Justia Minnesota Supreme Court Opinion SummariesArticles Posted in Arbitration & Mediation
Hennepin Healthcare System, Inc. v. AFSCME Minnesota Council 5, Union
The Supreme Court reversed the decision of the court of appeals reversed the judgment of the district court denying Hennepin Healthcare System, Inc.'s motion to vacate an arbitration award in favor of AFSCME Minnesota Council 5, holding that the court of appeals erroneously substituted its own judgment for that of the arbitrator.Hennepin Healthcare and AFSCME, which represented two bargaining units of Hennepin Healthcare employees, arbitrated a dispute regarding Hennepin Healthcare's use of temporary staffing agency workers. The arbitrator issued an award in favor of AFSCME. The district court confirmed the award. The court of appeals reversed, concluding that because the arbitration award did not draw its essence from the collective bargaining agreement it must be vacated. The Supreme Court reversed, holding that Hennepin Healthcare failed to meet its burden to demonstrate that the arbitrator clearly exceeded the powers granted to him in the CBA because the award failed the essence test. View "Hennepin Healthcare System, Inc. v. AFSCME Minnesota Council 5, Union" on Justia Law
Wilmington Trust, Nat’l Ass’n v. 700 Hennepin Holdings, LLC
The Supreme Court affirmed the opinion of the court of appeals reversing the judgment of the district court refusing to send the underlying rent dispute to arbitration and resolving the claim itself, holding that the dispute should be sent to arbitration.Landlord entered into a lease with Tenant providing that if Tenant defaulted Landlord shall submit such dispute to binding arbitration. When a dispute arose over water damage and withheld rent, litigation and arbitration resulted, with an arbitrator awarding judgment for Tenant. Thereafter, the trustee for several entities that held mortgages on the building brought a foreclosure action against Owner and appointed Receiver. When Tenant continued to refuse to pay rent, Receiver brought suit, and Tenant sought to send the dispute to arbitration. At issue was whether Receiver was bound by the lease's arbitration clause. The district court refused to send the dispute to arbitration and ruled that Tenant must make rent payments to Receiver. The court of appeals reversed. The Supreme Court affirmed, holding that the court of appeals properly concluded that Receiver was subject to the arbitration agreement in the lease. View "Wilmington Trust, Nat'l Ass'n v. 700 Hennepin Holdings, LLC" on Justia Law
Minn. Department of Corrections v. Knutson
The Supreme Court affirmed the decision of the court of appeals holding that decisions made under Minn. Stat. 43A.33 are quasi-judicial administrative decisions subject to certiorari review by the court but reversed its holding that the Bureau of Mediation Services was a proper party to the appeal, holding that the Bureau was not a proper party to the certiorari appeal.When the Minnesota Department of Corrections sought certiorari review of an arbitrator's decision granting Appellant's appeal from the discharge of his employment at the Minnesota Department of Corrections, Appellant challenged the court of appeals' jurisdiction to hear the appeal, arguing that review must be undertaken by the district court. The court of appeals upheld the arbitrator's decision. The Supreme Court affirmed in part and reversed in part, holding (1) Appellant and the Department were not parties to an arbitration agreement that invoked the judicial review procedures of the Uniform Arbitration Act; (2) the decision of an arbitrator appointed according to section 43A.33 is a quasi-judicial determination of an inferior tribunal reviewable via writ of certiorari at the court of appeals; and (3) the Bureau was not a proper party to this appeal because it had no legal or equitable interest in the outcome. View "Minn. Department of Corrections v. Knutson" on Justia Law
Glacier Park Iron Ore Properties, LLC, v. United States Steel Corp.
The Supreme Court affirmed the judgment of the district court determining that the district court, and not the arbitrator, was to decide whether the parties' dispute was subject to arbitration, holding that the district court correctly concluded that the parties' dispute was not subject to arbitration.Glacier Park Iron Ore Properties, LLC alleged that United States Steel Corporation (U.S. Steel) aided and abetted a breach of the fiduciary duty of Great Northern Iron Ore Properties Trust and sought recession of a lease that U.S. Steel signed with the Trust. Glacier Park filed a motion to stay proceedings pending arbitration and to compel the parties to engage in arbitration. The district court denied the motion, concluding that the court, not arbitrators, should decide the meaning of the arbitration clause at issue in this case and, thus, the arbitrability of the dispute. The district court denied the motion, and the court of appeals affirmed. The Supreme Court affirmed, holding that because there was not clear and unmistakable evidence that the parties intended to delegate arbitrability to the arbitrator, whether the parties' breach of fiduciary claim was arbitrable was a question for the court. View "Glacier Park Iron Ore Properties, LLC, v. United States Steel Corp." on Justia Law
Rodriguez v. State Farm Mutual Automobile Insurance Co.
In this case filed by a bus driver who sought reimbursement for chiropractic services related to her work-related injury the Supreme Court affirmed the decision of the court of appeals to reinstate Plaintiff's arbitration award after the district court vacated the award, holding that a provision in the Minnesota Workers' Compensation Act, Minn. Stat. 176.83, subd. 5(c), did not bar coverage.Plaintiff's employer's workers' compensation carrier agreed to pay workers' compensation benefits to Plaintiff but refused to pay for more than twelve weeks of chiropractic care in accordance with the treatment parameters adopted for purposes of the Act. In accordance with that decision, Plaintiff's first chiropractor stopped treatment after twelve weeks of providing care. Plaintiff then received additional care from a different chiropractor. It was for this care that Plaintiff sought reimbursement from State Farm, her personal automobile no-fault insurer. State Farm denied coverage. An arbitrator ruled in favor of Plaintiff and awarded her the full amount she sought. The district court vacated the arbitrator's award, and the court of appeals reversed. The Supreme Court affirmed, holding that the statutory prohibition on reimbursement in section 176.83, subd. 5(c) is limited to the first provider whose services the workers' compensation payer determined to be excessive. View "Rodriguez v. State Farm Mutual Automobile Insurance Co." on Justia Law
City of Richfield v. Law Enforcement Labor Services, Inc.
