Justia U.S. 7th Circuit Court of Appeals Opinion Summaries

Beverly, a former Abbott employee whose employment was terminated on October 20, 2010, filed suit against Abbott. She alleged that during her employment, Abbott had discriminated and retaliated against her on the basis of her German nationality in violation of Title VII of the Civil Rights Act, as well as on the basis of her disabilities in violation of the Americans with Disabilities Act. The district court denied Abbott’s motion for summary judgment and the parties engaged in a private mediation. During mediation, the parties signed a handwritten agreement stating that Beverly demanded $210,000 and mediation costs in exchange for dismissing the lawsuit. Abbott later accepted Beverly’s demand and circulated a more formal settlement proposal. After Beverly refused to execute the draft proposal, Abbott moved to enforce the original handwritten agreement. The court found that the parties entered into a binding settlement agreement and granted Abbott’s motion to enforce. The Seventh Circuit affirmed, holding that the handwritten agreement was valid and enforceable, since its material terms were clearly conveyed and consented to by both parties, and the existence and content of the draft proposal do not affect enforceability. View "Beverly v. Abbott Labs., Inc." on Justia Law

Dr. Meinders sued United Healthcare in Illinois state court, alleging that in 2013, United sent him and a number of similarly-situated persons an unsolicited “junk fax” advertising United’s services, which violated the Telephone Consumer Protection Act (TCPA), 47 U.S.C. 227, the Illinois Consumer Fraud and Deceptive Practices Act, and amounted to common law conversion. United removed the case to federal court and successfully moved to dismiss for improper venue under Federal Rule of Procedure 12(b)(3), claiming that Meinders had entered into a “Provider Agreement” with a United-owned entity, ACN, in 2006, which bound him to arbitrate his “junk fax” claims in Minnesota. Meinders unsuccessfully moved to strike or, in the alternative, for leave to file a sur-reply addressing the assumption theory and declaration. The Seventh Circuit reversed because the district court premised its dismissal order on law and facts to which Meinders did not have a full and fair opportunity to respond. View "Dr. Robert L. Meinders, D.C. v. UnitedHealthcare, Inc." on Justia Law

Bowman law firm filed suit in Hendricks County Indiana, to recover Bentrud’s credit card debt owed to Capital One. Months later, Bowman moved for summary judgment. Bentrud responded by invoking the arbitration provision in his credit card agreement. The state court granted Bentrud’s election of arbitration and stayed the case, allowing Bentrud 30 days to initiate arbitration. The American Arbitration Association declined to do the arbitration because Capital One had previously failed to comply with its policy regarding consumer claims. Bentrud failed to meet the 30-day deadline, so that the stay automatically dissolved. Bowman filed a second summary judgment motion. Although the state court granted an extension, Bentrud characterized that motion, as an unfair or unconscionable means of attempting to collect a debt, under the Fair Debt Collection Practices Act, 15 U.S.C. 1692f. Bentrud also claimed that the Annual Percentage Rate on his credit card debt was 13.9%, but when Bowman filed its state court complaint, it averred the applicable interest rate to be 10.65%. The Seventh Circuit affirmed judgment in favor of Bowman, noting that when Bowman filed a second summary judgment motion, it acted consistently with the state court order and that any interest rate violation would be attributable to Capital One, which was not a party. View "Bentrud v. Bowman, Heintz, Boscia & Vicia, P.C." on Justia Law

The Andermanns obtained mobile phone service from U.S. Cellular in 2000. Their renewable two-year contract was renewed for the last time in 2012. It included an arbitration clause that “survives the termination of this service agreement” and provided that “U.S. Cellular may assign this Agreement … without notice.” In 2013 U.S. Cellular sold the Andermanns’ contract to Sprint, without notice to the Andermanns. Months later Sprint sent Andermanns a letter, informing them of the sale and that their mobile service would be terminated on January 31, 2014 because Andermanns’ phones were not compatible with Sprint’s network. In December Sprint phoned to remind them that their service was about to expire, and added that Sprint had “a great set of offers and devices available to fit [their] needs.” Sprint made six such calls. Andermanns answered none, but filed a purported class action, contending that the unsolicited advertisements contained in the calls violated the Telephone Consumer Protection Act, 47 U.S.C. 227. Sprint requested arbitration, 9 U.S.C. 4. The district court denied Sprint’s motion. The Seventh Circuit reversed, finding connection to the contract, asking: What would Sprint have done if forbidden to call the customers whom it had inherited from U.S. Cellular and must now terminate because of technical incompatibility? View "Andermann v. Sprint Spectrum, L.P." on Justia Law

When Ameriprise Financial fired Renard, a financial adviser, for violation of the franchise agreement between the two, Ameriprise claimed that Renard owed it $530,000 on loans made to help Renard build his franchise. Renard disagreed. Ameriprise initiated arbitration under the agreement, which provides that Minnesota law governs, except “all issues relating to arbitrability,” are “governed by the terms set forth in [the] agreement, and to the extent not inconsistent with this agreement, by the rules of arbitration of” the Financial Industry Regulatory Authority. Wisconsin arbitrators rejected Renard’s counterclaims and awarded Ameriprise most of what it sought. Renard filed suit to vacate the award. The court confirmed the award and required Renard to pay additional interest. The Seventh Circuit affirmed, rejecting Renard’s argument that Ameriprise’s counsel procured the award through fraud and that the arbitrators acted in manifest disregard of the Wisconsin Fair Dealership Law and Minnesota tort law. His showing was far short of the high standard needed to upset the outcome of an arbitral proceeding. The panel did not issue a written opinion, so it was not clear how it reached its conclusions, but nothing suggested that it strayed so far that the “manifest disregard” standard was triggered. View "Renard v. Ameriprise Fin. Servs., Inc." on Justia Law

