Justia Contracts Opinion Summaries

Articles Posted in Arbitration & Mediation
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Plaintiff filed a class action against C.H. Robinson, alleging misclassification claims regarding overtime pay requirements. On appeal, C.H. Robinson challenged the district court's denial of its motion to compel arbitration. The court rejected plaintiff's argument that the Incentive Bonus Agreement at issue was procedurally and substantively unconscionable. In regards to procedural unconscionability, the court concluded that, under California law, the degree of procedural unconscionability of such an adhesion agreement is low. In regard to substantive unconscionability, the court concluded that any argument that the judicial carve-out was not substantively unconscionable has been waived; the waiver of representative claims was not substantively unconscionable where the unenforceability of the waiver of a Private Attorneys General Act (PAGA), Cal. Labor Code 2698-2699.5, representative action does not make this provision substantively unconscionable; and the venue provision, confidentiality provision, sanctions provision, unilateral modification provision, and discovery limitations are not substantively unconscionable. Therefore, the court concluded that the dispute resolution provision is valid and enforceable once the judicial carve-out clause is extirpated and the waiver of representative claims is limited to non-PAGA claims, and the district court erred in holding otherwise. The court reversed and remanded. View "Poublon v. C.H. Robinson Co." on Justia Law

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Plaintiff filed a putative class action against Wet Seal, alleging that the company violated the Labor and Business and Professions Codes, Industrial Welfare Commission Wage Order No. 7, and Title 8 of the California Code of Regulations. Plaintiff's claim also included a representative claim under the Private Attorneys General Act (PAGA), Lab. Code, § 2699. On appeal, Wet Seal challenges the denial of its motion to compel arbitration, and the grant of plaintiff's motion to compel discovery responses. The court concluded that Wet Seal's motion to compel arbitration was properly denied where the trial court declared the entire arbitration agreement was void and unenforceable based on its determination that the PAGA waiver was invalid, and applied the arbitration agreement's nonseverability provision. Wet Seal also asserts that the trial court should not have reached the merits of the discovery motion while its motion to compel arbitration was undetermined. The court concluded that there is no requirement for a trial court to issue a tentative ruling, or to announce its final ruling before taking a matter under submission. Because there is no basis to treat the appeal from the nonappealable order as a petition for writ of mandate, the court dismissed this portion of the appeal. The court affirmed in all other respects. View "Montano v. Wet Seal Retail, Inc." on Justia Law

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University Toyota and University Chevrolet Buick GMC (collectively referred to as "the University dealerships") appealed a circuit court order allowing Beverly Hardeman and Vivian Roberts to pursue their claims against the University dealerships in arbitration proceedings. conducted by the American Arbitration Association ("the AAA") instead of the Better Business Bureau of North Alabama ("the BBB"), the entity identified in the controlling arbitration agreements. In conjunction with their purchases of new vehicles from the University dealerships’ predecessor, Jim Bishop, Hardeman and Roberts purchased service contracts entitling them to no-cost oil changes for as long as they owned their respective vehicles. When the Jim Bishop dealerships were sold and rebranded as the University dealerships, initially the University dealerships honored the no-cost oil-change service contracts sold by the Jim Bishop dealerships. However, they eventually stopped providing no-cost oil changes to customers who held those contracts. On October 29, 2015, Hardeman and Roberts filed a demand for arbitration with the BBB, the dispute-resolution entity identified in arbitration agreements they had executed when they purchased their vehicles, on behalf of themselves and all similarly situated individuals, based on the University dealerships' refusal to honor the service contracts. Because a trial court can compel arbitration only in a manner consistent with the terms of the applicable arbitration agreement, the Supreme Court reversed the trial court's order compelling arbitration and remanded the case for the entry of a new order compelling Hardeman and Roberts to arbitrate their claims against the University dealerships before the BBB if they chose to pursue those claims. View "University Toyota v. Hardeman" on Justia Law

