Justia Contracts Opinion Summaries

In 2006, T3 Enterprises entered into the Distributor Agreement with Safeguard Business Systems (SBS). In 2014, T3 filed suit alleging SBS had breached the Distributor Agreement by failing to prevent other SBS distributors from selling to T3’s customers and for paying commissions to the interfering distributors rather than to T3. The Distributor Agreement between SBS and T3 contained an arbitration clause indicating disputes must be resolved in a Dallas, Texas based arbitration procedure. The Distributor Agreement also contained a forum selection clause indicating that the Federal Arbitration Act (FAA) and Texas law would apply to any disputes between the parties. Pursuant to this agreement, SBS moved the district court to compel arbitration in Dallas. The district court determined the parties had to submit to arbitration, but that the Dallas forum selection clause was unenforceable, and arbitration was to take place in Idaho. The Arbitration Panel (the Panel) found for T3 and the district court confirmed the award in the amount of $4,362,041.95. The district court denied SBS’s motion to vacate or modify the award. SBS appealed, but finding no reversible error, the Idaho Supreme Court affirmed the district court. View "T3 Enterprises v. Safeguard Business Sys" on Justia Law

The Supreme Court reversed the decision of the circuit court denying Defendant’s motion to compel arbitration, holding that the circuit court erred in denying the motion for arbitration because the parties’ disagreements were controversies arising out of or relating to their contract, and therefore, pursuant to the contract, an arbitrator must resolve them.Plaintiffs sued Defendant, alleging that the home Defendant constructed for Plaintiffs suffered from defects that caused damage to the home. Defendant filed a motion to compel arbitration under the arbitration clause of the parties’ contract. The circuit court denied the motion, concluding that the arbitration clause was unenforceable. The supreme Court reversed, holding that the parties’ disagreement over the interpretation of the arbitration clause, as well as the application of the doctrine of impossibility to the arbitration clause, were “controvers[ies] arising out of or relating to the contract,” and therefore, the circuit court erred in refusing to compel arbitration. View "Brush Arbor Home Construction, LLC v. Alexander" on Justia Law

The First Circuit affirmed the decision of the district court denying SPAR Group, Inc.’s motion to compel arbitration in this case brought by Paradise Hogan against SPAR Business Services, Inc. (SBS) and SPAR, holding that SPAR could not compel Hogan to arbitrate because SPAR was not a party to the agreement containing the arbitration clause.SPAR, a retail services provider, obtained the majority of its personnel from SBS, a staffing company. After SBS engaged Hogan as an independent contractor and assigned him to perform services for SPAR, Hogan and SBS entered into an independent contractor master agreement that contained an arbitration clause. Hogan later sued SBS and SPAR, and both defendants sought to compel arbitration. The district court compelled arbitration as to Hogan’s claims against SBS but denied the motion to compel arbitration as to SPAR. SPAR appealed. The First Circuit affirmed, holding that there was no legal basis to compel Hogan to arbitration where the clear terms of the agreement showed that Hogan did not consent to arbitrate his claims against SPAR. View "Hogan v. SPAR Group, Inc." on Justia Law

The Court of Chancery held that an asset purchase agreement between the parties in this case required the parties to arbitrate their dispute over the net working capital of the assets that Defendant brought from Plaintiff, thus granting Plaintiff’s motion for summary judgment.Before the Court, Defendant argued that the parties agreed to an expert determination of certain narrow disputes but not to binding arbitration. The Court of Chancery disagreed, holding (1) the contract language was unambiguous and manifested an intent to require the parties to arbitrate their disputes; and (2) there was no basis to rule that a failure to include arbitration rules in an arbitration clause invalidates the arbitration clause or changes the distinction between procedural and substantive arbitrability. View "Agiliance, Inc. v. Resolver SOAR, LLC" on Justia Law

The First Circuit affirmed the order of the district court finding that an arbitration agreement between the parties in this case was enforceable, granting AT&T Mobility Puerto Rico, Inc.’s (AT&T) motion to compel arbitration and dismissing Nereida Rivera-Colon’s (Rivera) suit, holding that Rivera manifested her intent to accept the agreement to arbitrate legal grievances as per Puerto Rico law.Rivera filed suit against AT&T, her former employer, alleging age discrimination and wrongful termination. AT&T entered a special appearance and moved to stay the proceedings and compel arbitration. In response, Rivera argued that there was no valid arbitration agreement. The district court held that the arbitration agreement was enforceable and granted the motion to compel arbitration. The First Circuit affirmed, holding that, under Puerto Rico law, Rivera was bound by the arbitration agreement because she failed to opt out of the agreement. View "Rivera-Colon v. AT&T Mobility Puerto Rico, Inc." on Justia Law

