Articles Posted in Arbitration & Mediation

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In 1998, 52 U.S. states and territories entered into the Master Settlement Agreement (MSA) with tobacco manufacturers (PMs), which released the PMs from tobacco-related consumer protection and product liability lawsuits in return for the PMs’ agreement to make annual payments to the states in perpetuity. This dispute concerned the application of the Non-Participating Manufacturer Adjustment (NPM Adjustment), a provision in the MSA that reduces the amount the PMs must pay to states that failed diligently to enforce certain legislation during a relevant year. PMs, Missouri, and other states arbitrated the dispute. More than twenty states and the PMs entered into a partial settlement agreement, but Missouri and other states did not join the settlement. The arbitration panel found that Missouri was not diligent in enforcing its legislative enactment and that the NPM Adjustment applied. Missouri sought relief. The trial court overruled Missouri’s motion to compel the PMS to engage in a single-state arbitration with Missouri over another dispute regarding application of the NPM Adjustment in a subsequent year but modified the award as requested by Missouri. The Supreme Court affirmed, holding (1) the trial court correctly refused to compel single-state arbitration; and (2) the trial court did not err in modifying the panel’s award. View "State ex rel. Greitens v. American Tobacco Co." on Justia Law

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In 2013, Plaintiff purchased a new car from Defendant. In 2014, Plaintiff filed the underlying petition for damages, alleging that Defendant violated the Missouri Merchandising Practices Act by failing to pass title for her new vehicle. Thereafter, Defendant asked the trial court to enforce the arbitration agreement between the parties. The trial court overruled the motion to compel arbitration on the ground that the contract between the parties was void under Mo. Rev. Stat. 301.210. The Supreme Court vacated the judgment of the trial court, holding that even though the sale between Plaintiff and Defendant may be void under section 301.210, that question is for the arbitrator to determine, not the trial court. Remanded with instructions for the trial court to grant Defendant’s motion and compel arbitration. View "Ellis v. JF Enters., LLC" on Justia Law

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Plaintiff purchased a manufactured home from Defendant. The contract between Plaintiff and Defendant included an arbitration clause. Plaintiff later sued Defendant alleging fraud, negligence, breach of contract, and negligent misrepresentation. Defendant filed a motion to dismiss or to stay the court action and to compel arbitration. Plaintiff opposed arbitration, arguing that the arbitration agreement lacked mutuality and was unconscionable on multiple grounds. The trial court overruled Defendant’s motion. The Supreme Court reversed, holding (1) the agreement’s “anti-waiver clause” was unconscionable and invalid, but the anti-waiver provision could be severed; (2) Plaintiff’s remaining objections did not render the contract as a whole unconscionable; and (3) absent the anti-waiver clause, the contract was not unconscionable. View "Eaton v. CMH Homes, Inc." on Justia Law

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Plaintiff, a former employee of the St. Louis Rams Partnership, filed an action claiming age discrimination against the Partnership and three of its affiliates. The Rams moved to compel arbitration, citing an arbitration provision of Plaintiff’s employment contract. The trial court granted the motion and ordered that the court action be stayed pending arbitration. Plaintiff petitioned for a writ of mandamus preventing the trial court from compelling arbitration of this dispute. Four judges of the Supreme Court issued a permanent writ of mandamus directing the trial court to vacate its order granting the motion to compel arbitration and to issue an order to compel arbitration whereby the trial court appoints a neutral arbitrator and implies the specific terms of arbitration from applicable statutes in Missouri’s uniform arbitration act, holding (1) the terms of Plaintiff’s employment contract designating the commissioner of the National Football League (NFL) as the sole arbitrator with unfettered discretion to establish the rules for arbitration are unconscionable and, therefore, unenforceable; and (2) Missouri’s uniform arbitration act provides a mechanism to imply the terms missing from the arbitration agreement and provides the rules for appointing an arbitrator to replace the NFL commissioner. View "State ex rel. Hewitt v. Hon. Kerr" on Justia Law

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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

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In 2007, Anita Johnson purchased a vehicle from a dealership operated by JF Enterprises. Johnson signed numerous documents at a single sitting, including a retail installment contract and a one-page arbitration agreement. In 2010, Johnson sued the dealership, its president (Franklin), and the vehicle manufacturer (American Suzuki), claiming negligent misrepresentation. Franklin and JF Enterprises moved to compel arbitration based on the arbitration agreement. The trial court overruled the motion, finding that the installment contract did not refer to or incorporate the arbitration agreement and contained a merger clause stating that it contained the parties' entire agreement as to financing. The Supreme Court reversed after noting that contemporaneously signed documents will be construed together and harmonized if possible, holding that because the separate arbitration agreement was a dispute resolution agreement, not an additional financing document, it could be harmonized with the installment contract and was not voided by operation of the merger clause.View "Johnson v. JF Enters., LLC" on Justia Law

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Borrower brought suit against a payday loan company (Company), arguing that its arbitration agreement containing a class waiver was unenforceable. The trial court found that Company's arbitration agreement was unconscionable and unenforceable because its class waiver deprived borrowers of a meaningful remedy. The Supreme Court reversed in light of AT&T Mobility LLC v. Concepcion, holding that that the trial court erred in finding that Company's arbitration agreement was unconscionable based on its class waiver and should have instead adjudicated whether the arbitration agreement was enforceable in light of Borrower's evidence relevant to her claims regarding ordinary state-law principles that govern contracts but that do no single out or disfavor arbitration. Remanded. View "Robinson v. Title Lenders, Inc." on Justia Law

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Missouri Title Loans appealed from a judgment finding that a class arbitration waiver contained in its loan agreement, promissory note, and security agreement (agreement) was unenforceable. The Supreme Court affirmed the judgment insofar as it held that the arbitration waiver was unconscionable and reversed that part of the judgment ordering that the claim be submitted to an arbitrator to determine suitability for class arbitration, holding that the appropriate remedy was to strike the entire arbitration agreement. The U.S. Supreme Court vacated the Court's judgment and remanded for further consideration in light of AT&T Mobility, LLC. v. Concepcion. Applying Concepcion, the Supreme Court affirmed in part and reversed in part, holding (1) the presence and enforcement of the class arbitration waiver did not make the arbitration clause unconscionable; (2) the formation of the agreement was unconscionable; and (3) therefore, the appropriate remedy was revocation of the arbitration clause contained within the agreement. Remanded. View "Brewer v. Mo. Title Loans, Inc." on Justia Law

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The underlying dispute in this case involved a contract and tort action brought by homeowners in a subdivision against certain homebuilders, including the Kerckhoff defendants. The trial court ordered that the case be referred to mediation. The parties were unable to agree to terms in a written settlement agreement at the conclusion of the mediation. The homeowners and some defendants then filed motions to enforce settlement and motions for sanctions against the Kerckhoffs, alleging the Kerckhoffs acted in bad faith during the mediation. The trial court entered an order denying the motions to enforce settlement but granted the motions for sanctions. The Kerckhoffs filed a motion with the trial court requesting that its order be certified as final and appealable, and the court entered an order finding that its prior ruling imposing sanctions was final for purposes of appeal. The court of appeals dismissed the appeal for lack of a final judgment. The Supreme Court granted transfer and dismissed the appeal, holding that because the trial court's order imposing sanctions did not dispose of a "claim for relief," the trial court certification of its order as final and appealable under Mo. R. Civ. P. 74.01 was ineffectual. View "Buemi v. Kerckhoff" on Justia Law