the district judge denied Keagle’s motion to refer the matter to arbitration, finding several parts of the arbitration clause unconscionable: Keagle had reserved the right to choose the arbitrator and location of arbitration. Campbell had agreed not to consolidate or file a class suit for any claim and to pay her own costs, regardless of the outcome. The judge did not find that the contract was one-sided as a whole. Keagle accepted striking the provisions found to be unconscionable but sought to arbitrate rather than litigate.The Seventh Circuit remanded with instructions to name an arbitrator, reasoning that the mutual assent to arbitration remains. The Federal Arbitration Act, 9 U.S.C. 4, provides that, absent a contrary agreement, the arbitration takes place in the same judicial district as the litigation; “who pays” may be determined by some other state or federal statute, such as the Fair Labor Standards Act, on which Campbell’s suit rests. The chosen arbitrator can prescribe the procedures. Under 9 U.S.C. 5, “if for any … reason there shall be a lapse in the naming of an arbitrator" the court shall designate an arbitrator. View "Campbell v. Keagle Inc" on Justia Law

Mendoza applied for employment with FTU. Mendoza cannot read English. A supervisor interviewed Mendoza in Spanish and filled out the application form, which Mendoza signed. All of the acknowledgments Mendoza signed were in English. FTU’s director of human resources later testified that it was his practice to review the FTU Employee Handbook, including an arbitration policy, in Spanish if appropriate, and to give Spanish-speaking employees a Spanish-language version of the Handbook. Mendoza denied receiving the Spanish-language Handbook.FTU hired Mendoza as a temporary, interstate truck driver. Mendoza filed a putative class action, alleging Labor Code violations: failure to pay minimum wages, to provide rest periods, to provide meal periods, to provide accurate wage statements, and to pay all wages owed upon termination. Mendoza opposed a motion to compel arbitration, arguing that the Handbook, which stated that it was not a contract and was merely for informational purposes, did not create a binding agreement and that any agreement was void for lack of mutual consent or voidable based on unilateral mistake.The court of appeal affirmed the denial of the motion to compel arbitration. It was for a court to decide whether the parties had entered into an agreement to arbitrate. In these circumstances, the parties have not entered into either an express or an implied contract to arbitrate. View "Mendoza v. Trans Valley Transport" on Justia Law

The Supreme Court reversed the decision of the court of appeals that applied the doctrine of forfeiture as the basis for its reversal of the circuit court's vacatur of Loren Imhoff Homebuilder, Inc.'s arbitral award under Wis. Stat. 788.10(1), holding that remand was required.This case arose from a construction contract that Imhoff entered into with Homeowners for a remodeling project on Homeowners' home. Homeowners later asserted that Imhoff breach the construction contract. The parties proceeded to arbitration. Imhoff brought a motion to confirm the arbitral award. Homeowners moved to vacate the award based partly on the arbitrator's sleeping during arbitration, which Homeowners alleged was both misbehavior that resulted in prejudice and indicative of a flawed process. The Supreme Court reversed, holding (1) Homeowners did not forfeit their objection to the arbitrator's sleeping; and (2) because this Court is divided on whether the arbitration award should be vacated pursuant to Wis. Stat. 788.10, remand was required for consideration of section 788.10 issues. View "Loren Imhoff Homebuilder, Inc. v. Taylor" on Justia Law

Sacks is a law firm with a 20-year history of working with the International Monetary Fund (IMF). In 2011, IMF hired Sacks to negotiate disputed claims of various contractors that worked on the renovation of its headquarters. The parties’ contract asserts IMF’s immunity from suit and provides that any disputes not settled by mutual agreement shall be resolved by arbitration. In a subsequent fee dispute between Sacks and IMF, Sacks filed a demand for arbitration with the AAA. The arbitration panel awarded Sacks $39,918.82 plus interest but denied Sacks’ claim of underpayment in connection with earlier work.Sacks sued the Fund, claiming that the award should be vacated pursuant to the D.C. Code as “the result of misconduct by the arbitrators.” IMF removed the case to federal court and moved to dismiss it on immunity grounds pursuant to its Articles of Agreement, given effect in the U.S. by the Bretton Woods Act, 22 U.S.C. 286h. Sacks asserted the contract waived immunity by expressly providing for arbitration pursuant to the AAA Rules, which contemplate courts’ entry of judgment on arbitral awards. The D.C. Circuit affirmed the dismissal of the suit. The AAA Rules and D.C. law contemplate judicial involvement in the enforcement of arbitral awards, so arguably the contract also does so but an international organization's waiver of the immunity must be explicit. The parties' contract expressly retains the IMF’s immunity, reiterating it even within the arbitration clause. View "Leonard A. Sacks & Associates P.C. v. International Monetary Fund" on Justia Law

The Supreme Court reversed the judgment of the district court concluding that an arbitration provision was void under Nev. Rev. Stat. 597.995 for failure to include a specific authorization, holding that the Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq., preempted section 597.955, and therefore, the district court's decision was erroneous.Nev. Rev. Stat. 597.995 requires any agreement that includes an arbitration provision to include a specific authorization for that provision. The district court concluded that the arbitration provision at issue in this case was void for failure to include a specific authorization, as required by section 597.995. The Supreme Court reversed, holding (1) because section 597.995 singles out and disfavors arbitration provisions by imposing stricter requirements on them than on other contract provisions, the FAA preempts the statute in cases involving interstate commerce; and (2) the district court erred by concluding that section 597.995 voided the parties' arbitration agreement. View "Maide, LLC v. Dileo" on Justia Law

