Justia Contracts Opinion Summaries

The lawsuit underlying this appeal involves a "spin-off" of the Fast & Furious franchise, a project ultimately released as Fast & Furious Presents: Hobbs & Shaw (the film), on which Moritz allegedly worked as a producer pursuant to an oral agreement with Universal. After Moritz filed suit for breach of a binding oral agreement regarding Moritz's work on the film, appellants moved to compel arbitration based on arbitration agreements in the written producer contracts regarding Moritz's work for Universal on the Fast & Furious franchise.The Court of Appeal affirmed the trial court's denial of appellants' motion to arbitrate, holding that the arbitration agreements from the Fast & Furious movies did not apply to the Hobbs & Shaw spin-off dispute. The court stated that not only is it not clear and unmistakable here that the parties agreed to delegate arbitrability questions concerning Hobbs & Shaw to an arbitrator, no reasonable person in their position would have understood the arbitration provisions in the Fast & Furious contracts to require arbitration of any future claim of whatever nature or type, no matter how unrelated to the agreements nor how distant in the future the claim arose. The court explained that the Federal Arbitration Act (FAA) requires no enforcement of an arbitration provision with respect to disputes unrelated to the contract in which the provision appears. In this case, appellants' argument that an arbitration provision creates a perpetual obligation to arbitrate any conceivable claim that Moritz might ever have against them is plainly inconsistent with the FAA's explicit relatedness requirement. View "Moritz v. Universal City Studios LLC" on Justia Law

The First Circuit reversed the judgment of the district court vacating a portion of an arbitration award that voided the guaranty agreement at issue in this case, holding that, contrary to the conclusion of the district court, the arbitrator acted within the scope of his powers.Massachusetts Technology Collaborative (MTC) contracted with KCST USA, Inc. to operate and market a fiber optic network in western Massachusetts. MTC also secured a guaranty of KCST's obligations under the contract from KCST's parent company, Axia NetMedia Corporation. Axia later sued MTC over the guaranty agreement. MTC sought an order compelling arbitration, which the district court granted. The arbitrator found that MTC had materially breached the agreement with KCST, and, therefore, that the guaranty agreement was void for failure of consideration. The district court concluded that the arbitrator had exceeded the scope of his powers and vacated the award. The First Circuit reversed, holding that the arbitrator did not exceed the scope of his powers under section 10(a)(4) of the Federal Arbitration Act. View "Axia NetMedia Corp. v. Massachusetts Technology Park Corp." on Justia Law

After Buyers purchased two care facilities from Sellers, Buyers filed suit alleging that Sellers made fraudulent or, at best, negligent misrepresentations in the parties' sale agreements. Buyers also brought claims against Sellers' representatives in their individual capacities.The Fifth Circuit affirmed the district court's dismissal of Buyers' claims with prejudice for failure to state a claim. The court held that the district court properly dismissed Buyers' non-fraud claims for negligent misrepresentation and breach of contractual representations and warranties because these claims were subject to arbitration. In regard to the remaining claims, the court held that Buyers have not adequately pleaded a misrepresentation with respect to both facilities and thus they failed to meet the particularity requirements of Federal Rule of Civil Procedure 9(b). Therefore, because there was no misrepresentation, there was no fraud. View "Colonial Oaks Assisted Living Lafayette, LLC v. Hannie Development, Inc." on Justia Law

In this action brought against a long-term care facility by Kenneth, as administrator of Estate of Tommy Patton, the Supreme Court reversed in part the court of appeals' decision concluding that an arbitration agreement was enforceable as to Kenneth's individual wrongful death claim but that the agreement was not enforceable as to the Estate's claims, holding that the agreement was valid as to both claims.Kenneth signed an arbitration agreement at the time his father, Tommy, was admitted to Signature HealthCARE of East Louisville's long-term care facility. Tommy later suffered a fall and died a few weeks later. Kenneth brought sued Signature, alleging negligence and wrongful death. Signature filed a motion to compel arbitration. The trial court denied the motion in its entirety. The court of appeals reversed in part, concluding that the arbitration agreement was not enforceable against the Estate but that Kenneth's wrongful death claim was arbitrable because he executed the arbitration agreement in his individual capacity. The Supreme Court reversed in part, holding that both the Estate's and Kenneth's individual claims were subject to arbitration because the arbitration agreement was valid and enforceable as to the Estate claim and as to Kenneth's individual wrongful death claim. View "LP Louisville East, LLC v. Patton" on Justia Law

