I’m Mediating Via Videoconference During The Coronavirus Crisis
Mediating While Social Distancing — I Am Doing It By Videoconferencing.
During this difficult public health emergency, we have watched as courthouses have limited intake of cases to emergencies, and lawyers have turned to telecommuting. However, efforts to resolve cases through mediation have continued. I mediate state and federal cases, and I have mediated cases with videoconferencing platforms. The most widely used platform with which many are familiar is Zoom. RingCentralMeetings, which is powered by Zoom, can also be used easily by anyone familiar with Zoom.
Videoconference mediations can be done efficiently, without traveling by the attorneys, clients, or insurance company representatives. Costs and time are less than with in-person meetings. The technology is flexible, allowing for joint sessions, separate caucuses, screen sharing, chat, and document exchange. Videoconference, like a phone call, can be initiated early during a lawsuit, and it is easy to schedule follow-up sessions. It can be lower-keyed than an in-person confrontation, helping some parties to focus on interests, rather than emotions.
A number of persons have expressed concern about the security features of Zoom, because they have read about the phenomenon of Zoombombing, where unwanted participants intrude into a Zoom meeting. Zoom has responded to security concerns by enabling the use of passwords and a virtual "Waiting Room" that persons must enter before the meeting host allows them to participate in a meeting.
While the coronavirus crisis has made videoconferencing a viable alternative to a physical meeting, it seems likely that after the current crisis fades, videoconferencing will become more popular as a means to conduct a mediation.
If you have questions about mediating by videoconference or setting up a mediation with me, feel free to contact me at:
(work email): malexander@alvaradosmith.com phone: 714.852.6836.
Take care and stay well,
Marc Alexander
Arbitration, Unconscionability: Two Trial Courts Deny Motions To Compel Arbitration, Two Courts Of Appeal Affirm
Elders In Both Cases . . .
Arbitration And An Elder Abuse Act Case.
Dougherty v. Roseville Heritage Partners, et al., C087224 (3rd Dist. 3/30/20) (Krause, Murray, Hoch) is another of the many elder care facility cases in which the enforceability of an arbitration clause is at issue. Here, the trial court denied the defendants’ motion to compel arbitration of claims brought on behalf of a 89-year old man, and the Court of Appeal affirmed.
The arbitration provision was held to be procedurally unconscionable, and a contract of adhesion, because the provision was part of 70 pages of documentation presented to the patient’s daughter at the time of admission, she was hurried, and she conveyed to the facility’s administrator that her father, who was suffering from dementia, had no alternative to the facility.
The Court of Appeal also held that the provision was substantively unconscionable because it limited discovery. While a limitation of discovery is not per se substantively unconscionable, the Court explained that it could be where statutory rights were at issue, as with the Elder Abuse Act, which provides for attorney’s fees and costs for a winning plaintiff, and which also requires proof by clear and convincing evidence.
The most important teachings to be gleaned from this case are that a single factor that may not establish unconscionability in all contexts may do so when combined with other factors, and that the denial of discovery where statutory rights are involved may support substantive unconscionability.
Arbitration And A Consumer Case.
In Dennison v Rosland Capital LLC, B295350 (2/8 4/1/20) (Grimes, Bigelow, Stratton), an 82-year old man, responded to a television ad, eventually purchased nearly $200,000 of gold and silver from Rosland Capital, but allegedly the purchases were worth considerably less than the price paid. The seller moved to compel arbitration, the trial court denied the motion, and the Court of Appeal affirmed.
The most interesting issue concerned whether there was an effective delegation to an arbitrator of decisions about the scope or applicability of the arbitration agreement, such that the court should have been the decision maker. The Court of Appeal explained that the contract contained a severability clause providing that a court of competent jurisdiction might excise an unconscionable provision. Given that provision, there is no clear and unmistakable delegation of authority to the arbitrator to determine if the provision is unconscionable.
The seller of precious metals argued that with a lifetime of experience and years in the military, Mr. Dennison could have negotiated the contract. To which the Court of Appeal replied: “An 82-year-old consumer who calls a telephone number displayed in a television ad to make his first-ever investment in the highly volatile precious metals market, no matter how sophisticated he may be in other matters, cannot reasonably be expected to consider negotiating the terms of a form contract in such tiny print it cannot be read without a magnifying glass.” Besides, in the context of consumer contracts, our Supreme Court has never required a complainant to first show that it tried to negotiate the contract as a prerequisite to establishing unconscionability.