Plaintiff Amanda Kernahan purchased a “home service agreement” from defendants Home Warranty Administrator of Florida, Inc., and Choice Home Warranty. When she became dissatisfied, she filed a complaint in Superior Court seeking statutory and common law relief. Plaintiff claimed that the agreement misrepresented its length of coverage and that the deceptively labelled “MEDIATION” section of the agreement failed to inform her that she was waiving her right to a jury trial and would be deterred from seeking the additional remedies of treble damages, punitive damages, and attorney’s fees and costs. Defendants filed a motion to dismiss the complaint with prejudice in favor of arbitration, citing the "mediation" provision. The trial court denied defendants’ motion to dismiss, concluding that the arbitration provision was unenforceable. The court found the provision both ambiguous and noncompliant with Atalese v. U.S. Legal Services Group, L.P., 219 N.J. 430 (2014), “in either its form or its function.” The court subsequently denied defendants’ motion for reconsideration, rejecting defendants’ argument that language stating that all claims will be resolved “exclusively” by arbitration would or should have adequately informed plaintiff that she is waiving her right to proceed in court, as opposed to use of other available dispute resolution processes. The Appellate Division affirmed the trial court’s refusal to dismiss the complaint, and the New Jersey Supreme Court also affirmed. View "Kernahan v. Home Warranty Administrator of Florida, Inc." on Justia Law

Oliveira is a driver for a trucking company, under an agreement that calls him an independent contractor and contains a mandatory arbitration provision. Oliveira filed a class action alleging that the company denies its drivers lawful wages. The company invoked the Federal Arbitration Act, arguing that questions regarding arbitrability should be resolved by the arbitrator. The First Circuit and Supreme Court agreed that a court should determine whether the Act's section 1 exclusion applies before ordering arbitration. A court’s authority to compel arbitration under the Act does not extend to all private contracts. Section 2 provides that the Act applies only when the agreement is “a written provision in any maritime transaction or a contract evidencing a transaction involving commerce.” Section 1 provides that “nothing” in the Act “shall apply” to “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” The sequencing is significant. A “delegation clause,” giving the arbitrator authority to decide threshold questions of arbitrability is merely a specialized type of arbitration agreement and is enforceable under sections 3 and 4 only if it appears in a contract consistent with section 2 that does not trigger section 1’s exception. Because “contract of employment” refers to any agreement to perform work, Oliveira’s contract falls within that exception. At the time of the Act’s 1925 adoption, the phrase “contract of employment” was not a term of art; dictionaries treated “employment” as generally synonymous with “work," not requiring a formal employer-employee relationship. Congress used the term “contracts of employment” broadly. View "New Prime Inc. v. Oliveira" on Justia Law

The Second Circuit affirmed the district court's denial of SquareTrade's motion to compel arbitration in a putative class action seeking to hold SquareTrade accountable for alleged violations of consumer protection laws. The court agreed with the district court and held that the arbitration provision did not become part of the contract because plaintiff did not have reasonable notice of and manifest his assent to it. In this case, the consumer was presented with several documents including the Pre-Sale T&C, the body of the subsequent email, and the Post-Sale T&C, none of them specifically identified as the "Service Contract" governing the purchase, and all containing different sets of terms. Furthermore, the prior course of dealing between the parties did not convince the court that plaintiff was on inquiry notice of the arbitration provision. View "Starke v. SquareTrade, Inc." on Justia Law

At issue was the circuit court’s role in determining the proper forum of dispute resolution when a subsequent contract, if enforceable, does not contain an arbitration clause that is present in an initial contract.The Supreme Court reversed the decision of the court of appeals reversing the non-final order of the circuit court denying a motion to compel arbitration pursuant to the initial agreement in this case, as well as the circuit court’s granting of a motion for declaratory judgment that the subsequent agreement was a valid contract, holding that, if valid, the subsequent agreement released certain parties from the agreement to arbitrate contained in the initial agreement, and the cause must be remanded to determine whether the subsequent agreement was a valid contract.The circuit court concluded that even though the initial agreement required arbitration, it was superseded by the subsequent agreement, which did not require the parties to submit to arbitration. The court of appeals concluded that arbitration was required pursuant to the initial agreement. The Supreme Court reversed, holding that, under the circumstances of this case, the determination of arbitrability must be decided by the circuit court rather than an arbitrator and that genuine issues of material fact existed as to whether the subsequent agreement was a valid contract. View "Midwest Neurosciences Associates, LLC v. Great Lakes Neurosurgical Associates, LLC" on Justia Law

The Supreme Court reversed the order of the circuit court denying Appellants’ motion to compel arbitration pursuant to Mo. Rev. Stat. 435.440.1, holding that the circuit court erred in refusing to compel arbitration on the basis that the arbitration agreement signed by the parties contained a delegation provision mandating that the arbitrator had exclusive authority to decide threshold questions of arbitrability, holding that the delegation provision was valid and enforceable.Appellant asserted in the circuit court that both the delegation provision and the agreement as a whole lacked mutual obligations and that there was no consideration for either the agreement or the delegation provision. The circuit court agreed with Appellants. The Supreme Court did not, holding that the delegation provision was a mutual promise to arbitrate any threshold questions of arbitrability which may arise, and therefore, the delegation clause was bilateral in nature, and consideration was present. View "Soars v. Easter Seals Midwest" on Justia Law