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Fifth Circuit: Court-Appointed Receiver may Avoid Arbitration

In Janvey v. Alguire, et al., the United States Court of Appeals for the Fifth Circuit held that the district court correctly denied motions to compel arbitration filed by employees of an alleged Stanford Ponzi scheme as to the receiver for the entities involved in the scheme. According to the court, in an effort to unwind the alleged Ponzi scheme, a receiver was appointed for Stanford-related entities to "preserve corporate resources and recover corporate assets that had been transferred in fraudulent conveyances." The receiver sued individuals employed by the entities to recover funds transferred by the entities to the employees. The employees moved for arbitration, relying upon arbitration agreements between the entities and the former employees. The receiver argued that (1) he (more specifically, a Stanford-related bank) did not agree to arbitrate; (2) the arbitration agreements should be rejected as part of the alleged fraudulent scheme; and (3) there is a conflict between arbitratio ...

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Texas: Arbitration provision did not confer personal jurisdiction

In Guam Industrial Services, Inc. v. Dresser-Rand Co., the First District Court of Appeals consdiered an accelerated interlocutory appeal from an order denying GIS's special appearance. Dresser-Rand and GIS had a contract for repair and restoration work, with Dresser-Rand suing GIS in district court. Dresser-Rand contended that the trial court had jurisdiction because the arbitration provision in the contract operated as a forum-selection clause where GIS consented to personal jurisdiction in Houston. In response, GIS filed a special appearance, which was denied. The First Court of Appeals reversed the trial court's order and rendered judgment granting the special appearance. The arbitration provision in the contract stated that "Judgment upon the award may be entered in any court having jurisdiction...The site of such arbitration shall be either in Buffalo, New York or Houston, Texas." In its opinion, the First Court of Appeals held that "an arbitration agreement is a typ ...

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Texas: Trial court did not abuse discretion in denying motion to strike; summary judgment affirmed

In Didmon v. American Arbitration Association, Inc. et al., the First Court of Appeals held that the trial court correctly acted within its discretion. Here, Didmond sued Frontier Drilling, USA, Inc. for personal injuries sustained in Singapore. Frontier removed the state suit to federal district court and Didmond moved to remand. In the federal court, Didmon argued that an arbitration agreement was not enforcible. Agreeing with Didmon, the federal court remanded the suit. After remand, Frontier moved to compel arbitration under another arbitration cluse found in Didmon's employment agreement. The trial court denied the motion, there was an appeal, and the appeallate court reversed and remanded. The trial court then dismissed Didmon's suit without prejudice, ordering that the defendants could raise limitations defenses if Didmon did not initiate arbitration within 60 days. Didmon did initiate arbitration proceedings in Singapore, where he demanded arbitration with the AAA, relying upon the arb ...

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Texas: Did arbitration agreement expand judicial review of award?

In Denbury Onshore, LLC v. Texcal Energy South Texas LP, et al., the Fourteenth Court of Appeals was asked whether the parties contracted to expand judicial review of the arbitration award under conventional appeal standards from a final judgment, instead of the limited grounds for reversal under the Federal or Texas arbitration acts. Relying upon the U.S. Supreme Court's decision in Hall St. Assocs., LLC v. Mattel, Inc, the Fourteenth Court of Appeals held that parties to an arbitration agreement governed by the FAA, but not the TAA, may not contractually supplement the statutory bases for vacatur denied in the statute. In Nafta Traders, Inc. v. Quinn, however, the Texas Supreme Court held that when only the TAA applies, or when both the TAA and the FAA apply, parties may contract for expanded court review of the arbitration award by agreeing that the arbitrators do or do not have the power or authity to reach a decision based on reversible error. Here, the Court of Appeals held presumed that both ...

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Massachusetts: Mediation Confidentiality Upheld

In his blog post for Nutter McClennen & Fish, John G. Loughnane writes that the Massachusetts Appeals Court recently refused to override the terms of a mediated agreement. According to Loughnane, the opinion is noteworthy because it confirms mediation confidentiality and encourages parties dealing with distressed situations to have a careful strategy, including a strategy for agreements that are reached in mediation. The court notes that the statute: "gives broad confidentiality protection to mediation communications, barring disclosure in any judicial or administrative proceeding, and creating only one express exception for the mediation of labor disputes. Significantly, the statute does not include an exception for fraud. In light of that omission, we would be hard pressed to find that such an exception exists in the circumstances of this case, where there is a confidentiality agreement, negotiated between sophisticated business people with the assistance of legal counsel, that is even broade ...

