[Dis-res] RDDR 11/22/2004 issue

[Diane E Gould]

Recent Developments in Dispute Resolution
Willamette University College of Law
Center for Dispute Resolution
November 8-12, 2004
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THIS ISSUE - November 22, 2004:

1.  Arbitration: The district court erred in reducing the amount of an
arbitration award by characterizing a $600,000 receivable account as a
credit toward monies owed by the defendant, even though the arbitration
panel clearly characterized the account as property of the plaintiff. 
(8th Cir., Nov. 10, 2004)

2.  Compromise and Settlement:  When an attorney agrees to a settlement
with her soon-to-be-former law partner on how to split fees upon
dissolution of their partnership, she may not obtain relief from the court
eight years later because she made a poor bargain. (IA, Nov. 10, 2004)

3.  Arbitration: The Montana Supreme Court ruled that a collective
bargaining clause that allows one party to refuse to arbitrate a dispute
violates a Montana statute that guarantees school employees the option of
either litigation or arbitration for redress of grievances. (Mont. Nov.
12, 2004)

4.  Arbitration:  An employer’s letter informing the union that it had “no
viable cause of action,” triggered the grievance deadlines in a collect
bargaining agreement because it amounted to an unequivocal refusal to
arbitrate under Section 301 of the Labor Management Relations Act.  (5th
Cir., Nov. 11, 2004)

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CASE SUMMARIES:

Arbitration: The district court erred in reducing the amount of an
arbitration award by characterizing a $600,000 receivable account as a
credit toward monies owed by the defendant, even though the arbitration
panel clearly characterized the account as property of the plaintiff.

Gas Aggregation Services, Inc. v. Howard Avista Energy, LLC, 2004 WL
2534040 (8th Cir. (Minn.), Nov. 10, 2004)

Plaintiff (GAS) and Defendant (HA) both sell and distribute natural gas. 
A dispute arose concerning their respective responsibilities under several
joint venture agreements, and an arbitration panel resolved the disputed
amounts in favor of GAS.  As part of the award, the arbitration panel
characterized a certain $600,000 receivable as property of GAS.  The
district court modified the award, characterizing the receivable as a
credit to the balance of the award owed by HA, and GAS appealed.  The
appellate court reversed, holding that the arbitration award clearly
treated the receivable as property of GAS, and the district court may not
modify an award just because they might disagree with it.  The arbitration
panel stated that GAS should “retain” the receivable, they awarded
prejudgment interest on the receivable, and listed interest on the
receivable as part of the award.  A court must not substitute its judgment
for that of the arbitration panel.  (FC)

Full opinion available online at:
 http://caselaw.lp.findlaw.com/data2/circs/8th/033291p.pdf

Compromise and Settlement:  When an attorney agrees to a settlement with
her soon-to-be-former law partner on how to split fees upon
dissolution of their partnership, she may not obtain relief from the court
eight years later because of perceived inequities in the bargain.

Walker v. Gribble, 2004 WL 2534307 (IA, Nov. 10, 2004)

Attorneys Walker and Gribble wished to dissolve their law firm.  They
finally came to a settlement agreement in July of 1996, after mediation. 
The agreement allocated proceeds still pending from four large
contingency-fee cases (it also included promises to refrain from making
derogatory remarks about each other).  Eight years later, Walker filed a
petition in district court to rescind the settlement, claiming that by
agreeing to the terms, she had violated the Iowa Code of Professional
Responsibility for Lawyers (Code).  Gribble filed a counterclaim and moved
for summary judgment.  Ms. Walker argues that because she had physically
left the firm at the time of the agreement, the plan to split the future
contingency fees with Mr. Gribble was more of a “referral” fee to a
non-firm lawyer than a fee sharing agreement between partners.  Secondly,
because Mr. Gribble did very little of the work on the cases, his share of
the proceeds was an “excessive fee.”  The district court granted Gribble’s
motion for summary judgment and Walker appealed to the Iowa Supreme Court.
The Supreme Court declared that "breaking up is hard to do" while
affirming the lower court.  They held that the agreement did not violate
the Code because Walker and Gribble were partners at the time of their
settlement agreement, and the “excessive fee” prohibition is to protect
clients from greedy attorneys, not to protect partners from each other.
(DG)

Full opinion available online at:
http://www.judicial.state.ia.us/supreme/opinions/20041110/03-1380.asp

Arbitration: The Montana Supreme Court ruled that a collective bargaining
clause that allows one party to refuse to arbitrate a dispute violates a
Montana statute that guarantees school employees the option of either
litigation or arbitration for redress of grievances.