Prof. Carrie Menkel-Meadow Speaks To The OC Bar ADR Section About Negotiating The US Constitution
In The Room Where It Happens . . .
Howard Chandler Christy's Scene at the Signing of the Constitution (1940). Wikipedia article. Public domain.
Prof. Carrie Menkel-Meadow, Distinguished and Chancellor's Professor of Law at UCI, spoke to the ADR Section of the Orange County Bar on February 24, 2020, about "Negotiating the American Constitution." Part of the genius of the 55 delegates to the Constitutional Convention was demonstrated by their devotion to crafting ground rules and decision rules before they turned to substantive debate and negotiation.
The process rules included: (1) dividing leadership among Washington, acting as a neutral chair ("President"), Franklin, acting as a process trouble shooter, and Madison, acting as agenda manager, scribe, reporter, and secretary; (2) confidentiality; (3) limiting speakers to speak only twice on a subject (and waiting till all others had their say before speaking a second time); (4) attendance rules; (5) assignments for committee and task groups; (6) lack of attribution of votes to particular delegates by name; (7) majority rule on most matters (with 9 of 13 states required to ratify).
While not every procedural rule was equally important, it is impossible to imagine how the Constitution as we know it could ever have been drafted if the procedural rules required unanimous rather than majority vote. Confidentiality and anonymity of votes were also extremely important, as both rules helped to build trust, avoided public interference and disparagement, and enabled delegates to change positions.
Prof. Menkel-Meadow concluded on an optimistic note: the Constitution, with amendments, and the government structures created, have proven to be highly durable, lasting more than 200 years.1 At the same time, we can trace some of the current challenges, such as problems with the voting system, back to the very negotiations, linkages, and compromises that resulted in our Constitution.
A copy of Prof. Menkel-Meadow's article entitled "Negotiating the American Constitution (1787-1789) Coalitions, Process Rules, and Compromises," a chapter in Landmark Negotiations from Around the World: Lessons for Modern Diplomacy (Emmanuel Vivet, editor, Intersentia 2019.), can be downloaded free of charge from SSRN by clicking here. You will need to open an account with SSRN, which, however, is free.
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1For a recent critical discussion of the Constitution, see the October issue of Harper's Magazine, "Do We Need The Constitution? "- a forum with Donna Edwards, Mary Anne Franks, David Law, Lawrence Lessig, and Louis Michael Seidman.
Reviews: Our Blogger Reviews McMillion$ In The Daily Journal
Review Of McMillion$ Appears In February 21, 2020 Issue Of Daily Journal.
After watching the first two episodes of the HBO documentary mini-series, McMillion$, I reviewed it for the Daily Journal under the heading, "‘McMillion$’ evokes nostalgia for burgers, fries and mere millionaires." The documentary is about McDonald's "Who Wants To Be A Millionaire" Monopoly game scandal that erupted in 2001 after it was discovered by the FBI, with the help of an inside tip, that the game was rigged. Thus far, I have thoroughly enjoyed this fast moving and entertaining documentary. Regrettably, the Daily Journal places articles behind a paywall, and thus I cannot link the article to social media, but perhaps some of you who subscribe to the Daily Journal can take a look at the review.
Arbitration, Nonsignatories: 2nd District Div. 8 Holds Nonsignatory Is Able To Compel Another Nonsignatory To Arbitrate Based On “Stipulation”
A Critical Letter Provided The Evidentiary Linchpin.
The Court of Appeal in Gamma Eta Chapter of PI Kappa Alpha, B25667 (2/8 2/6/20) (Wiley, Bigelow, Grimes), reversed the trial court's order denying a motion to compel arbitration and remanded so that the trial court could grant the motion and stay the case pending arbitration. The somewhat unusual circumstance here is that the defendants who moved to compel arbitration against the fraternity chapter were not signatories to the arbitration agreement — and neither was the chapter.
The arbitration agreement in question was between the national fraternity (Fraternity) and the local chapter (Chapter). It required that the Chapter mediate disputes, and if mediation did not resolve disputes, then arbitrate disputes with entities or persons "affiliated" with the Fraternity.
A dispute erupted between the Chapter and a housing corporation (Housing Corporation) created "to serve as a non-profit facilitator to ensure that the [Fraternity] at USC would consistently have a fraternity house to house and host its members." The Chapter sued the Housing Corporation and its director for constructive fraud, breach of fiduciary duty, unjust enrichment, negligent misrepresentation, and other claims.
