Vermont Says Court Can’t Force Defendant To Start the Arbitration, Plus Arbitration Decisions from Other State Courts

by Stinson Leonard Street - Arbitration Nation
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I declare this the Summer of Arbitration. It’s not as sexy as the Summer of Love (which is celebrating its 50th anniversary, btw http://www.sftravel.com/summer-love-2017), but there has to be some recognition of the avalanche of arbitration cases on my desk (to say nothing of the regulation changes).

Today, I focus on the state supreme courts. In the last few months, ten separate state high courts have issued arbitration decisions.  Many of those have addressed whether arbitrators properly disclosed relationships with the parties, their counsel and their experts.  To keep things brief, I will report each state in alphabetical order, in roughly tweet length below (140 characters, not counting citation).  Put some flowers in your hair, turn up the 60s tunes, and read on.

Alabama: Fraudulent inducement of entire contract and conditions precedent are not relevant arguments on motion to compel arbitration; both for arbitrator to decide. Rainbow Cinemas, LLC v. Consolidated Constr. Co. of Alabama, 2017 WL 2610506 (Ala. June 16, 2017).

Alabama/2: Arbitration clause not invalid, even though lender (and not consumer) could bring some claims to court. Family Security Credit Union v. Etheridge, 2017 WL 2200364 (Ala. May 19, 2017).

Arkansas: Public policy is not a valid basis for vacating arbitration awards. Kilgore v. Mullenax, 2017 Ark. 204 (June 1, 2017).

Hawai’i: Arbitrator not obligated to disclose that 1 of respondent’s experts had appeared before her previously or that second expert was counsel in mediations and arbitrations she handled. Narayan v. Assoc. of Apt Owners of Kapalua Bay Condominium, 2017 WL 2591321 (Haw. June 15, 2017) (clarifying scope of relationships requiring disclosure)

Minnesota: Courts should stay an action after compelling arbitration, not dismiss it. City of Rochester v. Kottschade, 2017 WL 2464520 (June 7, 2017).

Mississippi: Tenant’s claim of assault on apartment premises is outside scope of arb agreement in lease. Doe v. Hallmark Partners, 2017 WL 2001163 (Miss. May 11, 2017).

Nevada: Arbitrator did not exceed power by disagreeing with employee’s interpretation of CBA; colorable justification for award. Unvacated.  Washoe County School District v. White, 2017 WL 2825902 (Nev. June 29, 2017).

Nevada/2: Fact that arbitrator had worked with counsel for claimant 15 years before disclosures, and mediated cases for same counsel 7 years before, did not merit vacatur. Eagle Jet Aviation v. Milton Woods, 2017 WL 2813985 (Nev. June 27, 2017).

North Dakota: Even though arbitrator not selected by method in contract, can’t be basis for vacatur when no objection until after award. Thompson v. Lithia ND Acquisition Corp., 2017 WL 2464536 (N.D. June 7, 2017).

Texas: $21 M arb award confirmed; arbitrator unaware of trivial fact not disclosed & damages within authority. Forest Oil Corp. v. El Rucio Land & Cattle Co., 2017 WL 1541086 (Tex. Apr. 28, 2017).

Vermont: Just bc defendant is compelling arbitration, doesn’t mean a court can make it initiate the arbitration (and pay the fee). That’s plaintiff’s job.  –Hermitage Inn Real Estate Holding Co. v. Extreme Contracting, 2017 WL 2391725 (Vt. June 2, 2017) (reversing default judgment for plaintiff).

Virgin Islands: Loser cannot vacate award based on lack of arb agmt, when it never raised issue in court and first raised on final day of arb hearing. Bashiti v. Tutu Park, 2017 WL 2333809 (May 26, 2017). [I can count this as a state, right??]

These decisions show that arbitrator disclosures are popular bases for attempting to vacate arbitration awards right now.  As those cases bubble up, state high courts are clarifying the narrow set of relationships that must be disclosed as well as those which will form a valid basis for objection.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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