Justia Contracts Opinion Summaries

Wakaya Perfection, LLC and its principals sued Youngevity International Corp. and its principals in Utah state court. The Youngevity parties responded by bringing their own suit against the Wakaya parties in a California federal district court, then removing the Utah case to federal court. These steps resulted in concurrent federal cases sharing at least some claims and issues. The California litigation progressed; and in November 2017, the federal district court in Utah ordered dismissal. The issues presented for the Tenth Circuit's review centered on whether: (1) the federal district court should have abstained from exercising jurisdiction under the Colorado River Water Conservation District v. United States, 424 U.S. 800 (1976) test; and (2) and arbitrator would have needed to decide the arbitrability of Wakaya's claims. The Tenth Circuit reversed on both grounds: the federal trial court applied the wrong abstention test and erroneously ruled that an arbitrator should have decided whether Wakaya's claims were arbitrable. View "Wakaya Perfection, LLC v. Youngevity International" on Justia Law

The First Circuit affirmed the district judge’s order sending Appellant’s case to arbitration, holding that the arbitration agreement between the parties was enforceable and did not fail for lack of consideration or unconscionability.Appellant and his employer entered into an agreement outlining the terms for Appellant’s continued at-will employment, which included an arbitration agreement. After Appellant was fired, Appellant filed this federal court lawsuit against Appellees alleging that his discharged violated several federal and state laws. Appellees moved to dismiss the complaint and compel arbitration. In response, Appellant argued that the arbitration agreement was unenforceable for lack of consideration and that the agreement was unconscionable and thus, unenforceable. The district court granted Appellees’ motion, concluding that a valid and enforceable arbitration agreement existed between the parties. The First Circuit affirmed, holding that both Appellant’s consideration and unconscionability arguments failed. View "Britto v. Prospect CharterCare SJHSRI, LLC" on Justia Law

The First Circuit reversed the decision of the district court denying Defendants’ motion to dismiss Plaintiff’s complaint and compel arbitration based on the parties’ signed arbitration agreement, holding that, contrary to the conclusion of the district court, Defendants’ offer of continued at-will employment was valid consideration for the agreement.Plaintiff’s complaint alleged that Defendants fired him in violation of the Family Medical Leave Act and the Rhode Island Parental and Family Medical Leave Act. Defendants filed a motion to dismiss the case and compel arbitration. The district court denied the motion, concluding that the agreement failed for lack of consideration. The First Circuit reversed, holding (1) the agreement was supported by adequate consideration; and (2) Plaintiff’s motion to supplement the record is denied. The Court remanded the case with instructions to grant Defendants’ motion to dismiss and compel arbitration. View "Conduragis v. Prospect CharterCARE, LLC" on Justia Law

The Supreme Court vacated the decision of the court of appeals reversing the judgment of the district court that concluded that a fee agreement between the parties was not void and thus ordering arbitration, holding that the district court erred by directing entry of final judgment rather than staying the proceedings, and therefore, there was no proper final judgment from which to take an appeal.Plaintiffs sued Defendants after learning that Defendants had provided brokerage services to Plaintiffs without the requisite state license. Specifically, Plaintiffs alleged that the fee agreement obligating Defendants to pay for the services provided was void as against public policy. Defendants, in turn, moved to compel arbitration pursuant to the terms of the fee agreement and to dismiss or to stay the underlying proceedings. The district court ordered arbitration and dismissed the case, concluding that the fee agreement was not void. The court of appeals reversed, determining that the fee agreement was void. The Supreme Court vacated the court of appeals’ decision, holding that the district court erred by dismissing the case instead of staying proceedings and that the court of appeals erred when it concluded that it had jurisdiction over the merits of this case. View "Woischke v. Stursberg & Fine, Inc." on Justia Law

In 2014, Jeremy Gowan filed this action against Cavalier Home Builders, LLC, d/b/a Buccaneer Homes ("Buccaneer"), Minton Industries, Inc. ("Minton"), Monster Movers, LLC ("Monster Movers"), Jerry Dudley, and Britt Richards. Buccaneer, Dudley, Richards, and Minton moved to compel arbitration based on an arbitration agreement Gowan had signed relating to the sale of a manufactured home. Although Monster Movers was not a party to the arbitration agreement, Gowan's claims against Monster Movers were submitted to arbitration by consent of the parties. While the arbitration proceeding was pending, Monster Movers entered into a joint dismissal with Gowan. The case proceeded to arbitration against the remaining defendants. In 2017, the arbitrator issued an award in favor of Gowan and against Buccaneer in the amount of $10,000. As to Gowan's claims against all other remaining defendants, the award was adverse to Gowan. Gowan appealed the award to the circuit court on the basis that the award was insufficient against Buccaneer. The Alabama Supreme Court determined the circuit court deviated from the procedure for the appeal of an arbitration award established by Rule 71B, Ala. R. Civ. P. The issue raised in the mandamus petition was made moot, and the Supreme Court declined further review. View "Ex parte Cavalier Home Builders, LLC, d/b/a Buccaneer Homes." on Justia Law

