Justia Contracts Opinion Summaries

Plaintiff leased property from Defendants pursuant to a lease agreement that included an arbitration clause. Plaintiffs later sued Defendants over disputes regarding the lease. After engaging in litigation with Plaintiff for more than two years, Defendants filed a motion to stay the proceedings pending arbitration under the parties’ lease agreement. Plaintiff objected to the motion, arguing that Defendants had waived their right to enforce the arbitration clause by engaging in lengthy litigation. The trial court granted Defendants’ motion, concluding, as a matter of law, that a party cannot waive enforcement of an arbitration clause in a contract. The Appellate Court affirmed, concluding that the record was inadequate for review because the trial court failed to make any factual findings on the issue of waiver. The Supreme Court reversed, holding (1) because the legal basis of the trial court’s decision was at issue, a factual record on the question of waiver was not necessary to review the trial court’s decision; and (2) the trial court based its judgment on an incorrect statement of the law, and therefore, the court erred in granting Defendants’ motion for a stay pending arbitration. View "MSO, LLC v. DeSimone" on Justia Law

When Respondent was promoted from her position was an hourly employee to a salaried managerial position at one of Appellants’ long-term care facilities, the parties signed an employment agreement and arbitration agreement. Appellants later terminated Respondent from her position. Respondent filed a class action lawsuit against Appellants seeking compensation for allegedly unpaid overtime hours. Appellants filed a motion to compel arbitration, but the circuit court overruled the motion. The Supreme Court affirmed, holding that Respondent’s continued at-will employment and Appellants’ promise to resolve claims through arbitration did not provide valid consideration to support the arbitration agreement. View "Baker v. Bristol Care, Inc." on Justia Law

Defendant provides residential real estate brokerage services in Seattle, Washington. Plaintiff lives in California. In 2009 the parties executed a form contract drafted by defendant. Defendant engaged plaintiff as a Contract Field Agent (CFA) as “an independent contractor.” In 2013, plaintiff filed suit on behalf of himself and similarly situated individuals, alleging defendant improperly classified CFAs as independent contractors when they were actually employees under California’s Labor Code and Unfair Competition Laws and claimed unpaid overtime, missed meal and rest periods, inaccurate and untimely wage statements, waiting time penalties, and unreimbursed business expenses. Defendant sought arbitration under the Agreement, which provides that it is to be governed by the laws of the state of Washington. The trial court denied defendant’s motion to compel arbitration, holding that the arbitration clause was governed by the Federal Arbitration Act (FAA); that the arbitration clause did not apply to plaintiff’s statutory claims because those claims were based on statutes, not the contract; and noted “unrebutted evidence of substantial procedural unconscionability.” The court of appeal reversed, Under California law, there is a strong policy favoring the enforcement of choice-of-law provisions and, even under California law, plaintiff’s unconscionability claim lacks merit.View "Galen v. Redfin Corp." on Justia Law

In 2006, Lincoln T. Griswold purchased an $8.4 million life insurance policy. Griswold established a Trust for the sole and exclusive purpose of owning the policy and named Griswold LLP as the Trust’s sole beneficiary. In 2008, the Trust sold its policy to Coventry First LLC. The written purchase agreement contained an arbitration clause. After learning that the policy was sold for an allegedly inflated price that included undisclosed kickbacks to the broker, Griswold sued. Coventry moved to dismiss the case for lack of standing or, in the alternative, to compel arbitration. The district court denied the motion, concluding that both Griswold and the LLP had standing and that the arbitration clause was unenforceable as to the plaintiffs, who were non-signatories. Coventry appealed. The Third Circuit (1) concluded that it lacked appellate jurisdiction to review the district court’s denial of Coventry’s motion to dismiss; and (2) affirmed the district court’s denial of the motion to compel arbitration against the plaintiffs, as they never consented to the purchase agreement. View "Griswold v. Coventry First LLC" on Justia Law

Cargotec appealed the district court's conclusion that Cargotec's contract with NMC did not contain arbitration and indemnification provisions. As a preliminary matter, the court concluded that whether the arbitration clause became part of the parties' agreement remains a question "presumptively committed to judicial determination." On the merits, the court concluded that the district court erred in failing to order a trial to resolve material factual disputes concerning whether the parties agreed to arbitration and indemnification. Accordingly, the court vacated and remanded for the district court to hold a non-jury trial, making findings of fact, and apply the appropriate U.C.C. provisions in light of those facts. View "Nebraska Machinery Co. v. Cargotec Solutions, LLC" on Justia Law

