What happens when parties simultaneously sign two agreements regarding different subject matters where one contract has an arbitration clause and the other does not?

We've seen this issue come up twice involving business transactions (in both cases, shareholder agreements) and a divorce. In the prior case, Steritech Group v. Cassandra MacKenzie, a divorced spouse was claiming fair market value ownership of shares which were obtained during the marriage.

In the present case, Karen Lippman v. Steven Lippman, the couple were married and had a business together. The shareholder agreement had a clause calling for arbitration of business-related disputes. The marital settlement agreement incorporated the shareholder agreement.

The Panel (Warner, Farmer, and Levine) held that "the marital settlement agreement does not provide for the arbitration of family law issues. The shareholders' agreement... was limited to.. claims arising out of or relating to the shareholders agreement. The incorporation... does not expand the agreement to arbitrate."

Interestingly, we note the Lippman opinion cites a rule on jurisdiction and a case regarding the standard of review but no other authority. Candidly, none was probably needed in this fact investigation but its worth noting if the case arises as precedent or authority in a future matter.

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Perhaps the news comes in anticipation of some anticipated, forthcoming anti-arbitration federal legislation. Or, more likely, it stems from National Arbitration Forum's closure of its consumer arbitration program.

Two major credit card companies, JP Morgan Chase and (three months ago) Bank of America, have dropped arbitration provisions from their credit card agreements.

We turn -- for the first time we can think of -- to USA Today for the legal scoop.

For several years there has been some form of proposed federal legislation limiting arbitration and it appears likely that "something" will be passed in the future which retreats from the current national stance favoring arbitration. Strong forces exist on both sides as plaintiff lawyers and consumer groups claim that arbitration is a rigged star chamber while corporations claim that they are required to reduce litigation costs. Given that the consumer/plaintiff argument carries some simple-but-forceful themes (e.g., "secret" arbitration panels, "hidden" results, "maze of fine print"), the pro-arbitration argument comes across as cerebral at best and more often as a pro-business tool. If you have any question as to the force of these themes, watch this 10-minute Senate hearing excerpt from October 2009.

If you want to track the dueling bills, there is H.R. 1020 and Senate Bill 931.

An interesting point was raised by karlbayer.com suggesting that an amendment to another anti-arbitration bill, H.R. 3326 (preventing certain mandatory arbitration provisions in defense contractor employee contracts due to the Jamie Leigh Jones v. Halliburton matter), may have lead to a large number of supporters for H.R. 1020.

While HR 1020 does have a number of supporters, at least according to THOMAS, it has not moved significantly since the beginning of the year. A search on Google News for any update on the proposed Act yields little to no information.

Florida lawyers find themselves facing yet another appellate decision invalidating a Proposal for Settlement. Yes, it's been about a month since a Proposal was shot down like this case. Or this one.

In our instant case, which admittedly is a new twist on a tired issue, the Fourth District held that Proposals for Settlement cannot be used to resolve cases involving both claims for damages and injunctive relief.

In Palm Beach Polo Holdings, Inc. v. Equestrian Club Estates Owners Association (Kaplan, Polen and Ciklin), a land dispute resulted in a complaint seeking two counts of declaratory / injunctive relief and one count for damages. Multiple Proposals for Settlement were served and each sought to resolve the entire case.

The appellate court noted that, "the offer of judgment statute applies only to civil actions for damages" according to Florida Statute 768.79. Here, there was clearly a mix of counts for damages and injunctive relief. At best, the Proposal was ambiguous as to whether it meant both. Since Proposals are interpreted strictly, with "ambiguity" being the death knell, the Fourth DCA held the Proposal invalid. If the Proposal had been fashioned to resolve only the damages claim, it apparently would have otherwise been deemed valid.

Help still exists: check out the article, "Building a Better Proposal for Settlement," which, despite tough appellate rulings since its publication in 2008, appears to still offer solid guidance. Go to Florida Law Commentary and click the "2008 Proposal for Settlement" link under "Articles." Note: if you've used a Proposal which follows the format discussed in that article, email us the hearing transcript and order.