Bell sued attorney Ruben and his firm, alleging that they negligently and fraudulently mismanaged her trust, causing a loss of $34 million. Before arbitration, Ruben filed for Chapter 7 bankruptcy. Bell filed an adversary complaint opposing discharge of Ruben’s fraud-based debt to her, 11 U.S.C. 523(a)(2)(A), (4). The bankruptcy judge granted Ruben a discharge of his other debts, but not of that fraud debt. Ruben’s liability insurance did not cover fraud. Bell settled her negligence claims against Ruben and all claims against the other defendants in arbitration. The arbitration panel ruled, with respect to the fraud claim, that “damages proven to be attributable to the actions of [Ruben] have been compensated,” but ordered Ruben to pay administrative fees and expenses of the American Arbitration Association (AAA) totaling $21,200.00 and that compensation and expenses of the arbitrators, advanced by Bell, totaling $150,304.54 would be borne by Ruben. AAA rules, which governed the arbitration, provide that expenses of arbitration “shall be borne equally” unless the parties agree otherwise or the arbitrator assesses expenses against specified parties. Ruben refused to pay. The bankruptcy judge entered summary judgment in favor of Ruben. The district court reversed, in favor of Bell. The Seventh Circuit affirmed. View "Ruben v. Bell" on Justia Law

An employer that withdraws from an underfunded pension plan must cover its share of the shortfall, 29 U.S.C. 1381, 1391. After concluding that Allega had withdrawn, the Central States Pension Fund sent it a bill for about $375,000. The employer has 90 days to ask a pension plan to review its decision.. If the plan adheres to the original decision or does not act within 120 days, the employer has another 60 days to seek arbitration. For Allega, the last day was July 16, 2013. On July 9 Allega sent the Fund a letter demanding arbitration. It followed up on July 29 with a notice to the American Arbitration Association.: The AAA’s rules require that notices go to both the pension administrator and the AAA. The Fund has adopted those rules, but Allega did not notify the AAA within the statutory time limit. The district court concluded that Allega had waited too long to seek arbitration and must pay withdrawal liability as the Fund calculated it. The Seventh Circuit affirmed, rejecting an argument that the Fund’s failure to act within 120 days on a request for reconsideration tolled the time to seek arbitration. View "Cent. States, SE & SW Areas Pension Fund v. Allega Concrete Corp." on Justia Law

Pine Top, an insurer, sued Banco, an entity wholly owned by Uruguay, claiming that Banco owes $2,352,464.08 under reinsurance contracts. The complaint sought to compel arbitration but alternately proposed that the court enter judgment for breach of contract. Pine Top moved to strike Banco’s answer for failure to post security under Illinois insurance law. The district court denied the motion and later denied the motion to compel arbitration. The Seventh Circuit affirmed, citing the Foreign Sovereign Immunities Act, which prohibits attaching a foreign state’s property, thereby preventing application of the Illinois security requirement, 28 U.S.C. 1609. Banco did not waive its immunity in the manner allowed by that law and Pine Top forfeited contentions that the McCarran-Ferguson Act allows a state rule to govern. On the arbitration question, the court held that denials of motions to compel arbitration under the Panama Convention are immediately appealable under 9 U.S.C. 16(a)(1)(B), but that the contract language, reasonably read, does not transfer the right to demand arbitration. View "Pine Top Receivables of IL, LLC v. Banco de Seguros del Estado" on Justia Law

Doe settled his sexual abuse claims against the Archdiocese of Milwaukee for $80,000 after participating in a voluntary mediation program. He later filed a claim against the Archdiocese in its bankruptcy proceedings for the same sexual abuse. Doe responded to the Archdiocese’s motion for summary judgment by contending that his settlement was fraudulently induced. The argument depends upon statements made during the mediation, but Wisconsin law prohibits the admission in judicial proceedings of nearly all communications made during mediation. Doe argued that an exception applies here because the later action is “distinct from the dispute whose settlement is attempted through mediation,” Wis. Stat. 904.085(4)(e). The Seventh Circuit affirmed summary judgment in favor of the Archdiocese. Doe’s bankruptcy claim is not distinct from the dispute settled in mediation. The issue in both proceedings, which involved the same parties, is the Archdiocese’s responsibility for the sexual abuse Doe suffered. Doe sought damages in both the mediation and bankruptcy for the same sexual abuse; he did not seek separate or additional damages for the alleged fraudulent inducement. View "Doe v. Archdiocese of Milwaukee" on Justia Law

The Everetts formerly operated a PDRI franchise. After that franchise was terminated, they violated a non-compete clause. Only Mr. Everett and the Everetts’ corporation actually signed the franchise agreement. PDRI sought to bind Ms. Everett to an arbitration award pursuant to the franchise agreement. Although Everett was a non-signatory to the franchise agreement, PDRI asserted she was subject to arbitration under the doctrine of direct benefits estoppel. The district court determined that the benefits Everett received were filtered through her ownership interest in their corporation or through her husband and were therefore indirect. The Seventh Circuit reversed, holding that Everett did receive a direct benefit. It is clear that the Everetts’ corporation was formed to gain the benefit of the franchise agreement and was used only to conduct the business of the franchise; Ms. Everett had a 50% ownership and played an active role in running the corporation.View "Everett v. Paul Davis Restoration, Inc." on Justia Law