Justia Oklahoma Supreme Court Opinion SummariesArticles Posted in Arbitration & Mediation
Howell’s Well Service v. Focus Group Advisors
The Oklahoma Supreme Court granted certiorari to address this first impression issue of whether the right to compel arbitration was waived when it is not raised as an affirmative defense in a responsive pleading. Plaintiffs-appellees filed suit alleging various claims stemming from the parties' investment relationships. Nearly seventeen months after they filed their answer in which they omitted arbitration as an affirmative defense, defendants-appellants moved to compel arbitration pursuant to the parties' agreements. Very little case activity involving defendants had taken place during that time. The Court of Civil Appeals affirmed the trial court's denial of the motion to compel, holding that defendants-appellants waived any right to arbitration by failing to raise it in their answer. The Supreme Court held the right to compel arbitration was not waived in this case: defendants-appellants' motion to compel arbitration met the statutory requirements of the OUAA. “This finding, however, did not end our analysis because Oklahoma law provides that a party may waive their right to arbitration even when properly requested. After conducting an examination of the pertinent facts herein, we conclude Plaintiffs/Appellees failed to satisfy their burden of proof on the issue of waiver of the right to arbitration.” Accordingly, the judgment of the trial court was reversed. View "Howell's Well Service v. Focus Group Advisors" on Justia Law
Sutton v. David Stanley Chevrolet
In 2016, plaintiff-appellee Isaac Sutton went shopping for a vehicle at the defendant-appellant David Stanley Chevrolet, Inc.'s (hereafter DSC) car dealership. He agreed to purchase a 2016 Chevy Silverado on credit and he agreed to trade-in his 2013 Challenger. He was informed by DSC that his credit was approved. In addition, he was given $22,800.00 for the Challenger for which he still owed $25,400.00. The documents for the purchase of the vehicle amounted to approximately eighty-six pages, which included a purchase agreement and a retail installment sale contract (RISC). He left the dealership that evening with the Silverado and left his Challenger. Several days later he was informed by DSC that his financing was not approved and he would need a co-signor to purchase the Silverado. Sutton visited DSC but was then told he did not need a co-signor and there was no need to return the vehicle. At the end of June his lender for his 2013 Challenger contacted him about late payments. Sutton contacted DSC who said it was not their responsibility to make those payments since they did not own the Challenger he traded-in. A few days later, he was notified by DSC that his Challenger had been stolen and the matter was not the responsibility of DSC. Sutton had to make an insurance claim on his Challenger and DSC took back the Silverado. In the meantime, Sutton continued to make payments on the Challenger. Plaintiff and his wife Celeste Sutton sued DSC over the whole transaction involving the Challenger. DSC moved to compel arbitration. Plaintiffs alleged they were fraudulently induced into entering the arbitration agreement. The trial court found there was fraudulent inducement and overruled the motion to compel arbitration. The Oklahoma Court of Civil Appeals reversed the trial court and remanded for further proceedings concerning the unconscionability of the arbitration agreement. The Oklahoma Supreme Court granted certiorari, and found the trial court's order was fully supported by the evidence. The opinion of the Oklahoma Court of Civil Appeals was therefore vacated and the matter remanded to the trial court for further proceedings. View "Sutton v. David Stanley Chevrolet" on Justia Law
Signature Leasing, LLC v. Buyer’s Group, LLC
Plaintiff Signature Leasing, LLC requested a declaratory judgment regarding a contract containing an arbitration clause which Plaintiff alleged that Defendants Buyer's Group, LLC and Williams & Williams Marketing Services, Inc. had fraudulently induced Plaintiff to sign. Defendants filed motions to dismiss and motions to compel arbitration which the district court granted. The Court of Civil Appeals reversed and remanded to the district court. The underlying question presented for the Oklahoma Supreme Court's review was whether the district court or the arbitrator determined challenges of fraudulent inducement to the entirety of a contract which contains an arbitration clause under the Oklahoma Uniform Arbitration Act (OUAA). The Court determined the arbitrator makes that determination, and affirmed the judgment of the district court compelling the matter to arbitration. View "Signature Leasing, LLC v. Buyer's Group, LLC" on Justia Law
Williams v. TAMKO Building Products, Inc.
