Justia U.S. 6th Circuit Court of Appeals Opinion Summaries

Cogswell purchased the vacant paper mill in a tax foreclosure sale for $70,000. The site has more than 20 buildings, covering 440,700 square feet. Evanston issued first-party property insurance with a building coverage limit of $1,000,000, subject to coinsurance at 80%. On the first day of coverage, 15,700 square feet (less than 4%) were damaged by fire. Evanston determined that actual cash value of the buildings at the time of loss was $10,223,384.80; under the coinsurance provision, Cogswell was required to carry insurance of $8,178,707.84. Cogswell carried only $1 million. Evanston determined that it was liable for 12.23% ($1 million/ $8,178,707.84); calculated cash value of loss at $342,836.46; and determined that it was liable for $36,918.27 ($342,836.46 times 12.23% less $5,000 deductible). An umpire, appointed under the contract determined actual cash value of $1,540,000.00 and damage at $736,384.89. Cogswell demanded $554,553.49, the net amount under the appraisal after application of the coinsurance provision and deductible. The district court vacated the appraisal and granted Evanston judgment on a second appraisal. The Sixth Circuit affirmed. The provision calling for appointment of an umpire is not governed by the Federal Arbitration Act, 9 U.S.C. 1, which would require deference; the parties agreed to the process under Michigan law.View "Evanston Ins. Co. v. Cogswell Props., LLC" on Justia Law

Plaintiffs sought damages for breach of contract and unjust enrichment. Hartmann counterclaimed for breach of contract. The parties unsuccessfully exchanged multiple settlement offers. Three days before an agreed-upon discovery deadline, Hartmann notified plaintiffs that it intended to exercise its right to arbitrate as provided by their contract. When plaintiffs failed to respond, Hartmann filed a motion to compel arbitration. Plaintiffs served discovery responses on Hartmann in accordance with the agreed deadline and continued to seek discovery from Hartmann while the motion was pending. When Hartmann served discovery responses, it stipulated that it was not waiving its right to arbitrate. The court held that Hartmann had waived its right to compel arbitration by obtaining an extension of time within which to file an answer; asserting 10 affirmative defenses and a counterclaim; engaging in a judicial settlement conference and informal efforts to resolve the case; requesting adjustments of the Case Management Order; and serving discovery requests and that those actions prejudiced plaintiffs. The Sixth Circuit affirmed. Hartmann’s actions were completely inconsistent with any reliance on its right to arbitration and belated assertion of that right caused plaintiffs actual prejudice in the form of unnecessary delay and expense.

Tennessee law mandates mediation in certain contested divorce proceedings. Now-Judge Martin was appointed and performed mediation in plaintiff's divorce as part of his private legal practice. The divorce was granted, allowing wife to take the children to Japan during vacations but requiring her to live within 100 miles of husband. Husband believed that wife planned to abduct the children to her native Japan, petitioned to modify the parenting plan, and sought a restraining order. The hearing, initially assigned to another, was re-assigned to Judge Martin. The parties agreed to have Judge Martin hear the motion, despite the judge raising the issue. Judge Martin ruled in favor of wife, who subsequently took the children out of the U.S. with no apparent intent to return. Husband was awarded full custody; wife was charged with felony custodial interference. Husband filed suit against Martin as both judge and mediator; the law firm as his employer; and a court-ordered parental coordinator, under 42 U.S.C. 1983 and state law negligence and contract theories. The district court dismissed all claims. The Sixth Circuit affirmed.

Employee injured her wrist as a result of an equipment malfunction while performing her job and was sent to the hospital, where she was tested for drugs in accordance with a drug policy negotiated as part of a collective bargaining agreement. She tested positive for marijuana and was subsequently terminated. The parties submitted the dispute to arbitration pursuant to the CBA. The arbitrator sustained the Union's grievance, finding that employer lacked just cause to terminate a nine-year and otherwise satisfactory employee, who was not given adequate advance notice of the drug policy and the consequences. The district court ruled in favor of the Union. The Sixth Circuit affirmed. The outcome reached by the arbitrator was based on his interpretation of the relevant contractual language, which is all a court is asked to determine in conducting "exceedingly deferential," "very limited" review.

Plaintiff was hired as a nurse by defendant in October 2006, had to take leave for cancer treatment, then was informed that she had been terminated on December 12, 2006 because she did not have "any accrued PTO time or FMLA." The district court dismissed claims under the Americans with Disabilities Act, finding that plaintiff assented to a valid agreement to arbitrate the claims. The Sixth Circuit reversed. The employee handbook stated: "Dispute Resolution Process Please refer to the Eby Companies Dispute Resolution Procedure (DRP) for details." That policy does refer to arbitration and contains a signature line. Plaintiff claims she did not receive or sign the policy and defendant did not provide a signed acknowledgment. There was no indication that plaintiff was notified of the existence of the arbitration agreement, much less that she manifested an intent to agree to its terms.