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Topic: Arbitration

Is One-Sided Contract Requiring Arbitration by One Party, but Not the Other, Enforceable in Tennessee?

Posted on Jun 1 2014 8:42PM by Attorney, Jason A. Lee

Analysis:  A recent Tennessee Court of Appeals decision discussed the viability of a contract that had a one-sided arbitration provision.  The Tennessee Court of Appeals decision of Richard A. Berent v. CMH Homes, Inc., 2014 WL 813874 (Tenn. Ct. App. 2014) dealt with an arbitration agreement that required the purchaser of a manufactured mobile home to submit virtually all of the buyer’s potential claims to arbitration.  On the other hand, the same contract provided certain exceptions to the “mandatory” arbitration that exclusively benefited the mobile home manufacturer.  The effective result was that the purchaser of the mobile home had to submit virtually all of his claims to arbitration whereas the seller of the manufactured mobile home could pursue judicial relief for many claims.

 

As a result, the question before the Court was whether this arbitration requirement was unconscionable and therefore unenforceable under Tennessee law.  Previously in Taylor v. Butler, 142 S.W.3d 277 (Tenn. 2004) the Tennessee Supreme Court held that an arbitration agreement was unconscionable when it reserves the “right to a judicial forum for the defendants while requiring the plaintiff to submit all claims to arbitration.”  Taylor at 280.  In the Berent case the Tennessee Court of Appeals applied the Taylor reasoning and found that this arbitration agreement was unconscionable.  As a result, this Tennessee Court of Appeals decision reaffirmed the applicability of the Taylor decision finding that it is improper in Tennessee for any arbitration agreement to selectively decide that one party has access to a judicial remedy while the other party only has access to an arbitration remedy. 

 

Interestingly, the defendants in this case attacked the viability of the Supreme Court’s holding in Taylor from 2004.  The defendants asserted in this case that Taylor is no longer in the legal majority across the country and that this decision should be overruled (in fact they assert this holding is only accepted in a “small minority” of jurisdictions).  Obviously, the Tennessee Court of Appeals declined to overrule a Tennessee Supreme Court decision and specifically stated that such an issue must be directed to...

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TAGS: Defenses, Breach of Contract, Arbitration, Contracts Comments [0]
  
 

Arbitration - Sixth Circuit Continues Favorable Support of Arbitration

Posted on Jan 11 2014 4:59PM by Attorney, Jason A. Lee

Sometimes I want to bring your attention to other great legal blog commentary on things that may be of interest to those that are involved in Tennessee litigation.  A recent post by the Sixth Circuit Appellate Blog discussed recent Sixth Circuit decisions on arbitration.  There is a clear trend in the Sixth Circuit and in many of the other Federal Circuits of favoring arbitration and providing great deference to the decisions of arbitrators.  One recent case is discussed in this blog post is a Sixth Circuit decision supporting the decision of the arbitrator even though the decision was contrary to Sixth Circuit precedent.  The Court supported the decision because it provided a “colorable” reading of an ERISA statute and therefore the arbitrator’s decision was upheld.

I recommend that you read this post (it can be found here) and these cases if you have any desire to appeal an arbitration decision in the Sixth Circuit.  These recent cases may make you reconsider such an appeal unless you have rock solid grounds for the appeal.

Follow me on Twitter at @jasonalee for updates from the Tennessee Defense Litigation blog.

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TAGS: Sixth Circuit, Arbitration Comments [0]
  
 
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Jason A. Lee is a Member of Burrow Lee, PLLC. He practices in all areas of defense litigation inside and outside of Tennessee.

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Tennessee Defense Litigation Blog
Jason A. Lee, Member of Burrow Lee, PLLC
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