News: Gerard I. Nierenberg, Founder of The Negotiation Institute, Dies at 89
The website of The Negotiation Institute describes the institute as “the longest running negotiation skills training organization in the world.” Its founder, Gerard J. Nierenberg, died on September 19, 2012, as reported in a September 24, 2012 NY Times obituary. Mr. Nierenberg authored several books, including one entitled “How to Read a Person Like a Book” — advice on reading body language. We liked his wife’s observation that he practiced what he preached at home: “’I could always rely on reminding him, or he would remind me, about the principles of negotiation,’ she said.”
News: Cowabunga: City of Half Moon Bay Wins $10 Million In Arbitration
Arbitrator Finds Insurance Coverage For Land Use Fiasco
Famous for its big wave surfing, the City of Half Moon Bay got hit with a big one a while back, when it committed to pay $18M as a legal settlement to a private developer. That’s a “big wave” for a city reported to have a population of 11,324 in the 2010 census. Finding coverage for at least part of the problem, retired Supreme Court Justice, Edward Panelli, acting as arbitrator, has now awarded $10M to the City against Insurance Company of the West. So reports Aaron Kinney on September 21, 2012, in the San Mateo County Times.
Arbitration/Consumers: Consumer Advocates Urge Consumers To Take Advantage Of Opt-Outs In Nursing Home Agreements
On March 27, 2012, we posted about Marmet Health Care Center, Inc. v. Brown, 565 U.S. ___ (2012). Marmet Health, a Supreme Court case, concluded the Federal Arbitration Act does pre-empt the state public policy of West Virginia against predispute arbitration agreements applying to personal injury or wrongful death claims against nursing homes. So if you check Mom or Dad into a nursing home, and an arbitration clause is signed, Mom or Dad can generally be compelled to arbitrate (unless the clause is found to be unconscionable for reasons other than that it offends a pre-empted state policy against such clauses).
A September 18, 2012 article by Michelle Andrews on the National Public Radio website points out many such arbitration clauses have “opt-out” agreements giving the party additional time to back out of the arbitration agreement. It’s good business, because if the arbitration agreement is not “take it or leave it”, it is more likely to be enforceable. Consumer advocates, however, advise against signing the arbitration agreement, arguing arbitration results in additional costs, and results in smaller awards for plaintiffs.
Arbitration/Disclosures/FINRA: San Diego Superior Court Overturns $5M Award To Brokers Because Of Failure To Disclose Relationship By Arbitrator
FINRA Begin Again?
On June 21, 2012, we posted about a $5M award by FINRA to brokers John Paladino and Todd G. Vitale. FINRA is the Financial Industry Regulatory Authority, and its awards are generally difficult to overturn. However, San Diego Judge Lisa Schall has overturned the award, based on the failure of one of three arbitrators in the case to relationships. As reported by Corrie Driebusch on September 18 for the Dow Jones Newswires, the arbitral award was overturned because one arbitrator “failed to disclose this his daughter worked for a brokerage firm and maintains an account with Morgan Stanley.” Ouch.
Arbitration/Employment/Enforceability/Record: Unsigned Stand-Alone Arbitration Provision Is Insufficient Evidence To Require Arbitration
Patchy Record Also Didn’t Help Appellant
When footnote 1 of an opinion begins, “Appellants omitted several key documents . . . “, followed by, “We therefore have little information . . . “ it does not augur well for the appellant.
An augur holding a lituus, the curved wand often used as a symbol of augury on Roman coins. Wikipedia.
This case arose from an employment suit. Because the Employment Handbook provided for settling disputes “exclusively by final and binding arbitration,” the employer moved to compel arbitration. The trial court denied the motion to compel arbitration, and the employer appealed. Tisor v. Marketshare Partners, LLC, Case No. A134327 (1st Dist. Div. 4 September 13, 2012) (Sepulveda, J., author) (unpublished).
The employee had allegedly signed an acknowledgment that “none of the statements in the handbook (other than this Acknowledgment and the agreement to arbitrate) are intended to create any contractual or other legal obligations. I also understand that [MarketShare] may at any time modify or rescind any policy, benefit or practice described in the handbook, except for its policy of at-will employment, the arbitration agreement and policies required by law.” The Handbook was 41 pages long. (Seems like opinions that deny a motion to compel arbitration often mention the length of the document in which the arbitration provision is to be found).
Here’s the rub: the arbitration provision contained lines for dates and signatures of the employee and the employer, neither of which was signed or dated. Therefore, the one part of the Handbook intended to create legal obligations, and contemplating a signature, was unsigned. Concluding that the Handbook “contemplated that the arbitration of disputes provision would be effective only if both [employer and employee] assented to that provision” (Marcus & Millichap Real Estate Investment Brokerage Co. v. Hock Investment Co., 68 Cal.App. 4th 83, 91 (1998)), the Court of Appeal affirmed. Well, this one didn’t look good for the appellant from the get-go (footnote 1, supra).
Arbitration/Enforceability/Unconscionability: Goodridge v. KDF Automotive Group, Inc. Ordered Published
Arbitration Clause In Contract To Purchase Used Automobile Was Found To Be Procedurally and Substantively Unconscionable
On August 26, 2012, we posted about Goodridge v. KDF Automotive Group, Inc., Case No. D060269 (4th Dist. Div. 1 August 24, 2012) (McDonald, Acting P.J., author). On September 13, 2012, the Court ordered that the case be published. Footnote 1 of Goodridge notes, “the circumstances (e.g., preprinted contract and arbitration clause) and issues in this case are virtually identical to those in Sanchez v. Valencia Holding Co., LLC (2011) (A201 Cal.App.4th, review granted Mar. 21, 2012, S199119 (Sanchez). The California Supreme Court will likely make the ultimate determination of the issues discussed in this case.”