Justia Contracts Opinion Summaries

Merritt Charles Horning III; Riggers Store Holdings, LLC; Riggers Store 1, LLC; Chase Merritt Management, Inc.; Chase Merritt, LP; and Racers Store Management, LLC (collectively the "Horning defendants") appealed a district court order denying their motion to compel arbitration of Raymond Melendez's lawsuit against them. The issues in this appeal centered on whether Melendez's claims against the Horning defendants concerning the operation of a convenience store in Williston were arbitrable under an arbitration clause in an operating agreement for Riggers Store Holdings. After review, the North Dakota Supreme Court concluded the district court erred in deciding Melendez's claims were not arbitrable, and reversed the order denying arbitration and remanded for entry of an order compelling arbitration. View "Melendez v. Horning III" on Justia Law

The Supreme Court affirmed the district court’s denial of a motion to compel arbitration, although for different reasons than those of the district court.In denying the motion to compel arbitration, the district court concluded that the agreement to arbitrate concerned or related to an insurance policy and was thus unenforceable under Neb. Rev. Stat. 25-2602.01(f)(4). On appeal, Appellant argued that the district court erred in denying the motion to compel arbitration and in determining that arbitration agreement concerned or related to an insurance policy. The Supreme Court affirmed, holding that there was a failure of proof regarding the arbitration itself because the record did not show that the relevant parties agreed to submit future disputes to binding arbitration. View "Zweiback Family L.P. v. Lincoln Benefit Life Co." on Justia Law

The Supreme Court affirmed the district court’s denial of a motion to compel arbitration, although for different reasons than those of the district court.In denying the motion to compel arbitration, the district court concluded that the agreement to arbitrate concerned or related to an insurance policy and was thus unenforceable under Neb. Rev. Stat. 25-2602.01(f)(4). On appeal, Appellant argued that the district court erred in denying the motion to compel arbitration and in determining that arbitration agreement concerned or related to an insurance policy. The Supreme Court affirmed, holding that there was a failure of proof regarding the arbitration itself because the record did not show that the relevant parties agreed to submit future disputes to binding arbitration. View "Zweiback Family L.P. v. Lincoln Benefit Life Co." on Justia Law

After paying a total of $15,493.00 on his $5,000 loan, MacDonald filed a putative class action concerning the loan agreement. He cited RICO and New Jersey state usury and consumer laws, arguing that the agreement is usurious and unconscionable for containing a provision requiring that all disputes be resolved through arbitration conducted by a representative of the Cheyenne River Sioux Tribe (CRST) and a clause that delegates questions about the arbitration provision’s enforceability to the arbitrator. No CRST arbitral forum exists. The agreement also purported to waive all of the borrower’s state and federal statutory rights. The district court denied a motion to compel arbitration. The Third Circuit affirmed, concluding that the agreement directs arbitration to an illusory forum without a provision for an alternative forum, and the forum selection clause is not severable, so that the entire agreement to arbitrate, including the delegation clause, is unenforceable. View "MacDonald v. Cashcall Inc." on Justia Law

After paying a total of $15,493.00 on his $5,000 loan, MacDonald filed a putative class action concerning the loan agreement. He cited RICO and New Jersey state usury and consumer laws, arguing that the agreement is usurious and unconscionable for containing a provision requiring that all disputes be resolved through arbitration conducted by a representative of the Cheyenne River Sioux Tribe (CRST) and a clause that delegates questions about the arbitration provision’s enforceability to the arbitrator. No CRST arbitral forum exists. The agreement also purported to waive all of the borrower’s state and federal statutory rights. The district court denied a motion to compel arbitration. The Third Circuit affirmed, concluding that the agreement directs arbitration to an illusory forum without a provision for an alternative forum, and the forum selection clause is not severable, so that the entire agreement to arbitrate, including the delegation clause, is unenforceable. View "MacDonald v. Cashcall Inc." on Justia Law

Plaintiff Tony Muro entered into an employment contract with defendant Cornerstone Staffing Solutions, Inc. (Cornerstone). The contract included a provision requiring that all disputes arising out of Muro's employment with Cornerstone to be resolved by arbitration. It also incorporated a class action waiver provision. In response to this case, which was styled as a proposed class action and alleged various Labor Code violations, Cornerstone moved to compel arbitration and dismiss the class claims. Relying heavily on Garrido v. Air Liquide Industrial, U.S. LP, 241 Cal.App.4th 833 (2015), the trial court concluded the contract was exempted from the operation of the Federal Arbitration Act (FAA; 9 U.S.C. 1 et seq.) and was instead governed by California law. It further determined that the California Supreme Court's decision in Gentry v. Superior Court, 42 Cal.4th 443 (2007) (overruled by 59 Cal.4th 348(2014)) continued to provide the relevant framework for evaluating whether the class waiver provision in the contract was enforceable under California law. After applying Gentry to the record here, the court found the class waiver provision of the contract unenforceable and denied the motion to compel arbitration. Cornerstone appeals, but finding no error, the Court of Appeal affirmed. View "Muro v. Cornerstone Staffing Solutions" on Justia Law