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Trade Secrets Troubles are Well-Suited for Early Mediation

In her article in the Los Angeles Daily Journal, Lizbeth Hasse, a JAMS neutral, suggests that trade secret cases "present concerns that generally motivate early ADR efforts."  The author discusses the intersection of ADR procedures and the Defend Trade Secrets Act. In summary, the author concludes that trade secrets cases are expensive, need to move quickly, and the parties may not want the publicity associated with a trial, making these disputes appropriate for early mediation.

ADR Section Roadshow at St. Mary's Law School

The Alternative Dispute Resolution Section is pleased to announce the State Bar of Texas ADR Section Roadshow: Mediation, Arbitration, Ethics, and More at St. Mary's University!

St. Mary's Law School - Room LC105

September 19, 2016

Noon-2:15 p.m.

Lunch will be provided. Sponsored by the ADR Section of the State Bar of Texas along with the San Antonio Bar Association's Alternative Dispute Resolution Section. Presented by Co-Chairs: Lionel Schooler and Jerry King, Chair of the San Antonio ADR section. Law students are welcome! Attendees will receive State Bar CLE ethics credit.

Please confirm your attendance by RSVP to Linda McLain. The sooner you RSVP, the better! This will allow us to get an accurate headcount for lunch.

 

We hope to see you there!


Lionel Schooler, Chair
Alternative Dispute Resolution Section
State Bar of Texas

Texas: Arbitrator should have decided gateway issues, not trial court judge

In T.W. Odom Management Services, Ltd. v. Williford, the Ninth District Court of Appeals reversed the trial court's order denying arbitration and remanded the matter with instruction to enter an order granting the motion to compel arbitration. At issue is whether the trial court or the arbitrator had the power to determine gateway issues, such as the interpretation, applicability, or enforceability of the agreement. Willford worked for Odom, becoming a participant in a workplace injury benefit plan that provided non-subscriber compensation benefits to employees injured on the job. Williford was injured and collected non-subscriber compensation benefits. Williford also filed a negligence suit for the injuries he allegedly sustained on the job. Williford's employer moved to compel arbitration, pursuant to an agreement as a condition of Williford's employment. Williford objected to the motion to arbitrate because the claims were excluded non-subscriber compensation benefits and not tort claims (that were includ ...

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Texas: Arbitration agreement wasn't illusory

In NACE International v. Johnson, the Court of Appeals for the First District in Texas reversed the trial court's order denying a motion to compel arbitration, remanding the case for entry of an order compelling arbitration. This case involves a construction dispute where one of the parties allegedly failed to pay the outstanding balance for work performed.  NACE moved to compel arbitration and in response, the argument was made that the arbitration agreement was illusory and, therefore, unenforceable. The arbitration agreement provided that any claims subject to mediation and not resolved by that process is subject to binding arbitration and "if a satisfactory settlement is not reached in the arbitration process, [NACE] retains the right to pursue litigation in a court to resolve any such issue."  The Court of Appeals held that "arbitration agreements that bind parties to only arbitrate certain claims to the exclusion of others are not necessarily illusory" and that "one-sided arbitration agreeme ...

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Texas: Arbitrator did not exceed authority by awarding damages not encompassed by arbitration agreement

In Patel v. Moin, the Fourteenth Court of Appeals affirmed the trial court's judgment confirming an arbitration award. The arbitrator did not exceed her authority by awarding damages that were not encompassed by the arbitration agreement. This arbitration started with an agreement that was part of the operating agreement for a health center. After a lawsuit was underway, the parties signed a one-page "Agreement for Binding Arbitration" that included other parties.  The arbitration commenced and the arbitrator did not award damages for lost profits (because those damages were "too speculative") but did award damages for breach of contract, including an award of attorney's fees. The arbitrator also awarded arbitration costs and attorney's fees to a party finding that certain claims were groundless and brought in bad faith. The arbitration agreement encompassed all claims and counterclaims then pending before the trial court. When the arbitrator awarded breach of contract damages, the movants for va ...

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  1. Re: Welcome to the SBOT ADR Section's Blog.

    Great job to all on this blog, I think it will be a great resource for the latest developments for the...

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