While regular people count down the days to summer blockbusters that come in the form of high-paid actors fighting aliens or robots, I prefer my summer blockbusters in the form of arbitration opinions that have been months in the making (maybe finally released because the clerks are about to turn over?). Today, I report on three of these arbitration blockbusters, all from state high courts.
Blockbuster 1: New Hampshire Rejects Application of FAA.
In the most ambitious of the three decisions, the New Hampshire Supreme Court found that the FAA’s sections regarding confirming and vacating awards do not apply in state courts. Finn v. Ballentine Partners, LLC, __ A.3d __, 2016 WL 3268852 (NH June 14, 2016) (an opinion that took five months to produce). In that case, a company ousted one of its founders, and she instituted an arbitration challenging her termination. She was awarded about $6.5 million. After the company engaged in some major restructuring, which resulted in lots of cash, the ousted founder started a new arbitration. Although the company argued her claims were barred by res judicata, the second arbitration went all the way through hearing and she was awarded another $600,000.
Blockbuster 2: Michigan Allows Law Firm To Compel Arbitration Of Suit Against Its Principals
Michigan’s decision has more interesting facts but less of a jaw-dropping result. In Altobell v. Hartmann, __ N.W.2d__, 2015 WL 3247615 (Mich. June 13, 2016), a principal in a law firm had gotten the chance to be an assistant football coach at the University of Alabama. (What attorney has a second act as a football coach? I imagine him giving his clients half-time type pep talks trial: “Clear eyes. Full hearts. Can’t lose!”) He got the impression that his firm would allow him to keep his ownership interest for a year, but the firm audibled and declared the coach had withdrawn from the partnership. No law firm money was coming his way.
Blockbuster 3: Kentucky Finds CPA Determination Is Not “Arbitration”
Kentucky waded into the muddy issue of defining arbitration in The Kentucky Shakespeare Festival, Inc. v. Dunaway, __ S.W.3d__, 2016 WL 3371085 (Ky. June 16, 2016). In that case, a theater fired its director but agreed to pay his bonus for 2013. The agreement noted that “the parties agree to abide by the determination of the … certified public accountants…in case of a dispute as to the true amount of the net profits, and each party agrees to accept such determination as final.” After the CPAs concluded the director was entitled to no bonus, the director filed suit. A year later, the theater filed for summary judgment, arguing the CPA determination was a binding arbitration award. The district court denied the motion and the intermediate appellate court agreed.
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