In this case involving an arbitration provision in short-term loan contracts the Supreme Court affirmed the judgment of the court of appeals ruling (1) the borrowers’ claims against the lender came within the arbitration provision, and (2) the lender did not waive its right to arbitrate by providing information to the district attorney that checks written to the lender by the borrowers had been returned for insufficient funds.The borrowers sued the lender, claiming that the lender wrongfully used the criminal justice system to collect unpaid loans by filing false charges against them. The lender responded by filing a motion to compel arbitration. The trial court denied the motion, concluding that the arbitration clause was inapplicable because the borrowers' claims related solely to the lender’s illegal use of the criminal justice system and that the lender waived its right to arbitration by substantially invoking the judicial process. The court of appeals reversed. The Supreme Court affirmed, holding (1) the borrowers’ claims were within the scope of the arbitration provision; and (2) the lender did not substantially invoke the judicial process, and therefore, there was no evidence to support the trial court’s finding the the lender waived its right to arbitrate. View "Henry v. Cash Biz, LP" on Justia Law

In this case involving an arbitration provision in short-term loan contracts the Supreme Court affirmed the judgment of the court of appeals ruling (1) the borrowers’ claims against the lender came within the arbitration provision, and (2) the lender did not waive its right to arbitrate by providing information to the district attorney that checks written to the lender by the borrowers had been returned for insufficient funds.The borrowers sued the lender, claiming that the lender wrongfully used the criminal justice system to collect unpaid loans by filing false charges against them. The lender responded by filing a motion to compel arbitration. The trial court denied the motion, concluding that the arbitration clause was inapplicable because the borrowers' claims related solely to the lender’s illegal use of the criminal justice system and that the lender waived its right to arbitration by substantially invoking the judicial process. The court of appeals reversed. The Supreme Court affirmed, holding (1) the borrowers’ claims were within the scope of the arbitration provision; and (2) the lender did not substantially invoke the judicial process, and therefore, there was no evidence to support the trial court’s finding the the lender waived its right to arbitrate. View "Henry v. Cash Biz, LP" on Justia Law

This litigation began when purchasers of computer service contracts filed a putative class action against the sellers. The sellers successfully moved to compel arbitration pursuant to the terms of the computer services contracts. The sellers, in the meantime, had applied for tax abatements from the Commissioner of Revenue. The Commissioner denied the applications, and the sellers petitioned the Appellate Tax Board. Appellant, one of the consumers who purchased these service contracts, moved to intervene in the proceedings, which petition the Board allowed. The Board reversed the Commissioner’s decision and allowed the abatements. Taxes were imposed on the service contracts purchased by Appellant. After final judgment was entered in the sellers’ favor in the class action litigation, the sellers withdrew their tax abatement petitions with prejudice. The Board denied Appellant’s motion to strike the withdrawals and terminated the proceedings. The Supreme Judicial Court reversed, holding (1) the Board did not err as a matter of law in allowing the Sellers’ withdrawals; but (2) the Board’s termination of the proceedings in their entirety, after permitting Appellant to intervene and allowing the abatements, was an error of law. Rather, Appellant should have been allowed to proceed as an intervener on its claim to recover the taxes imposed on the service contracts it purchased. View "WorldWide TechServices, LLC v. Commissioner of Revenue" on Justia Law

This litigation began when purchasers of computer service contracts filed a putative class action against the sellers. The sellers successfully moved to compel arbitration pursuant to the terms of the computer services contracts. The sellers, in the meantime, had applied for tax abatements from the Commissioner of Revenue. The Commissioner denied the applications, and the sellers petitioned the Appellate Tax Board. Appellant, one of the consumers who purchased these service contracts, moved to intervene in the proceedings, which petition the Board allowed. The Board reversed the Commissioner’s decision and allowed the abatements. Taxes were imposed on the service contracts purchased by Appellant. After final judgment was entered in the sellers’ favor in the class action litigation, the sellers withdrew their tax abatement petitions with prejudice. The Board denied Appellant’s motion to strike the withdrawals and terminated the proceedings. The Supreme Judicial Court reversed, holding (1) the Board did not err as a matter of law in allowing the Sellers’ withdrawals; but (2) the Board’s termination of the proceedings in their entirety, after permitting Appellant to intervene and allowing the abatements, was an error of law. Rather, Appellant should have been allowed to proceed as an intervener on its claim to recover the taxes imposed on the service contracts it purchased. View "WorldWide TechServices, LLC v. Commissioner of Revenue" on Justia Law