Justia Contracts Opinion Summaries

Federico Garcia, president of Mama Kio’s, entered into an agreement with Total Merchant Services (TMS) for credit-card financial services for the restaurant. Two months after opening Mama Kio’s, Garcia noticed that the bank deposits through TMS were considerably less than expected. TMS later discovered the cause was an improper code in its software that had failed to collect the tips authorized by the customers. The missing tips totaled approximately $14,000. TMS attempted to remedy the error by running the credit cards again for the uncharged tip amounts. However, the customers were charged not only for the uncollected tips but also for the entire charged amounts. More than three thousand customers’ transactions were double and/or triple billed, resulting in more than $400,000 taken from Mama Kio’s customers’ accounts. Mama Kio’s worked with the credit-card companies for more than a month to repair and mitigate the damages. Mama Kio’s was forced to close its restaurant for lack of customers. LAGB, LLC, a commercial landlord, filed suit against Mama Kio’s for breach of its lease contract and sought damages for rent, insurance, taxes, and capital improvements. LAGB also sued the companies that provided credit-card processing services to Mama Kio’s, alleging that the negligence of the credit-card processing companies caused Mama Kio’s to breach its lease with LAGB. Mama Kio’s filed a cross-claim against the credit-card processing companies, alleging misrepresentations and tortious interference with its business. The credit-card processing companies filed motions compelling LAGB and Mama Kio’s to arbitrate. The trial court granted the motions. The Mississippi Supreme Court determined that while the trial court did not err by compelling Mama Kio’s to arbitrate its cross-claims, it did err by compelling LAGB to arbitrate its claims. View "LAGB, LLC v. Total Merchant Services, Inc." on Justia Law

Jason Blanks, Peggy Manley, Kimberly Lee, Nancy Watkins, Randall Smith, Trenton Norton, Earl Kelly, Jennifer Scott, and Alyshia Kilgore (referred to collectively as "the customers") appealed the denial of a motion to compel arbitration and a declaratory judgment entered in an action brought by TDS Telecommunications LLC, and its two affiliates, Peoples Telephone Company, Inc., and Butler Telephone Company, Inc. (referred to collectively as "the Internet providers"). The customers subscribed to Internet service furnished by the Internet providers; their relationship was governed by a written "Terms of Service." The customers alleged that the Internet service they have received was slower than the Internet providers promised them. At the time the customers learned that their Internet service was allegedly deficient, the Terms of Service contained an arbitration clause providing that "any controversy or claim arising out of or relating to [the Terms of Service] shall be resolved by binding arbitration at the request of either party." In the declaratory-judgment action, the trial court ruled that the Internet providers were not required to arbitrate disputes with the customers. The Alabama Supreme Court determined the arbitration clause in the applicable version of the Terms of Service included an agreement between the Internet providers and the customers that an arbitrator was to decide issues of arbitrability, which included the issue whether an updated Terms of Service effectively excluded the customers' disputes from arbitration. Accordingly, the Supreme Court reversed the trial court's denial of the customers' motion to compel arbitration and its judgment declaring the updated Terms of Service "valid and enforceable," and remanded the case for further proceedings. View "Blanks et al. v. TDS Telecommunications LLC" on Justia Law

In this case brought by Plaintiffs seeking to enforce a settlement agreement the Supreme Court reversed the judgment of the district court denying Defendants' motion to compel arbitration, holding that the Federal Arbitration Act (FAA) preempts Nev. Rev. Stat. 597.995, which requires agreements that include an arbitration provision also to include a specific authorization for the arbitration provision showing that the parties affirmatively agreed to that provision.The parties in this case entered into a settlement agreement that referenced a licensing agreement that included an arbitration provision. When Plaintiffs sued to enforce the settlement agreement Defendants filed a motion to compel arbitration and dismiss the complaint because the settlement agreement incorporated the licensing agreement's arbitration clause. The district court concluded that the arbitration provision was unenforceable because it did not include the specific authorization required by section 597.995. The Supreme Court reversed, holding (1) the statute did not void the arbitration clause; and (2) the claims in the underlying complaint were subject to arbitration. View "MMAWC, LLC v. Zion Wood Obi Wan Trust" on Justia Law