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In 2012, Nappa Construction Management, LLC (Nappa) and Caroline and Vincent Flynn (the Flynns) entered into a contract for a commercial construction project. Service Insurance Company, Inc. (Service Insurance) furnished a performance bond on the contract. In 2013, the Flynns directed Nappa to stop work on the project. Nappa subsequently submitted an application for payment, which the Flynns declined to pay. Nappa then terminated the contract due to nonpayment. The Flynns filed an action alleging that Nappa had wrongfully terminated the contract. Nappa filed a demand for arbitration in accordance with an arbitration provision in the contract and also named Service Insurance as a party to the arbitration. The arbitrator found that Nappa was not justified in terminating the contract but concluded that, under the termination-for-convenience clause in the contract, neither Nappa nor the Flynns were in breach of the contract. The arbitrator awarded Nappa $37,980. The superior court granted Nappa’s petition to confirm the arbitration award, concluding that the arbitrator did not exceed his powers in holding that the contract was terminated for convenience. The Supreme Court vacated the superior court’s judgment, holding that the arbitrator exceeded his authority in interpreting the contract. View "Nappa Construction Management, LLC v. Flynn" on Justia Law

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Plaintiff filed a class action against Samsung, alleging that it made misrepresentations as to the performance of the Galaxy S4 phone. The district court denied Samsung's motion to compel arbitration based on an arbitration provision contained in a warranty brochure included in the Galaxy S4 box. Determining that its analysis is governed by California contract, rather than warranty, law, the court concluded plaintiff did not assent to any agreement in the brochure, nor did he sign or otherwise act in a manner that showed he accepted the arbitration agreement. The court concluded that Samsung failed to demonstrate the applicability of any exception to the general California rule that an offeree’s silence does not constitute consent. Therefore, in the absence of an applicable exception, California’s general rule for contract formation applies. The court also concluded that, under the circumstances of this case, Samsung's inclusion of a brochure in the Galaxy S4 box, and plaintiff's failure to opt out, does not make the arbitration provision enforceable against plaintiff. Finally, the court concluded that Samsung's argument that plaintiff agreed to arbitrate his claims by signing the Customer Agreement with Verizon Wireless is meritless. The court explained that Samsung is not a signatory to the Customer Agreement between Verizon Wireless and its customer. Furthermore, Samsung is not a third-party beneficiary to the Customer Agreement. Accordingly, the court affirmed the judgment. View "Norcia v. Samsung Telecommunications" on Justia Law

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LeGrand Belnap, M.D., was a surgeon at the Salt Lake Regional Medical Center (“SLRMC”). Dr. Belnap and SLRMC entered into a Management Services Agreement under which he would provide consulting services to help SLRMC develop a new surgical center. The Agreement contained an arbitration provision, including an agreement to arbitrate questions of arbitrability. SLRMC subsequently disciplined Dr. Belnap for alleged misconduct and then reversed course and vacated the discipline. As a result, Dr. Belnap brought various claims against SLRMC, its alleged parent company, and several of its individual employees. These Defendants moved to compel arbitration on the basis of the arbitration provision in the Agreement. The district court determined that most of the claims fell outside the scope of the Agreement, and granted in part and denied in part the motion. Defendants appealed the portions of the district court’s order denying their motion to stay litigation and to compel arbitration, arguing: (1) because the parties agreed to arbitrate arbitrability, the district court erred when it failed to submit all questions of arbitrability to an arbitrator; and (2) even if the parties did not agree to arbitrate arbitrability, the district court erred when it found that any of Dr. Belnap’s claims fell outside the scope of the Agreement, despite also finding that the Agreement’s dispute-resolution provision was broad. The Tenth Circuit found that by incorporating the JAMS Rules into the Agreement, Dr. Belnap and SLRMC evidenced a clear and unmistakable intent to delegate questions of arbitrability to an arbitrator. Nevertheless, the Tenth Circuit concluded the district court reached the right outcome regarding Dr. Belnap’s first claim against SLRMC (compelling that claim to arbitration) and upheld that portion of its order. The Court felt “constrained,” however, to reverse the order as to the remainder of the SLRMC claims. The Court remanded, instructing the court to compel all of Dr. Belnap’s claims against SLRMC to arbitration. With respect to Defendants wh did not sign the Agreement, the Court held they were not entitled to enforce the arbitration provision of the Agreement. Thus, the Court affirmed the district court’s order in this respect. View "Belnap v. Iasis Healthcare" on Justia Law