Since 1986, the GSW NBA basketball team has played their home games at the Authority's Oakland arena. A 1996 License Agreement gave GSW certain obligations to pay the debt incurred in renovating the arena if GSW “terminates” the agreement. In 2012, GSW announced its intention to construct a new arena in San Francisco. GSW did not exercise the renewal option in the Agreement, and, on June 30, 2017, its initial term expired. GSW initiated arbitration proceedings, seeking a declaration that it was no longer obliged to make debt payments if it allowed the License Agreement to expire rather than terminating it.The arbitrator ruled in favor of the Authority and against GSW, awarding the Authority attorney fees. The court of appeal affirmed. Based on extrinsic evidence, the arbitrator found the parties intended to adhere to the terms of a pre-agreement Memorandum of Understanding, which required the team to continue making debt payments after the initial term. The 1996 License Agreement is reasonably susceptible to the parties’ competing interpretations, so parol evidence was admissible to prove what the parties intended. Even assuming that the arbitrator addressed a question of law when she interpreted the Agreement, the parties intended to include a termination of the agreement upon GSW’s failure to exercise the first two options to renew. View "Oakland-Alameda County Coliseum Authority v. Golden State Warriors, LLC" on Justia Law

Jarboe was hired by DKD. Shortly after he began working, Jarboe was transferred to Leehan. Following his termination at Leehan, Jarboe brought this wage and hour action individually and on behalf of a putative class against the Hanlees Auto Group, its 12 affiliated dealerships (each us a separate corporate entity), including DKD and Leehan, and three individuals. The defendants moved to compel arbitration based on an employment agreement between Jarboe and DKD. The trial court granted the motion as to 11 of the 12 causes of action against DKD but denied the motion as to the other defendants. The trial court allowed Jarboe’s claim under the Private Attorneys General Act of 2004 (PAGA), Labor Code section 2698, to proceed in court against all defendants. The trial court refused to stay the litigation pending arbitration of Jarboe’s claims against DKD. The court of appeal affirmed, rejecting an argument that the other defendants are entitled to enforce the arbitration agreement between Jarboe and DKD as third party beneficiaries of Jarboe’s employment agreement or under the doctrine of equitable estoppel. View "Jarboe v. Hanlees Auto Group" on Justia Law

After encountering problems with their used 2011 Dodge Grand Caravan, plaintiffs Dina C. and Pastor O. Felisilda brought an action against Elk Grove Auto Group, Inc., doing business as Elk Grove Dodge Chrysler Jeep (Elk Grove Dodge) and the manufacturer, FCA US LLC (FCA) for violation of the Song-Beverly Consumer Warranty Act. Relying on the retail installment sales contract signed by the Felisildas, Elk Grove Dodge moved to compel arbitration. FCA filed a notice of nonopposition to the motion to compel. The trial court ordered the Felisildas to arbitrate their claim against both Elk Grove Dodge and FCA. In response, the Felisildas dismissed Elk Grove Dodge. The matter was submitted to arbitration, and the arbitrator found in favor of FCA. The trial court confirmed the arbitrator’s decision. The Felisildas appealed, contending: (1) the trial court lacked jurisdiction to compel them to arbitrate their claim against FCA for lack of notice that the motion to compel included FCA; and (2) the trial court lacked discretion to order the Felisildas to arbitrate their claim against FCA because FCA was a nonsignatory to the sales contract. After review, the Court of Appeal concluded the Felisildas forfeited their claim regarding lack of notice by arguing against FCA’s participation in arbitration. Furthermore, the Court concluded the trial court correctly determined the Felisildas’ claim against FCA was encompassed by the arbitration provision in the sales contract. View "Felisilda v. FCA US LLC" on Justia Law

