Justia Contracts Opinion Summaries

Appellants, individually and on behalf of all others similarly situated, filed a class action complaint against their Internet service providers (Providers). Providers' Internet service agreement contained an arbitration clause that required customers to submit damage claims against Insight to arbitration, and it barred class action litigation against Providers by their customers. The circuit court determined the class action ban was enforceable and dismissed Appellants' complaint. The court of appeals affirmed. The Supreme Court affirmed in part and reversed in part, holding (1) the contractual provision under which Appellants waived their right to participate in class action litigation was enforceable under federal law; (2) the service agreement's choice of law provision was not enforceable; (3) the service agreement's general arbitration provision was enforceable; and (4) the provision imposing a confidentiality requirement upon the litigants to arbitration proceedings was void and severable from the remaining portions of the agreement. Remanded for entry of a final judgment. View "Schnuerle v. Insight Commc'ns Co., LP" on Justia Law

A home remodeling contractor (Contractor) received a demand for arbitration regarding allegedly defective work it performed on a remodeling project. Contractor's insurer (Insurer) accepted defense of the claim under a reservation of rights. The arbitrator issued an arbitration award in favor of the homeowners. When Insurer refused to pay the award, Contractor paid the homeowners and sued Insurer for indemnification under the policy. The district court granted Contractor's motion for summary judgment, concluding that a vague arbitration award made it impossible to determine whether the insurance policy covered any of the homeonwers' successful claims and was directly attributable to the inaction of the attorney appointed by Insurer to represent Contractor. The court of appeals reversed. The Supreme Court reversed, holding (1) a portion of the homeowners' claim may be covered under the policy; (2) Insurer was not vicariously liable of the absence of an explanation of the arbitration award; and (3) Insurer was directly liable to Contractor for the failure of the attorney to request an explanation of the arbitration award to determine what portion of the award, if any, was for the covered claim. Remanded. View "Remodeling Dimensions, Inc., v. Integrity Mut. Ins. Co." on Justia Law

Lexington Insurance Company and Chartis, Inc. appealed a circuit court order that appointed a third arbitrator to the arbitration panel established to settle a dispute between Lexington and Southern Energy Homes, Inc. ("SEH"). From January 1, 2002, through October 31, 2004, SEH purchased from Lexington three commercial general-liability ("CGL") policies. An endorsement to a CGL policy insuring SEH from January 1, 2002, through December 31, 2002, provided that SEH is responsible for a $100,000 self-insurance retention ("SIR") "per occurrence." Endorsements to two successive CGL policies that together provided coverage to SEH through October 31, 2004, provide that SEH is responsible for a $250,000 SIR per occurrence. The SIR applied both to costs of defense incurred by SEH and to amounts SEH pays in settlement or pursuant to a judgment. From January 1, 2002, through October 31, 2004, SEH was named as a defendant in 46 lawsuits alleging property damage and personal injury resulting from SEH's using a vinyl-on-gypsum product in the homes it manufactured. SEH gave notice of these lawsuits to Lexington, and that it had exhausted its SIR amounts in the litigation and was entitled to reimbursement from Lexington. More than 120 days passed without SEH receiving a decision from Lexington as to whether it agreed with SEH's claim for this amount. SEH made an arbitration demand pursuant to the arbitration clauses of the CGL policies, including the SIR endorsement to the 2002 policy. Upon review of the policies in question, the Supreme Court concluded that the circuit court erred in appointing the third arbitrator. The order was reversed and the case was remanded for further proceedings. View "Lexington Insurance Co. v. Southern Energy Homes, Inc. " on Justia Law

Alpine Glass, Inc. appealed the district court's partial denial of Alpine's motion to consolidate 482 short-pay claims for arbitration against the Country Mutual Insurance Co. and five of its subsidiaries. The Eighth Circuit Court of Appeals dismissed Alpine's appeal for lack of appellate jurisdiction, holding (1) the Court lacked jurisdiction to hear the appeal under 28 U.S.C. 1291 because the district court's order was not a final order; and (2) the denial of a motion to consolidate arbitrations does not imperil a substantial public interest sufficient to warrant jurisdiction under the collateral order doctrine, and therefore, the order was not appealable under the collateral order doctrine. View "Alpine Glass, Inc. v. Country Mut. Ins. Co." on Justia Law

This case arose from an underlying dispute involving three parties related to an alleged breach of an assignment agreement. The three parties disagreed over the appointment of arbitrators to hear their dispute. The agreement to arbitrate seemed designated for a two-party dispute. Notwithstanding that the parties agreed to arbitrate before three arbitrators, the district court ordered the parties to proceed to arbitration before five arbitrators: three party-appointed arbitrators, who would then choose two neutral arbitrators. If the party-appointed arbitrators could not agree, the district court ordered the parties to petition for appointment of the two neutral arbitrators. On appeal, the Fifth Circuit Court of Appeal affirmed in part and vacated in part the district court's judgment, holding (1) there was a lapse in the naming of the arbitrators in the parties' agreement; (2) the district court was authorized to exercise appointment power under 9 U.S.C. 5; and (3) the district court erred in deviating from the parties' express agreement to arbitrate before a three-member panel. Remanded. View "BP Exploration Libya Ltd. v. ExxonMobil Libya Ltd." on Justia Law