In 2007 the McDonalds opened a J.P. Morgan Bank investment account and a brokerage account with its affiliate, J.P. Morgan Securities (JPMS). Different contracts governed the accounts. The Bank managed the money in the investment account, while the McDonalds directed the funds in their JPMS brokerage account. By the end of 2008, the McDonalds had lost $1.5 million from the Bank investment account. The money held in the JPMS account produced a profit. The McDonalds filed an arbitration demand, alleging breach of fiduciary duty, self-dealing, and other misrepresentation and mismanagement. They did not name the Bank, but named only JPMS and Bank employees who set up and oversaw the accounts. The McDonalds claimed that the employees ignored their stated investment goals by putting nearly all their money in an illiquid proprietary hedge fund. The claim charged JPMS (not the Bank) with vicarious liability for failing to supervise. JPMS is registered with the Financial Industry Regulatory Authority, as are the employees. FINRA is an industry self-regulatory organization, and under its rules JPMS and the employees were subject to arbitration at the McDonalds’ request, an obligation reiterated in the contract governing the JPMS account. The Bank is not a member of FINRA; the Bank’s contract did not provide for arbitration. The Bank sought to prevent arbitration. The district court dismissed, finding that the Bank lacked standing to block the arbitration to which it was not a party and that the two employees were indispensable parties. The Seventh Circuit reversed. The Bank has standing to sue because the arbitration would violate a forum-selection clause in its contract with the McDonalds. The McDonalds cannot avoid that clause by naming only an affiliate and the employees, who are not necessary parties.View "J.P. Morgan Chase Bank, N.A. v. McDonald" on Justia Law

In this contract dispute between a home health care agency, Visiting Nurse Association of Florida, Inc. (VNA), and a hospital, Jupiter Medical Center, Inc. (JMC), an arbitration panel granted VNA damages. JMC filed a motion to vacate the arbitration award, alleging that the arbitration panel construed the contract containing an arbitration provision to be an unlawful agreement. The circuit court dismissed the motion to vacate and granted the motion to enforce the award. The Fourth District Court of Appeal reversed, holding that a court must determine whether a contract is legal prior to enforcing an arbitral award based on the contract. The Supreme Court quashed the Fourth District’s decision, holding (1) the claim that an arbitration panel construed a contract containing an arbitration provision to be an unlawful agreement is an insufficient basis to vacate an arbitrator’s decision pursuant to the Federal Arbitration Act or the Florida Arbitration Code; and (2) the arbitration panel did not exceed its powers in this case. View "Visiting Nurse Ass'n of Fla., Inc. v. Jupiter Med. Ctr., Inc." on Justia Law

Plaintiff filed a class action suit to recover unpaid overtime wages from her former employer, Bloomingdale's. The district court granted Bloomingdale's motion to compel arbitration, determining that shortly after being hired by Bloomingdale's, plaintiff entered into a valid, written arbitration agreement and that all of her claims fell within the scope of that agreement. The court concluded that plaintiff had the right to opt out of the arbitration agreement, and had she done so she would be free to pursue this class action in court. Having freely elected to arbitrate employment-related disputes on an individual basis, without interference from Bloomingdale's, she could not claim that enforcement of the agreement violated either the Norris-LaGuardia Act, 29 U.S.C. 101 et seq., or the National Labor Relations Act, 29 U.S.C. 151 et seq. The court concluded that the district court correctly held that the arbitration agreement was valid and, under the Federal Arbitration Act, 9 U.S.C. 1 et seq., it must be enforced according to its terms. The court affirmed the judgment of the district court. View "Johnmohammadi v. Bloomingdale's, Inc." on Justia Law

Plaintiff filed a class action suit alleging that Nordstrom violated various state and federal employment laws by precluding employees from bringing most class action lawsuits in light of AT&T Mobility LLC v. Concepcion. Nordstrom, relying on the revised arbitration policy in its employee handbook, sought to compel plaintiff to submit to individual arbitration of her claims. The district court denied Nordstrom's motion to compel. The court concluded that Nordstrom satisfied the minimal requirements under California law for providing employees with reasonable notice of a change to its employee handbook, and Nordstrom was not bound to inform plaintiff that her continued employment after receiving the letter constituted acceptance of new terms of employment. Accordingly, the court concluded that Nordstrom and plaintiff entered into a valid agreement to arbitrate disputes on an individual basis. The court reversed and remanded for the district court to address the issue of unconscionably. View "Davis v. Nordstorm, Inc." on Justia Law

Respondents sold a collection of insurance companies to Petitioners in an agreement that contained an arbitration clause. Petitioners later invoked arbitration, alleging breach of contract. After Respondents complained about Petitioners’ first and second choice arbitrators the American Arbitration Association (AAA) struck the arbitrators. Petitioners’ third appointee was not challenged, and the arbitration proceeding resulted in an award in Respondents’ favor. When Respondents filed a motion to confirm the award in the trial court, Petitioners renewed their previous objection to the disqualification of their first-choice arbitrator. Ultimately, the court of appeals held that the arbitration panel was properly appointed under the terms of the arbitration agreement and the AAA rules. The Supreme Court reversed, holding (1) because the AAA disqualified Petitioners’ first-choice arbitrator for partiality, the arbitration panel was formed contrary to the express terms of the arbitration agreement; (2) therefore, the arbitration panel exceeded its authority when it resolved the parties’ dispute; and (3) accordingly, the arbitration award must be vacated. View "Americo Life, Inc. v. Myer" on Justia Law