[Dis-res] RDDR Summary (June 14 - 18)

[Kelly J Niemeyer]

Recent Developments in Dispute Resolution
Willamette University, College of Law
Center for Dispute Resolution
June 14 - 18, 2004
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THIS WEEK:

1.      Arbitration:  Appeal based on arbitrator’s alleged manifest
disregard of the law raises a federal question and gives rise to subject
matter jurisdiction. (9th Cir., May 25, 2004)

2.	Arbitration: Arbitrator went beyond the scope of his power when adding
a non-party claimant to the award. (Cal.App. 4 Dist., May 26, 2004)

3.	Mediation:  A mediation settlement agreement does not need to include
all the provisions the parties agree upon. An incomplete mediation
compromise is still valid if there is a meeting of the minds.  (La. Ct.
App., May 26, 2004)

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CASE SUMMARY:

1.     Arbitration:  Appeal based on arbitrator’s alleged manifest
disregard of the law raises a federal question and gives rise to subject
matter jurisdiction.

Vu Luong v. Circuit City Stores, Inc., U.S. App. LEXIS 10215 (9th Cir.,
May 25, 2004)

Plaintiff Vernon Vu Luong filed a disability discrimination claim against
Circuit City. Circuit City then moved to arbitrate the dispute pursuant to
an arbitration agreement.  The arbitrator determined that Luong was not
disabled according to federal law. Luong appealed the judgment, claiming
that the arbitrator’s finding was in manifest disregard of the law. The
United States Court of Appeals for the Ninth Circuit issued a two-part
holding, affirming the lower court’s dismissal of Luong’s petition to
vacate the judgment.  First, the court adopted the Fifth Circuit Court’s
holding that a good faith claim that an arbitrator’s award is in manifest
disregard of the law raises a federal question that gives rise to subject
matter jurisdiction.  However, an arbitrator’s application of federal law
to reach a conclusion, whether or not the arbitrator applied the law
correctly, does not amount to manifest disregard of the law.  For a
judgment to be in manifest disregard of the law, the arbitrator must have
“recognized the applicable law and then ignored it.”  (MH)

Full opinion available online at:
http://www.ca9.uscourts.gov/ca9/newopinions.nsf/B9A89DF5698F32FA88256E9F004F70A2/$file/0256522.pdf?openelement

2.      Arbitration: Arbitrator went beyond the scope of his power when
adding a non-party claimant to the award.

Abbruzzese v. Torres-Morfin, 2004 WL 1168019, (Cal.App. 4 Dist., May 26,
2004)

Plaintiff Abbruzzese, a medical doctor, filed suit against Torres-Morfin
(Torres) for embezzling funds while employed in Abbruzzese’s medical
clinic.  The parties agreed to binding arbitration under the employment
contract.  Torres’ attorney raised a corporate entity issue for the first
time during closing arguments and argued that any money owed by Torres
should go to the corporation Bristol Family Medical Clinic instead of
Abbruzzese.  The arbitrator added Bristol Family Medical Clinic as a
claimant and awarded damages to both Abbruzzese and the corporation. 
Torres filed a motion to vacate the award arguing that the arbitrator went
beyond his power when he added the corporation as a claimant.   The trial
court found that the arbitrator exceeded his authority, but the court did
not vacate the award.  The Court of Appeals affirmed the lower court’s
ruling, stating that the arbitrator’s powers were limited to the agreement
between the parties.  The addition of a non-party to the agreement was an
issue for the court, not the arbitrator.  The Court did not vacate the
award, but concluded that eliminating the improperly added claimant would
not materially affect the arbitrator’s award.  (CF)

Full opinion available online at:
http://www.courtinfo.ca.gov/opinions/nonpub/G032222.DOC

3.	Mediation:  A mediation settlement agreement does not need to include
all the provisions the parties agree upon. A mediation compromise is still
valid if there is a meeting of the minds.

LeBlanc v. State Farm Ins. Co., 2004 La. App. LEXIS 1357 (La. Ct. App.,
May 26, 2004)

Julaine LeBlanc (LeBlanc) was in an automobile accident, which led to
extended litigation against multiple insurance companies and personal
parties.  LeBlanc and the defendants agreed to participate in a mediation
conference.  All parties present signed a “Mediation Settlement Agreement”
stating that a formal settlement agreement would be executed at a later
date.  When the defendants moved to compel enforcement of the settlement
agreement LeBlanc claimed there was no legally binding settlement until
the formal settlement was signed.  The court relied on reasoning from the
Fourth Circuit Court of Appeals of Louisiana and held that a mediation
settlement agreement need not include all the provisions the parties agree
upon. The “Mediation Settlement Agreement” was a legally binding document
because there was a meeting of the minds.  (JB)

Full opinion available online at: Lexis.

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Editor-in-Chief: Kelly J. Niemeyer

Writers: Mark Hogan, Cayce Falck, Jarom Bangerter

Faculty Advisor: Richard Birke
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