Defendant, a 24-hour skilled nursing facility, appealed an order denying its petition to compel arbitration of claims asserting negligent or willful misconduct, elder abuse, and wrongful death filed against it by decedent’s daughter as successor in interest and individually. The trial court found the successor claims were not arbitrable because no arbitration agreement existed between decedent and defendant, given defendant’s failure to prove daughter had authority to sign the agreement on decedent’s behalf. The court further found the arbitration agreement was unenforceable against daughter individually on grounds of unconscionability. Finding no reversible error, the Court of Appeal affirmed the trial court order. View "Lopez v. Bartlett Care Center, LLC" on Justia Law

Gupta joined Morgan Stanley and signed an employment agreement containing an arbitration clause; an employee dispute resolution program (CARE) applied to all U.S. employees. The CARE program did not then require employees to arbitrate employment discrimination claims but stated that the program “may change.” In 2015, Morgan Stanley amended its CARE program to compel arbitration for all employment-related disputes, including discrimination claims, and sent an email to each U.S. employee, with links to the new arbitration agreement and a revised CARE guidebook. The email attached a link to the arbitration agreement opt-out form and set an opt-out deadline, stating that, if the employee did not opt-out, continued employment would reflect that the employee agreed to the arbitration agreement and CARE guidebook and that opting out would not adversely affect employment status. Gupta did not submit an opt-out form or respond to the email. He continued to work at Morgan Stanley for two years until, he alleges, the company forced him to resign because of military leave. Gupta sued for discrimination and retaliation under the Uniformed Services Employment and Reemployment Rights Act, 38 U.S.C. 4301–35. The court agreed with that Illinois law permits an offeror to construe silence as acceptance if circumstances make it reasonable to do so; based on pretrial evidence, Gupta could not dispute he received the email. The Seventh Circuit affirmed an order compelling arbitration under the Federal Arbitration Act, finding the existence of a written agreement to arbitrate, a dispute within the scope of that agreement, and a refusal to arbitrate. View "Gupta v. Morgan Stanley Smith Barney, LLC" on Justia Law

The Supreme Court reversed the decision of the court of appeals affirming the trial court's judgment granting Plaintiff's motion to certify a class action, holding that when a class-certification case originates with a single named plaintiff and that plaintiff is not subject to an arbitration agreement that was entered into by unnamed putative class members, the defendant need not raise a specific argument referring or relating to arbitration in the defendant's answer.Plaintiff filed a class-action complaint against Defendant, his former employer. When Plaintiff moved to certify the case as a class action Defendant opposed the motion, asserting the defense of arbitration. The trial court granted the motion, concluding that Defendant waived any right of arbitration. The appellate court affirmed, determining that Defendant's failure to assert the arbitration defense in his answer or to seek to enforce the right to arbitration prior to its opposition to the certification was inconsistent with its right to assert the defense. The Supreme Court reversed, holding (1) because arbitration was not available as a defense at the time Defendant submitted its answer, Defendant could not waive a right to assert arbitration at that time; and (2) Defendant had no duty to raise an argument that Plaintiff failed to satisfy Civ.R. 23(A)'s typicality and adequacy requirements. View "Gembarski v. PartsSource, Inc." on Justia Law

