Justia Contracts Opinion Summaries

The Supreme Court affirmed the decision of the arbitration board finding that a discount to wholesale customers who renewed their contractual relationship with Nebraska Public Power District (NPPD) was not discriminatory or an abuse of NPPD’s statutory rate-setting authority.Appellants were political subdivisions engaged in the distribution of electricity to retail electric customers and were wholesale customers of NPPD. Appellants brought this complaint after they elected not to renew their contractual relationship, alleging that the discount was discriminatory and that NPPD breached the implied covenant of good faith and fair dealing by charging them a different rate. The arbitration board determined that the discount was reasonable and nondiscriminatory and that NPPD did not breach the contract or the covenant of good faith and fair dealing. The Supreme Court affirmed, holding that NPPD’s rate structure was fair, reasonable, and nondiscriminatory and that the rate structure did not constitute a breach of contract or the implied covenant of good faith. View "In re Application of Northeast Nebraska Public Power District" on Justia Law

The Supreme Court affirmed the denial of Appellant’s motion to dismiss or stay proceedings and compel arbitration, holding that the issue of whether the arbitration agreement in this case was enforceable was properly decided by the district court and not an arbitrator.Thomas Cullinane, as special administrator for the estate of his mother, Helen Cullinane, filed a wrongful death action against Appellant, Beverly Enterprises - Nebraska, Inc., doing business as Golden LivingCenter - Valhaven (GLCV). GLCV filed a motion to dismiss or stay proceedings and compel arbitration in accordance with the terms of a written arbitration agreement between GLCV and Helen. GLCV asserted that Eugene Cullinane, Helen’s husband, while acting as Helen’s attorney in fact, signed the agreement when he and Helen were admitted to the facility. The district court found that Eugene’s execution of the arbitration agreement could not be binding upon Helen, nor her estate, and thus dismissed GLCV’s motion. The Supreme Court affirmed, holding that the district court did not err in determining that the arbitration agreement was not binding upon Helen or her estate. View "Cullinane v. Beverly Enterprises - Nebraska, Inc." on Justia Law

The arbitrator in this case did not manifestly disregard the law or the provisions of the employment agreement at issue when he awarded Defendant extended severance payments based on his finding that Defendant had been the subject of a “de facto termination.”Defendant, the former vice president and chief financial officer of CharterCAREHealth Partners (Plaintiff), invoked the “de facto termination” provision of the parties' employment agreement and requested extended severance, contending that he had suffered a material reduction in his duties and authorities as a result of change in “effective control.” Defendant’s request was denied based on the assessment that he had suffered no material reduction in duties. Defendant filed a demand for arbitration seeking to be awarded extended severance benefits pursuant to the de facto termination provision of the employment agreement. The arbitrator determined that Defendant was entitled to the eighteen-month severance proscribed in the agreement’s de facto termination clause. Plaintiff filed a petition to vacate the arbitration award. The superior court denied the motion to vacate and granted Defendant’ motion to confirm the arbitration award. The Supreme Court affirmed, holding that there was nothing in the record to support Plaintiff’s contention that the arbitrator exceeded his powers or manifestly disregarded the law or the contract. View "Prospect CharterCARE, LLC v. Conklin" on Justia Law

Charlotte Fischer was moved into a nursing home; after she died, her family initiated a wrongful death action against the health care facility in court. Citing a clause in the admissions agreement, the health care facility moved to compel arbitration out of court. The trial court denied the motion, and the court of appeals affirmed, determining the arbitration agreement was void because it did not strictly comply with the Health Care Availability Act ("HCAA"). In this case, the Colorado Supreme Court considered whether section 13-64-403, C.R.S. (2017) of the HCAA, the provision governing arbitration agreements, required strict or substantial compliance. The HCAA required that such agreements contain a four-paragraph notice in a certain font size and in bold-faced type. Charlotte’s agreement included the required language in a statutorily permissible font size, but it was not printed in bold. Charlotte’s daughter signed the agreement on Charlotte’s behalf. The Supreme Court held the Act demanded only substantial compliance. Furthermore, the Court concluded the agreement here substantially complied with the formatting requirements of section 13-64-403, notwithstanding its lack of bold-faced type. Accordingly, the Supreme Court reversed the judgment of the court of appeals and remanded for further proceedings. View "Colorow Health Care, LLC v. Fischer" on Justia Law