Two of Florida intermediate appellate courts have now ruled that pre-dispute arbitration clauses which refers health care disputes to the American Arbitration Association (AAA) are nonetheless valid -- even though the AAA will decline the case -- because referral to the AAA is not typically an integral term. Instead, the parites can petition the trial court for another arbitrator.

The Second District issued the first case from August 2009 (New Port Richey Medical Investors and Life Care Centers v. Stern).

The Fifth District echoed that opinion in Estate of Rafaela Miranda Perez v. Life Care Centers of America, Inc. (Orfinger, Sawaya and Jacobus).

We note that the same law firms are in both cases and that the subject matter appears to be the same nursing home form agreement.

It is anticipated that parties seeking to avoid arbitration will now seek to develop evidence suggesting that the AAA was an integral part of agreeing to arbitration.

If the plaintiff had succeeded in up-ending every arbitration clause referring pre-dispute cases to the AAA, it would have been a major victory for arbitration opponents given the broad reach of the AAA. By upholding the concept of arbitration over a specific selection of a panel, at least in these specific cases, the two Florida courts have empowered a number of arbitration clauses out there -- and handed a fair amount of business to AAA competitors.

Does this solve the question in Florida? It should however we note that the Second and Fifth Districts often uphold arbitration clauses and squarely place the burden on parties who object while the Third and (moreso) the Fourth Districts are tougher on those pushing arbitration. A split among the intermediate courts on these issues generally develop along those lines; whether this specific issue will follow that pattern remains to be seen. If the Fourth agrees with this thinking, the question will be pretty well-settled.

Apparently arbitration-watchers will want to be current on their nursing home case law since the Florida Supreme Court has granted review of Estate of Gessa v. Manor Care. Back in February, we wrote a long post attempting to sew together the long history of a particular nursing home arbitration agreement and the disparate treatment it has received in various Florida intermediate appellate courts. Read that post here.

Once your up to speed, join us as we keep an eye on Gessa in the Florida Supreme Court.

The Order accepting jurisdiction stated:

The Court accepts jurisdiction of this case. Oral argument will be set by separate order. Counsel for the parties will be notified of the oral argument date approximately sixty days prior to oral argument. Petitioner's initial brief on the merits shall be served on or before November 16, 2009; respondent's answer brief on the merits shall be served twenty days after service of petitioner's initial brief on the merits; and petitioner's reply brief on the merits shall be served twenty days after service of respondent's answer brief on the merits. Please file an original and seven copies of all briefs. The Clerk of the Second District Court of Appeal shall file the original record which shall be properly indexed and paginated on or before December 21, 2009. The record shall include the briefs filed in the district court separately indexed.

In our last post, we discussed the Nebraska Supreme Court decision in Koricic / Baker v. Beverly Hallmark to find that a family member "agent" could be authorized to signed the "principal" into a nursing home but the court would later parse through the clauses to decide which terms might not be included.

Consider, on the other hand, a trial court order in Brenda Ann Christenson, by and through Stephen Christenson v. The Abbey Rehabilitation and Nursing Center, Senior Health Management - Gold Coast, LLC; Capital Source, Inc. et al. where a judge came to a different conclusion on familial agency.

In Christenson, the validity of an arbitration agreement was at issue when a wife was admitted to a nursing home and orally gave her husband an unambiguous, all inclusive general grant of authority to sign "a bunch of papers" on her behalf, without limitation, and created a situation where the people at the nursing home reasonably believed the husband had such authority.

The court considered the situation akin to recent Florida long term care cases examining the scope of a power of attorney and likened that extension of authority to general agency-principal situations. While powers of attorney are strictly construed (Estate of McKibbin), a sufficiently broad, unambiguous, general grant of authority is a factual question and, if answered affirmatively, will lead the agent to bind the principal as courts indicated in Jaylene v. Moots, Five Points v. Mallory, and Sovereign Health Care of Tampa v. Est. of Huerta.

Here, the trial court was the finder of fact and determined that such a broad granting had occurred -- relying on two 60+ year old Florida Supreme Court cases which noted that agency could exist even if both agent and principal later deny (we presume that was the case here, although we also question if the same agent-principal couple are the named plaintiffs).

Take a look at the conclusion in the Nebraska case and contrast with Aguesta v. Industrial Fire and Casualty Co., which was cited in paragraph 16 of the order.