The parties to this appeal were a Bolivian company, Compania de Inversiones Mercantiles S.A. (“CIMSA”), and Mexican companies known as Grupo Cementos de Chihuahua, S.A.B. de C.V. and GCC Latinoamerica, S.A. de C.V. (collectively “GCC”). Plaintiff-appellant CIMSA brought a district court action pursuant to the Federal Arbitration Act to confirm a foreign arbitral award issued in Bolivia against Defendant-appellee GCC. The underlying dispute stemmed from an agreement under which CIMSA and GCC arranged to give each other a right of first refusal if either party decided to sell its shares in a Bolivian cement company known as Sociedad Boliviana de Cemento, S.A. (“SOBOCE”). GCC sold its SOBOCE shares to a third party after taking the position that CIMSA failed to properly exercise its right of first refusal. In 2011, CIMSA initiated an arbitration proceeding in Bolivia. The arbitration tribunal determined that GCC violated the contract and the parties’ expectations. GCC then initiated Bolivian and Mexican court actions to challenge the arbitration tribunal’s decisions. A Bolivian trial judge rejected GCC’s challenge to the arbitration tribunal’s decision on the merits. A Bolivian appellate court reversed and remanded. During the pendency of the remand proceedings, Bolivia’s highest court reversed the appellate court and affirmed the original trial judge. But as a result of the simultaneous remand proceedings, the high court also issued arguably contradictory orders suggesting the second trial judge’s ruling on the merits remained in effect. GCC filed a separate Bolivian court action challenging the arbitration tribunal’s damages award. That case made its way to Bolivia’s highest court too, which reversed an intermediate appellate court’s nullification of the award and remanded for further proceedings. Invoking the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, CIMSA filed a confirmation action in the United States District Court for the District of Colorado. After encountering difficulties with conventional service of process in Mexico under the Hague Convention on Service Abroad of Judicial and Extrajudicial Documents, CIMSA sought and received permission from the district court to serve GCC through its American counsel pursuant to Federal Rule of Civil Procedure 4(f)(3). The district court then rejected GCC’s challenges to personal jurisdiction, holding (among other things) that: (1) it was appropriate to aggregate GCC’s contacts with the United States; (2) CIMSA’s injury arose out of GCC’s contacts; (3) exercising jurisdiction was consistent with fair play and substantial justice; and (4) alternative service was proper. The district court rejected GCC's defenses to CIMSA's claim under the New York Convention. Before the Tenth Circuit Court of Appeals, the Court affirmed the district court: the district court properly determined that CIMSA’s injury arose out of or related to GCC’s nationwide contacts. "The district court correctly decided that exercising personal jurisdiction over GCC comported with fair play and substantial justice because CIMSA established minimum contacts and GCC did not make a compelling case to the contrary." The Court also affirmed the district court's confirmation of the arbitration tribunal's decisions. View "Compania De Inversiones v. Grupo Cementos de Chihuahua" on Justia Law

In 1998, Bay and Oxbow entered into a limestone supply contract, agreeing to resolve any disputes according to specified “Dispute Resolution Procedures.” Oxbow began to provide lower quality limestone that posed a danger to Bay’s equipment. Bay agreed to pay—under protest—a price in excess of that permitted by the contract for adequate limestone. Negotiations and mediation failed. Bay filed a demand for arbitration. An arbitration panel unanimously held that Oxbow had breached the contract and awarded nearly $5 million in damages, costs, and interest. The panel did not award attorneys’ fees, concluding that the Dispute Procedures expressly deny it the jurisdiction to do so. The district court confirmed the award, agreeing that the contract did not permit the prevailing party to recover its attorneys’ fees.The Sixth Circuit reversed. The Procedure authorizing the allocation of costs states,“(but excluding attorneys’ fees which shall be borne by each party individually). The provision immediately following that grants the prevailing party a right to attorneys’ fees and another provision refers to attorneys’ fees. Those provisions can either be read together to permit the recovery of attorneys’ fees in court but not before an arbitration panel, or they are hopelessly contradictory and unenforceable. Bay presents a reasonable construction of the terms to harmonize them. View "Bay Shore Power Co. v. Oxbow Energy Solutions, LLC" on Justia Law

The Fourth Circuit vacated the district court's order denying DIRECTV's motion to compel arbitration in an action brought by plaintiff, alleging violations of the Telephone Consumer Protection Act (TCPA). Plaintiff alleged that defendants called her cell phone to advertise DIRECTV products and services even though her telephone number is listed on the National Do Not Call Registry.Because plaintiff signed an acknowledgement expressly agreeing to the arbitration provision of the Wireless Customer Agreement with AT&T, which provision applies to her as an authorized user, the court rejected plaintiff's argument that she did not form an agreement to arbitrate. The court held that plaintiff formed an agreement to arbitrate with DIRECTV where the ordinary meaning of "affiliates" and the contractual context convinced the court that the term includes affiliates acquired after the agreement was signed. Furthermore, in light of the expansive text of the arbitration agreement, the categories of claims it specifically includes, and the parties' instruction to interpret its provisions broadly, the court must conclude that plaintiff's TCPA claims fall within the scope of the arbitration agreement. Therefore, the court remanded for further proceedings. View "Mey v. DIRECTV, LLC" on Justia Law