Robert was admitted to a nursing home multiple times. During his final stay, he fell out of bed, sustained a head injury, and later died. His estate sued in state court, alleging negligence, negligence per se, violations of Kentucky’s Residents’ Rights Act, KRS 216.515(26), corporate negligence, medical negligence, wrongful death, and loss of consortium. The nursing home sought to enforce an arbitration agreement in federal court. The district court held that no valid agreement covering the final visit existed. An Agreement dated January 5, 2015 displays a mark of some kind in the “Signature of Resident” block, but it is difficult to read. Bramer’s estate alleges that this scrawl is a forgery; Robert's widow stated in an affidavit that neither she nor Robert signed that form. On an Agreement dated January 26, 2015, the widow signed in the “Signature of Resident” block. The Alternative Dispute Resolution Agreements are identical, bind successors and assigns, and require arbitration of a wide range of disputes. They purport to remain in effect through discharge and subsequent readmission. Although signing the Agreement was not a condition of admission, it was presented as part of the admissions packet. The estate presented evidence that the staff implied that signing the Agreement was required. The Sixth Circuit affirmed. By requesting a second agreement on January 26, the nursing home effectively abandoned the first agreement. Lacking Robert’s consent, there was no valid agreement to arbitrate. View "GGNSC Louisville Hillcreek v. Estate of Bramer" on Justia Law

The First Circuit affirmed the arbitrator's decision in favor of RMS Lifeline, Inc. in this dispute between RMS and Dialysis Access Center (DAC) and the district court's refusal to vacate that decision, holding that the district court was correct in denying DAC's challenge and confirming the award.In this multi-year arbitration-fueled litigation the arbitrator ultimately entered a decision for RMS, awarding it almost $2 million. The district court confirmed the award and dismissed DAC's complaint to vacate and/or modify the arbitration award. The First Circuit affirmed, holding that vacatur of the arbitration award was not warranted and that the district court properly confirmed the award. View "Dialysis Access Center, LLC v. RMS Lifeline, Inc." on Justia Law

The Supreme Court reversed the judgment of the district court denying the motion to compel arbitration filed by Edwards Jones & Company, Jeremy Kientz, and Nick Ferranto (collectively, Edwards Jones) of post-termination claims asserted against them by former Edward Jones employee Adam Bucy, holding that Bucy's claims were mandatorily arbitrable and within the scope of the arbitration agreements.Bucy, who worked for Edward Jones for approximately nineteen years primarily as a financial advisor, was terminated after an internal review. Bucy filed a complaint against Edward Jones asserting claims for statutory blacklisting, statutory defamation, and common law tortious interference with a prospective business relationship. Edward Jones moved to dismiss and compel arbitration of Bucy's claims on the basis that they were subject to arbitration under Financial Industry Regulatory Authority, Inc. (FINRA) and National Association of Securities Dealers, Inc. (NASD) regulations and two arbitration agreements between the parties. The district court denied arbitration of post-employment claims, concluding that the claims were not arbitrable within the scope of the arbitration agreements. The Supreme Court reversed, holding that the arbitration agreements were valid and enforceable, that Bucy's claims were mandatorily arbitrable, and that the claims were within the scope of the arbitration agreements. View "Bucy v. Edward Jones & Co." on Justia Law

Defendants, 150 Realty, LLC and Harbour Links Estates, LLC, appeal superior court orders denying their motions to dismiss or stay actions filed by plaintiffs, Hoyle, Tanner & Associates, Inc. (HTA), McLean Communications, LLC (McLean), and At Comm Corporation. Plaintiffs leased commercial space located at 150 Dow Street in Manchester, New Hampshire. Their tenancies commenced between 1992 and 2001, after they entered into separate lease agreements with the property owner, One Dow Court, Inc. (ODC). The lease agreements allotted each plaintiff a specific number of parking spaces adjacent to the 150 Dow Street building and allowed plaintiffs to use additional spaces in other parking areas. Each agreement also provided that “lessee’s parking rights are subject to lessor’s reasonable rules and regulations.” The trial court ruled that plaintiffs’ claims relating to defendants’ imposition of certain parking rules and fees did not fall within the scope of identical arbitration clauses included in each of the plaintiffs’ lease agreements. The trial court also granted partial summary judgment to HTA and McLean on their declaratory judgment claims, concluding that defendants’ parking rules that assess fees for certain parking spaces were unenforceable. Finding no reversible error in the trial court's judgment, the New Hampshire Supreme Court affirmed. View "Hoyle, Tanner & Associates, Inc. v. 150 Realty, LLC" on Justia Law