The Supreme Court reversed the decision of the court of appeals reversing the district court’s denial of the City of Richfield’s motion to vacate an arbitration award reinstating Nathan Kinsey, a police officer, after the City discharged him for failing to report his use of force and violating other policies, holding that enforcing the arbitration award does not violate a well-defined and dominant public policy.The arbitrator ordered reinstatement after finding that Kinsey did not use excessive force and his decision not to report the use of force was a “lapse in judgment,” and therefore, the City did not have just cause to discharge Kinsey. The district court denied the City’s motion to vacate the award. The court of appeals reversed, concluding that enforcement of the award would violate well-defined and dominant public policies against excessive force. The Supreme Court reversed, holding that reinstatement of Kinsey does not violate any public policy. View "City of Richfield v. Law Enforcement Labor Services, Inc." on Justia Law
Posted in: Arbitration & Mediation
Woischke v. Stursberg & Fine, Inc.
The Supreme Court vacated the decision of the court of appeals reversing the judgment of the district court that concluded that a fee agreement between the parties was not void and thus ordering arbitration, holding that the district court erred by directing entry of final judgment rather than staying the proceedings, and therefore, there was no proper final judgment from which to take an appeal.Plaintiffs sued Defendants after learning that Defendants had provided brokerage services to Plaintiffs without the requisite state license. Specifically, Plaintiffs alleged that the fee agreement obligating Defendants to pay for the services provided was void as against public policy. Defendants, in turn, moved to compel arbitration pursuant to the terms of the fee agreement and to dismiss or to stay the underlying proceedings. The district court ordered arbitration and dismissed the case, concluding that the fee agreement was not void. The court of appeals reversed, determining that the fee agreement was void. The Supreme Court vacated the court of appeals’ decision, holding that the district court erred by dismissing the case instead of staying proceedings and that the court of appeals erred when it concluded that it had jurisdiction over the merits of this case. View "Woischke v. Stursberg & Fine, Inc." on Justia Law
City of Rochester v. Kottschade
In this arbitration dispute, the district court erred by directing the entry of final judgment rather than staying the proceeding, and the court of appeals, faced with a final appealable judgment, should have vacated the judgment and entered a stay of the underlying action pending completion of the arbitration.Plaintiff sued Defendants to stop arbitration proceedings after Defendants demanded arbitration and an arbitrator determined that the dispute was arbitrable. The district court granted summary judgment for Defendants and compelled arbitration. Instead of staying the underlying action, the district court directed the entry of judgment. Plaintiff appealed, arguing that the district court’s order was a final judgment because it dismissed, rather than stayed, the underlying proceeding. The court of appeals disagreed and dismissed the appeal as taken from a nonfinal order and judgment. The Supreme Court reversed, holding (1) the district court erred by directing the entry of final judgment rather than staying the proceeding, as required by Minn. Stat. 572B.07(f); and (2) the proper course for the court of appeals, faced with a final judgment that was appealable under Minn. R. Civ. App. P. 103.03(a), was to direct the district court to vacate the judgment and enter a stay of the underlying action pending completion of the arbitration. View "City of Rochester v. Kottschade" on Justia Law
Seagate Tech., LLC v. W. Digital Corp.
After Sining Mao left his employment with Seagate Technology, LLC, Mao joined Seagate’s competitor, Western Digital Corporation. Seagate subsequently commenced a district court action alleging that Mao stole Seagate’s trade secrets and confidential information and provided it to Western Digital. Western Digital invoked an arbitration clause in Mao’s employment agreement with Seagate. Before the arbitration hearing, Seagate brought a motion for sanctions against Western Digital and Mao (Appellants) based on alleged fabrication of evidence. An arbitrator issued an award against Appellants in an amount exceeding $500 million. The district court vacated the award in part, but the court of appeals reinstated the award. On appeal, Appellants argued that the arbitrator’s exceeded his authority by issuing punitive sanctions and prejudiced Appellants by refusing to hear evidence material to the controversy. The Supreme Court affirmed the court of appeals’ decision reinstating and confirming the arbitration award in full, holding that the arbitrator did not exceed his authority or refuse to hear material evidence as required for vacatur. View "Seagate Tech., LLC v. W. Digital Corp." on Justia Law
Fernow v. Gould
A snowplow driver for the City of Alexandria collided with Donald Fernow's vehicle. Fernow brought a personal injury action against the City. At the same time, Fernow's insurance company (Insurer) sought arbitration against the City, seeking repayment in basic economic loss benefits paid to Fernow. In the personal injury action, the district court denied the City's motion for summary judgment on the basis that Fernow's claim was barred by statutory discretionary immunity, common law official immunity, and statutory snow and ice immunity. The court of appeals affirmed. Meanwhile, the arbitrator awarded Insurer basic economic loss benefits, concluding that the defense of governmental statutory immunity did not apply to the matter because of the denial of the City's motion for summary judgment. The district court confirmed the award. The court of appeals reversed, concluding that the arbitrator exceeded her authority when she determined that the defense of governmental statutory immunity did not apply to the matter. The Supreme Court affirmed on different grounds, holding that claims of immunity, including necessary questions of fact, should be determined by the district court prior to arbitration on the merits under the Minnesota No-Fault Automobile Insurance Act. Remanded.View "Fernow v. Gould" on Justia Law