Defendant-appellee TAMKO Building Products, Inc. was a roof shingle manufacturer incorporated in Missouri. Plaintiffs-appellants were homeowners whose contractors installed Defendant's shingles on homeowner's roof. Plaintiffs filed suit alleging they were entitled to compensation for damage to their home caused by Defendant's faulty shingles and the expense of installing a new roof. Defendants moved to stay proceedings and compel arbitration pursuant to an arbitration agreement on the shingle's packaging. The trial court granted the Defendant's Motion to Stay Proceedings and Compel Arbitration concluding the Plaintiffs were charged with the knowledge of the contract even if they did not read it, that TAMKO did not waive its right to compel arbitration, and that the contract was not unconscionable. Plaintiffs appealed. The Oklahoma Supreme Court reversed, finding that the arbitration clause at issue in this case was printed on the shingles' wrapping, which was seen only by the contractors installing them. The wrapping was discarded once the shingles were unpackaged and placed on rooftops. The Supreme Court concluded the Homeowners were not bound by the arbitration agreement: "n implied agent whose sole authority is to select and install shingles does not have the authority to waive the principal's constitutional rights. Further, the intentional printing of an agreement to waive a constitutional right on material that is destined for garbage and not the consumer's eyes is unconscionable. The Homeowners never had an opportunity to make a knowing waiver of access to the courts." View "Williams v. TAMKO Building Products, Inc." on Justia Law
American Federation of State, County & Municipal Employees v. City of Norman
Appellants, American Federation of State, County and Municipal Employees, Local 2875 (Union), and Robert Green (Green), sought certiorari relief from the Court of Civil Appeals' (COCA) opinion affirming the trial court's grant of summary judgment in favor of the City of Norman and reversing an arbitration award in favor of Green and Union. Green, a member of his local union, was discharged from his job with the City of Norman, Oklahoma (City). Green appealed the decision and the matter was ultimately presented to an arbitrator for a determination. The arbitrator determined there was no "just cause" for discipline and he ordered reinstatement of Green's employment. The union filed a petition in district court to enforce the arbitration award. City filed a cross petition asking the district court to vacate the arbitration award. Both parties sought summary relief from the district court. The district court denied relief to Green and granted summary judgment in favor of City. The district court held the arbitrator exceeded his authority under the collective bargaining agreement and vacated the arbitrator's opinion and award. Green and the union filed a Petition in Error; the Court of Civil Appeals affirmed the district court's grant of summary judgment to City but remanded the matter for the arbitrator to resolve the issue of progressive discipline. Green and the union sought certiorari relief from the Oklahoma Supreme Court. After review, the Supreme Court held the arbitrator acted within the scope of his authority under the terms of the CBA when determining whether the City had "just cause" to discipline Green. It vacated the Court of Civil Appeals' opinion, reversed the district court and remanded this matter for further proceedings. View "American Federation of State, County & Municipal Employees v. City of Norman" on Justia Law
Walker v. BuildDirect.com Technologies, Inc.
The Tenth Circuit Court of Appeals certified a question of Oklahoma law to the Oklahoma Supreme Court. In April 2008, plaintiffs Shannon and Eric Walker requested several samples of hardwood flooring from BuildDirect.com Technologies, Inc., a Canadian corporation, through BuildDirect's website. The next month they arranged, over the telephone, to purchase 113 boxes of flooring from BuildDirect. BuildDirect emailed a two-page written Contract entitled "Quotation" to Ms. Walker, who signed and dated the Contract and returned it to BuildDirect via fax. The Contract described the type, amount, and price of the flooring purchased by the Walkers. And, it included 14 bullet points setting forth additional terms. The sixth bullet point stated: "All orders are subject to BuildDirect's 'Terms of Sale.'" The Walkers alleged that after they installed the flooring, they discovered that their home was infested with nonindigenous wood-boring insects. According to the Walkers, the insects severely damaged the home, and caused the home to be subject to quarantine and possible destruction by the United States Department of Agriculture. The question the federal appeals court posed to the Oklahoma Supreme Court was whether a written consumer contract for the sale of goods incorporated by reference a separate document entitled "Terms of Sale" available on the seller's website, when the contract stated that it was "subject to" the seller's "Terms of Sale" but did not specifically reference the website. In response, the Oklahoma Court held that Oklahoma law did not recognize a "vague attempt at incorporation by reference" as demonstrated in this case. Under the Oklahoma law of contracts, parties may incorporate by reference separate writings, or portions thereof, together into one agreement where: (1) the underlying contract makes clear reference to the extrinsic document; (2) the identity and location of the extrinsic document may be ascertained beyond doubt; and (3) the parties to the agreement had knowledge of and assented to its incorporation. View "Walker v. BuildDirect.com Technologies, Inc." on Justia Law
Johnson v. Convalescent Center of Grady, LLC