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Bank foreclosed its loan on residential real estate and resold the property to Buyers. The purchase agreement for the transaction contained an arbitration clause. After Buyers learned that another bank had a superior lien against the real estate they sued Bank for damages. Bank filed a motion to compel arbitration pursuant to the purchase agreement. The district court sustained the motion. The Supreme Court affirmed, holding (1) the purchase agreement was governed by the Federal Arbitration Act, and Buyers’ claims were subject to the arbitration clause; and (2) there was no merit to Buyers’ other arguments. View "Wilczewski v. Charter West National Bank" on Justia Law

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Following court-ordered mediation, spouses Gary Rolison and Martha Rolison and Caleb Fryar and his father, Robert Fryar, entered into a mediation settlement agreement that resolved four lawsuits pending between the Rolisons and the Fryars. After a bench trial, the Circuit Court found that the Rolisons had breached the settlement agreement, and the court entered a final judgment pursuant to Mississippi Rule of Civil Procedure 54(b) and postponed hearing the issue of damages. The Rolisons appealed the final judgment but later dismissed the appeal voluntarily. After the trial on damages, the trial court awarded the Fryars $399,733.02 in damages, including lost profits and attorney fees. The Rolisons appealed, arguing that their jury trial waiver was ineffective, the trial court’s Rule 54(b) certification was erroneous, and the trial court erroneously denied a motion to intervene filed by two interested parties. Because the Rolisons dismissed their appeal from the Rule 54(b) final judgment, those issues were not at issue before the Supreme Court. After further review, the Supreme Court held that the trial court committed no error by finding that the Rolisons had waived their right to a jury trial on damages and attorney fees. Further, the Court rejected the Rolisons’ challenges to the trial court’s awards of damages and attorney fees because those awards were supported by substantial, credible evidence. Therefore, the Court affirmed the trial court. View "Rolison v. Fryar" on Justia Law

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Defendants-Appellants Ultegra Financial, its CEO Muhammad Howard, (collectively Ultegra Defendants) and Clive Funding, Inc., appealed a district court’s order denying their motion to compel arbitration. In 2013, Ragab entered into business relationship with the Ultegra Defendants. The parties had six agreements. The agreements contained conflicting arbitration provisions; the conflicts involved: (1) which rules would govern, (2) how the arbitrator would be selected, (3) the notice required to arbitrate, and (4) who would be entitled to attorneys’ fees and on what showing. In 2015, Ragab sued the Ultegra Defendants for misrepresentation and for violating several consumer credit repair statutes. The district court found that Ragab’s claims fell within the scope of all six agreements. The Ultegra Defendants moved to compel arbitration. The district court denied the motion to compel, concluding that there was no actual agreement to arbitrate as there was no meeting of the minds as to how claims that implicated the numerous agreements would be arbitrated. The Ultegra Defendants appealed that finding, and seeing no reversible error in the judgment, the Tenth Circuit affirmed. View "Ragab v. Howard" on Justia Law

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Bugs “R” Us, LLC (BRU) appealed the denial of its motion to compel arbitration in an action filed by Autumn McCants for negligent and/or wanton termite inspection of a house she purchased. After review, the Supreme Court concluded that BRU met its burden of establishing the existence of an arbitration contract between the parties. Furthermore, the arbitration provision dictated that the issues McCants raised about the applicability of the Federal Arbitration Act to this dispute, whether her claims were subsumed under the arbitration provision, and whether she was bound by the arbitration provision had to be submitted to an arbitrator for determination. Therefore, the trial court's order denying RU's motion to compel arbitration was reversed and the matter remanded for further proceedings. View "Bugs "R" Us, LLC v. McCants" on Justia Law