Justia Civil Procedure Opinion Summaries

When Richmont Holdings, Inc. bought the assets of Superior Recharge Systems, LLC the parties signed an asset Purchase Agreement that contained an arbitration provision. Superior Discharge’s part-owner, Jon Blake, signed an employment contract to continue as general manager of the business. The contract contained a covenant not to compete but not an arbitration provision. After Blake’s employment was terminated, Superior Recharge and Blake (together, Blake) sued Richmont in Denton County for fraud and breach of contract. Richmont then sued Blake individually in Dallas County to enforce the covenant not to compete. The Dallas County suit was subsequently abated. Nineteen months after being sued, Richmont moved to compel arbitration, asserting that Blake’s claims arose out of the Asset Purchase Agreement. The trial court denied the motion, and the court of appeals affirmed. The Supreme Court reversed. On remand, the court of appeals concluded that Richmont had waived arbitration by substantially invoking the judicial process. The Supreme Court reversed, holding that the circumstances of this case did not approach a substantial invocation of the judicial process. Remanded. View "Richmont Holdings, Inc. v. Superior Recharge Sys., LLC" on Justia Law

Gilda filed for dissolution of marriage. She and former husband, Murray, agreed to resolve property and support issues through mediation, during which they purportedly exchanged financial disclosure declarations mandated by the Family Code. They executed a marital settlement agreement, which was incorporated into a stipulated judgment. Shortly after entry of judgment, Gilda learned that Murray recently sold a company he founded during the marriage. In the settlement agreement, Gilda relinquished her community share of the company for $10 million. Murray received approximately $75 million from the sale. Gilda sought to set aside the judgment on grounds of fraud and duress and served discovery on Murray requesting the financial disclosure declarations that were exchanged prior to entry of judgment. Murray refused to produce the declarations, asserting they were covered by the mediation confidentiality statutes, insofar as they constituted writings that were prepared for the purpose of, in the course of, or pursuant to, mediation. (Evid. Code, 1119(b).) The trial court a motion to compel on mediation confidentiality grounds. The court of appeal vacated, noting the Family Code’s stated public policy to promote “full and accurate disclosure of all assets and liabilities” in dissolution proceedings View "Lappe v. Superior Court" on Justia Law

Nijjar hired Judge as a resident property manager. Nijjar terminated her employment. Judge filed claims for unpaid compensation, meal and rest period premiums, waiting time penalties, and wrongful termination. Under the Private Attorney General Act, Judge alleged similar claims on behalf of other employees. Judge also filed a class action, alleging similar claims on behalf of herself and class members. The trial court determined that the actions were related cases and designated the individual/PAGA action as the lead case, but denied Judge’s subsequent application to consolidate the cases. Based on an arbitration agreement that Judge had signed as an employee, the trial court granted a petition to compel arbitration and stay proceedings on the individual and PAGA claims. The court concluded that the Federal Arbitration Act governed the agreement and that Judge’s employment-related claims and individual PAGA claims were covered. The arbitrator issued a clause construction award, finding that the agreement permitted arbitration of class and representative claims. The trial court granted the defendants’ petition to vacate the n award. The court of appeal dismissed, stating that because the arbitrator has not ruled on any substantive issues, the order did not vacate a final arbitration award and is not appealable.View "Judge v. Nijjar Realty, Inc." on Justia Law

Wells Fargo Bank filed a declaratory and injunctive relief complaint. The defendant sent plaintiff a demand for mediation and arbitration pursuant to a dispute resolution provision in a February 27, 2008 servicing agreement between the parties. On October 9, 2013, plaintiff rejected defendant’s mediation and arbitration demand. On October 24, defendant moved to stay the action pending compliance with the arbitration demand. No petition or motion to compel arbitration was filed. No petition to compel compliance with the mediation provision of the parties’ servicing agreement was filed. The defendant stressed the stay motion was not a petition to compel arbitration. The district court denied the motion to stay. The court of appeal dismissed the appeal because the trial court’s denial of the stay motion unaccompanied by any motion or petition to compel arbitration or a pending arbitration is not an appealable order.View "Wells Fargo Bank, N.A. v. The Best Service Co." on Justia Law