In a critical letter the Fraternity sent to its Chapter and the Housing Corporation, it asserted the Housing Corporation was affiliated with the Chapter, the Chapter lacked standing to sue, the Chapter must mediate, and if mediation did not resolve the dispute, then it must arbitrate. The Housing Corporation and its director then moved to compel arbitration, which the trial court, without explanation, denied.
The Court of Appeal reasoned, based on the record it had, that the Fraternity "is an overarching and governing international organization, and the local chapter . . . is merely a subordinate fraternal component of the international fraternity. ¶ The international fraternity wanted arbitration, and so did the defendant housing corporation. This was in effect a stipulation for arbitration."
COMMENTS:
Several things helped the Court of Appeal reach this result. First, the record on appeal was scant. There was no transcript. The trial judge had not explained his reasoning in a minute order, nor was there a statement of decision. And there were no disputes of fact. Therefore, the standard of review was de novo.
Second, the critical letter in which the Fraternity aggressively asserted its control over the Chapter, was not objected to, and was "in evidence for the truth of the matter it asserts."
Third, the effectiveness of the arbitration agreement depended on the interpretation of the word "affiliated." At first blush, it is not clear that the Housing Corporation is "affiliated" to the Chapter in the way the word is sometimes used, to mean one entity owning a majority of another entity's stock. However, once the Court of Appeal concluded that the Chapter was a subordinate unit of the Fraternity, then because the Fraternity staked the position that the Housing Agency and the Chapter were "affiliated", "the letter established that affiliate relationship from the perspective that counts: the perspective of the governing international fraternity."
Presumably there is some "perspective that counts" from which the Court of Appeal could have rejected a completely off-the-wall interpretation of the meaning of "affiliated". However, since the Housing Corporation was set up for the purpose of securing housing for the Chapter, and because it acted as an agent for the Chapter, the Fraternity's interpretation of "affiliated" was colorable.
Arbitration, Vacatur, Public Policy: Second Dist., Div. 6 Holds Arbitrator Award Violated Public Policy in HOA/Developer Dispute
And Now There Is A Split Between The 4th District, Div. 3, And The 2nd District, Div. 2.
In Branches Neighborhood Corp. v. CalAtlantic Group, Inc., 26 Cal.App.5th 743 (2018), a homeowner's association began a construction defects arbitration with a developer without first getting a vote of 51% of its membership, despite association documents requiring such approval. When the developer sought to dismiss the arbitration, the association obtained a ratifying vote. The arbitrator dismissed the arbitration based on the failure to get the required vote before initiating the arbitration, the trial court entered judgment against the association, and the Court of Appeal, 4th District, Div. 3, affirmed.
Now Aldea Dos Vientos v. CalAtlantic Group, Inc., No. B291731 (2nd Dist., Div. 6 2/6/20) (Gilbert, Yegan, Tangeman) holds otherwise. Note: (1) the facts of the two cases are essentially the same; (2) the developer defendant is the same; (3) the 51% voting requirement is in the governing documents of the HOA in both cases; (4) the arbitrator in both cases dismissed the arbitration; (5) the trial court in both cases affirmed judgment in favor of the developer; (6) the law firm representing the developer is the same in both cases. The differences are the outcome (affirmance in the earlier case, reversal in the later case), the legal arguments, and the courts.
In the later case, Justice Gilbert explains that the arbitrator exceeded his power, a basis for vacating an award under Cal. Code Civ. Proc., section 1286.2. "Arbitrators exceed their power by issuing an award that violates a party's unwaivable statutory rights or that contravenes an explicit legislative expression of public policy."
First, provisions that require a 51% vote before initiating arbitration or litigation "contravene statutory policy by giving the Developer the unilateral power to bar actions for construction defects", contrary to housing policy. The developer here argued that the majority voting requirement of an early vote was for the good of the homeowner. However, Justice Gilbert sees the voting requirement as an issue between the HOA and its members, one that was taken care of by ratification, and not one that the Developer could take advantage of after ratification had occurred.
Second, Civ. Code section 5975(a) provides that "unreasonable" equitable servitudes shall not be enforced. Justice Gilbert views as unreasonable a covenant that "gives the Developer veto power over the Association's claims in spite of the members' vote to proceed with the arbitration." The provision, if not interpreted to allow for ratification, "amounts to a trap for the unwary set by the Developer to bar claims against it. The Developer is burdened with no similar hurdle prior to seeking a determination of its rights."
Third, Senate Bill No. 326, signed by the Governor on August 30, 2019, "bars the use of provisions such as section 7.01B [the 51% member voting requirement to initiate legal action] as a defense for developers against claims of condominum associations."
The judgment is reversed.