Smythe, a driver for both Uber and Lyft, claimed that Uber directed its drivers and others to use fake Lyft accounts to request rides, sending Lyft drivers on “wild goose chases.” He asserted claims for unfair business practices and intentional interference with prospective economic damage on behalf of a putative class of Lyft drivers. Uber moved to compel arbitration. Smythe signed agreements containing an arbitration provision that “applies to any dispute arising out of or related to this Agreement or termination of the Agreement … without limitation, to disputes arising out of or related to this Agreement and disputes arising out of or related to your relationship with the Company …. to disputes regarding any city, county, state or federal wage-hour law, trade secrets, unfair competition, compensation, breaks and rest periods, expense reimbursement, termination, harassment and claims arising under [several specific laws] and all other similar ... claims. This Agreement is intended to require arbitration of every claim or dispute that lawfully can be arbitrated.” The agreement's delegation clause states that the disputes subject to arbitration include "disputes arising out of or relating to interpretation or application of this Arbitration Provision, including the enforceability, revocability or validity .... All such matters shall be decided by an arbitrator and not by a court.” The court of appeal affirmed that Smythe’s allegations were beyond the scope of the arbitration agreement and that the delegation provision was unenforceable in this context. View "Smythe v. Uber Technologies, Inc." on Justia Law

Smythe, a driver for both Uber and Lyft, claimed that Uber directed its drivers and others to use fake Lyft accounts to request rides, sending Lyft drivers on “wild goose chases.” He asserted claims for unfair business practices and intentional interference with prospective economic damage on behalf of a putative class of Lyft drivers. Uber moved to compel arbitration. Smythe signed agreements containing an arbitration provision that “applies to any dispute arising out of or related to this Agreement or termination of the Agreement … without limitation, to disputes arising out of or related to this Agreement and disputes arising out of or related to your relationship with the Company …. to disputes regarding any city, county, state or federal wage-hour law, trade secrets, unfair competition, compensation, breaks and rest periods, expense reimbursement, termination, harassment and claims arising under [several specific laws] and all other similar ... claims. This Agreement is intended to require arbitration of every claim or dispute that lawfully can be arbitrated.” The agreement's delegation clause states that the disputes subject to arbitration include "disputes arising out of or relating to interpretation or application of this Arbitration Provision, including the enforceability, revocability or validity .... All such matters shall be decided by an arbitrator and not by a court.” The court of appeal affirmed that Smythe’s allegations were beyond the scope of the arbitration agreement and that the delegation provision was unenforceable in this context. View "Smythe v. Uber Technologies, Inc." on Justia Law

The Fifth Circuit affirmed the district court's dismissal of Delek's challenge to an arbitrator's award in an action alleging that the company violated a collective bargaining agreement (CBA), which required that employees get first crack at new work unless certain exceptions apply. The court held that the arbitrator's exercise of his discretion did not conflict with the CBA, and that the district court did not abuse its discretion in finding that Delek's challenge was without justification and subject to a fee award. View "Delek Refining, Limited v. Local 202" on Justia Law

The lower courts in this case erred by requiring a signatory to arbitrate its non-contractual claims against non-signatories.Jody James Farms, JV purchased a crop revenue coverage insurance policy from Rain & Hail, LLC through the Altman Group. The insurance policy contained an arbitration clause. Neither the Altman Group nor any of its employees signed the agreement. After Rain & Hail denied coverage for a grain sorghum crop loss suffered by Jody James and the parties arbitrated the dispute, Jody James sued the Altman Group and its agent (collectively, the Agency) for breach of fiduciary duty and deceptive trade practices. The Agency successfully moved to compel arbitration under the insurance policy. At arbitration, Jody James asserted that it had a right to proceed in court against the Agency because the Agency was a non-signatory to the arbitration agreement. The arbitrator resolved that issue and the merits of the dispute in the Agency’s favor. The trial court confirmed the award. The court of appeals affirmed. The Supreme Court reversed because (1) Jody James and the Agency did not agree to arbitrate any matter; and (2) Jody James may not be compelled to arbitrate under agency, third-party-beneficiary, or estoppel theories. View "Jody James Farms, JV v. Altman Group, Inc." on Justia Law