Petitioner Safari Associates and real party in interest Alan Tarlov arbitrated a dispute pursuant to a written agreement. The arbitrator awarded Safari damages, attorney fees, and costs. Safari petitioned to confirm the arbitration award at the trial court. In response, Tarlov filed a motion to modify or correct the award on the ground that the arbitrator acted in excess of his powers in awarding Safari attorney fees. The trial court ruled that the arbitrator's decision to apply Civil Section section 1717 was subject to judicial review, and concluded that the arbitrator had erred in failing to apply the definition of "prevailing party" contained in the parties' agreement. The trial court corrected the award by ruling that the definition of prevailing party contained in the parties' agreement applied and remanding the matter to the arbitrator for further proceedings to apply the agreement's definition of prevailing party in determining whether to award attorney fees. Safari filed a petition for writ of mandate requesting that the Court of Appeal direct the trial court to vacate its order correcting the arbitrator's award. The Court found that the record unambiguously demonstrated that Safari and Tarlov extensively briefed this very issue in the arbitration. In addition, there was no provision in the parties' arbitration agreement that "explicitly and unambiguously limited" the arbitrator's power to determine the applicability of section 1717 in awarding attorney fees. Under these circumstances, the arbitrator acted within the scope of his powers in applying the definition of prevailing party found in section 1717, subdivision (b)(1) in awarding Safari attorney fees. Further, any error that the arbitrator may have committed would have constituted legal error, which was not subject to correction in the trial court. Accordingly, the Court granted Safari's petition and directed the trial court to vacate its order correcting the arbitration award, and to conduct further proceedings.View "Safari Associates v. Super. Ct." on Justia Law

The Alabama Supreme Court consolidated cases that arose out of an action brought by Guy Willis against three defendants: Alaska Bush Adventures, LLC ("Alaska Bush") and Hugh and Ryan Krank (collectively, the defendants). The Kranks are the owners and operators of Alaska Bush, an outfitter that provided guided hunting trips in Alaska. In December 2011, Willis entered into a written contract with Alaska Bush pursuant to which Alaska Bush would lead a guided hunting trip in Alaska. Willis also claimed that he entered into a separate oral contract to hunt black bears during that guided hunting trip. The guided hunting trip took place in September 2012. A few months after the trip, Willis sued the defendants in Alabama seeking damages for breach of contract, misrepresentation, and suppression. Willis's claims against defendants centered primarily on his allegations that the equipment Alaska Bush provided for the hunting expedition was inadequate in number, unsafe, and inoperable, and he also alleged that he lost hunting time because the defendants were providing services to other hunters who were apparently not included in the guided hunting trip. Willis claimed that he lost most of his personal hunting equipment and had to leave the trip early because he "was caused to be thrown from an improperly repaired, inspected, and/or working motorized boat ...." Willis further alleged that the defendants misrepresented the quantity of wild game that would be available on the hunt. Willis filed an application for the entry of a default judgment against Ryan, and, on the following day, he filed a similar application against Alaska Bush and Hugh. On December 21, 2012, defendants filed an answer to Willis's complaint and an objection to Willis's applications for entry of a default judgment. Thereafter, defendants filed a motion to compel Willis to arbitration pursuant to an arbitration agreement found in the written contract. Defendants then each filed an individual motion to dismiss Willis's complaint for lack of personal jurisdiction. The trial court issued an order denying the defendants' respective motions to dismiss and their motion to compel arbitration. In case no. 1130184, defendants petitioned the Alabama Supreme Court for a writ of mandamus to challenge the denial of their motions to dismiss for lack of personal jurisdiction; in case no. 1130231, they appealed the trial court's denial of their motion to compel arbitration. The Supreme Court concluded after review that defendants were not entitled to mandamus relief on the jurisdiction question, but met their burden in their motion to compel arbitration.View "Willis v. Alaska Bush Adventures, LLC et al." on Justia Law

Doe settled his sexual abuse claims against the Archdiocese of Milwaukee for $80,000 after participating in a voluntary mediation program. He later filed a claim against the Archdiocese in its bankruptcy proceedings for the same sexual abuse. Doe responded to the Archdiocese’s motion for summary judgment by contending that his settlement was fraudulently induced. The argument depends upon statements made during the mediation, but Wisconsin law prohibits the admission in judicial proceedings of nearly all communications made during mediation. Doe argued that an exception applies here because the later action is “distinct from the dispute whose settlement is attempted through mediation,” Wis. Stat. 904.085(4)(e). The Seventh Circuit affirmed summary judgment in favor of the Archdiocese. Doe’s bankruptcy claim is not distinct from the dispute settled in mediation. The issue in both proceedings, which involved the same parties, is the Archdiocese’s responsibility for the sexual abuse Doe suffered. Doe sought damages in both the mediation and bankruptcy for the same sexual abuse; he did not seek separate or additional damages for the alleged fraudulent inducement.View "Doe v. Archdiocese of Milwaukee" on Justia Law