Belgrade Education Association v. Belgrade School District No. 44, 2004 WL
2569360 (Mont. Nov. 12, 2004).

The Belgrade School District (School) and the Belgrade Education
Association (Union) entered into a collective bargaining agreement (CBA). 
Shane, a member of the Union, quit her job and requested her longevity
pay, pursuant to the CBA.  The School refused to pay her, the Union filed
a grievance, and after attempts to resolve the issue administratively
failed, the Union requested arbitration.  The School refused arbitration,
stating that the CBA provided that issues could only go to arbitration if
both parties consented.  The Union petitioned the District Court to compel
arbitration, and the School sought to quash the writ.  The District Court
granted the School’s motion, holding that the School had no legal duty to
arbitrate and that the Union had “other plain, speedy, and adequate
remedies.”  Upon appeal, the Supreme Court of Montana, interpreting the
applicable Montana statute, held that in cases involving CBAs with
schools, a grievant has a statutory right to choose resolution of her
claims through arbitration or litigation.  Therefore, the School had a
legal duty to provide the option of arbitration, and that the “Mutual
Agreement” clause of the CBA was void because it violated this statute. 
(AKH)

For the full opinion online:
http://www.lawlibrary.state.mt.us/dscgi/ds.py/Get/File-36474/04-187.pdf.

Arbitration:  An employer’s letter informing the union that it had “no
viable cause of action,” triggered the grievance deadlines in a collect
bargaining agreement because it amounted to an unequivocal refusal to
arbitrate under Section 301 of the Labor Management Relations Act.

Independent Coca-Cola Employees’ Union of Lake Charles, No. 1060 v.
Coca-Cola Bottling Company United, Inc. 2004 WL 2554847 (5th Cir. (La.))
Nov. 11, 2004

Coca-Cola (Employer) fired Arthur Etienne in August of 1998. Etienne’s
Union filed a grievance.  Coca-Cola denied the grievance in December, and
the Union notified Coca-Cola of their intent to arbitrate the dispute
under the CBA in February 1999.  The Federal Mediation and Conciliation
Services provided the employer with a panel of arbitrators the following
month.  However, the parties postponed selecting an arbitrator and
continued efforts to settle the dispute.  Three years later, in March
2002, the Employer informed the Union that although it had no legal
obligation to Etienne, it would settle the grievance for $12,000 if the
Union or Etienne accepted the offer within 30 days.  The Union did not
respond until November 19, 2002.  On November 27, the Employer informed
the Union and Etienne that any cause of action was time barred 6-months
after their March 2002 letter.  The Union filed suit in June 2003 to
compel arbitration.  The Employer moved for summary judgment on the basis
that the action was time barred.  The United States District Court for the
Western District of Louisiana found that Coca Cola’s November 27 letter
had unequivocally communicated to the Union that Coca-Cola was not going
to arbitrate.  As the Union did not file suit within 6 months, its action
to compel arbitration was time-barred.  The Fifth Circuit affirmed the
district court and held that when one party tells another that it has no
viable cause of action because any claims that it might have had are
time-barred, then that party has unequivocally refused to arbitrate. 
(KKR)

Full opinion available online at: Westlaw

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Writers:  Forrest Collins, Alycia Huskins, Geoffrey McCann, Daniel
Rayfield, Kathryn Kellogg Runkle, and Cheryl Taylor
Editor:  Diane Gould
Faculty Advisors:  Richard Birke and A. Lee Jordan
*This issue is dedicated to Prof. Carlton J. Snow - arbitrator, professor,
scholar, and a true gentle man.

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