The Supreme Court reversed the decision of the court of appeals reversing order of the circuit court denying the motion of Legacy Health Services, Inc. Cambridge Place Group, LLC, and Cambridge Place Properties, LLC (collectively, Defendants) to dismiss or stay this lawsuit and compel arbitration of the medical malpractice claims brought by Christopher Jackson, as guardian for Christine Jackson, his mother, holding the court of appeals erred.At issue was whether Christopher possessed the authority, as his mother's guardian, to enter a voluntary arbitration agreement that was not a prerequisite to the provision of care or services to his ward. The circuit court concluded that Christopher did not have that authority. The court of appeals reversed, holding that a guardian's authority to enter into contracts generally is within the ambit of what is reasonably inferable from the relevant statutes. The Supreme Court reversed, holding (1) guardians have the authority to bind their wards to contracts that limit or deprive the civil rights of their wards only to the extent necessary to provide needed care and services to the ward; and (2) because the arbitration agreement was not necessary to provide care or services to Christine, Christopher lacked the authority to enter into the arbitration agreement. View "Jackson v. Legacy Health Services, Inc." on Justia Law

Charter created a program for resolving and ultimately arbitrating employment-related disputes. Individuals who received an offer from Charter were required to complete a web-based onboarding process as a condition of employment; they were prompted to review and accept various policies and agreements, including the arbitration agreement and the program guidelines. After agreeing to submit all employment-related disputes with Charter to arbitration, Ramirez was hired in July 2019. In May 2020, Charter terminated Ramirez. Ramirez filed suit, alleging multiple claims under California’s Fair Employment and Housing Act (FEHA) and wrongful discharge. Charter moved to compel arbitration and sought attorney fees in connection with its motion pursuant to the arbitration agreement.The court denied Charter’s motion to compel arbitration, finding that the requirement was substantively unconscionable because it shortened the statute of limitations for FEHA claims, failed to restrict attorney fee recovery to only frivolous or bad faith FEHA claims (contrary to FEHA), and impermissibly provided for an interim fee award for a party successfully compelling arbitration. The court of appeal affirmed. The arbitration agreement was a contract of adhesion, which establishes a minimal degree of procedural unconscionability, and the agreement contained a high degree of substantive unconscionability. The arbitration agreement is permeated by unconscionability and cannot be enforced. View "Ramirez v. Charter Communications, Inc." on Justia Law

The Supreme Court reversed the decision of the court of appeals vacating the order of the district court entering judgment on an arbitrator's award, holding that the court of appeals erred in finding the award ambiguous and ordering a remand to the arbitrator for further clarification.Signal 88, LLC brought this contract action against Lyconic, LLC. The district court ordered the dispute to be submitted to arbitration. The arbitrator issued a decision, after which Lyconic applied for an order confirming the arbitration award. The district court confirmed the award but, in the process, modified it. The court of appeals vacated the judgment, determining that the arbitrator's award was ambiguous. The Supreme Court reversed, holding (1) the district court erred in modifying rather than confirming the award; and (2) the court of appeals erred in finding that the arbitrator's award was ambiguous. View "Signal 88, LLC v. Lyconic, LLC" on Justia Law

The Supreme Court affirmed the judgment of the district court denying Ahhmigo, LLC's motion to vacate the arbitrator's ruling in favor of The Synergy Company of Utah, LLC in this breach of contract proceeding, holding that the district court did not err.Ahhmigo filed a complaint and demand for arbitration against Synergy, alleging breach of contract, unjust enrichment, and other climes. Synergy agreed to arbitrate Ahhmigo's claims, and the arbitrator ruled in favor of Synergy. Ahhmigo moved the district court to vacate the arbitration award, arguing that the arbitrator had manifestly disregarded the law. The district court denied the motion and confirmed the arbitration award. The Supreme Court affirmed, holding that this Court will not reach the question presented on appeal because Ahhmigo did not raise it in the district court. View "Ahhmigo, LLC v. Synergy Co. of Utah, LLC" on Justia Law

The First Circuit reversed the judgment of the district court in this dispute between the International Brotherhood of Electrical Workers, Local 103 (the Union) and Johnson Controls Security Solutions, LLC over Johnson Controls' compliance with the terms of the parties' collective bargaining agreement (CBA), holding that the district court erred by failing to order arbitration as called for by a clause in the CBA.Johnson Controls' Norwood, Massachusetts facility entered into a CBA with the Union, a labor organization that represented employees of the company, that contained an arbitration clause. The Union filed a grievance concerning Johnson Controls' reduction in its matching contribution to the company's 401(k) plan, which Johnson Controls denied. When the Union filed a demand for arbitration Johnson Controls brought this lawsuit seeking a declaratory judgment that the dispute was not arbitrable under the CBA. The district court concluded that the dispute was not arbitrable. The First Circuit reversed, holding that nothing in the record showed that the parties intended to exclude this type of dispute from the scope of the arbitration clause. View "Johnson Controls Security Solutions, LLC v. Int'l Brotherhood of Electrical Workers, Local 103" on Justia Law