In consolidated appeals and petition for a writ of mandamus arose out of litigation stemming from the alleged breach of a lease agreement, which litigation was originally initiated by the lessor, Goodall-Brown Associates, L.P. Following the entry of an order compelling the matter to arbitration, the defendants Sloss Real Estate Group, Inc. ("SREG"), the lessee; Sloss Goodall-Brown, LLC, the assignee of SREG; Cadence Bank, N.A., and Second Avenue Holdings, LLC, the successors in interest to Goodall-Brown's original mortgage lender; and Leigh Ferguson, Catherine Crenshaw, Jack Peterson, A. Page Sloss, Jr., Ronald Capello, and Vicki Bolton (collectively, "the individual defendants"), and Sloss Real Estate Company ("SREC"), the alleged alter ego of the individual defendants in conjunction with SREG and Sloss Goodall, unsuccessfully sought dismissal of Goodall-Brown's claims based on the trial court's alleged lack of subject-matter jurisdiction to order the matter to arbitration because, they argued, Goodall-Brown lacked standing to assert the claims. In case no. 1111422, Cadence appealed the trial court's order effectively compelling it to arbitration. In case no. 1111449, the Sloss defendants renewed their contention that the trial court lacked the requisite subject-matter jurisdiction to compel the parties to arbitration. Alternatively, in case no. 1111526, the Sloss defendants petitioned the Supreme Court for a writ of mandamus to direct the trial court to void its order compelling the matter to arbitration and to dismiss the underlying action based on Goodall-Brown's alleged lack of standing and that court's resulting lack of subject-matter jurisdiction. In case no. 1121455 and case no. 1130054, Second Avenue appealed the trial court's denial of its request to enjoin discovery in the arbitration proceeding ordered by that court as to Second Avenue, pending resolution of the other appeals and petition. Upon review of the cases, the Supreme Court: affirmed in case 1111422; denied the petition in 1111526; and dismissed the appeals in cases nos. 1111449, 1121455, and 1130054.View "Cadence Bank N.A. v. Goodall-Brown Associates, L.P. " on Justia Law

After losing millions of dollars because of delays and coordination failures in building a hospital, W.J. O’Neil Company sued its construction manager in state court. In subsequent arbitration, the architect and a design subcontractor (defendants) were added to the arbitration on indemnity claims. In the arbitration, O’Neil did not formally assert claims against those defendants, but O’Neil’s claims against its construction manager arose from the defendants’ defective and inadequate design of the hospital. O’Neil won the arbitration against its construction manager, but the construction manager did not establish its indemnity claims, so the defendants were not held liable. No party sought judicial confirmation or review of the arbitration award. O’Neil then sued the defendants in federal court. The district court dismissed, finding the claims barred by Michigan’s doctrine of res judicata. The Sixth Circuit reversed. An arbitration award cannot bar a claim that the arbitrator lacked authority to decide, and an arbitrator lacks authority to decide a claim that the parties did not agree to arbitrate. O’Neil did not agree to arbitrate the claims at issue. View "W.J. O'Neil Co. v. Shepley, Bulfinch, Richardson & Abbott, Inc." on Justia Law

After filing for bankruptcy, Houston Refining, L.P., suspended matching contributions to its employees' 401(k) plans. The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, acting on behalf of itself and its local unions (collectively "Union"), filed a grievance under the then-current collective bargaining agreement seeking resumption of the matching contributions. Houston Refining refused to process the grievance, claiming that the suspension was not a grievable issue. Months later, the Union commenced an adversary proceeding in the bankruptcy court to compel Houston Refining to arbitrate the grievance under the CBA. Houston Refining agreed to submit the matter to arbitration. Following a two-day hearing, the arbitrator rendered an award in favor of the Union. Houston Refining filed suit in the district court seeking to vacate the arbitral award, and the Union counterclaimed to enforce the award. The district court found that because the Settlement Agreement evinced the parties’ clear agreement to have the arbitrator decide questions of arbitrability, its review of this issue would be deferential. On the merits, the district court upheld the arbitrator’s finding that Houston Refining violated portions of the CBA, but concluded that the arbitral award’s remedy was ambiguous in certain respects. The district court accordingly denied the company’s motion and granted the Union’s motion in part, but remanded to the arbitrator for clarification of the award’s monetary value, among other issues. Houston Refining appealed, arguing that the district court erred in deferring to the arbitrator’s determination of the grievance’s arbitrability. According to the company, because the parties never agreed in clear and unmistakable terms to give the issue of arbitrability to the arbitrator, the district court was obligated to decide the issue independently. The Fifth Circuit found after review of the matter that "the party contending that an arbitrator has authority to decide arbitrability 'bears the burden of demonstrating clearly and unmistakably that the parties agreed to have the arbitrator decide that threshold question.'" In this case, the Union did not meet its burden, and therefore the district court erred in failing to decide arbitrability “just as it would decide any other question that the parties did not submit to arbitration, namely, independently.” The Court reversed and remanded this case to the district court to decide arbitrability issues raised by this opinion, "independently" without deference to the arbitral decision.View "Houston Refining, L.P. v. United Steel, Paper & Forestry, et al" on Justia Law