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Tag Archives: Arbitration

Arbitration – Discovery – No Prejudice (access required)

HCW Retirement & Financial Services, LLC v. HCW Employee Benefit Services, LLC For one hour of plaintiff Wilton Drake’s 10- to 11-hour deposition, defendants Frank Woody and Todd Yates asked him questions about the issues defendants seek to submit to arbitration. Otherwise, defendants have not acted inconsistently with their arbitration demand, and plaintiff has not shown prejudice.

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Contract – Investors Not ‘Customers’ for FINRA Arbitration (access required)

Raymond James Financial Services Inc. v. Cary Investors who purchased allegedly fraudulent securities directly from a business on the recommendation of a lawyer who was working with a broker for a financial services company were not “customers” of the company entitled to FINRA arbitration; the 4th Circuit says that to compel arbitration in this case, in which the investors did not buy from the financial services company, would expand the scope of the arbitration agreement beyond what the text permits and the parties intended.

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Real Property – Buyer-Only Arbitration Clause Unenforceable (access required)

Noohi v. Toll Bros. Inc. A real estate contract clause that required the buyer – but not the seller – to submit to arbitration is unenforceable under Maryland law for lack of mutual consideration, and the 4th Circuit affirms judgment for plaintiff buyers who are seeking return of their deposit on a luxury home after they were unable to obtain mortgage financing from multiple lenders.

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Court: Arbitration agreement not fatally vague (access required)

Last month, the North Carolina Court of Appeals struck down an arbitration clause for being inflexible about the arbitrators to be used. (See “Arbitration agreement proved too specific,” NLCW Jan. 28.) On Feb. 5, vagueness was in vogue at the court as it upheld an arbitration clause in a different case against claims that it was too vague to be enforceable.

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Contract – Arbitration – FINRA — Securities – Valuation & Marketing Firm (access required)

Morgan Keegan & Co. v. Silverman A company that valued and marketed certain bond funds purchased by plaintiff investors through a brokerage firm is not subject to FINRA arbitration proceedings, the 4th Circuit says, because the investors were not “customers” of the marketing company under the controlling FINRA rule; the district court order enjoining arbitration is affirmed.

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