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Court Watch
Arbitration Clause in Franchise Agreement Is Enforceable By Nonsignatories
The Eighth Circuit Court of Appeals has ruled that nonsignatories to a franchise agreement were entitled to enforce the agreement's arbitration clause. In CD Partners, LLC v. Grizzle, ___ F.3d ___, 2005 WL 2319132 (8th Cir. Sept. 23, 2005), the court considered whether a franchisor's three principals could compel arbitration of a tort lawsuit brought against them in their individual capacities by the franchisee. The franchisee's lawsuit alleged claims of negligence, negligent misrepresentation, and fraudulent misrepresentation against the three principals. The district court denied the principals' motion to compel arbitration under the arbitration clauses in the franchise agreements on the grounds that the three principals were not signatories to the franchise agreements between the franchisor and franchisee and the tort lawsuit was not covered by the agreements' arbitration clauses.
On appeal, the Eighth Circuit reversed. The court first recognized that there are several circumstances in which a “nonsignatory can enforce an arbitration clause against a signatory to the agreement.” The court noted that one circumstance is when “the relationship between the signatory and nonsignatory defendants is sufficiently close that only by permitting the nonsignatory to invoke arbitration may evisceration of the underlying arbitration agreement between the signatories be avoided,” and another is “when the signatory to a written agreement containing an arbitration clause 'must rely on the terms of the written agreement in asserting [its] claims' against the nonsignatory.” Id. (internal citations omitted). The court found that both of these circumstances were present in CD Partners. First, the court found that the tort allegations against the three principals all arose out of their conduct while acting as officers of the franchisor. Consequently, their relationship to the signatory, the franchisor, was a close one and evisceration of the underlying arbitration agreement would be avoided only by allowing the principals to invoke arbitration. Second, the court found that the franchisee's claims against the three principals relied upon, referred to, and presumed the existence of the written agreement between the two corporations. Therefore, the court held that arbitration was appropriate.
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.
The Stranger to the Deed Rule
In 1987, a unanimous Court of Appeals reaffirmed the vitality of the "stranger to the deed" rule, which holds that if a grantor executes a deed to a grantee purporting to create an easement in a third party, the easement is invalid. Daniello v. Wagner, decided by the Second Department on November 29th, makes it clear that not all grantors (or their lawyers) have received the Court of Appeals' message, suggesting that the rule needs re-examination.