Where a roofing shingle manufacturer displays on the exterior wrapping of every package of shingles the entirety of its product-purchase agreement—including, as particularly relevant here, a mandatory-arbitration provision— homeowners whose roofers ordered, opened, and installed the shingles are bound by the agreement's terms. The Eleventh Circuit held that the manufacturer's packaging in this case sufficed to convey a valid offer of contract terms, that unwrapping and retaining the shingles was an objectively reasonable means of accepting that offer, and that the homeowners' grant of express authority to their roofers to buy and install shingles necessarily included the act of accepting purchase terms on the homeowners' behalf. Therefore, the court affirmed the district court's decision to grant the manufacturer's motion to compel arbitration and to dismiss the homeowners' complaint. View "Dye v. Tamko Building Products, Inc." on Justia Law

Au pairs and former au pairs filed a class action lawsuit against AuPairCare, Inc. (“APC”) and other au pair sponsoring companies alleging violations of antitrust laws, the Racketeer Influenced and Corrupt Organizations Act (“RICO”), the Fair Labor Standards Act (“FLSA”), federal and state minimum wage laws, and other state laws. Eventually, the au pairs amended their complaint and added two former au pairs, Juliane Harning and Laura Mejia Jimenez, who were sponsored by APC. In response, APC filed a motion to compel arbitration, which the district court denied. The district court found the arbitration provision between the parties both procedurally and substantively unconscionable and declined to enforce it. Because the arbitration provision contained only one substantively unconscionable clause, the Tenth Circuit concluded the district court abused its discretion by refusing to sever the offending clause and otherwise enforce the agreement to arbitrate. The Court therefore reversed the district court’s ruling and remanded for further proceedings. View "Beltran v. Interexchange, Inc." on Justia Law

Singing River Health System a/k/a Singing River Hospital System (“Singing River”) sued KPMG, LLP, alleging separate counts of breach of contract and negligence and/or professional malpractice based on the audits KPMG performed for Singing River in fiscal years 2008 through 2012. Singing River alleged that KPMG failed to comply with the professional auditing and accounting standards expressed in GAAS (Generally Accepted Auditing Standards), GAGAS (Generally Accepted Government Auditing Standards), and GAAP (Generally Accepted Accounting Principles), which KPMG had agreed to follow. Singing River specifically alleged that KPMG’s audits were replete with computational errors and incorrect assumptions, and that KPMG had not performed basic tests to substantiate its opinions. Singing River separately alleged that KPMG was negligent and committed professional malpractice by failing to use the skill, prudence, and diligence other reasonable and prudent auditors would use in similar circumstances, as expressed in the GAAS, GAGAS and GAAP. Singing River alleged, inter alia, that, as a direct and proximate result of KPMG’s audits, Singing River was unaware that its employee-pension plan was underfunded by approximately one-hundred-fifty million dollars ($150,000,000.00). Further, Singing River alleged that it was unaware that it was not in compliance with certain bond covenants due to KPMG’s negligence. KPMG sought to compel arbitration of Singing River’s claims. The circuit court declined to order Singing River to arbitration. The Mississippi Supreme Court determined KPMG’s 2008, 2009, 2010, 2011, and 2012 letters were not spread across the Board’s minutes. The Court could not enforce these contracts or the dispute-resolution clauses attached to them. KPMG’s additional arguments concerning the delegation clause, collateral estoppel, and direct-benefit estoppel were without merit. The trial court’s order denying KPMG’s motion to compel arbitration was affirmed, and the case was remanded for further proceedings. View "KPMG, LLP v. Singing River Health System" on Justia Law

The Supreme Court affirmed the district court’s denial of Appellants’ motion to compel arbitration of claims brought by Appellee, holding that the district court did not err in denying Appellants’ motion to compel arbitration.At issue in this case was a dealership agreement containing an arbitration clause. The agreement was signed by Frontline Ag, LLC and John Deere Company. Appellee owned an interest in Frontline. The dealer agreement contained an arbitration clause requiring arbitration of disputes between Deere and Frontline, the dealer. Appellee eventually filed this action against Deere alleging, inter alia, tortious interference with contract. Deere moved to stay the proceedings and compel arbitration. The district court denied the motion to compel arbitration, reasoning that Appellee never agreed to arbitrate his claims against Deere and that the dealer agreement only required arbitration of disputes between Deere and Frontline. The Supreme Court affirmed, holding that the arbitration clause did not incorporate Appellee’s personal damage claims within its definition of disputes subject to mandatory arbitration. View "Anderson v. John Deere & Co." on Justia Law

The Supreme Court affirmed the order of the circuit court denying Lender’s application to compel arbitration and stay proceedings on the claims brought by Borrower, holding that the plain language of the parties’ arbitration agreement showed they agreed to arbitrate before a specified, but unavailable, arbitrator and no other arbitrator.The contracts between the parties contained an arbitration agreement stating that any dispute between the parties shall be resolved by binding arbitration by the National Arbitration Forum (NAF). Thereafter, NAF entered into a consent decree requiring it immediately to stop providing arbitration services for consumer claims nationwide. After Borrower defaulted, Lender filed suit. Borrower counterclaimed. Lender moved to compel arbitration on Borrower’s counterclaim and asked the circuit court to designate a new arbitrator where NAF was unavailable as an arbitrator. The circuit court denied Lender's application. The Supreme Court affirmed, holding that because Lender made the choice to insist upon NAF, and only NAF, as the arbitration forum, Lender could not now expand the arbitration promise it extracted from Borrower in the agreement. View "A-1 Premium Acceptance, Inc. v. Hunter" on Justia Law