Justia Contracts Opinion Summaries

After completing MoneyGram's Transfer Send Form, Fisher, a 63-year-old veteran with poor eyesight, initiated Moneygram money transfers at California Walmart stores, one for $2,000 to a Georgia recipient, and another for $1,530 to a Baton Rouge recipient. The funds were delivered to the intended recipients. Fisher never turned over the Send Form to read the Terms and Conditions, which included an arbitration requirement. He would have been unable to read the six-point print without a magnifying glass. Fisher sued MoneyGram, claiming that the transfers were induced by a “scammer,” and that MoneyGram knew its system was used by scammers but failed to warn or protect customers; MoneyGram’s service was used frequently in fraudulent transactions because the money was immediately available at a Walmart store or other MoneyGram outlet. Other services (bank transfers) place a temporary hold on funds to discourage fraudulent transactions. Fisher alleged MoneyGram had been the subject of an FTC injunction, requiring it to maintain a program to protect its consumers.Fisher’s class action complaint cited the unfair competition law. The court of appeal affirmed the denial of MoneyGram’s petition to compel arbitration. The provision was unenforceable as procedurally and substantively unconscionable, and not severable. The small font, placement, and “take it or leave it nature” were “indications” of procedural unconscionability. The one-year limitations period, a requirement that any plaintiff pay arbitration costs and fees, and waiver of attorneys’ fees were substantively unconscionable “in the aggregate.” View "Fisher v. MoneyGram International, Inc." on Justia Law

When Selden signed up for Airbnb, an online home rental platform, he was presented with a sign-in webpage that informs the user he is agreeing to certain terms by signing up. Airbnb’s Terms of Service required that all disputes be resolved by arbitration. After Selden signed up for Airbnb, he attempted to rent a listed room and suspected that the host denied his request because of his race, which the host could see from Selden’s profile picture. Selden created two fake Airbnb accounts with profile pictures of white individuals and used his fake accounts to request renting the same property for the same dates. According to Selden, the host accepted both requests. Selden posted his claims on social media where they went viral.Selden sued, citing Title II of the Civil Rights Act of 1964, 42 U.S.C. 2000a), the Civil Rights Act of 1866, 42 U.S.C. 1981, and the Fair Housing Act, 42 U.S.C. 3604. The district court compelled arbitration of his claims. The arbitrator ruled in favor of Airbnb. The court refused to vacate the arbitration award. The D.C. Circuit affirmed, rejecting Selden’s arguments that he did not agree to arbitrate because Airbnb’s sign-up screen failed to put him on notice of the arbitration clause in its Terms of Service, that his discrimination claims were not arbitrable, and that the arbitrator committed misconduct by failing to provide for sufficient discovery and by refusing to consider his expert report. View "Selden v. Airbnb, Inc." on Justia Law

The Supreme Court affirmed the judgment of the district court determining that the district court, and not the arbitrator, was to decide whether the parties' dispute was subject to arbitration, holding that the district court correctly concluded that the parties' dispute was not subject to arbitration.Glacier Park Iron Ore Properties, LLC alleged that United States Steel Corporation (U.S. Steel) aided and abetted a breach of the fiduciary duty of Great Northern Iron Ore Properties Trust and sought recession of a lease that U.S. Steel signed with the Trust. Glacier Park filed a motion to stay proceedings pending arbitration and to compel the parties to engage in arbitration. The district court denied the motion, concluding that the court, not arbitrators, should decide the meaning of the arbitration clause at issue in this case and, thus, the arbitrability of the dispute. The district court denied the motion, and the court of appeals affirmed. The Supreme Court affirmed, holding that because there was not clear and unmistakable evidence that the parties intended to delegate arbitrability to the arbitrator, whether the parties' breach of fiduciary claim was arbitrable was a question for the court. View "Glacier Park Iron Ore Properties, LLC, v. United States Steel Corp." on Justia Law

Boykin, a 73-year-old African-American veteran, worked in managerial roles for Family Dollar Stores. On July 8, 2018, Boykin had a dispute with a customer. Family Dollar fired Boykin weeks later. Boykin sued, alleging age and race discrimination. Family Dollar moved to compel arbitration, introducing a declaration that Family Dollar employees must take online training sessions, including a session about arbitration. When taking online courses, employees use their own unique ID and password. During the arbitration session, they must review and accept Family Dollar’s arbitration agreement. According to Family Dollar, Boykin completed the session on July 15, 2013. Boykin replied under oath that he did not consent to or acknowledge an arbitration agreement at any time, that he had no recollection of taking the arbitration session, and that no one ever told him that arbitration was a condition of his employment. Boykin requested his personnel file, which did not include an arbitration agreement. The district court granted Family Dollar’s motion.The Sixth Circuit reversed. Although the Federal Arbitration Act requires a court to summarily compel arbitration upon a party’s request, the court may do so only if the opposing side has not put the making of the arbitration contract “in issue.” 9 U.S.C. 4. Boykin’s evidence created a genuine issue of fact over whether he electronically accepted the contract or otherwise learned of Family Dollar’s arbitration policy. View "Boykin v. Family Dollar Stores of Michigan, LLC" on Justia Law