The trial judge denied the appellants' motion to compel arbitration on the ground that there was no binding arbitration agreement. The trial judge ruled that Tamera Nelson did not have authority to sign an arbitration agreement on behalf of her grandmother, Arda Lee Churchill (who was a resident of the Grace Living Center-Chikasha until her death), so no valid arbitration agreement existed. The Supreme Court agreed with the trial court that no valid arbitration agreement existed because Tamera Nelson was not authorized to make health care decisions for her grandmother under the circumstances. The Health Care Power of Attorney required that Arda Lee Churchill's physician certify that she was not capable of making her own health care decisions and no such certification was made. View "Johnson v. Convalescent Center of Grady, LLC" on Justia Law
Boler v. Security Health Care, LLC
Cleo Boler was admitted to Grace Living Center - Norman, in January 2010 and was a resident there until January 2012. Judy Little, as Cleo Boler's attorney in fact, signed the admission documents which included a three-page Dispute Resolution Provision. The arbitration agreement provided that any claim, controversy, dispute or disagreement arising out of or in connection with the care rendered to Cleo Boler would be determined by submission to neutral, binding arbitration. It purported to bind not only Cleo Boler, but any future legal representatives, heirs, successors, etc., who might assert a claim against Grace. Cleo Boler, individually, and Judy Little and Johnnie Boler as attorneys in fact, sued Grace and others for negligence, violation of the Nursing Home Care Act and breach of contract regarding the care and treatment of Cleo Boler. Grace filed a Motion to Compel Arbitration, asserting that the contract was one involving interstate commerce and was valid and enforceable under the Federal Arbitration Act (FAA), which preempted contrary state law. The issue this case presented for the Supreme Court's review was whether the trial court erred in denying the nursing home's motion to compel arbitration. The trial judge held that the wrongful death claim belonging to Cleo Boler's statutory claim was not subject to an agreement to arbitrate contained in her nursing home's admission contract. The Supreme Court agreed with the trial court and held that the personal representative and the next of kin were not bound by the arbitration agreement in the contract signed on Cleo Boler's behalf. They did not sign the nursing home contract in their personal capacities and their claim was not wholly derivative of Cleo Boler's claim. View "Boler v. Security Health Care, LLC" on Justia Law
Harris v. David Stanley Chevrolet, Inc.
In 2005, Plaintiff Marlene Harris purchased a car from Defendant David Stanley Chevrolet. Her purchase agreement contained an arbitration provision that applied to any "controversy, claim or dispute between the Purchaser and the Dealer arising out of, or related to this sale or transaction, including but not limited to, any and all issues or disputes arising as a result of this sale or transaction whether said issues arise prior to, during or subsequent to the sale or attempted sale of a vehicle." A few days after executing the purchase agreement, Plaintiff entered into a GAP insurance contract sold to her by an employee of the dealership (acting as an agent of the insurance company). In 2009, the car was a total loss. The GAP insurance company refused to pay the total difference between the insurance proceeds and the amount owed on the car, and Plaintiff sued to compel the GAP coverage. Plaintiff maintained that the purchase of the vehicle and the purchase of the policy were separate transactions, and that the arbitration clause of the purchase contract was inapplicable to the underpayment of coverage (GAP coverage). She argued no claim was brought against the GAP insurance company which was related to the sale or financing of the vehicle, conceding the arbitration clause would have applied to claims related to the sale or financing issues. After reviewing the motions of the parties, the trial court denied Defendant's Motion to Compel arbitration without an evidentiary hearing. Upon review, the Supreme Court concluded that the two contracts involved two separate subjects, executed on different dates, and the arbitration clause in the purchase agreement did not mention or reference GAP insurance or any relationship between the two contracts. The trial court did not abuse its discretion in denying the evidentiary hearing and ruling that the arbitration clause did not apply as a matter of law.View "Harris v. David Stanley Chevrolet, Inc." on Justia Law
Howard v. Nitro-Lift Technologies, LLC
Plaintiffs-Appellants Eddie Lee Howard and Shane Schneider (Employees) entered an employment contract with Defendant-Appellee Nitro-Lift Technologies, L.L.C. For two years following termination, the contract prohibited employees from: working for, leasing to, or selling equipment to competitors. The contract contained an arbitration agreement requiring application of Louisiana law with disputes to be resolved in Houston, Texas. After the employees terminated their employment with Nitro-Lift, they went to work for a competitor in Arkansas. The employer filed an arbitration proceeding in Houston. Howard and Schneider filed an application for a declaratory judgment and injunctive relief in Oklahoma asserting that the non-competition agreement violated public policy. The district court initially granted the employees a temporary injunction, prohibiting Nitro-Lift from continuing the arbitration proceedings in Texas. Thereafter, the employer filed a motion to dismiss. After considering the parties' briefs and arguments, the district court found the arbitration clause to be valid on its face and reasonable in its terms, lifted the temporary restraining order, and granted the motion to dismiss. Upon review, the Supreme Court held that: (1) the existence of an arbitration agreement in an employment contract did not prohibit judicial review of the underlying agreement; and as drafted, the non-competition covenants were void and unenforceable as against Oklahoma public policy. The Court reversed the district court's judgment and remanded the case for further proceedings. View "Howard v. Nitro-Lift Technologies, LLC" on Justia Law