Michael Wolgin

Ninth Circuit Affirms Denial of Motion to Compel Arbitration Against Non-Signatory Spouse of Contracting Party

January 14, 2022 by Michael Wolgin

In a case brought under the Telephone Consumer Protection Act (TCPA), the Ninth Circuit Court of Appeals affirmed an order denying the defendant corporation’s motion to compel arbitration, which the company filed pursuant to a truck purchase agreement signed by the plaintiff’s husband, but not by her. The company contended that the plaintiff was bound by the arbitration clause because she was designated as her husband’s agent and authorized third party on the subject account, made payments on the account, made substantive changes to the account, called the company regarding the account, and filed a TCPA claim that arose out of the contract containing the arbitration agreement. The Ninth Circuit, however, held that the district court correctly ruled that under Florida law, which governed the contract, the plaintiff was not bound to her spouse’s agreement to arbitrate. The court further held that the plaintiff was not equitably estopped from avoiding the arbitration agreement, observing that, generally, Florida courts do not apply equitable estoppel to estop non-signatories. The court concluded that the plaintiff had not derived sufficient benefit under the contract to warrant application of estoppel.

Canady v. Bridgecrest Acceptance Corp., No. 20-15997 (9th Cir. Nov. 8, 2021).

Court Permits Munich Re to Expand Its Counterclaims Against Cedent AMIC, Following Dismissal of AMIC’s Bad Faith Claims

October 1, 2021 by Michael Wolgin

On April 13, 2021, we reported on a decision by the U.S. District Court for the Middle District of Alabama that dismissed a portion of a complaint brought by cedent Alabama Municipal Insurance Corp. (AMIC) for bad faith against its reinsurer Munich Reinsurance America Inc., based on the court’s prediction that the Alabama Supreme Court would refuse to recognize bad faith claims in the context of reinsurance disputes.

The district court has now granted Munich Re’s motion for leave to file a second amended answer and add two counts for declaratory relief to its counterclaim regarding the parties’ rights under the relevant reinsurance treaties, including AMIC’s alleged litigation management and reporting responsibilities. The court rejected AMIC’s arguments that the request to amend was unduly delayed, or that the discovery plan would be inadequate if the amendments were permitted.

Alabama Municipal Insurance Corp. v. Munich Reinsurance America Inc., No. 2:20-cv-00300 (Sept. 8, 2021).

Third Circuit Affirms Dismissal of Petition to Confirm “Sham” Arbitration Award

August 13, 2021 by Michael Wolgin

A pro se plaintiff had sought to confirm a $116,313 award by “Sitcomm Arbitration Association,” which had allegedly ruled that TD Auto Finance LLC was liable for breach of contract. TD Auto Finance contested the petition by moving to dismiss, contending that the award was a “sham” related to the repossession of the plaintiff’s car and that it had never agreed to participate in an arbitration. The district court agreed with TD Auto Finance and dismissed the petition, finding that the plaintiff failed to submit a valid agreement to arbitrate and noting that the purported award was incomprehensible, lacked factual findings and legal conclusions, and did not support the existence of an agreement between the parties.

On appeal, the Third Circuit Court of Appeals rejected the plaintiff’s argument that TD Auto Finance was barred from challenging the award because it had not moved to vacate it within the three-month statutory time period. The court ruled that it was unnecessary to consider this issue, where, as here, the district court properly denied a petition to confirm that lacked “evidence of a genuine arbitration award and an agreement between the parties.”

Pena v. TD Auto Finance LLC, No. 21-1670 (3d Cir. July 15, 2021).

Second Circuit Affirms Denial of Vacatur of Employment Arbitration Award Due to Failure to Provide Evidence of Alleged Perjury in Arbitration Proceedings

June 11, 2021 by Michael Wolgin

The district court had denied a motion filed by a former employee of a department store for vacatur of an arbitration award that rejected a grievance filed by the employee’s union against the store. On appeal, the employee argued that the district court erred when it denied vacatur because the award was obtained by fraud, namely, false testimony. The Second Circuit affirmed, holding that, because the employee provided no record evidence of the arbitration testimony, and only repeated “unsupported allegations,” the appellant failed to show (1) the existence of fraudulent activity; (2) that, even with the exercise of due diligence, he could not have discovered the fraud prior to the award issuing; and (3) that the fraud materially related to an issue in the arbitration. The court concluded: “Without providing at least the challenged testimony, [the appellant] has failed to show that any perjury occurred or even that the testimony he wishes to challenge was materially related to the arbitrator’s decision.” The court affirmed, ruling that the employee failed to demonstrate any error with the denial of the motion for vacatur.

Bright-Asante v. Saks & Co., No. 20-1280 (2d Cir. May 14, 2021).

Eleventh Circuit Revives Labor Union’s Complaint to Compel Arbitration That District Court Had Found to Be Time-Barred

May 14, 2021 by Michael Wolgin

The Eleventh Circuit Court of Appeals reversed an order granting summary judgment to an employer in a case brought by a union to compel arbitration pursuant to a collective bargaining agreement. The district court had concluded that the complaint was untimely because it was filed beyond the six-month limitations period for complaints brought under Georgia law to compel arbitration under section 301 of the Labor Management Relations Act. According to the district court, the employer, BellSouth, “unequivocally refused to arbitrate” more than six months before the union’s lawsuit. The Eleventh Circuit disagreed, agreeing with the union that the record demonstrated that discussions had continued between the parties regarding arbitrability and that BellSouth never unequivocally refused to arbitrate. The court found: “Debating the arbitrability of the grievance and keeping the scheduled arbitration are not unequivocal refusals to arbitrate.” The court vacated the summary judgment and remanded to the district court to consider the arbitrability issues raised in the summary judgment briefing.

Communications Workers of America v. BellSouth Telecommunications, LLC, No. 20-14244 (11th Cir. Apr. 20, 2021).