DENIAL OF ARBITRATION REVERSED WHERE TRIAL COURT FAILED TO HOLD TRIAL TO RESOLVE DISPUTED QUESTIONS OF FACT
The Eighth Circuit reversed a trial court’s decision to deny arbitration, based on the fact that the lower court failed to hold a trial (as required by the FAA) when disputed questions of fact surrounding the parties’ agreement remained. The case surrounded a disagreement over whether a seller of equipment agreed to indemnify a manufacturer of heavy machinery, in connection with litigation against the manufacturer by a third-party. Disputed facts surrounded whether the agreement between the manufacturer and the seller included a form containing indemnification terms and arbitration provisions. The district court denied arbitration because it concluded that the only undisputed contract terms were the terms of the purchase, sale, and payment; the court left undecided the issue of whether arbitration provisions were included in the agreement, as not subject to a “definitive answer.” Citing a recent Tenth Circuit decision, on which we reported on May 20, 2014, the Eighth Circuit reversed, holding that “if the motions record reveals a material issue of fact, the FAA maintains that the court move summarily to trial. And, when that trial is not demanded by the party opposing arbitration [as was the case here], ‘the court shall hear and determine such issue.’” The court explained that here, “the district court never resolved the factual issues concerning the making of the contract but merely recognized their existence.” The Eighth Circuit vacated the order and remanded “for the district court to hold a non-jury trial, make findings of fact, and apply the appropriate U.C.C. provisions in light of those facts.” Nebraska Machinery Co. v. Cargotec Solutions, LLC, Case No. 13-2753 (8th Cir. Aug. 7, 2014).
This post written by Michael Wolgin.