Colulmbia City seeks to compel IMA to arbitrate a dispute involving unreimbursed medical fees. The parties are connected by a series of intermediary agreements within a preferred provider organization (PPO) network that allows patients in covered health plans to receive medical services from participating hospitals at discounted rates, and one of these agreements contains an arbitration clause. It is undisputed that IMA is not a party or signatory to the Hospital Agreement that contains the arbitration clause.The Fifth Circuit affirmed the district court's denial of Columbia Hospital's motion to compel arbitration. Applying Texas law, the court concluded that the district court correctly applied this circuit's precedent that knowledge of the agreement requires knowledge of the contract's basic terms. In this case, the district court did not clearly err in concluding, based on the record before it, that IMA lacked the requisite knowledge of the Hospital Agreement and its basic terms to be compelled to arbitrate under direct benefits estoppel. Alternatively, the court declined, contrary to Columbia Health's assertions, to construe the series of contracts between IMA, PPOplus, HealthSmart and Columbia Hospital as a unified contract. View "IMA, Inc. v. Columbia Hospital Medical City" on Justia Law

The Supreme Court reversed the decision of the court of appeals vacating an arbitration award and affirmed the circuit court's denial of the motion to vacate the arbitrator's award, holding that the court of appeals exceeded the statutory basis for vacating the award.After she purchased a home, Plaintiff initiated an arbitration proceeding against Defendants, the seller of the home as well as two real estate agents, seeking to recover damages or to rescind the purchase contract. The arbitrator concluded that Plaintiff could not, as a matter of law, prevail on her breach of contract and rescission claims. Plaintiff filed a petition seeking to vacate the arbitration decision pursuant to the provisions of Ky. Rev. Stat. 417.160. The circuit court denied the petition. The court of appeals reversed and remanded for a new arbitration. The Supreme Court reversed, holding that the arbitrator did not exceed his powers. View "Booth v. K&D Builders, Inc." on Justia Law

RECON filed suit against AECOM for damages related to AECOM's alleged failure to properly manage the construction project on which RECON worked as one of AECOM's subcontractors. After AECOM moved to compel arbitration based on an arbitration clause contained in a separate contract (the Prime Agreement) between AECOM and the property owner, Shell, the trial court denied AECOM's motion.The Court of Appeal affirmed and concluded that, in the absence of a clear agreement to submit a dispute to arbitration, the court will not infer a waiver of a party's jury trial rights. The court explained that the subcontractor's incorporation of a voluminous contract containing an arbitration agreement between other parties was insufficient to subject RECON to arbitration of its claims against AECOM. Accordingly, AECOM has failed to establish the existence of an agreement to arbitrate RECON's claims. View "Remedial Construction Services, LP v. Aecom, Inc." on Justia Law

The Supreme Court affirmed the judgment of the circuit court refusing to compel arbitration in this case alleging violations of the West Virginia Human Rights Act, W. Va. Code 5-11-1 to -20, holding that the West Virginia Department of Health and Human Resources (DHHR) could not enforce the arbitration agreement.Plaintiff, a nurse who formerly worked for Sunbelt Staffing, LLC, signed an employment agreement containing an arbitration provision. Plaintiff was assigned to work at a hospital under DHHR's direction but later was informed she was not eligible to return to work for DHHR. Plaintiff filed an amended complaint against DHHR and others, alleging violations of the Act. DHHR moved to dismiss the amended complaint and to compel arbitration. The circuit court denied the motion. The Supreme Court affirmed, holding (1) DHHR had no right to invoke arbitration contained in the employment agreement; and (2) the theory of estoppel did not require arbitration. View "W. Va. Department of Health & Human Resources v. Denise" on Justia Law

The Supreme Court reversed the judgment of the court of appeals affirming the decision of the trial court denying Aerotek, Inc.'s motion to compel arbitration, holding that an alleged signatory's simple denial that he signed the record was insufficient to prevent attribution of an electronic signature to him.Plaintiffs, four individuals, were hired by Aerotek to work as contractors on a construction project. After all four were terminated, they sued Aerotek and others for racial discrimination and retaliation. Aerotek moved to compel arbitration based on an online-only hiring application that each employee had completed. Plaintiffs opposed the motion, arguing that they had completed the online hiring application but denying that they had ever seen or signed a mutual arbitration agreement (MAA) within the application. The trial court denied the motion to compel arbitration. The court of appeals affirmed, rejecting Aerotek's argument that it had conclusively established the validity of the MAAs. The Supreme Court reversed, holding (1) Aerotek conclusively established that Plaintiffs signed, and therefore consented to, the MAAs; and (2) therefore, the trial court erred in denying Aerotek's motion to compel arbitration. View "Aerotek, Inc. v. Boyd" on Justia Law

Pillar hired Epiphyte to convert its cryptocurrency into Euros. Epiphyte informed Pillar that it used Payward’s online exchange to convert its clients’ cryptocurrencies. Pillar transferred its cryptocurrency into Epiphyte’s account on Payward’s platform. After Epiphyte converted the currency but before the exchanged funds were transferred to Pillar’s bank account, four million Euros belonging to Pillar were stolen from Epiphyte’s account.Pillar sued Payward, alleging Payward knew or should have known that Epiphyte was using its Payward account on Pillar's behalf, failed to use standard security measures that would have prevented the theft, and falsely advertised that it provided the best security in the business. Payward moved to compel arbitration, claiming that Epiphyte agreed to Payward’s “Terms of Service” when it created an account, as required for all users, that those Terms included an arbitration agreement, and that Pillar was bound by that agreement.The court of appeal affirmed the denial of Payward’s motion. There is no evidence Epiphyte was acting as Pillar’s agent when it agreed to the Terms two years before Pillar hired it or that the agency relationship automatically bound the principal to the agent’s prior acts. There is no evidence Pillar knew the arbitration agreements existed or had a right to rescind them. No ratification occurred. There was no intent to benefit Pillar or similar parties. Pillar’s claims are not inextricably intertwined with the Terms. View "Pillar Project AG v. Payward Ventures, Inc." on Justia Law