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Posted on Jun 1 2014 8:42PM by Attorney, Jason A. Lee
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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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Posted on Jan 11 2014 4:59PM by Attorney, Jason A. Lee
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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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