Art Etc., LLC sought a declaratory judgment that the sale of inventory purchased from Angel Gifts, Inc. and Donald Schmit would amount to copyright infringement in violation of the United States Copyright Act. Angel Gifts and Donald Schmit moved to stay the proceedings pending arbitration, invoking an arbitration provision in an agreement between the parties. The district court denied the motion. The Eighth Circuit Court of Appeals affirmed, holding (1) the parties intended for the arbitration provision to apply only under certain circumstances; and (2) Art. Etc.'s claims did not fall within the scope of the arbitration provision. Thus, arbitration in this case was not required.

CS manufactures and sells X-ray and metal detection devices for use in public facilities around the world. Tecapro is a private, state-owned company that was formed by the Vietnamese government to advanced technologies into the Vietnamese market. In 2010, Tecapro purchased 28 customized AutoClear X-ray machines from CS for $1,021,156. The contract provides that disputes shall be settled at International Arbitration Center of European countries for claim in the suing party’s country under the rule of the Center. Tecapro initiated arbitration proceedings in Belgium in November 2010. In December 2010, CS notified Tecapro of its intention to commence arbitration proceedings in New Jersey. In January 2011, CS filed its petition to compel arbitration in New Jersey and enjoin Tecapro from proceeding with arbitration in Belgium. The district court concluded that it had subject matter jurisdiction under the U.N.Convention on the Recognition and Enforcement of Foreign Arbitral Awards, that it had personal jurisdiction over Tecapro, and that Tecapro could have sought to arbitrate in Vietnam and CS in New Jersey. The latter is what happened, so “the arbitration shall proceed in New Jersey.” After determining that it had jurisdiction under the Federal Arbitration Act, 9 U.S.C. 1, the Third Circuit affirmed.

An Agreement was signed by ISC and by Gerber, treasurer of Nobel, under which ISC was to manage $200 million of Nobel assets; the Agreement provided for arbitration. Months later, ISC filed a petition to compel arbitration. Nobel argued that the court lacked personal jurisdiction and that the Agreement had been fraudulently procured by ISC, a firm with no history of asset management, and Gerber, who, without authority, had signed in exchange for a kickback. The district court denied the petition, noting that the American Arbitration Association had refused to arbitrate, because rules specified in the Agreement were incompatible with AAA arbitration. On remand, discovery problems arose; the court allowed withdrawal by ISC counsel; ISC filed notice of voluntary dismissal without prejudice and requested that the judge recuse himself because of his conversation with counsel about reasons for withdrawal. The court denied recusal, vacated notice of dismissal, and rescheduled the trial. ISC unsuccessfully attempted to obtain a stay. At trial, ISC declined to call witnesses or introduce evidence; the court dismissed with prejudice. The Second Circuit affirmed. Even if ISC counsel conveyed extrajudicial information, denial of recusal was appropriate. ISC’s purported voluntary dismissal was improper because Rule 41(a)(1)(A)(i) does not apply to petitions to compel arbitration.

DynMcDermott Petroleum Operations Company (DM) subcontracted with Petrofac, Inc. to design and install a plant to serve the Strategic Petroleum Reserve for the Department of Energy. DM and Petrofac agreed to resolve any claim under the subcontract through binding arbitration. Later, Petrofac sent DM a multi-volume Request for Equitable Adjustment (REA), asserting that DM disputed Petrofac's ability to perform its work and seeking damages. An arbitration panel awarded Petrofac damages. The district court affirmed. The Fifth Circuit Court of Appeals affirmed, holding that the district court properly confirmed the arbitration panel's arbitration award, as DM failed to demonstrate reversible error on appeal.

Gove worked for TDC, which had a contract with Loring. TDC employees were informed that CSD had been awarded the Loring contract and would be providing services previously furnished by TDC. Gove applied online for a CSD position, similar to the one that she held with TDC. The application included a provision that any dispute with respect to any issue prior to employment, arising out of the employment process, would resolved in accord with the Dispute Resolution Policy and Arbitration Agreement adopted by CSD for its employees. When Gove was interviewed by CSD, she was visibly pregnant and was asked whether she had other children. Gove was not hired, although CSD continued to have a need for the position and continued to advertise the position. Gove filed a complaint with the Maine Human Rights Commission, which found reasonable grounds, but was unable to persuade the parties to reach agreement. She sued under Title VII of the Civil Rights Act, 42 U.S.C. 2000e, and the Maine Human Rights Act. CSD moved to compel arbitration. The district court found that the arbitration clause was ambiguous as to whether it covered an applicant who was never hired and should be construed against CSD. The First Circuit affirmed.