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Subcontractor’s counterclaim leads to $1.1 million award
A masonry subcontractor who successfully defended a lawsuit brought by a general contractor collected $1.1 million on his counterclaim after an arbitration panel ruled he was not at fault for holding up the project. The contractor had brought claims for delay on a project. On September 2007, in the midst of the project, the project’s […]
Foot-dragging homebuilder can’t belatedly seek arbitration
A defendant who spars in litigation for more than three years while sleeping on its right to compel the plaintiffs to arbitration shouldn’t be surprised if a court rules that it has thereby waived that right. But for one such defendant, there was an added surprise last week: The North Carolina Court of Appeals ruled […]
Arbitration – Discovery – No Prejudice
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 prejudic[...]
Arbitration agreement ruled to be binding, even though nobody signed it
A recent North Carolina Business Court decision to enforce arbitration, despite the fact neither party to the suit ever signed the contract containing the clause, has left lawyers wondering what impact the decision will have on contract law in the future.
Contract – Investors Not ‘Customers’ for FINRA Arbitration
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[...]
Real Property – Buyer-Only Arbitration Clause Unenforceable
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. [...]
Court: Arbitration agreement not fatally vague
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.
Contract – Arbitration – FINRA — Securities – Valuation & Marketing Firm
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.
Contract – Arbitration – FINRA – Municipal Bond ‘Customer’
UBS Financial Services Inc. v. Carilion Clinic A Virginia healthcare company is a “customer” of the financial services companies it hired to structure its municipal bond offering, and it is entitled to FINRA arbitration of its claims that it was fraudulently induced to issue over $234 million in auction-rate municipal bonds; the 4th Circuit upholds the order allowing arbitration to g[...]
Arbitration – Real Property – Title Insurance – Borrower – Statutory Violation Claims – Class Action
Hamilton v. Mortgage Information Services, Inc. The plaintiff-borrower, who didn’t negotiate or sign the title insurance contract, is not bound by its arbitration clause when she sues for statutory violations.
Arbitration – Civil Practice – Findings of Fact – Investment Contract
Cornelius v. Lipscomb The trial court’s order has no findings and no explanation for the basis of the court’s denial of defendants’ motion to compel arbitration. We must reverse and remand for findings of fact regarding whether the parties had a valid agreement to arbitrate and, if so, whether the parties’ dispute falls within the scope of that agreement.
Arbitration – Motion to Vacate – Construction Contract – Upgrade Costs – Contractor’s License
E. Rick Miller Construction Co. v. Mugridge The arbitrator found that the defendant-owners relied on the plaintiff-contractor’s representations as to the costs of certain recommended upgrades to their “financial detriment”; however, the arbitrator also found that the owners didn’t typically ask the contractor questions about the cost of the upgrades. The arbitrator’s holding tha[...]
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