Yates Construction, LLC, and D.W. Caldwell, Inc., entered into a construction subcontract for the roof installation on a residential dormitory at Auburn University in Auburn, Alabama. When Caldwell completed both the repairs and the roof installation, it had yet to receive total payment for the structural repairs. The companies disputed the scope and expense of these repairs and quickly negotiated to an impasse. Thereafter, Caldwell filed a claim against Yates for causing delay and increased costs by failing to pay for work performed, which was in breach of the agreements between the parties. The parties proceeded to arbitration. Although the arbitration record was neither recorded nor transcribed, the parties conceded that the arbitrator considered arguments, reviewed evidence, and heard witness testimony over the course of three days. He then reopened the proceedings for additional documentation, before issuing his thirteen-page award. Within two weeks of the arbitrator’s decision to deny Yates’s motion for reconsideration, Caldwell requested that the circuit court confirm the award under Mississippi Code Section 11-15-125. Yates moved the trial court to alter, amend, or vacate the award under Mississippi Code Section 11-15-25. With the understanding that Yates would provide oral argument on its motion at the award confirmation hearing, Caldwell filed a request to limit the presentation of proof before the circuit court. Ultimately, the trial court reviewed fourteen exhibits and the testimony of one witness in making its decision. Based on this evidence, the court issued its order modifying the arbitrator’s award. Finding that the arbitrator had duplicated the labor costs for shingle installation in its award–once under the original subcontract and once under the oral agreement to repair the structural damage (referred to as the Repair Agreement)–it amended the award, reducing the total by $104,507. After its review, the Mississippi Supreme Court determined: (1) the miscalculations alleged in this matter were not evident from the award itself, nor were they apparent from the agreed-upon record; and (2) the judge erred when he allowed the parties to present witness testimony regarding the extent of any alleged miscalculations, rather than relying on the award and the arbitration record as the relevant law suggested. Finding error, the Court therefore reversed the circuit court’s decision and remanded this case to the circuit court with directions to confirm the arbitration award. Furthermore, because the subcontract between the parties provided that each contractor would be responsible for his own fees and costs, the Court declined to assess costs to one party over the other, and instead, enforced their bargained-for agreement. View "D. W. Caldwell, Inc. v. W.G. Yates & Sons Construction Company" on Justia Law

Warrior Met Coal, LLC sued Eickhoff Corporation alleging certain pieces of heavy mining equipment Eickhoff had manufactured and sold to Warrior Coal were defective. Eickhoff subsequently moved the trial court to compel Warrior Coal to arbitrate its claims pursuant to an arbitration provision in contracts executed after the sale of the equipment, not the original purchase-order contracts associated with the allegedly defective equipment. The trial court denied the motion to compel arbitration and Eickhoff appeals. The Alabama Supreme Court determined the breach-of-warranty, breach-of-contract, and products-liability claims asserted by Warrior Coal in its action against Eickhoff were at least arguably connected to the master service agreements inasmuch as those contracts addressed Eickhoff's obligation to provide an employee to assist with the maintenance and operation of the longwall shearers (the allegedly defective equipment). Accordingly, because the parties also agreed in the master service agreements that the AAA commercial arbitration rules would govern any arbitration, and because those rules empowered the arbitrator to decide questions of arbitrability, the trial court erred when it instead at least implicitly resolved the arbitrability issue in favor of Warrior Coal in its order denying Eickhoff's motion to compel. That order was accordingly reversed and the case remanded for the trial court to enter an order granting Eickhoff's motion to compel arbitration and staying proceedings in the trial court during the pendency of the arbitration proceedings. View "Eickhoff Corporation v. Warrior Met Coal, LLC" on Justia Law